Nahl Group (LSE:NAH) — Interim Results

0:00 Good morning, and welcome to the NAHL GROUP PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, James Ceralis. Good morning, sir.

0:31 Thank you, Lily, and good morning, everyone. I'm James Ceralis, CEO of NAHL GROUP, and I'd like to welcome you all to our interim results presentation, which covers the six months, to 06/30/2023. We issued our interims last Tuesday on Tuesday, September 26, and we're gonna give you a flavor of those results today and highlight the progress that we're making in delivering our strategy for growth.

0:58 With me here today is Chris Hiram, the group's CFO, and we're gonna talk through the presentation, which is also available in the investor section of our website. That's www.nahlgroupplc.co.uk. You can see today's agenda on the screen now. I'll start by giving you a flavor of the highlights from the first half and review the progress that we've made against our strategic priorities. Then I'll hand over to Chris to present the financial review and to talk a bit more about our progress in reducing our net debt. Then we'll dive into an update on each of the divisions, and we'll finish with some insights into current trading and and outlook. There should be plenty of time at the end for questions. So if you do want to submit a question, please do so. We'll try to answer as many as we can.

1:44 If there's any we don't get to, then I'll I'll submit a a written response, which I'm sure the IMC team will add to the meeting so that you can look at that at your own leisure time. So if I turn to the highlights, we'll we'll crack on and and get into the highlights. So I was very pleased with the performance of the group in the first half of the year. We delivered growth, generated cash, and strengthened our balance sheet in some quite challenging markets. The results were in line with our expectations. Revenue grew to £21,000,000, and profit before tax was breakeven as we'd said it would be as we continue to invest in scaling our integrated law firm, National Accent Law or NALS, I'll refer to it as.

2:30 The group performed strongly in generating £1,800,000 of free cash flow. That's 74% higher than in the first half of last year. And as you'll see later on, operating cash conversion was very strong at 270% as many of our previous investments across the group converted into cash. This all helped us to strengthen our balance sheet with net debt reducing £1,800,000 from 13,300,000 at the end of December to 11,500,000 at June 30. Turning to the operational highlights then. Our performance in the first half demonstrates the growing maturity of the group's integrated law firm, National Accent Law, and a clear momentum in our critical care business, Bush and Co, which had a fantastic first half.

3:21 If we take the two divisions in turn, firstly, in consumer legal services, our market leading brand, National Accent Helpline, continued to grow market share in a contracting market and generated over 17 and a half thousand new personal injury inquiries. As I said, NAH was getting more mature all the time and settled over 1,700 claims in h one. That's a 178% more than the equivalent period last year and almost as many settlements as we did in the whole of 2022. That resulted in us collecting £2,700,000 of cash, which was up 77% on last year, demonstrating the rapid scale up of our legal operations. Finally, we closely monitor and estimate the future value of NAHL's book of ongoing claims. I'm pleased to report that at June 30, we revalued the future revenue generated by the book upwards by £1,600,000 and anticipate it will now generate 9,900,000 of future revenue and 8,600,000 of future profit as it matures.

4:26 If we move on to critical care then, I'm happy to say that Bush and Co is having its strongest year since the pandemic, growing its revenues and growing operating profit by an impressive 39%. Leading the way is our expert witness services where the number of reports is 15% up, resulting in revenue growth of 34%. Over the past few years, we've been investing in this business, in upgrading its systems, in people, and in business development. And those investments have enabled us to expand the operating margin from 24 and a half percent last year to over 31% in the period. Bush and Co Care Solutions, the new service line that we launched in 2021, grew its revenues by 41%, and we continue to extend our competencies and specialisms by recruiting 40 new associates to support our growth.

5:19 Now this is all sustainable growth that we're seeing in Bush and Co, and we now have the platform in this business to kick on further still.

5:33 So those are the highlights from the first half of the year. But before we go any further, I wanted to take a step back for those of you who aren't familiar with our business or would appreciate a recap. And this slide should give you an introduction to who we are. NAHL is The UK's leading personal injury law firm and rehab business, helping people who've had an accident that wasn't their fault to get their lives back on track. In our thirty year history, we've helped over a million customers access over a billion pounds in compensation by providing legal support and rehabilitation services. We provide services and products to individuals and businesses through our two divisions, which we call consumer legal services and critical care. In consumer legal services, we're one of The UK's leading providers of personal injury advice, services, and support.

