Shares in listed claims firm NAH fell today on news of a downbeat warning to investors on first-half profits. The marketing and legal services business is holding its annual general meeting today.

In a statement ahead of the meeting, chair Tim Aspinall told investors: ‘NAH had been forecasting a return to normalised levels of volume, cost and panel demand through June and July, however, recent results and additional external data are suggesting that this recovery will be slower and costs will remain higher for a longer period.

‘While the board expects these headwinds to be short-term in nature and that the personal injury business will at least be breakeven in 2024, its revenue and profit for the year are anticipated to be significantly lower than previously expected and will therefore have a material impact on current full year market expectations for the group.’

The biggest problem appears to be the claims management side of the business, with NAH proactively reducing the number of enquiries generated by 30% to match the expected reduction in demand from panel firms. This has led to lower revenues than expected, albeit offset by a 45% reduction in marketing spend.

‘This marketing reduction helped to limit the number of enquiries generated and we achieved the anticipated lower enquiry acquisition cost, reflecting our agile operating model,’ Aspinall said.

NAH said that in the second quarter of this year, Google completed an organic search algorithm change which led to paid search becoming ‘disproportionately expensive’. The company continued to bid for enquiries at an elevated cost, while taking other actions to improve its Google search positioning.

Aspinall added: ‘This has had the effect of significantly increasing our average enquiry acquisition cost in the short-term and NAH generated approximately 9,700 enquiries in the five months to 31 May 2024, 33% fewer than the equivalent period in 2023.’

The group’s law firm, National Accident Law, will generate higher profits for the group than anticipated. NAL settled 19% more claims in the first five months of 2024 than in the equivalent period in 2023 and generated £3.3m of cash from settlements, a 56% increase.

Shares in NAHL Group opened 16.7% down at 55p.

 

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