Helphire Group plc
Pre-Close Trading Update
Helphire Group plc (the "Group") is today issuing its pre-close trading update for the year ended 30 June 2008.
In spite of the generally more challenging economic conditions, particularly in the latter part of the financial year, the Group has continued to make satisfactory progress and profits for the year ended 30 June 2008 are expected to be in line with market expectations.
As anticipated, the UK non-fault accident management market is maturing and most motor insurers are now utilising some or all of the services of accident management companies. Accordingly, Helphire's caseload is growing less rapidly. In the second half of the year ended 30 June 2008 the Group handled 20 per cent. more hire cases than in the same period in the previous financial year, giving overall growth in hire cases of 29 per cent. for the full year. If the economic environment remains challenging in the near future and fuel prices remain high, motoring activity and therefore growth in the use of credit hire may slow.
The Board is aware that the current economic climate is having an impact on valuations in the used vehicle market and regardless of the Group's fleet ownership policy it is exposed to these influences. The implementation of Helphire's new fleet management system, TRYX, gives the business the tools to manage the vehicle fleet effectively. The system enables management to monitor estimated residual values and thereby set the most appropriate vehicle holding strategy and depreciation policy to manage vehicle holding costs and maximise fleet utilisation. The Board is satisfied, at present, that the Group's depreciation policy is appropriate in the circumstances.
We are continuing to focus on efficiency, profitability and cash generation. Current indications are that the improved weighted average age of our claims as reported for the third quarter of the year has been largely sustained in the final quarter. However our objective is to continue to improve this ratio and we are continuing to increase the resource targeted at collecting claims outstanding beyond the 90 day period provided in the ABI General Terms of Agreement ("GTA"). We are introducing changes to our processes and terms of business with the intention of accelerating payment by insurers. The implementation of our new claims handling system, Expedite, is continuing to plan and is expected to bring efficiency savings in the coming financial year.
The preliminary announcement of results for the year ended 30 June 2008 are planned to be issued on 23 September 2008.
7 July 2008
Mark Jackson, Chief Executive Officer
Mark Adams, Group Finance Director
Roddy Watt, College Hill
020 7457 2810