6:24 Just last week, we celebrated our thirtieth anniversary, so we've got a strong heritage in this market. And in that time, we've helped more people injured in accidents than anyone else. Through our market leading brand, National Accident Helpline, we guide accident victims through the steps of making a personal injury claim. We triage those claims. And for those that we think have legal merit, we either pass them to one of our panel of specialist third party law firms or to one of our joint venture firms for processing, or increasingly, we process these claims in our own fully integrated law firm, National Accident Law. Also, in this division, we have a small property searches business called searches UK. In critical care, our Bush and Co business is a market leader providing expert witness reports, immediate needs assessments, and case management rehabilitation services in The UK.

7:19 We support children, young people, and adults following a catastrophic injury or clinical negligence. And these are the most serious injuries often leading to life changing disabilities and include acquired brain injuries and spinal cord injuries with claim settlements exceeding £500,000 and usually into the millions.

7:40 We also have a centralized shared services division, which provides strategic leadership, funding, and governance to support the division's growth. Over the years, we have built an inclusive and supportive employee culture with a strong focus on employee engagement, and this helps us to recruit and retain top talent across The UK. We're proud to have been recognized externally for this culture. We've been awarded the gold standard by investors and people and included in the best small companies list in recent years.

8:15 So within our two divisions, we're creating a more sustainable, higher margin business by implementing a strategy for growth. And I wanted to give you a flavor for the progress that we're making, some of which we'll expand on more later in the presentation. So if we take consumer legal services first then, we have built a fully integrated law firm, National Accident Law, fit for the future and capable of scaling to generate high returns for shareholders and great outcomes for our customers. We're gonna do this by focusing on three areas. So firstly, growing the number of accident victims that we support. Now despite the challenging market in which we're operating in, we continue to grow market share, which was up 3% in the period. Secondly, we intend on processing more inquiries in NAHL to benefit from the efficiencies of scale.

9:06 At June 30, we've grown the number of claims we're processing by 7% year on year. And in h one, we settled a 178% more claims than last year. Furthermore, we're gradually diverting new inquiries from our joint venture firms where we share the profits into NAHL in order to maximize the return on our investment. And I'm pleased to report that as a result, we have reduced the profit we paid away to joint ventures by 30% in h one. Finally, we said we'd fund NAHL's growth by leveraging our agile and scalable placement model, balancing work placed with the panel, JVs, and NAHL. And we've been successful in doing this, and NAHL has been self funding since 2022.

9:52 As I said in the highlights, the cash we generated from settlements is growing, and we continue to generate strong levels of cash from our joint ventures as they settle historical claims. If we move on to critical care next then, our strategy is to focus on three areas in order to continue our growth trajectory. Firstly, we want to grow share by appealing to a broader customer base. We've seen a step change in our business development and marketing capabilities since the COVID pandemic, and performance in h one was encouraging, growing our instruction volumes and generating a more profitable mix of work. Secondly, we want to extend our competencies and specialisms, meaning the services that we offer in the markets that we operate in. Again, we had a strong first half, growing Bush and Co Care Solutions by 41% and recruiting and training more associates in growth areas such as children and young people, midwifery, and in geographies that complement our existing teams.

10:50 And finally, we wanted to become more efficient in what we do, including by using technology better. Well, we've made progress here too, growing our employed case management team to drive margin expansion and realizing efficiency gains from our new finance system, which is speeding up our processes by reducing manual intervention. We also had an ambition across the grid to reduce net debt, which was particularly important in the the high interest rate environment in which we're operating and given the really challenging macroeconomic conditions. And we've made excellent progress already this year. We'll continue to focus on this in the second half, and I anticipate further progress by year end.

11:31 Finally, we wanted to make NAHL a great place to work and a great place to succeed in your career with a progressive, people centric culture. Our employees tell us that we're succeeding on this front too. And in our annual employee employee survey, which was done back in June, that saw our people returning an engagement score of 81%. That was our highest ever score and compares really strongly to Gallup's 72% average engagement for their so called best practice organizations. So, hopefully, over the last two slides, that gives you a bit of an overview into who we are and the good progress that we're making on our strategic priorities. I'll now hand over to Chris, who's going to take you through a review of the financials for the first half. Chris?

