One of the biggest handlers of claims for law firms has reported significant falls in profits as it tries to adapt its business to the changing market.
National Accident Helpline announced to the London stock exchange today that pre-tax profits in the year ending December 2017 fell almost 22% to £12.4m. Revenue rose 2.5% to £51.9m.
Publication of the figures caused the company’s share price to drop almost 15% to 146p a share. Dividends for the year will be 15.9p, down from more than 19p in 2016.
NAHL said the profits falls were due to the costs of setting up two alternative business structures in 2017 to work directly alongside select law firms.
The company revealed it will spend a further £4m on a new ABS over the next two years that will be ‘small claims ready’ – set up specifically to handle claims captured by the government’s proposed new £5,000 small claims limit.
‘[In 2018] we anticipate a broadly unchanged landscape in terms of the number of accidents, and the number of consumers seeking redress, but expect to experience a progressive reduction in [panel law firms’] appetite for these smaller value cases,’ said NAHL chairman Steve Halbert. While panel firms ’may be less inclined’ to take on lower value cases, ’handled correctly we believe that they still offer NAH a valuable opportunity.’
During 2017, NAHL spent £1m relaunching its personal injury brand, leading to ‘significant growth’ in online enquiries and created 35 new jobs.
The company admitted that profits are likely to be affected during the next 18 to 24 months as investment continues to be made. Chief executive Russell Atkinson said this cash injection will prove to be advantageous in the long run, adding: ‘Increasing our own involvement in the end-to-end economics of a PI case enables us to leverage our know-how to maximum advantage.’