Expanding law firm still hunting for ABS opportunities

A law firm owned by a stock exchange-listed company has repeated its pledge to create more joint ventures with new entrants later this year.

NewLaw, owned by listed entity Redde PLC, said today it expects applications to set up further alternative business structures with additional partners to come to fruition in the latter part of 2017.

The firm had said it wanted to open more ABSs in Redde’s announcement to the London Stock Exchange this time last year, but has yet to make any further moves.

Optimism has been in short supply among legal services providers that trade on the stock exchange. Australian firm Slater and Gordon is going through a difficult period, with a shrinking share value, multi-million-pound losses and a 20% reduction in staff numbers. Fairpoint PLC has suffered a steep drop in its share price and has warned shareholders that results for 2016 were likely to be below expectations.

However the only firm in the UK to float in its own right, Gateley PLC, has performed much better, with its share price steadily rising and profits increasing significantly.

NewLaw, headquartered in Cardiff, has existing partnerships with the likes of doctors’ union the British Medical Association and the Royal College of Nursing, and receives legal work from these organisations.

In its interim results for the six months ending 31 December 2016, Redde said NewLaw had continued to build its range of services and pursue new opportunities.

Investment has been made in the employment law practice and private client practice dealing with wills, probate and trusts.

The firm has reduced its reliance on personal injury claims from RTAs, mindful of the forthcoming reforms of the sector, and has instead increased headcount in employers’ liability and medical negligence departments.

Redde said: ‘These proposed changes would have an impact on the profit costs of the group’s legal businesses and/or increase the cost of recovering credit charges.

‘The group is mitigating against these possible changes in its personal injury legal practice by participating in this consultation [and] by (for some time) diversifying towards a greater volume of significant injury cases which would not be affected to the same extent by these proposed changes.’

The PLC, which also offers accident management services, said its profit before tax increased 13.8% to £19.7m over the reporting period, with revenues up 37.5% to £227.1m.

A dividend of 5p per share is payable on 30 March, up from 4.5p per share paid in March 2016.

Redde's share price dropped marginally to 173.25p per share following the results announcement.

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Expanding law firm still hunting for ABS opportunities