Nahl Share Discussion Threads

[mister md] 20/3/2018 12:12

fwiw

finnCap today initiates coverage of Nahl Group (LON:NAH) with a corporate investment rating and price target of 257p.

[horndean eagle] 20/3/2018 11:53

Finncap note out today. Pretty detailed. forecasting about 19.5p earnings next year and 20.5p the year after. Highlighting that in next couple of years NAH will likely take more control over enquiries and capture more of the value.

[aleman] 20/3/2018 10:37

I know 3 business owners who had a best year last year and who are now worried by sales trends. That's what happens as recessions start. They are in fashion, orthopaedic sales and retail and industrial shopfitting manufacture.

[rcturner2] 20/3/2018 10:29

I see a mixed picture myself, employment and unemployment figures are very good. House prices cooling off is not necessarily a bad thing. The fall in car sales is perhaps a worry, but falling off from very high levels, sales are still very high compared to a few years ago. In my own business I am about to complete my best year since 2008, although the order book has softened recently.

[aleman] 20/3/2018 10:15

Another one that did not see the last recession coming.

PMI figures used to be fairly good but they don't track as well as they used to. I noticed a weaker link with (revised) GDP from around the last recession and I now consider them a bit misleading so don't bother with them much any more. An index of 50 does no equal zero gowth either. That is only in theory. If you compare PMIs to revised growth figures, some countries are neutral up to 52 and some down to 45. Different countries have different biasses in reporting and assessment. Reporting, therefore, of what PMIs indicate are sometimes naive.

[rcturner2] 20/3/2018 10:13

The British Chambers of Commerce (BCC) has raised its UK growth forecast, but warns it will be among the worst performing G7 economies until 2020.

The BCC has raised its GDP forecast for 2018 from 1.1% to 1.4% and in 2019 from 1.3% to 1.5%. Its first forecast for 2020 is for 1.6% growth.

[fenners66] 20/3/2018 09:32

Trump is on his way to engineering a recession in the USA , so after that.....

[rcturner2] 20/3/2018 09:25

Aleman, why do you think recession is coming? Quarterly growth figures are positive and all the PMI surveys are over 50 so still expansion.

[aleman] 20/3/2018 09:20

fenners66 - you are going off forecasts from before the results. The extra investment is likely to see lower forecasts for EPS. It could be offset by the first two ABSs starting to generate returns but analysts tend to be conservative on new sources of revenue - so I'd expect 16p earnings and 8p dividend and the market is in a bad mood for valuations.

If we look at operating cashflows, the multiple is about 5 times and likely to fall as revenue picks up and start-up costs fade. That is cheap for a business that can usually have high payouts. It's about half price. Hopefully EPS and the dividend will recover in a few years to make that cheap price more evident. Don't expect it soon, though. It will probably be a good buy for those prepared to sit through a recession and take a 5-6% yield (at 8p dividend) while they wait, but be prepared for the shares to go lower once the recession becomes more evident.

[horndean eagle] 20/3/2018 09:13

Huge over reaction. NAH management are a little too open and honest. They could have just left the dividend as it was to avoid all this negativity. They could have left establishing the 3rd ABS until the financials started to normalise. Those would have been short term measures to appease the market. The decisions they have taken are the correct ones for the business going forward. Very short sightedness rules the day again on NAH. I imagine the shares will recover a fair chunk of losses once management go around meeting shareholders. At some point the market will start looking forward past regulatory changes. Had thought we had reached that point a few months ago but apparently not. Once we come through the other side the company should be back to generating close to 100% fcf conversion and earnings will be much higher. Share price likely to as well.

[fenners66] 20/3/2018 09:11

On the face of it the earnings look ok - but they are signalling that these earnings are not translating into cash - and may not do so until 2020 at the earliest as that is when they plan to look again at the dividend policy.

I get why that has spooked the market as - say - the warning signal of CLLN was that for all the reported profits they were not translating into cash.
Now where other companies are reporting failure to turn profit into cash the market is attaching more risk weighting.

[lazygun] 20/3/2018 08:44

Hmm, dunno. The two reasons for institutional support are now not as compelling.

You’ve got a contraction in eps, and you’ve got a contraction in divvy yield as well.

