Personal injury specialist Fletchers said today that its eye-catching financial results are testament to the benefits of private equity investment.
In the year to April 2024, the firm reported profit before tax almost quadrupling to £8.3m on revenue up by 36% to £58m. The profit leap was largely down to an previous increase in the caseload which started to turn into settlements during the year.
Staff numbers shot up from 486 to 628 – a figure which did not even take account of the acquisition of Bolton-based Serious Injury Law earlier this year. Directors’ remuneration for the four board members went from £1.2m in 2023 to £1.7m.
Fletchers was acquired in 2021 by an affiliate of private equity outfit Sun European Partners and has been subject to massive investment in the subsequent three years, growing to four offices and across the north. Earlier this year it was revealed that the firm’s holding company had spent £74m on acquisitions in two years, including £32m on the lead generator MMA Management (trading as Blume Group).
Fletchers chief financial officer Alex Lynch said the latest results show the opportunities in the personal injury market for investors willing to inject capital.
‘In recent years the sector has been underweight in respect of private capital, but I believe injury law is ripe for further consolidation, and as our results indicate, there are attractive returns for investors looking to participate in the consolidation in our industry, post reform,’ said Lynch. ‘We expect to make another acquisition shortly and our pipeline is as strong as ever; many firms are looking to M&A to secure their long term future, and their current owners want to find a good home for their current staff and of course take some value from what they’ve built over many years.’
Revenue from personal injury work increased by 14% during the year, with clinical negligence revenue up by 22%. The majority of new cases have damages estimated at more than £25,000.
Following the acquisition of Blume, the number of new signed cases during the year rose by 48% to 9,921.
Such an increased caseload has been made possible by an investment in artificial intelligence technology to identify the cases most likely to win, with the firm now boasting a data science team of 10 people. Pilot projects are underway for specific tasks such as bills of costs and the pagination of medical reports.
Alex Wyndham, managing director at Sun European Partners LLP, said the investment climate in injury law was ‘as positive as I can remember’. He added: ‘The latest results underline our view that consolidation in this field of civil law is a compelling investment strategy and I’m confident there is further headroom for profitable growth.’
