NAHL : Interim Results Investors Presentation September 2021

2021 Interim Results

Introduction

Agenda

1. Overview
2. Financial Results
3. Strategic Progress
4. Our Businesses
5. Summary and Outlook
6. Appendix

Presentation team

Tim Aspinall - Chair

Tim became Chair in October 2020, having been a Non- Executive Director since June 2016.

In addition to his role at NAHL, he advises professional service firms on strategy and M&A, having enjoyed a successful executive career including as Managing Partner of an award- winning mid-market law firm.

James Saralis - Group CEO

James is Chief Executive Officer of the Group, which he joined in January 2018. His responsibilities include implementing the strategy agreed by the Board and managing the day-to-day operations of the Group.

Chris Higham- Group CFO

Chris Higham is acting Chief Financial Officer of the Group, having joined in 2006. His responsibilities include management of the finance function and liaising with the Group's investors and banks.

challenging backdrop

Highlights

• Despite ongoing impact of COVID-19, the Group has remained profitable, generated cash and reduced net debt
• Profits attributable to joint-venture law firm partners down by 26% due to a lower allocation of new enquiries
• Underlying operating profit of £2.5m (H1 2020: £2.8m)
• Free cash flow of £1.4m, as the Group prioritises the allocation of claims into its wholly owned law firm National Accident Law
  ("NAL")
• Net debt further reduced to £14.9m (31 December 2020: £16.3m)
• Over 14,000 new personal injury enquiries generated in the Period, 26% fewer than last year, but experienced growth since the Period end, albeit at a slower rate than originally anticipated

Outlook

• As a consequence of slower growth in enquiries due to the pandemic and investment into NAL , the Group's revenues and profits are expected to be lower than previously anticipated and less than 2020

Strategic progress

• 80% increase in enquiries allocated to NAL, the Group's modern, technologically enabled law firm
• NAL now processing all RTA claims and, since 1 July, an increasing number of non-RTA claims, resulting in higher margin business
• Over 4,250 ongoing claims in NAL at the Period end, an increase of 43% on 31 December 2020, which will generate an estimated £4.6m of unrecognised profits when the claims are concluded (31 December 2020: £3.5m)
• Successful launch of NAL's small claims proposition, with work commencing on approximately 1,500 RTA small claims. All key metrics are in line with management's planning assumptions
• Resilient performance from Critical Care division, with progress made on strategic initiatives that will drive future growth
• 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
• Negotiations regarding the sale of Homeward Legal, part of the
  Group's Residential Property business are ongoing