I can see this hovering around current levels, or even dropping back to September lows in run up to April divvy record date (with a bit of a short term bounce leading up to that date, given yield on just the final divvy alone is around 7% or more at moment), but after that, I can see a gradual selloff as funds rebalance their portfolios. If future divvy is going to be based on 2* earnings cover, then total 2k18 divvy likely to be around 10p total, so interim divvy prob around the 3p mark, and final around 7p next year, and that’s assuming no earnings growth next year of course. With divvy and earnings contractions likely during next couple of years, funds have less reason to stay as heavily invested in Nahl as they are at present, hence I see a bit of a sell off over an extended period after April.

The one good point is that trading still seems fairly strong.

L.

[mister md] 20/3/2018 08:42

added a few here this morning

[its the oxman] 20/3/2018 08:29

Opportunity possibly. Fall looks excessive.

[lazygun] 20/3/2018 08:14

Yep, one to watch over the next month. If the price keeps dropping, there could be potential for a bounce leading up to the 27th April divvy record date. Final 10p divvy would have a great yield vs current share price. The more it drops now, the greater the yield....short term trading opp perhaps?

L.

[rcturner2] 20/3/2018 08:13

Yes, I agree with that. Investors want a bigger margin of safety in uncertain times.

[aleman] 20/3/2018 08:05

It looks like the market is not happy with further investment. The cost of creating a third ABS will reduce this year's forecasts to maybe 16p and the increase in cover will see the dividend drop to maybe 8p. This should create a base for strong growth thereafter as start-up costs drop out and profits from ABSs increase but regulatory uncertainty continues. The sharp drop in the share price seems harsh but this market is running scared of recession and such falls are being seen all over the place.

[masurenguy] 20/3/2018 07:46

Yes, solid but hopefully this will establish a base for further progress this year.

Final Results

NAHL, the leading UK consumer marketing business focused on the UK legal services market, announces its Final Results for the year ended 31 December 2017.

Financial Highlights

-- Trading performance in line with expectations
-- Revenue up 2.5% to £51.9m (2016: £50.6m)
-- As expected, underlying operating profit down 19.4% to £14.5m (2016: £18.0m)
-- Profit before tax of £12.4m (2016: £15.8m)
-- EPS ahead of expectations at 21.7p (2016: 27.0p)
-- Recommended final dividend of 10.6p, a total dividend for the year of 15.9p (2016: 19.05p)

Operational Highlights

-- A year of progress with continued evolution of Personal Injury (PI) division
-- Establishment and operational launch of two ("ABS") ventures, with early signs encouraging
-- Successful relaunch of National Accident Helpline brand, generating positive results
-- Critical Care division ahead of last year with continued growth in market share
-- Solid trading performance from Residential Property division against a challenging market backdrop

Russell Atkinson, CEO of NAHL, commented:"2017 was a year of change and progress for NAHL as we continued to evolve our Personal Injury (PI) division. We are particularly pleased to have successfully delivered the key elements of our PI strategy with the launch of two ABS ventures, the relaunch of our brand and the delivery of an improved digital capability. These initiatives have given us the insight and experience to lay out a confident vision for the future. Given the success of this first phase, we plan to accelerate our investment by establishing a third ABS to capture the growth opportunity which exists for NAH and further enhancing both our brand and technological capability. Simultaneously we will continue to work closely with our panel law firm partners whilst building in more flexibility into the way we process enquiries helping us to better manage demand.

The importance of our other divisions should not be overlooked. Critical Care performed ahead of last year securing a number of high profile strategic business development partnerships which we expect will contribute to growth in the year ahead. Residential Property faced difficult market conditions though performed solidly thanks to our focus on margin and cost. We have started the new financial year in line with Board expectations. 2018 will be a year of transition with further investment to accelerate the PI division's evolution. This additional investment necessitates a change to our dividend policy which will enable us to go into the future with confidence about the Group's prospects."

[basem1] 20/3/2018 07:35

Solid Results. Fair value £2.20 IMO.

[slaccs] 13/3/2018 08:29

Thanks bc4

[bc4] 12/3/2018 09:18

Results 20/03/018 next Tuesday

[badtime] 06/3/2018 13:36

Took a nibble early doors