27th Sep 2013 13:49
LONDON (Alliance News) - Helphire Group PLC Friday said it returned to a pretax profit for the recent full year due to exceptional accounting item worth GBP33.7 million.
Helphire, which rents out cars and provides legal services to drivers involved in road accidents that weren't their fault, said it returned to a pretax profit of GBP32.4 million for the year ended June 30, compared with a GBP6.3 million loss for the corresponding period the year prior.
A decline in revenues was leavened by a drop in the cost of sales, which resulted in gross profit increasing 7.9% to GBP46.1 million. Helphire said the decline in revenues was because of a drop in personal injury cases handled in the run-up to a ban on referral fees that came into force on April 1. Helphire said it also saw reduced numbers of credit-repair cases handled because the number of accidents across the country fell.
However, the largest contributor to the strong profit figure was an exceptional accounting item. Earlier this year, Helphire raised equity finance and used the net proceeds, together with an issue of new shares to its creditor banks, to settle in full its senior debt facilities.
The company said the GBP33.7 million credit represented the difference between the carrying value of the bank debt that was eliminated and the fair value of the Helphire shares issued to the banks as part of the equity financing arrangements.
Helphire also said it would seek to make good its underlying losses once it examines several thousand cases to determine the appropriate level of damages it suffered as a result of its on-going Autofocus litigation. Helphire is pursuing redress for loss against insurers who benefited financially from the alleged criminal activity of employees of rate surveyor Autofocus, who are alleged to have falsified hire rate evidence in their submission to insurers and UK courts.
Helphire said it has been engaging with solicitors acting for Autofocus Liquidators and the intervening insurers, Direct Line Group and RSA, to access information permitted under a court order granted in June 2012. Helphire said the information will enable it to determine the damages it suffered because of Autofocus's unreliable evidence.
Helphire will then seek to retrieve the recovery of the losses from the insurers, but said there are several thousand cases to examine before recovery of losses is possible. Helphire said a number of the insurers have "indicated that they would wish to enter into dialogue" over the return of losses.
Following payment a special dividend of 0.165 pence per share for the year to June 30, Helphire said it wouldn't pay a final dividend. However, the company declared an interim dividend of 0.110 pence for the current year ending June 30, 2014.
Helphire shares were Friday quoted at 5.27 pence, down 0.43 pence, or 7.5%.
By Samuel Agini; [email protected]; @samuelagini
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