12:16 Thank you, James. I'll start with the the key highlights from the from the p and l. The first half saw revenue grow by 1% to 21,000,000. Consumer legal services generated 13,700,000 in that period, 0.4 percent, that's 400,000 lower than last year. This reduction was primarily due to the residential property business, and this included a 400,000 reduction relating to Home and which had become lost making them disposed off in April. The personal injury business within consumer legal services did grow slightly, and Critical Care delivered revenue growth of 600,000 or just under 9%. Operating profit of 1,800,000 was 400,000 lower than the first half of last year. This was expected due to continued investment in case new cases for our law firm, National Accident Law, where we invested 1,400,000 into four and a half thousand new inquiries and processing.

13:05 We also invested £500,000 in TV advertising in h one, and we saw a reduction in revenue profit from the joint venture partnerships as that book of claim now gets book of claims now get smaller as the older cases settle. The lower revenue from these profit revenue profit from the joint venture partners meant that we also saw a 30% reduction in noncontrolling interests. Investments made in consumer legal services were offset by revenue and margin growth in critical care where investment in prior periods are delivering both top line growth and operating efficiencies. Interest costs rose year on year. This was expected despite the falling debt levels due to rising interest rates. And just as a reminder, our interest rate our our interest rate costs are 2.25% above Sunnier, and that's closely matching the Bank of England base rate.

13:52 Finally, PBT was breakeven as expected.

13:58 I'll focus a bit more on revenue. So the mix of mix of revenue in the group also saw a change year on year as the law firm continued to mature. So revenue from cases in national accident law where we either have an admission of liability or full settlement has been agreed increased by 71% in the period, which is the evidence of that growing maturity of of the firm. This was offset by the by 19% reduction in revenues from the joint ventures as the on ground book of claims become smaller as we've already highlighted. And then whilst residential property was 34% lower, and, again, that was partly due to dispose of home and legal highway for the period. It's also just due to challenging market conditions in in that market. So this resulted in consumer legal service division seeing a reduction in revenue of 2,700,000. This was offset by the critical care business, which I've already referred to, which grew revenue by 9%, with particularly strong performance seen in in our expert witness product, which grew by 34%.

14:56 From a profit perspective, although statutory operating profit reduced from 2,300,000 down to 1,800,000, this was offset by a reduction in the amounts owed to the noncontrolling interests. So if I take the two together, that showed a net profit growth of naught point from naught 300,000 in 2022 to naught 500,000 this year. Processing profits in in the law firm grew by naught 800,000,000 to naught 900,000, and this was offset partly by naught 700,000 in production in panel and marketing profits due to fund the generation of the new inquiries into the law firm alongside a continuing TV campaign. The joint venture partnerships fell by around 700,000 of operating profit or 100,000 after operating after not controlling interests as that book of cases shrinks. And residential property business broke even in the period as home and legal made a small loss prior to its disposal in in April 23.

15:45 Critical care grew profits by 600,000 as those previous investments in business development and people began to pay back. Overheads were held flat in that business despite inflationary pressures partly enabled by the operating system upgrades, which have boosted efficiency.

16:03 And from a cash perspective, cash remains a key focus for us as we balance that continued investment in growing the business with reducing debt, particularly in the current high interest rate environment. We generated a free cash flow of 1,800,000 in the period that was seventy four percent up on this time last year and an operating cash conversion of 270%. Personal injury business remained cash generative after 13 drawings paid to their joint venture partners. And in the North End, cash collection from settlements was up 77% to 2,700,000. And the joint ventures themselves generated cash of £2,000,000. Critical Care also delivered a strong cash performance, generating £2,600,000 of cash and operating cash conversion of 117%. This enabled us to reduce the net debt to 11,500,000 at half year, and reduction in net debt continues to be a key focus.

16:53 And I'll pass back to James who cover the divisions in a bit more detail. Thank you, Chris. Well, in consumer legal services, we operate in the claimant side personal injury market, which we estimate is worth around £1,100,000,000 with around 500,000 claims being made last year. Those of you who follow our progress might recognize this slide from six months ago, and the reality is not much has changed in the market in that time. Overall, the number of claims registered in the market has fallen by about 1% in the last six months. Or if we're comparing June 2023 with the year prior, then the number of road traffic accidents or RTAs was 4% lower and looks to have returned to its pre pandemic trend of a slow decline that's really driven by increased roads and car safety.

