Profits at a listed claims management company tumbled in the first half of the year as the coronavirus pandemic took effect - but a possible buyer has come forward for the troubled business.
NAHL Group reported to the London Stock Exchange yesterday that profit before tax for the six months to 30 June was down 61% to £1.8m. Revenue also fell by 22% to £20.2m.
Basic earnings per share will be 0.8p compared to 3.4p in the same period in 2019, although net debt has been reduced to £18.5m from £21m at the start of the year.
It emerged today that listed financial advisor and wealth manager Frenkel Topping has made an indicative non-binding proposal to NAHL to combine the two businesses through an all-share acquisition.
In a statement, Frenkel Topping said there is a 'clear strategic, operational and financial rationale to combining these two complementary businesses that focus on providing excellent professional support to the victims of life changing injury, incident or clinical negligence'.
It added: 'Frenkel Topping believes that a combination would be compelling to both sets of shareholders and to the broader stakeholders of both companies. Frenkel Topping is mindful that the combination is subject to due diligence and would require a careful assessment of the position of NAHL’s consumer legal services division within the combined group and that this may lead to a divestment of the division in due course.'
There has not yet been any response to this proposal and the request to enter into discussions. Frenkel Topping currently holds 2,826,998 NAHL shares representing y 6.11% of its voting rights.
Former NAHL chief executive Russell Atkinson resigned with immediate effect three weeks ago in the latest stage of a tumultuous year where residential and personal injury work more halved at the peak of lockdown, and where the share price has consequently tumbled.
NAHL chair Caroline Brown said on Tuesday: ‘The first half of 2020 has been the most challenging in NAHL’s history and I am very proud of how the group has responded to the Covid-19 pandemic.
‘We are pleased to report that the business remained profitable and enjoyed strong free cash flow generation in the period. I would like to thank our people, who have shown great agility and commitment to supporting our customers in very difficult circumstances.’
The company says personal injury enquiry volumes in April were down to 30% of the level recorded a year earlier, but had recovered to 70% of normal volumes by August.
The group has restructured, merging the personal injury and residential property businesses into a new consumer legal services division, resulting in £1m annual cost savings.
The share price actually increased in value by 4.74% to 48.6p following today’s announcement. Nine months ago the share price was 118.5p.