The personal injury market is facing significant challenges this year, impacting business operations.
- Revenue from personal injury services at NAHL PLC dropped alongside Google’s algorithm changes.
- Consumer legal services saw a 17% revenue decline, further exacerbated by a drop in PI revenues.
- The critical care division’s growth contrasts with struggles in other business areas.
- Despite challenges, NAHL reports improvements in RTA claims and maintains strategic focus.
The personal injury (PI) market has faced considerable challenges, leading to a contraction that has impacted business outcomes. NAHL PLC has reported a decline in turnover as changes in Google’s algorithm have added pressure, reducing visibility and effectiveness in lead generation. Revenue for the first half of 2024 was £19.4m, a 7% drop compared to the previous year, while operating profit remained at £1.8m.
The consumer legal services division experienced a significant revenue decline of 17%, attributed primarily to a 20% reduction in personal injury revenues. This decline was slightly mitigated by a 6% increase in the small residential property sector. Such fluctuations highlight the diverse impacts on various business sectors within the group, illustrating the ongoing challenges faced by the personal injury market.
Within the context of market contractions, the critical care division has shown resilience, generating revenue growth of 11% to reach £8m. This division’s success is significant, considering its focus on providing specialised services for catastrophic and serious injuries through Bush & Co. The positive trend in this division contrasts starkly with the struggles seen in other areas of the business.
Chief Executive James Saralis has commented on the difficulty in adapting to market conditions in the first half of 2024, noting a contraction in the UK personal injury market. Official statistics revealed a 4% reduction in road traffic accident claims and a 5% drop in employer, public, and occupier liability claims in 2023. However, Saralis pointed to improvements in RTA claims figures in July as a positive development.
The competitive landscape in online search has evolved significantly post Google’s algorithm changes. Despite NAHL’s adaptation efforts, competitors’ aggressive investments in paid search resulted in fewer enquiries due to high acquisition costs. While the situation remains highly competitive, indications of improvements have started to appear.
NAHL’s strategy focuses on increasing enquiries through National Accident Helpline and processing them in-house for higher long-term profitability. Despite a 36% drop in enquiries, the company aims to optimise its mix between third-party law firms and its own processing to ensure sustainable business growth. Moreover, NAHL has seen an improvement in its financial health, with net debt decreasing to £9m as of 30 June.
NAHL also continues to explore the sale of Bush & Co, driven by strong interest from multiple potential buyers. The legal group’s share price reflects mixed market sentiments, having fallen to 49p post-June warning but rebounding to 64.5p recently. The share performance indicates both the market’s responsiveness to recent company developments and its volatile nature.
NAHL remains focused on strategic adaptations amid the contracting personal injury market and evolving digital landscape to sustain growth.