17:46 And the number of non RTA claims, which we define as employer's liability, public liability, and occupy liability, well, that was about 3% lower than twelve months prior. But there's no clear trend in this market. You can see on the chart, it sort of bumps around up and up and down, but it's it's pretty stagnant. We continue to believe that the decline that we've seen since the start of the COVID nineteen pandemic is caused by three things. Firstly, behavioral changes caused by hybrid and remote working and changes in transport usage. That all results in fewer accidents. Secondly, the impact of a set of regulatory reforms called the civil liability act that was introduced in 2021. So the CLA or the whiplash reforms that removed a lot of value from low value RTA claims.

18:37 And it also caused friction because it forced claimants and their representatives to use a, well, hastily designed and a badly implemented IT portal, and that all resulted in a lower propensity for accident victims to claim. And the third reason for the decline is reduced advertising in the market as many law firms out there look to manage their marketing budgets in order to reduce costs. This has resulted in a failure to address accident victims' reluctance to claim because of a lack of understanding or perceived complexity or cost or just the stigma of making a personal injury claim. But what's really interesting is that independent research published in December last year confirmed that there are many more people out there who have had an accident but have not made a claim, and that that untapped market can be unlocked.

19:29 If if if someone can do that, unlock that untapped market, that could potentially double the size of the addressable market. And this presents a significant opportunity for a firm with a strong brand presence and a deep understanding of accident victims who can stimulate the market, And I believe that that can be us. So if that's what's happening in the market, I want to talk for a few minutes about where what we're doing in our business to capitalize on this opportunity. And as many of you will know that over the past few years, we've been transforming our business. We've been building a new type of law firm in National Accident Law, which we're scaling rapidly with a plan to be mature by 2025. And and firstly, I'd like to talk about the marketing element of that integrated law firm.

20:18 Now despite the contraction in the market, our market leading brand, NAHL GROUP continues to build share. We generated over 17,500 new inquiries in h one, which was in line with last year on a like for like basis. And I say like for like because in February last year, we stopped placing the lowest value RTA inquiries, so called tariff only claims. And as a result of this change, the work the the RTA work that we now generate is generally of a higher value than can be seen elsewhere in the industry. To support our inquiry generation, we invested £500,000 in brand advertising on TV in the first half, and we continue to optimize our paid search account and our website. And on the topic of our website, it performed really strongly during the period, and I was pleased to see a 3% increase in the share of inquiries coming through our organic channels in the first half. Now this is important because it's an indicator of the strength of our brand, and those inquiries don't cost us anything themselves.

21:21 So it helps us to manage the blended cost of acquisition. And whilst the TV advertising performed well in the first half, we've since started investing more in social media channels where we think there could be quite a big opportunity. That's really building on the success that we've had in the past with Facebook and YouTube, and we're starting the trial ads on other platforms such as TikTok. In the first half of the year, we also saw a marked increase in the mix of RTA work that we've been generating. That's moved from 22% of the total number of inquiries last year to 25% this year. Now at the time, we didn't have any panel firms taking RTA work, so all of this went into NAHL.

22:07 As a result, we weren't able to book any upfront profit for this work, but this is good, profitable work that will be realized in time as the cases settle. According to independent research published in March 2023, National Accident Helpline is the first choice for people who've had an accident and want legal representation. And in the first half, we grew our share of the market by 3% overall. So some really encouraging results in inquiry generation. And next, I'd like to turn to the performance of claims processing within our law firm, and I'm gonna ask Chris to provide us with an update. Thank you, James. Yeah. So this is the this is the picture of the the cases that have gone into NAHSA accident law.

22:55 So our our book of claims continues to grow. And so if I if I focus on the the what what what it shows is the year on year investment in new cases in the pink bars and then the cash collected we've put in those periods against cases as they settle. So I focus on the area in the in the dotted box. We added 4,555 new inquiries into national accident law in the first six months of the year. These cases are expected to generate future revenues in cash of 3,400,000 as those cases settle. As a reminder, so these cases can take anywhere between two and three years to to settle. At the same time, in this period, we generated 2,700,000 of cash from from cases that had settled. Most of those cases will have been taken on in prior periods. And just for context, we we generated 2,700,000 sorry, 3,500,000 of cash from settled cases in the whole of 2022. So you can really see that ramp up in in cash collection now coming through. And and for us, this is a growing sign of maturity in the law firm.

