For release at 07.00 Monday May 19th 2008
Helphire Group plc
Interim Management Statement
Helphire Group plc is today issuing its Interim Management Statement for the period 1 January to 18 May 2008. The financial and operational data relates to the three month period ended 31 March 2008 being the third quarter of the financial year ending 30 June 2008.
Motorists are increasingly being made aware of their legal entitlement in the event of an accident where they are not at fault. As a result more accidents are resulting in the hire of a replacement vehicle, most commonly via a credit hire organisation.
Motor insurers are responding to the increased penetration of credit hire services by seeking to capture and refer cases, thereby generating income. All leading motor underwriters are now utilising or investigating the possibility of utilising replacement vehicle services. The entry of major insurers into the market as introducers of business, in addition to their role as underwriters, has led to a rapid expansion in the volume of cases handled by credit hire organisations. The vast majority of these cases are being supplied on credit hire terms but, just as we undertake credit repairs and personal injury cases in order to provide a comprehensive, profitable, accident management service, we are also being increasingly asked to help insurers to discharge their obligations to policyholders by providing vehicles on standard hire terms. We will do this where those terms are attractive to Helphire and providing the service strengthens our relationships with insurers.
We are pleased to be able to confirm that the ABI General Terms of Agreement ("GTA") rate review has been concluded and that, as a result, GTA rates will increase by 3.5% for all new hires commencing on or after 1 June 2008.
Helphire has successfully established itself as the market leader in credit hire and our principal challenge at present is to continue to participate in the growth of the market in an increasingly profitable and cash-generative manner. We are introducing a number of operational measures to achieve this which include the implementation of our new claims handling system, Expedite and our new fleet management system, TRYX.
Our growth derives from overall market growth in addition to establishing new framework agreements with referrers of business (insurers, dealer groups, body shops, brokers and others) and by fulfilling the cases that flow from those agreements. As expected, the exceptional growth experienced in the first half of the financial year reduced somewhat in the third quarter with total hire cases increasing by 25% compared to the same period in the previous financial year. This trend was also evident elsewhere with repair cases increasing by 29%.
Our legal services business continues to grow in line with our plans with personal injury cases in the third quarter up by 15% compared to the same period in the previous financial year.
The Board is confident that profit for the year to 30 June 2008 will be in line with market forecasts.
We have continued to focus on accelerating the claims settlement process. As a result, the weighted average age of debt reduced by a further 8% to 248 days (31 December 2007: 270 days) in the three month period to 31 March 2008.
As at 31 March 2008, the Group's net indebtedness excluding fleet related financing was £161.3m (31 December 2007: £151.9m). Fleet related financing was £199.4m (31 December 2007: £190.6m).
After a lengthy search process which commenced in November 2007 we were delighted to announce that Mark Adams was appointed as Group Finance Director with effect from 1 April 2008, expanding and strengthening the Executive Board. Mark, aged 43, was most recently Group Finance Director of Alpha Airports Group plc, one of the world's leading aviation support companies and has previously served as Finance Director at three other public companies. The appointment has enabled David Lindsay and David Robertson to take up new roles as Group Operations Director and Group Commercial Director respectively. With effect from 1st May 2008 the Board is also joined by Dr. Reiner Hagemann as a non-executive director. Dr. Hagemann, aged 60, has recently retired from the executive board of Allianz AG where he was latterly responsible for non-life business in Germany and for Allianz operations in the UK, Ireland, Switzerland & Austria. Dr. Hagemann brings a wealth of both insurance and European experience to the Board.
The preliminary announcement of results for the year ending 30 June 2008 will be issued in September 2008.
Enquiries: 01225 321134
Mark Jackson, Chief Executive Officer
Mark Adams, Group Finance Director