28th Apr 2020 14:48
(Alliance News) - NAHL Group PLC on Tuesday reported a decline in profit for 2019 due to a volatile and competitive market which hurt the performance of its businesses.
Shares in the National Accident Helpline operator were trading 0.5% higher at 37.12 pence each on Tuesday afternoon in London.
NAHL posted pretax profit of GBP2.2 million for 2019, down 78% from GBP9.9 million reported for 2018. This was despite revenue rising by 4.8% to GBP51.3 million from GBP49.0 million.
The company attributed the fall in profits to exceptional costs incurred in its Personal Injury division as well as an impairment charge of GBP5.3 million relating to its Residential Property division.
"2019 has been a challenging year for NAHL Group and its board. During the year, continued political and regulatory uncertainties in our markets have increased the risks faced by the group. The residential property sector experienced depressed market conditions in 2019 and the personal injury market experienced challenges in both supply and demand. The group as a whole has fallen short of the financial targets set by the board despite good performances from some of our businesses, most notably Critical Care," said Chair Caroline Brown.
NAHL said the Personal Injury division contributed GBP31.7 million to total group revenue, up from GBP29.5 million the previous year. The Critical Care unit contributed GBP13.6 million, up from GBP12.4 million. However, the Residential Property division saw revenue fall to GBP6.0 million from GBP6.4 million.
No final dividend was proposed in order to reduce net debt and de-risk its balance sheet. An interim dividend for the period of 2.6p was paid, down from 3.2p.
Looking ahead, the Kettering-based company said while its businesses were progressing well at the start of 2020, the Covid-19 outbreak has had a negative effect on operations.
It noted that while its Personal Injury business has seen a "significant" reduction in new enquiries, its law firms continue to process historic claims, agree settlements and generate cash. The Critical Care division has recorded only a "modest impact" which is expected to continue in the short to medium-term and may result in lower revenues per case while market volumes in Residential Property have been significantly hurt.
"We have proactively taken measures to reduce our costs across the group and ensure we have sufficient liquidity to operate the business through this period. We will continue to evaluate and implement further measures as necessary to optimise the structure of the business, maximise savings, reduce property and lease costs, leverage IT to support broader-based home working and delay capital expenditure," said Chief Executive Russell Atkinson.
Net debt as at the end of December was GBP21.0 million, down from GBP15.5 million.
By Ife Taiwo; [email protected]
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