23:51 So we we would expect in as the law firm hits maturity, that that cash bar kinda matches the value of new inquiries going in in a period. So that's we're getting closer to that point of the law firm now being mature. And we've already touched it earlier on, but pleasingly, we have we also revalued up value valued upwards the estimate, the value value estimate of the cases that are left in our book. So this was 1,600,000 in the period and is a direct result of performance in the earlier cohorts, the average value of cases settled coming through higher than that is higher than originally anticipated. So that now means that the the total book of claims is now expected to be worth 23,200,000, of which 9,700,000 has has already been collected in cash to date. We have a further 500,000 invoiced awaiting payment from the insurers, and 3,000,000 is accrued on cases where we've had the admission liability.

24:43 So that leaves 9,900,000 of future revenue to be generated from the 10 10,611 open cases at the end of June. We expect our marketing and processing costs as we incur them. We expect there to be some future processing costs on these cases, as you'd expect. We feel that's going to be around 1,300,000, meaning the open cases have an expected future gross profit value of about 8,600,000.

25:10 We can better see how the how the book of work is maturing by looking at cases in cohorts. So the twenty nineteen cohort is on the screen, and this is our most mature group of cases and illustrates why we have increased the estimates on what the book is worth. So the history of that cohort is that we placed 2,415 new inquiries into an AL in 2019. Not all of those inquiries may come or win. Some will be closed very early on in the process as we assess whether or to submit a claim. Others will close later on in the process as we decide whether or not to pursue settlement through litigation. We initially thought that this particular cohort of cases would generate 2,300,000 in future cash and revenue. Since then, we've settled eleven fifty four cases and have generated $2,700,000 of cash on those settled cases. In addition to this, we have $100,000 of revenue billed and awaiting payment on settled cases and a further 100,000 of accrued revenue where we've received an admission of liability.

26:06 That amounts to 2,900,000 against the original 2,300,000 estimate. We still have $2.25 claims ongoing or just under 9% of the claims ongoing. So we still expect additional revenue and cash to be generated from those claims. As a result, we've revalued up this cohort by 9,800,000, with the overall value now expected to be 3,100,000. We've included similar charts for each of the twenty twenty to twenty twenty two cohorts in the appendices of the presentation. But the summary is that there's a 600,000 revaluation upwards for twenty twenty cohort and 200,000 each of the twenty twenty one and twenty twenty two cohorts. We've always honed the cohort assumptions as we acquire more data on settlements, so an element of past performance would already be included in the underlying assumption with the more recent cohorts, hence, slightly smaller evaluation upwards.

26:55 I'll back to James. Thank you, Chris. Good to see some improving performance in the law firm. So now we're gonna turn to our other division, critical care, and we're going to start with our case management and care services first. Now within case management, we earn revenue in two ways. So firstly, by issuing initial needs assessment reports or INAs, which is what we call them. This is where we visit the clients. We conduct an assessment of their condition, and we make recommendations on the rehab that they require. And, pleasingly, the business delivered 265 INAs in the first half of the year, which was up 5% on last year. Secondly, we signed many of these INA clients up to ongoing case management.

27:42 And whilst our overall our overall revenues were down about 2% compared to last year, we grew the number of ongoing case management clients by seven percent. And this bodes really well for the future as this is recurring revenue, which we're able to bill on a monthly basis for the support that we provide, and where we typically support these customers for around three years on average as their recovery from the accident or medical negligence progresses. Now instruction numbers, that's our pipeline of future INA reports that remained robust. It was down about 6% compared to last year, but the numbers remain substantially higher than they were a couple of years ago. And we're seeing a trend towards higher value work, which should result in higher revenues per case. As I said earlier, we've also been developing our capabilities and specialisms and adding new services into Bush and Co. And one example of this is our development of a team of employed case managers.

