15th Apr 2014 11:06
LONDON (Alliance News) - Nationwide Accident Repairs Services PLC Tuesday reported a fall in profit for the full-year, after increased administrative costs took their toll, combined with struggles within its insurance division.
The company, which provides integrated automotive accident repair management services to the UK insurance industry, fleet and retail customers, posted pretax profit of GBP148,000 for 2013, down from GBP5.1 million a year earlier, after being hit by an increase in administrative costs of GBP22.6 million compared with GBP18.3 million in 2012.
Revenue, however, crept up to GBP156.6 million from GBP155.9 million in the previous period, despite the insurance arm recording a 3.9% fall in revenue to GBP111.6 million from GBP116.0 million in 2012.
The insurance-funded vehicle repair market has been declining in size for more than ten years, with the reduction in motor claims frequency reflecting factors such as advances in vehicle technology and this has been exacerbated by the more recent economic and financial downturn.
The fleet division on the other hand performed well with revenue rising 14.7% to GBP40.4 million from GBP35.2 million more than offsetting pressures in the insurance market. The retail arm remained flat at GBP4.7 million.
On the back of its performance the company reduced its final dividend to 1.9 pence from 3.6 pence, resulting in a total dividend for the year of 2.9 pence down from 5.5 pence.
Nationwide said enhancements to operational efficiency during the second-half of 2013 resulted in an improvement in the gross margin to 35.8% for the full-year compared with 35.5% in 2012 after a gross margin of 34.2% in the first-half.
Overhead costs were higher at GBP51.8 million compared with GBP48.5 million and included both increased expenses associated with operating the bodyshops acquired with Exway Coachworks in July 2013 and investment in resources.
During the period the company also acquired North West-based automotive crash repair services chain Howard Basford in a deal worth GBP4.1 million.
"The acquisition is highly complementary to the group's existing operations and provides a significantly enhanced presence in this region, with the prospect of economies of scale and efficient work flows as well as other benefits," it said of Howard Basford.
Financially, net cash at the period-end stood at GBP6.3 million, up from GBP5.1 million which the firm said reflects its "strong control of working capital."
Looking ahead the firm said it has made an encouraging start to 2014, while it has seen some early signs that the economic cycle is beginning to enter a recovery period.
"Although there is additional scope for UK bodyshop capacity to reduce, some regions are already beginning to see a rebalancing of supply in line with demand," Chairman Michael Marx said in a statement. "Nationwide is well-positioned and there are opportunities to build the business both organically and by further strategic acquisitions."
The stock was trading at 83.45 pence Tuesday morning, up 1.95 pence or 2.4%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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