Nahl Group Plc · LSE:NAH
Nahl — H1 2018 Earnings Presentation
26 slides from Nahl's earnings presentation, Sep 18, 2018
Slide 1: NAHL Group plc Interim Results 2018
NAHL Group plc Interim Results 2018 18 September 2018
Slide 2: Agenda
Agenda 1. Highlights 2. Our Business 3. Financial Performance 4. Divisional Review 5. Personal Injury 6. Outlook 1
Slide 3: H1 Highlights
H1 Highlights Financial • Performance in line with expectations • Revenue of £24.9m (2017 H1: £24.9m) • Underlying operating profit of £6.4m (2017 H1: £7.3m) • Profit before tax of £5.3m after exceptional costs relating to the establishment of wholly owned small claims ready law firm or Alternative
Slide 4: Our Business
Our Business
Slide 5: NAHL Group plc – a leader in the UK Consumer Legal Services market
NAHL Group plc – a leader in the UK Consumer Legal Services market Our core offering… To provide services and products to individuals and businesses in the Consumer Legal Services market The Group comprises three divisions: • Personal Injury provides outsourced marketing services and products to law
Slide 6: 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 • Consumers are confused by how the legal process works. • NAHL Group aims to provide clarity and guidance for consumers • The personal injury market has
Slide 7: Our Services
Our Services Personal Injury (PI) Critical Care Residential Property Fees charged Fees charged to law firms for Marketing Services to law firms for PI conveyancing enquiry generation instructions Case Legal and service fees management fees charged to individual charged to law firms Service Provision
Slide 8: Financial Performance
Financial Performance NAHL
Slide 9: Income Statement
Income Statement Six Six 12 months months months to Revenue by Division * to June to June % December £'000 2018 2017 Change 2017 30 25 3.8 Personal Injury 15,489 14,854 4.3% 31,660 4.7 4.5 3.4 4.3 Clinical Care 5,970 5,564 7.3% 11,037 20 5.4 5.2 5.6 6.0 Residential Property 3,406 4,512 (24.5)% 8,340
Slide 10: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Balance Sheet Cash Flow Six Six 12 months months to months to to 31 Six Six 12 months 30 June 30 June December months to months to to 31 £’000 2018 2017 2017 30 June 30 June December £’000 2018 2017 2017 Underlying operating profit 6,360 7,347 14,491 Fixed assets 225 290
Slide 11: Divisional Review
Divisional Review NAHL
Slide 12: Personal Injury – Building for the Future
Personal Injury – Building for the Future • Revenue up by 4.3% to £15.5m, underlying operating profit (post minority interest) down by 24.4% to £4.1m, in line with expectations, after expensing £0.6m of enquiry origination costs relating to our second ABS • As guided, 2018 (and 2019) is a year of tr
Slide 13: Your Law – Scaling and Performing to Plan
Your Law – Scaling and Performing to Plan Highlights 100% Claim Underway 80% 14 Months in operation 60% 40% 16,000 Enquiries from NAH 20% 12,000 Retained clients 0% Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Apr 18 Mar 18 May 18 Jun 18 Jul 18 1,100 Won cases to date £4m Damages recovere
Slide 14: Critical Care – Continued Progress and Market Share Growth
Critical Care – Continued Progress and Market Share Growth • Revenue up by 7.3% to £6.0m, operating profit up by 4.4% to £2.1m • Strong performance in both Case Management (+7.4%) and Expert Witness (+7.3%) • Secured affinity case management deals with Child Brain Injury Trust (CBIT) and the Spinal
Slide 15: Residential Property – a Challenging Market
Residential Property – a Challenging Market • Revenue down 24.5% to £3.4m, underlying operating profit down 27.0% to £0.6m • Performance reflects ongoing challenging market conditions, impacting residential conveyancing volumes • Investment in sales leadership to enhance our business development cap
Slide 16: Personal Injury
Personal Injury NAHL
Slide 17: The Personal Injury Market
The Personal Injury Market • The PI market, worth £3.7bn, is typically segmented by claim type and Market Segmentation heavily weighted towards Road Traffic Accident claims (RTA) by Claim Type * • RTA market volumes are declining and this is expected to continue Non-RTA • NAH has always focused on n
Slide 18: Regulation Changes in Personal Injury
Regulation Changes in Personal Injury PI reforms are progressing through Parliament with a target implementation date of April 2020 • Small Claims limit increasing from £1,000 to £5,000 (RTA) and £2,000 (non-RTA) • Reduced consumer damages and reduced cost recovery for whiplash claims Impact of Refo
Slide 19: The Opportunity to Add More Value to a Claim
The Opportunity to Add More Value to a Claim Efficient, Technologically • Consumers will still need advice and support on digitised Enabled how the legal process works. process • A new type of law firm is needed to take Consumer advantage of these opportunities. Focused • We are uniquely placed to p
Slide 20: Personal Injury – Our Business Model
Personal Injury – Our Business Model 1. Non-Fault 2. Marketing 3. NAH Legal 4. Claim 5. Successful Accident Activity Support Centre Processing Outcome for Consumer • Consumers unsure if • NAH attracts these • Over 280,000 • Consumers are • Liability is admitted they have a claim and consumers throug
Slide 21: Personal Injury – Channel Economics
Personal Injury – Channel Economics Traditional Panel Model Self Processing Self Processing – Joint Venture – In House Profit Timing 100% of profit recognised in Profits recognised at liability Processing costs written off month enquiry passed to law admission (typically 15-18 on incurred basis and
Slide 22: Self Processing – In House
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 CMS platform tha
Slide 23: Investment Case for our PI Law Firm
Investment Case for our PI Law Firm Our markets are regulated, highly fragmented and undergoing significant reform, impacting both consumers and law firms. We expect to see traditional law firms unable to grow profitably in this new marketplace. NAHL are building a new type of law firm to add value
Slide 24: Outlook
Outlook
Slide 25: Outlook
Outlook • The Board’s expectations for earnings in 2018 remain unchanged • The evolution of our PI division remain on track and we continue to see the opportunity to add value through self- processing, both in joint-venture law firms and, ultimately, our wholly-owned law firm • As previously outline
Slide 26: Questions
Questions NAHL