28:38 They're capable of delivering the same first class case management service for our clients as our associates. But by delivering this through an in house team, it allows us to better control resource levels, which should enable us to generate higher margins over time. Now we grew this team from seven colleagues at the end of December to 10 at the end of June, and we'll continue to scale this initiative as we move through the year. Finally, our Bush and Co care solutions business, which was launched in 2021, continues to perform strongly and grew its revenues by 41% in the period. Now this proposition provides support and management service for employing care staff that not only complements our existing case management services, but it also attracts stand alone work.

29:28 And that stand alone work or ongoing care packages as we refer to them as, they're really important as well because they also generate recurring monthly revenue for the life of the case. Pleasingly, appetite for this type of work is building, and we now have 12 ongoing packages at the end of June compared to just two twelve months ago.

29:52 If we turn to our expert witness services then, well, this business has performed it performed really well in 2022. And to be honest, it just seems to go from strength to strength. The number of expert witness reports that it issued grew 15% year on year. And when combined with a more profitable mix of reports and more follow-up work from our customers, that resulted in our revenues growing by 34% on last year. Instruction numbers have been very strong over the past couple of years, and they grew a further 2% in the period. That means we've got a good pipeline of future work to develop over the next twelve months. I mentioned earlier that we have also recruited 40 new associates in key specialisms across Bush and Co in h one. And at June 30, we worked with a 117 case managers and a 146 expert witnesses across The UK to support our growth plans.

30:50 So a very strong start to the year for expert witness and the critical care division as a whole, and I'm really excited to see what Bush and Co can do in the second half of the year. So before we move on to questions, I'll summarize. I was very pleased with the performance of the group in the first half of the year, both from a financial and an operational perspective. Our results were in line with our expectations, and we made good progress with our strategy for growth in both divisions. We grew our revenues, and our profit before tax was breakeven after we invested £1,400,000 in new inquiries for NAHL. And in consumer legal services, we grew our market share.

31:36 And in a sign of growing maturity of the law firm, NAHL collected 77% more cash from claims than last year, and we upgraded the value of NAHL's book. Our critical care division is having its strongest year since the pandemic and has grown the number of expert witness reports it generated by 15%. It also expanded its operating margin by 39 in the period. And this all contributed to the group strengthening its balance sheet by substantially reducing net debt from 13,300,000 at the end of December to 11,500,000 by the end of the period.

32:14 And if we finish with the outlook then, well, the momentum that we generated in the first half has carried through into h two, and that gives me confidence in saying that we expect the group to meet market expectations for the full year. In July and August, while in consumer legal services, there's been no material change in the market, but National Accent Helpline has grown inquiry numbers by 9%, suggesting further market share growth. Furthermore, NAHL collected £1,000,000 from settlements in those two months. That was 67% more than last year, and that brought the year to date collections to 3,700,000. You might remember on that chart that Chris showed, we collected £3,500,000 for the whole of last year. So we've already collected more than last year.

33:03 And in critical care, during July and August, our expert witness services delivered further growth, increasing report numbers for the two months by 53% compared to last year. In case management, INA reports were down about 45% compared to last year for the two months, but that really reflects a very slow July that we encountered. And in August, the numbers pleasingly returned to normal levels, so I'm not overly concerned. Finally, as we've said before, cash generation is a real focus across the group, and the board remains committed to reducing net debt. I know that the market consensus for net debt is to reduce to £10,300,000 at December 31, and I fully expect to see that achieved.

33:49 So that brings the formal presentation to an end. Chris and I are very happy to take questions, and I can see some of the questions coming in now, which is fantastic. But for the moment, I'm gonna hand back to Lily. Lily, over to you. James, Chris, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Could I please ask you to read out the questions and give responses where appropriate to do so? And I'll pick up from you at the end. Yes. Thanks, Lily. Right. So the first question is how much working capital is required until the PI business is self funded?

34:46 Well, I'll I'll take that one. Well, we're as we mentioned earlier on, we're already at the point where the personal injury business has become self funding. Last year, for for the whole of 2022, the business generated £1,400,000 of cash after payments were made to the joint venture partners. And in the first half of this year, that amounted to 700,000 net. Over the medium term, lower cash receipts are expected from the joint ventures. That really reflects the runoff, particularly of our first joint venture, But this has been offset by the continued growth in cash receipts from NAHL. That was up 77% in the first half as NAHL is maturing all the time. So PI is now entirely self funding, and and we absolutely expect that to continue and and and cash generation to grow.

