Trading Update and Revised Banking Facility

This announcement is deemed to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014

23 July 2020

NAHL Group PLC

("NAHL" or the "Group")

Pre-Close Trading Update & Revised Banking Facility

NAHL (AIM: NAH), a leader in the UK consumer legal services market, is today providing a trading update for the first half of its current financial year, covering the six months to 30 June 2020.

Trading Update

The results for the first half are significantly impacted by Covid-19.  Despite this, the Group has responded well to the challenges arising from the pandemic.  Revenue for the period is expected to be £20.4m (H1 2019: £25.8m) and underlying earnings* are expected to be in the range £1.0m to £1.2m (H1 2019: £3.4m).

The Group has made good progress with its restructure, merging its Personal Injury and Residential Property businesses into a new Consumer Legal Services ("CLS") division.  This, along with other actions taken to reduce costs, has resulted in the identification of over £1m of annualised savings.

Personal Injury enquiry volumes are gradually recovering albeit they are currently at 50-60% of prior year levels.  The number of conveyancing instructions, which came to a standstill during April and May, recovered quickly during June as the volumes in the UK housing market returned to pre Covid-19 levels.  Whilst the Government's changes to stamp duty are welcome, the long-term outlook for this sector remains uncertain.  The Group's Critical Care division has demonstrated a reasonable level of resilience throughout the period, however there has been a noticeable slowing of new enquiries as a result of a reduction in road traffic accidents and medical negligence incidents. 

Since the impact of the pandemic became clearer, management have proactively taken steps to manage the Group's balance sheet and maximise liquidity.  As at 30 June 2020, net debt had been reduced to £18.6m, which was better than management's expectations.  This provides the Group with £6.4m of liquidity in its £25m revolving credit facility, the highest level of liquidity in the last 12 months.

Revised Banking Facility

In the 2019 Final Results, the Group highlighted that it may breach its banking covenants from Q2 2020 and that it was in positive discussions with its lender, Yorkshire Bank, to remedy this.  The Board is pleased to announce that these discussions have now concluded successfully and new covenants that provide reasonable levels of headroom have been agreed.  Importantly, the Group has remained in full covenant compliance throughout this period and we expect this to continue through to the end of the facility term.  As part of this agreement, Yorkshire Bank has also agreed to extend the facility term for a further 12 months, through to 31 December 2022.

NAHL will announce its results for the six months ended 30 June 2020 on 22 September 2020.

Russell Atkinson, CEO of NAHL, commented:

"The first half of the year has been the most challenging in the Group's history, following the emergence of the Covid-19 pandemic in the UK in late February.  Despite the operational and demand challenges that this situation imposed, the Group's swift response enabled us to continue to support customers and clients across the Group while keeping our employees safe.

"Whilst it remains to be seen whether there will be further waves of Covid-19 in the UK that may have an impact on our business, I am pleased with the resilience that the Group has demonstrated in the first months of the pandemic and that the discussions with our bank, including the extension of the facility to December 2022, have concluded successfully.

"Throughout this period the health and wellbeing of our staff has been our priority.  My thanks go to the talented and committed people that we employ across the Group whose dedication gives me confidence that we will emerge from this situation as a strong and growing business."

* Underlying earnings is based on profit attributable to shareholders of NAHL (i.e. excluding profits attributable to non-controlling interests) before the deduction of non-underlying costs.

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Notes to Editors

NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services ("CLS") market. The Group provides services and products to individuals and businesses in the CLS market through its two divisions:

· Consumer Legal Services provides outsourced marketing services to law firms through National Accident Helpline and Homeward Legal; and claims processing and conveyancing services to individuals through Your Law, Law Together, National Accident Law and National Conveyancing Partners.  In addition, it also provides property searches through Searches UK.

· Critical Care provides a range of specialist services in the catastrophic and serious injury market to both claimants and defendants through Bush & Co.

More information is available at www.nahlgroupplc.co.uk and www.national-accident-helpline.co.uk.