Slide 1: NAHL Group plc 2018 Full Year Results Presentation
NAHL Group plc 2018 Full Year Results Presentation March 2019
Slide 2: Agenda
Agenda 01 Overview and highlights 06 Divisional performance Personal Injury | Critical Care | Residential Property 02 Financial performance 07 Corporate and social responsibility 03 Our business 08 Summary and outlook 04 Our markets 09 Appendix 05 Our response to PI reforms 2
Slide 3: Overview and highlights
Overview and highlights As we progress through our transition we remain on track Revenue (£m) Profit before tax (£m) Financial Revenue of £49.0 million (2017: £51.9m) £49.0m -5.7% £9.8m -21.3% Underlying operating profit down 16.3% to £12.1m (2017: £14.5m) primarily as a result of our transforma
Slide 4: Financial performance
Financial performance
Slide 5: Income statement
Income statement £m 2018 2017 Variance Revenue of £49.0m Personal Injury 30.2 32.5 -7.2% £4.6m revenue from ABSs Critical Care 12.4 11.0 12.2% £1.4m organic growth in Critical Care Residential Property 6.4 8.3 -23.4% Residential Property facing into market challenges Revenue 49.0 51.9 -5.7%
Slide 6: Balance sheet
Balance sheet ABS strategy requires investment in working capital to build a £m 2018 2017 Variance sustainable and growing earnings stream in Personal Injury Goodwill and intangibles 66.8 67.6 (0.8) Trade and other receivables increases £6.5m to £28.8m. Property, plant and equipment 0.2 0.3 (0.1
Slide 7: Cash flow
Cash flow Free cash flow increased by 18.4% to £2.9m £m 2018 2017 Variance £1.5m of free cash flow generated by ABSs before Underlying operating profit 12.1 14.5 (2.4) deduction of MI drawings Depreciation and amortisation 0.4 0.3 0.1 Underlying cash conversion 65.6%, an improvement on Working
Slide 8: Our business
Our business aE
Slide 9: NAHL Group plc – our business
NAHL Group plc – our business Personal Injury Critical Care Residential Property Personal Injury provides outsourced marketing Critical Care provides a range of specialist services Residential Property provides marketing services services and products to law firms through in the catastrophic and ser
Slide 10: Our services
Our services Personal Injury Critical Care Residential Property Fees charged to law firms Fees charged to law firms Marketing Services for PI enquiry generation for conveyancing instructions Legal and service fees charged Case management fees Service Provision to individual consumers for charged to
Slide 11: Our markets
Our markets aE
Slide 12: Our markets
Our markets NAHL Group operates in the UK Consumer Legal Services (CLS) market CLS is a highly fragmented subset of the UK Legal Services market NAHL operates in personal injury, residential conveyancing and medical reporting / rehabilitation sectors Consumers are confused by how the legal pro
Slide 13: The personal injury market
The personal injury market The PI market, worth £3.9bn, is typically segmented by claim type and heavily weighted towards Road Traffic Accident claims (RTA) Market Segmentation RTA market volumes are declining and this is expected to continue by Claim Type * NAH has always focused on non-RTA (
Slide 14: Regulatory changes in personal injury
Regulatory changes in personal injury PI reforms are contained in the Civil Liabilities Bill which received royal assent in December 2018, implementation planned for April 2020 Small Claims limit increasing from £1,000 to £5,000 (RTA) and £2,000 (non-RTA) Reduced consumer damages and reduced cos
Slide 15: Our response to PI reforms
Our response to PI reforms aE
Slide 16: Create the UK’s leading Personal Injury provider…
Create the UK’s leading Personal Injury provider… Panel law firm demand for our Traditional law firms We are leveraging our brand, traditional model is diminishing and require significant investment in technology and processes to a number of law firms are withdrawing technology, process and brand
Slide 17: …and participate in the entire claims process
…and participate in the entire claims process Our strategy enables us to:- 1. Non-Fault 2. Marketing 3. NAH Legal 4. Claim 5. Successful i. Grow market share in the Accident Activity Support Centre Processing Outcome for larger PI market (£3.9bn) Consumer rather than just the smaller Consumers uns
Slide 18: Divisional performance
Divisional performance Personal Injury | Critical Care | Residential Property
Slide 19: Personal Injury - a year of continued progress
Personal Injury - a year of continued progress 2018 Performance Strategic Progress Traded well through the year in a Our first, wholly owned law firm, National competitive market Accident Law, to launch in April 2019 As anticipated, continued erosion in panel First stage of technology platfo
Slide 20: ABS performance in 2018 is encouraging
ABS performance in 2018 is encouraging 2018 - first full year of operation for both ABSs Claim volumes across ABSs during 2018 In the ABSs… 13,503 claims underway £4.6m revenue recognised in the year = 77% vs target 67% £0.5m profit generated after deduction of £1.7m of MI £7.0m of damages won
Slide 21: Critical Care - strong performance with double-digit profit growth
Critical Care - strong performance with double-digit profit growth 2018 Performance Strategic Progress Operating profit growth of 16.4% Brand and website audit completed in preparation for a brand refresh in Q2 2019 Continued growth in market share, No.1 brand in our sector Addition of a fur
Slide 22: Residential Property – new management team in place to drive growth
Residential Property – new management team in place to drive growth 2018 Performance Strategic Progress The market remains challenging New B2B platform, The Conveyancing Exchange, launched Volume of core conveyancing and surveys has reduced and we have lost some market Web site optimisation
Slide 23: Corporate and social responsibility
Corporate and social responsibility
Slide 24: We have a strong, embedded culture that underpins our strategy
We have a strong, embedded culture that underpins our strategy Social Purpose Employees Communities We began our mission to bring justice It is our people and their talents, We believe it’s within the strength of local to those affected by accidents back in dedication and vision which has created co
Slide 25: Summary and outlook
Summary and outlook aE
Slide 26: Summary and outlook
Summary and outlook 2018 A year of continued progress with significant steps forward in transforming core PI business to take advantage of opportunities Both ABS ventures trading profitably and developing well, validating Group’s strategic response to regulatory changes Critical Care division
Slide 27: Investment case
Investment case We are primed for new opportunities in evolving markets Investing in innovative solutions, underpinned by technology, to maximise the growth opportunity across all our businesses We have a clear brand proposition Nationally recognised in the market with strong leadership and trust in
Slide 28: Appendix
Appendix aE
Slide 29: Personal injury – channel economics
Personal injury – channel economics Traditional Panel Model Self Processing – Joint Venture Self Processing – In House Profit Timing 100% of profit recognised in month enquiry Profits recognised at liability admission Processing costs written off on incurred passed to law firm (typically 15-18 month
Slide 30: Personal injury – self processing in house
Personal injury – self processing in house Development of our new, wholly-owned, venture is progressing well and due for launch in H1 2019. There are three phases to the build. Today Dec 2018 Dec 2019 Dec 2020 Stage 1 – Building a Law Firm • Technology – Building a bespoke solution with an existing
Slide 31: NAHL Group plc
NAHL Group plc 1430 Montagu Court, Kettering Parkway, Kettering, Northamptonshire, NN15 6XR finnCap Ltd (NOMAD & Broker) Julian Blunt / James Thompson (Corporate Finance) Andrew Burdis (Corporate Broking) +44 (0) 20 7220 0500 FTI Consulting (Financial PR) Alex Beagley / James Styles / Laura Saraby +