35:35 So hopefully, that answers that question. Next, I'll probably hand the next question on to Chris to answer. The question is inflation continues to be high. How is this impacting on NAHL's results? Yeah. No problem. So, yeah, high inflation remains a challenge as as it does for for many businesses across the country. From I guess, things we're doing from a cost perspective, we continue to monitor our salary bands against those with similar roles in the market. We've continued with our hybrid working model, and that's remained in place since COVID. And that's that's proved to be a vital tool for us really in attracting and retaining talent. We also used look to use continued improvements to our technology where possible to drive efficiencies in our processes. And that's something we've really been able to leverage in the critical care business in particular this year.

36:23 From a revenue perspective, we've adjusted our pricing where we can, where market forces allow, and we're benefiting from uplift in customer damages on PI claims as as I kind of outlined on the on on the book of claims chart, and that's contributed as part of that revaluation we've seen on the book of claims. An inflationary increase is also expected to be coming through on fixed costs on contested PI claims, so that should also positively impact us going forward. Okay. Yeah. Thank you, Chris. So the next question is I'll I'll take the next one. The question is what is the board's thinking about reinstating dividends? Well, as a board, we keep our dividend and capital allocation policy under review all the time. But at the moment, we believe the best use of our cash is to continue to pay down debt, particularly as the cost of debt is is relatively high at the moment, and also to invest in our two divisions in order to generate future growth. There's still lots and lots of opportunities to grow our business using our own cash at the moment.

37:25 So we think that's the best use of that. As the business grows, as the law firm matures and we generate excess cash, then other options like dividends or share buybacks, I mean, that might be something we look at in the future, but it's it's certainly not a priority at present. So thank you for the question. The next question is around market share. It's for Andrew. What market share do you have? How fragmented is the market, and how are you looking to grow share? So, actually, we covered off we covered off some of that in earlier slides. So I might actually flick back if I can do that. Flick back to some previous slides on the personal injury market. So I'll just refer to to this slide. As we said earlier on, we've increased our total market share by 3% in the period, so total being across all types of claims.

38:19 So that that's that's really good. We continue to grow market share last year as well, so that's sort of a continuation of that. On the chart on the right hand side, we've split down market share between non RTA and RTA. You can see we've been consistently growing our RTA share since the reforms came in. That's encouraging. As we said, we've been placing all of that into NAHL. That's good profitable work that's gonna generate revenue and cash in the future and forms part of the book of claims that Chris talked about. Non RTA non RTA tailed off a little bit in the first half. You can see we've generated good growth through 2021 and and and 2022. Yes. It tailed off in the first half, but that's remained steady since then.

39:10 So I'm not overly concerned about that. There was a bit of a we had some poor performance from some of the inquiries and some of the leads that we were generating some from some of our partners. We've addressed that now, and and we expect to see that build into the future. So, hopefully, that gives you a bit of insight into market share. Another part of the market, particularly where critical care operates, is the clinical negligence market. And, actually, that's that that's looking really encouraging as an opportunity for us. So that there's there's a report issued by NHS resolution. They issue an an annual report. They look after all the claims made against made against the NHS, and that shows that since since before the COVID pandemic, the number of claims is up 27%.

40:03 So I think there's there's a real opportunity there. We're gonna see that growing, and I think that's already coming through in some of Bush and Co's results that you've we've that talked about earlier on today. So definitely a a growing opportunity in clinical negligence. That's not we don't process clinical negligence claims in the law firm ourselves. We do generate that work, and we we pass that across to to third party law firms. So definitely some opportunities around clinical actions too. The next question is from Alex. What has driven the increase in settlements, and do you see this trend continuing? Chris, you want to answer that one? Yeah. Sure. I I guess the the primary reason is the is the growing maturity of the law firm. Sorry. I got a kind of outline on the on on the chart. I'm just gonna flip to it.

