The listed parent company of a leading personal injury firm has confirmed the business is moving away from RTA claims ahead of legislative changes.
Redde plc said in interim results it had continued to build its caseload in legal services but has developed a greater proportion of work from non-RTA cases.
Redde is the parent of PI outfit NewLaw. In 2017 it created an additional alternative business structure named Your Law, launched alongside claims management company National Accident Helpline. It also operates in the credit hire and repair markets.
The move away from claims likely to be worth less following the Civil Liability Act, together with growth in the employers’ liability and medical negligence practices, give ‘further cause for optimism’.
During the period, the consolidation of all NewLaw operations into the existing Cardiff office was completed, costing almost £500,000.
The costs of the move are listed as exceptional items, with leasehold property provisions costing £170,000, and reorganisation and redundancy costs coming to £323,000.
Shareholders in the company were told they should expect no increase in their dividend this year.
Redde plc said the interim dividend would remain at 5.50p – despite today announcing positive financial results across the board.
According to interim results for the six months ended 31 December 2018, profit before tax increased 7.2% to £23.6m, with turnover up 14.9% to £291.1m.
Martin Ward, chief executive, said the company has had to increase investment in its infrastructure and IT systems to deal with a higher volume of cases.
‘This has been funded from cash balances without utilising bank working capital facilities,’ added Ward. ‘Given the ongoing working capital requirements to support this growth, we have maintained the interim dividend at 5.50p for the period.’
The market appeared unimpressed by today’s results, with the share price dropping 12.5% to its lowest value for almost two months.
The period saw a 27.8% increase in total number of hire days driven by a 14.9% increase in credit hire case volumes compared to the corresponding period last year. The average number of vehicles held during the period was increased by 19.5%, to 10,667.