A leading claims business has reached another loan agreement with bankers after the coronavirus pandemic decimated profits in 2020, investors were told today. In a trading update posted to the London Stock Exchange, NAHL Group said revenue for the first half of this year is expected to be down by one fifth while half-year earnings are expected to plummet from £3.4m in the first half of 2019 to between £1m and £1.2m this year.
NAHL has agreed with Yorkshire Bank to extend an existing loan facility for a further 12 months to the end of 2022, the statement said, adding that 'new covenants that provide reasonable levels of headroom have been agreed'.
Russell Atkinson, chief executive of NAHL, said: 'The first half of the year has been the most challenging in the group's history, following the emergence of the Covid-19 pandemic in the UK in late February. Despite the operational and demand challenges that this situation imposed, the group's swift response enabled us to continue to support customers and clients across the group while keeping our employees safe.'
The group said its proactive steps to manage the balance sheet have created the highest level of liquidity in the last 12 months.
The business specialises in person injury, conveyancing and critical care claims – all of which have been impacted during the lockdown. The trading update confirmed PI volumes are 'gradually recovering', albeit only at 50-60% of levels in prior years.
Conveyancing instructions came to a standstill in April and May, and, while the market has been bolstered by easing of lockdown restrictions and government changes to stamp duty, the long-term outlook for this sector 'remains uncertain'. The company also noted that while its critical care division demonstrated a 'reasonable level of resilience' throughout this year, there has been a noticeable slowing of new enquiries as a result of a reduction in road traffic accidents and medical negligence incidents.
Results for the six months ending 30 June will be announced on 22 September.
Today's update provided a rare boost to the company's shares, which rose almost 10% to 42.2p.