An admission from personal injury (PI) marketing specialist NAHL (NAH:AIM) that it is unsure if a government clampdown on exaggerated or fraudulent whiplash claims announced in the Autumn Statement on 25 November will impact its business is putting pressure on the share price - down 19.1% to 315p.
In a statement released just after 11am on 26 November the company notes the changes seek to restrict the ability for sufferers of minor whiplash injuries to claim compensation and will increase the Small Claims limit from £1,000 to £5,000.
NAHL, which joined AIM in May 2014, does not actually fund no-win no-fee claims itself but concentrates on marketing to generate leads for the law firms it counts as clients – largely through the ‘Underdog’ character which fronts its core National Accident Helpline brand.
It seeks to reassure investors, noting its increasingly diversified strategy (with 2015 acquisitions taking it into the conveyancing and catastrophic injury markets) and arguing there is no impact on management expectations in the short-term. It says: 'NAHL is the market leader in PI, has a robust business model and is well positioned to adapt to proposed regulatory changes, which it has done a number of times in the past.'
We removed the company from our Plays portfolio in July citing the risk of profit taking.