40:52 You can see the value of the well, there was a step change in 2021 in terms of the volume inquiries that were going into the into the law firm at that point. These cases have a a kind of two to three year case cycle. So, naturally, as those case volumes increase, there was gonna be we were gonna see that come through in settlements as as those cases settled. And we are seeing that now. So there's been a step change in the year for for certain in terms of what we've seen come through. I don't expect that to fall if we carry on investing at the level we're investing into law firm at the moment. We've we've kind of reached the new level, if you like, albeit with a little bit more growth to come as as as the cash catches up and we hit that full maturity in in NAHL. So, yeah, slight increase to come. I wouldn't expect it to be as aggressive as the increase we've seen year on year this time around. But, yeah, it's certainly it's certainly a new norm that we're we're kinda working to.

41:44 Thanks, Chris. The next question we've got time for a couple more. The next question we've got is around critical care. So how do you look to scale the critical care business? So I'd probably refer back to I'm gonna go back to a slide towards the start of the presentation which set out our strategy for growth, which is this this slide. So there's probably three ways that we're looking to grow our critical care business. So firstly, by appealing to a broader customer base. So this is all about marketing and business development, and we've seen good success in this, particularly since the pandemic. I think there was a step change in our business development capability and activities through the pandemic and and since then as well. And we're seeing a really strong pipeline of growth of of of our instructions in that business. So that's our pipeline of future work. So we we we've got line of sight of that over the next probably six to twelve months ahead of us, and that's looking really encouraging.

42:48 Secondly, we want to extend our competencies and specialisms. So that's all around the services that we offer in the markets we operate in. Again, we we got good examples of areas that we were looking to develop, like Bush and Co Care Solutions, which is relatively small at the moment. Grew its revenues by 41% to about a £250,000. That's gonna be I think that's going to be a service line that's gonna really help us to generate growth in the future. I think it's gonna be substantially bigger in a few years' time, so that's definitely one to watch. And I suppose, thirdly, we're looking to become more efficient at what we do, including investing in technology, including looking at options to drive margin expansion. So there were there were some examples I pointed to, and on the screen there, you can see around new systems that we're implementing to become more efficient.

43:37 And also different initiatives like the employed case manager initiative where we're able to generate higher margins from doing the same work and providing the same sort of services, but in a different way. So I think there's lots of opportunities to organically grow critical care. There are also opportunities further down the line to acquire firms. So it's quite a fragmented marketplace. There's there's a few bigger players of which we are we are one of those, and then there's a lot of smaller regional firms. You know, I think we've got a fantastic business with a strong foundation and and something that could be a real platform for growth in the future. And when when capital allows, that could be something that we we look to in the future. So hopefully that answers that question.

44:25 Finally, a question around debt. So congratulations on the great results. Thank you, Janlika, and the work on debt repayment. Do you have a target level of debt in mind you'd like to reach and then maintain? Well, I think we don't at the moment, so we're on we're on a we're sort of progressing down a scenario at the moment that we said that we would we would go down. We're we're looking to mature the law firm. We're looking to grow critical care. We're looking to reduce our net debt. You can see in the the the numbers that are out in the marketplace at the moment, that is forecast our net debt is forecast to come down to 10,300,000 at the end of the year and then go even further.

45:12 And over the next couple of years, that that that could potentially be quite low. Whether that pans out like that, I think it's something we need to we need to look at over the next six to twelve months. And I think we've been focused on growing the law firm. It feels like in in in the next year, it could be time really where that's completely proven out, and we can look to accelerate our growth even further. And we can look to set out our plans on on that in the future. I don't think now is the time to do that, but we're really pleased with the progress that we're making. We're gonna continue to to reduce net debt from here. And then at the appropriate time, we can then set out our vision for the next stage of the strategy. So I think that that completes the number of questions we've got at the moment. If there's any further questions, I think you might have a minute to to submit those. But for now, Lily, I think I'll hand back to you.

46:09 James, Chris, thank you. And I think you addressed all those questions you can for investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the investment company platform. Before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, James, could I please just ask you for a few closing comments? Yeah. Sure. Thank you, Lee. Well, NAHL has grown its revenues in some quite challenging markets in the first half. We've strengthened our balance sheet, and we've continued to carefully invest and build a more profitable and sustainable business. Based on our performance in the first half and the early indications that I set out for for h two, the board is confident that it will deliver its full turnout turn in line with market expectations. So I'd just like to thank you for your time listening today.

46:57 And if you've got any further questions, please send them through, and and we look to address those in writing. Thank you. James, Chris, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of NAHL GROUP PLC, we'd like to thank you for attending today's presentation. Good morning to you all.