The challenge facing certain sectors was brought into focus today as a leading player reported work volumes are still only half those enjoyed before the pandemic.
National Accident Helpline (NAHL) said work in its personal injury and residential property divisions dropped by between 75-90% in the early weeks of the UK lockdown.
This was as a result of fewer vehicles being on the roads, the number of workers furloughed or working from home and the housing market coming to a standstill.
In a statement to the group’s annual general meeting, chief executive Russell Atkinson reports today that volumes are still 50% below normal levels.
‘Whilst the board acknowledges the progress being made, with the UK only recently starting to re-open, it remains too early to quantify the full impact on 2020 with any degree of certainty,' Atkinson states. ‘That said, given the board’s experience in navigating change in difficult markets, I remain confident in the group’s ability to emerge from this period as a sustainable business.’
While confirmation that work has fallen away during lockdown, the extent of the drop will be alarming for the personal injury sector in particular, where margins have been tighter in recent years and claims numbers have decreased. Most firms have kept afloat by furloughing staff or reducing their work in progress in the absence of new cases, but both options are nothing more than short-term measures.
Atkinson will report that net debt for the listed firm was £21.7m as of 31 May, with a £25m revolving credit facility committed until December 2021. No need for further funding is expected.
The firm, which runs its own cases through joint ventures and finds work for panel firms, says it has ‘actively recalibrated’ its marketing activity and is encouraged by recent improvements in search engine performance.
Following the Covid-19 update in 20 April, the group said its response to the pandemic continues to evolve and trading has been broadly in line with management’s early scenario planning.