Current Trading and PUSU extension

RNS Number : 7761I

NAHL Group PLC

16 December 2020

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS DOES NOT CONSTITUTE  AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND ACCORDINGLY THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE MADE OR THE TERMS OF ANY SUCH OFFER

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

16 December 2020

NAHL Group plc

("NAHL" or the "Company")

Current Trading and PUSU extension

NAHL (AIM: NAH), a leader in the UK consumer legal services market, today provides an update on trading for the year ending 31 December 2020 and on the proposed combination with Frenkel Topping Group plc ("Frenkel Topping").

Current Trading

On 22 September 2020, the Group announced that revenue performance in the first half was approximately 22% lower than the corresponding period in the prior year; and that the Group experienced an increased demand for its services following the end of the first national lockdown in June.  Pleasingly, volumes across each of the Group's businesses showed a steady recovery throughout Q3, ahead of management's planning assumptions.  On entering Q4, the impact of the second national lockdown and localised restrictions have impacted volumes, but to a lesser extent than compared to the first national lockdown. 

Revenues for the five months ended 30 November 2020 (the "Five Month Period") were approximately 15% lower than the same period last year (£17.9m, 2019: £21.1m).

Throughout the year, management have taken proactive steps to manage the Group's balance sheet by reducing costs and maximising liquidity, and the business continued to benefit from strong free cash flow generation in the second half. As a result, the Company has further reduced its net debt to £17.1m at 30 November 2020 (31 December 2019: £21.0m).

Divisional performance

In the Consumer Legal Services ("CLS") division, the volume of personal injury enquiries in Q3 recovered to approximately 67% of the corresponding period in the prior year.  During October and November, secondary national lockdowns across Wales, and then later England, caused volumes to reduce to approximately 56% of prior year.  Management are pleased that volumes were more resilient during the second lockdown.

In June, conveyancing volumes in CLS's residential property business, recovered to pre-COVID levels.  The number of instructions in the Five Month Period was approximately 4% higher than the same period last year.

The Critical Care division has demonstrated a reasonable level of resilience throughout 2020.  However, as anticipated, management are now seeing evidence of a slow-down in case management and initial needs assessment instructions following the first national lockdown, which came into effect in March of this year. 

Outlook

Given the economic uncertainty caused by the ongoing COVID restrictions, the medium-term outlook for the Group remains hard to predict. However, having taken appropriate actions to strengthen the business, the Board believes the Group remains well placed to benefit from a sustained recovery as and when the COVID restrictions ease, and to deliver on its near-term strategic focus of producing positive cash flows and reducing net debt.

Proposed Combination with Frenkel Topping

On 23 September 2020, NAHL announced that it had received a preliminary approach from Frenkel Topping setting out a proposal for an all-share combination through the acquisition of NAHL's entire issued and to be issued share capital (the "Proposed Combination").

Discussions with Frenkel Topping regarding the Proposed Combination are at an advanced stage with respective management teams working constructively together with a view to delivering a transaction to the benefit of stakeholders.

The Proposed Combination is structured as a takeover of NAHL by Frenkel Topping for the purposes of the Code but also represents a reverse takeover of Frenkel Topping for the purposes of the AIM Rules for Companies. The completion of a formal offer would accordingly be conditional, amongst other things, on the approval of Frenkel Topping's shareholders at a general meeting. The due diligence, procedural and documentary requirements of a reverse takeover are more extensive than a typical takeover.

PUSU extension

In light of the above, the Company has in accordance with Rule 2.6(c) of the Code requested, and the Takeover Panel has consented to, an extension to the date by which Frenkel Topping is required either to announce a firm intention to make an offer for NAHL in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. Such announcement must now be made by not later than 5.00pm on 13 January 2020. This deadline can be extended by the Board of NAHL, with the consent of the Takeover Panel, in accordance with Rule 2.6(c) of the Code.

There can be no certainty that a formal offer will be made or the terms of any such offer. Further announcements will be made as appropriate.

This announcement is made with the approval of Frenkel Topping.

For further information please contact:

NAHL Group plc Tim Aspinall (Chair) James Saralis (CFO)	via FTI Consulting Tel: [phone]
Peel Hunt LLP (Financial Adviser, Nomad & Broker) Miles Cox Rishi Shah Michael Nicholson Ed Allsopp (NOMAD)	Tel: [phone]
FTI Consulting (Financial PR) Alex Beagley James Styles Sam Macpherson	Tel: [phone]

Notes to Editors

NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services ("CLS") market. The Group provides services and products to individuals and businesses in the CLS market through its two divisions:

·   Consumer Legal Services  provides outsourced marketing services to law firms through National Accident Helpline and Homeward Legal; and claims processing and conveyancing services to individuals through Your Law, Law Together, National Accident Law and National Conveyancing Partners.  In addition, it also provides property searches through Searches UK.

·   Critical Care  provides a range of specialist services in the catastrophic and serious injury market to both claimants and defendants through Bush & Co.

More information is available at  www.nahlgroupplc.co.uk  and  www.national-accident-helpline.co.uk .

Important notice

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for NAHL and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than NAHL for providing the protections afforded to clients of Peel Hunt or for providing advice in relation to the contents of, or matters referred to in, this announcement.

Additional information

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction. Any offer (if made) will be made solely by certain offer documentation which will contain the full terms and conditions of any offer (if made), including details of how such offer may be accepted. This announcement has been prepared in accordance with English law and the Code, and information disclosed may not be the same as that which would have been prepared in accordance with laws outside of the United Kingdom. The release, distribution or publication of this announcement in jurisdictions outside of the United Kingdom may be restricted by laws of the relevant jurisdictions, and therefore persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Nothing in this announcement is or should be relied on as a promise or representation to the future.

This announcement includes certain statements, estimates and projections provided by the Company in relation to the Company's anticipated future performance. Such statements, estimates and projections are based on various assumptions made by the Company concerning anticipated results which may or may not prove to be correct. No representations or warranties are made by any person as to the accuracy of such statements, estimates or projections.

Market Abuse Regulations

The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement via a regulatory information service, this inside information will be considered to be in the public domain. The person responsible for arranging the release of this announcement on behalf of the Company is James Saralis, Chief Financial Officer.

Rule 26.1

In accordance with Rule 26.1 of the Code,  a copy of this announcement will be available on NAHL's website at  www.NAHLgroupplc.co.uk  (subject to certain restrictions relating to persons resident in restricted jurisdictions). The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclose under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

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