The UK consumer legal services business behind the National Accident Helpline (AIM: NAH), NAHL Group PLC (LSE: NAH), has seen its shares slump earlier in the week after warning on profits.
Due to fewer inquiries during the pandemic, its half-year results showed a dip in revenues from £20.2 million to £19.5 million. Moving from a £0.4 million loss to a £0.6 million profit.
But profits attributable to joint-venture law firm partners fell by 26% to £1.7 million. As for the outlook, growth in personal injury inquiries at the start of the second half was at a slower rate than originally anticipated. It stated:
“The group’s strategy to deliver long-term growth in its personal Injury business will generate a higher margin business in the medium-term, whilst resulting in a short-term reduction in profits and higher levels of working capital as cases are progressed.”
The company added:
“Slower than expected growth in the number of personal injury inquiries due to the sustained impact of the pandemic, coupled with the strategic decision to grow the number of inquiries placed into NAL, will result in revenues and underlying operating profits for the full year being lower than management’s previous expectations, and are now expected to be lower than 2020.”
The board now remains cautious around the speed and timing of the recovery from the pandemic.
On the news, its shares have dropped 10.2p or 18.15% to 46p.
