The personal injury market in the United Kingdom continues to face significant challenges in 2024, compounded by alterations in Google’s search algorithms, affecting major legal entities such as NAHL PLC.
In the first half of 2024, NAHL PLC reported a 7% decline in overall revenue, totalling £19.4 million, compared to the same period in the previous year. The operating profit remained stable at £1.8 million, despite multiple challenges in lead generation and lower panel placement levels in the personal injury (PI) sector.
The company’s consumer legal services division saw a 17% reduction in revenues, primarily driven by a 20% drop in PI revenues. However, this was somewhat mitigated by a 6% increase in revenues from their small residential property division. Conversely, the critical care division, operating through Bush & Co, experienced an 11% increase, reaching £8 million, attributed to their services for claimants and defendants in serious injury cases.
Chief Executive James Saralis highlighted the difficult market conditions, indicating that the broader UK PI market contracted further, with official statistics showing a 4% decrease in road traffic accident claims and a 5% decline in employer’s, public, and occupier liability claims in 2023. However, there was a slight improvement in road traffic accident claims as of July.
Saralis noted that a significant change in Google’s organic search algorithm posed additional hurdles. National Accident Helpline managed to adapt and maintain its search ranking, yet competitors heavily invested in paid search, creating an expensive and competitive environment. As a result, lead acquisition costs increased markedly, and the firm saw a decrease in enquiries.
At the end of June, strong cash generation allowed NAHL to reduce net debt to £9 million, marking a 7% decrease from the end of the previous year and a 22% decrease from the previous year. NAHL’s strategy focuses on increasing customer enquiries processed through its law firm arm, National Accident Law, creating a sustainable business model aimed at balancing short-term gains with long-term profitability.
During this period, NAHL generated 11,304 enquiries, a 36% fall from the first half of 2023. The enquiries were composed of 28% road traffic accidents, 43% non-road traffic accidents, and 29% specialised cases. Of these, 3,072 were processed by National Accident Law, slightly increasing the proportion from last year, albeit in smaller absolute numbers due to fewer overall enquiries.
Additionally, NAHL announced its consideration of selling Bush & Co. Saralis confirmed significant interest from various potential buyers, with the board currently negotiating with selected parties. Despite initial volatility, NAHL’s share price showed signs of recovery, increasing to 64.5p in early trading after earlier dips.
The contraction of the personal injury market and algorithmic changes by Google have significantly impacted legal firms like NAHL PLC. While challenges persist, strategic adjustments and debt reduction reflect an optimistic outlook for NAHL’s future.
