Trading Statement
(Thomson Reuters ONE) - Helphire Group plc14th September 2009Helphire Group plc ('Helphire' or the 'Group')Market updateAhead of the Group's full year results for the year ended 30th June2009 to be released on 2nd October 2009, we are able to updateshareholders on progress made to date in certain areas of thebusiness and key developments relating to charges that are expected,subject to audit, to be presented as exceptional items in the resultsfor the period to 30th June 2009..Key Account - Further InformationOn 24th July we reported the potential loss of a significant referrerwho intended to serve notice of termination. This notice has now beenreceived and we can confirm the referrer is Acromas Holdings, theparent company of the AA and SAGA businesses. Discussions regardingthe timing of the ending of services to both the AA and SAGA areongoing. The Acromas relationship represents approximately 22% of theGroup's current case hire volume and 11% of turnover. Going forward,the parties are seeking ways to continue to work together in thesupply of services in a different capacity.We are pleased to announce that we have agreed contract renewal termswith one of our largest referrers to supply non-fault accident andrelated services for a further two years. Additionally, we haverecently signed a renewal agreement with another significant accountto supply our non-fault services for a further three years on anexclusive basis. Together, these accounts represent 30% of currentcase hire volumes.Cash Resources and Current TradingIn our announcement dated 15th July 2009 we referred to thesignificant cash flow improvements generated in the business in thefour months through 30th June 2009 and that net indebtedness(excluding fleet related debt) had fallen to £99.9 million from£151.2 million at 31st December 2008.New management remains focussed on cash generation and further costreduction and continues to make good progress on these fronts. Thecreation of a more productive streamlined operation is progressingwell and delivering the benefits intended. Current trading is in linewith our expectations.Exceptional ChargesLegal ServicesHistorically, the Group's relationships with CS2 Lawyers Ltd ("CS2")and Fishers Solicitors Ltd ("FSL"), principally for the management ofpersonal injury cases, have led to the Group consolidating thefinancial results of these entities.FSL closed at the end of June this year and following an extensivestrategic review of the CS2 position by the new management, we haveconcluded that traditional panel solicitor arrangements offer theGroup significant cash flow advantages, better commercial returns,lower overhead commitments and more flexibility. Consequently, wehave decided to amend the current arrangements with CS2.The effect of this decision and the closure of FSL will be a non-cashexceptional charge in the financial year ending 30th June 2009 ofapproximately £18 million relating to the deconsolidation of the FSLand CS2 entities and a fair market value adjustment of the carryingvalue of related net assets.IT SystemsIt had been the intention of the previous management for someconsiderable time to operate the Group credit hire businesses from asingle IT system platform. To meet this requirement, the Group, overthe last five years, has been developing an in-house IT platform(called Expedite).Following a detailed financial, system capability and requirementsreview by the new management, it has been determined that there arealternative proprietary platform solutions already operating withinthe Group which provide significant cost and functionality benefitsover Expedite. Accordingly, the new management has taken the viewthat the needs of the Group are better served through ceasingExpedite development and deploying an existing Group platform thatwill provide immediate cost and functionality benefits.Consequently, there will be an exceptional non-cash impairment chargein the financial year ending 30th June 2009 of approximately £12million for writing off the capitalised development cost of Expedite,together with an exceptional cash charge in the first half of thefinancial year 2010 of approximately £0.75 million, relating to thenotice and redundancy costs of approximately 55 staff associated withthis decision.GoodwillWe are required by IAS 36 ('Impairment of Assets') to review thecarrying value of the goodwill on previous acquisitions. As a resultof our review and the current performance of the acquired businesses,we anticipate an exceptional non-cash impairment charge ofapproximately £8 million in the financial year ending 30th June 2009to write down the value of goodwill relating to previousacquisitions.Estimate of Settlement Value of ReceivablesAt the beginning of the 2009 calendar year, previous managementcarried out a review of the estimated settlement value of ABIreceivables, and made an exceptional item charge of £34.5 millionrelating to settlement rates on an historical and expected netrecovery basis from settled claims.Since then, the new management has undertaken a substantive analysisof open claims and in particular their status against variouscriteria and ageing. We have also reviewed recent recoveryperformance on newer claims. Whilst the more recent claims recoveryrate is performing slightly better than current provisions, certaincategories of legacy claims, in many cases claims going back a numberof years, are demonstrating a lower estimated settlement value or areuneconomic to pursue. Consequently, management is considering afurther exceptional impairment charge of approximately £29 million inthe financial year ended 30th June 2009.Full Year Exceptional ChargesAt the half year ending 31st December 2008 we reported pre-taxexceptional charges of £62.3 million. In the second half of ourfinancial year ended 30th June 2009, we expect to charge furtherexceptional items of approximately £82 million (of which £67 millionare detailed above and the remaining £15 million representsprincipally restructuring charges relating to redundancy and vacantbuilding impairments). Of this charge, approximately £7 millionrepresents future cash outflows.Additional exceptional charges were allowed for in the Amended andRestated Banking Facility Agreements, originally signed in April2009. We have obtained clearance on our updated position with ourpartner banks and expect to sign an amendment agreement in the nextfew days.Commenting on the above update Ian Wardle, Chief Financial Officer,stated:"There has been a considerable amount of progress made in the Groupover the last six months and it is in much better shape, financially,organisationally and operationally. Dealing with the legacy issuesand implementing an appropriate restructuring programme is essentialas we aim to position the business with a much greater performancefocus as we go forward. The Group is well positioned to continue itsrecovery programme."Enquiries:Helphire Group plcIan Wardle, Chief Financial Officer 01225 321134Martin Ward, Group Managing Director 01225 321134Richard Rose, Executive Chairman 01225 321134Gayatri Barua-Howe, Group Communications Manager 01225321175College HillRoddy Watt 020 7457 2020Tony Friend 020 7457 2020Notes to Editors:Helphire Group plc is a market leader in the provision of accidentmanagement assistance to drivers involved in road accidents that werenot their fault. Working with the UK's top insurance companies, itsservices include provision of like for like replacement vehicles,financing of vehicle repairs, legal expenses and the management ofpersonal accident claims.Helphire was founded in 1992 and floated on the London Stock Exchangein 1997. With a staff of over 2,600 and a fleet of over 17,000vehicles to meet its customer requirements, the award winning Groupis headquartered in Bath. The Group has six call centre sites and anational network of 30 branches.---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 14.09.2009 - 08:00 Uhr
Sprache: Deutsch
News-ID 5753
Anzahl Zeichen: 0
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 273 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Trading Statement"
steht unter der journalistisch-redaktionellen Verantwortung von
Helphire Group PLC (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
