20th Mar 2007 07:01
Helphire Group PLC20 March 2007 Date March 20th 2007 Contacts Mark B Jackson Tel: 01225 321 205 David E Lindsay 01225 321 298 Helphire Group plc Chris Steele Tel: 07979 604 687 020 7034 4759 Adventis Financial PR Helphire Group plc Interim results for the six months ending 31 December 2006 Highlights Highlights and commentary in the Chief Executive's statement compare results forthe six months ending 31 December 2006 to the six months ending 31 December2005. • Revenue increased by 41% to £126m• Adjusted operating margin increased from 17.3% to 18.0% * (statutory operating margin 16.0% (2005: 15.8%)• Adjusted operating profit increased by 47% to £22.8m (statutory operating profit increased by 43% to £20.3m)• Adjusted pre-tax profits increased by 52% to £20.6m (statutory pre-tax profits increased by 48% to £18.1m)• Adjusted diluted EPS increased by 25% to 10.51p (statutory diluted EPS increased by 18% to 8.74p)• Interim dividend of 5.2p per share * Adjusted results for the six months ending 31 December 2006 are beforeamortisation of intangible fixed assets of £1,148k, an impairment of intangibleassets of £406k, share option charge of £164k and abortive acquisition costs of£766k. Adjusted results for the six months ending 31 December 2005 are beforeamortisation of intangible assets of £1,097k and share option charge of £248k. Chief Executive's statement for the six months ending 31st December 2006 Overview I am pleased to be able to report that strong growth in the business hascontinued in the first six months of the new financial year. A total of 65,714hires generated almost 1.5m car hire days (2005: 51,460 hires and 1.2m days,increases of 28% and 25% respectively). Financial Results Revenue grew by 41% to over £126m from £90m in the same period in 2005. Thisincrease over and above the growth in hire days is due to the tariff increaseagreed by the Association of British Insurers (ABI) and the continuing growth ofour credit repair and personal injury claims management services adopted by ourreferrers. Gross profits also increased by 39% to £52.8m (2005: £38.1m). Operating profit increased by 43% to £20.3m (2005: £14.2m). This resultincorporates amortisation and impairment of intangible assets, a charge relatingto share options, abortive acquisition costs and Albany claims. Excluding theseitems, adjusted operating profit is £22.8m (2005: £15.6m), increasing the marginat this level from 17.3% to 18.0%. Adjusted profit before tax was £20.6m (2005:£13.5m) an increase of 52%. Debtor days at 31 December 2006 were 213 compared with 202 at 30 June 2006. Theincrease was a temporary one caused by the receipt of a large settlement fromone of the major insurers several days after the period-end. Progress continuesto be made in improving the case settlement process and the underlying averagesettlement period is expected to fall. Aborted negotiations in Autumn 2006 in connection with a possible acquisitionand the associated due diligence process resulted in an exceptional cost of£0.8m. Diluted earnings per share increased by 17.6% to 8.74p (2005: 7.43p). Adjusteddiluted earnings per share increased by 24.5% to 10.51p (2005: 8.44p). Theearnings per share in the six months ended 31 December 2005 benefited from alower effective tax rate of 18.4% because of the use of brought forward taxlosses. If the current period's effective tax rate of 32% had applied to thatperiod, the growth in adjusted diluted earnings per share would have been 45%. Operational Performance The number of cases handled in the period was 65,714 and the number of thosewhere the repair of the vehicle was also managed has risen to 23,890 (2005:19,007). More than 14,200 personal injury claims were also processed in the period. Over 96% of hires were fulfilled using the Group's own fleet which now comprisesmore than 12,650 vehicles. A single fleet for the whole Group is now beingoperated with 25 depots distributed around the United Kingdom. Divisional Developments The Group is now structured into three divisions: Automotive, Albany andHelphire / Angel. The 'Automotive Division' of the Group, which deals with claims generated byautomotive dealerships and car body repair shops, has been integrated with SwiftRent-A-Car, the prestige credit hire specialist acquired in 2005. This divisionis now based in Northwich, Cheshire, in a newly-acquired call centre facilityclose to the original Swift headquarters. This division will continue to targetboth Prestige and Mainstream car dealerships and repairers. Albany, based in Peterlee, which provides services to both Uninsured LossRecovery and insurer customers, continues to grow and has acquired a number ofnew clients. The call centre in which it is based is being fully refurbishedover the next six months. The Helphire / Angel Division, based in Bath, has expanded into a new callcentre facility in Bristol in which there are already over two hundred staff.Further expansion is planned in Bristol. The total number of staff employed in the Group as at 31 December 2006 was1,794. Of these 245 are based in Peterlee with Albany, 115 in Northwich in theAutomotive Division, 460 in the branch network distributed around the UnitedKingdom, and the remaining 974 in Bath and Bristol. Infrastructure The freehold on the new, larger call centre facility purchased in Northwich forthe Automotive Division cost £6.4m. The building comprises 36,000 square feet offloor space arranged in three floors of which two are currently sublet to athird party but unoccupied. This facility provides the space required for theDivision's growth over the next two years. Board Changes We are pleased to welcome two new Non-Executive Directors to the Board. MikeO'Leary, previously a Main Board member of Misys plc, joined us on 1 October2006 and David Paige, previously a Main Board Director at Royal Sun Alliance,joined us on 1 February 2007. Alistair Mathers is retiring from the Board atthe end of May. Alistair has served as a Non-Executive Director and Chairman ofthe Audit Committee since Helphire's flotation in April 1997. I would like totake the opportunity to thank him for his great contribution over this periodand wish him all the best for the future. Dividends This is the first interim report since the change of the financial year-end from31 March to 30 June. Last year, a total dividend of 10p was paid for thefifteen-month period to 30 June, which is equivalent to 8p when annualised. The progressive dividend policy will continue. I am therefore pleased to beable to announce that the Board is recommending an interim dividend payment of5.2p, which will be paid on 1 May 2007 to shareholders on the register as at 30March 2007. Mark JacksonChief Executive consolidated income statement for the six months to 31 December 2006 Unaudited Unaudited Audited Note 6 months ended 6 months ended 15 months ended 31 December 31 December 30 June 2006 2005 2006 Total Total Total £'000 £'000 £'000 Revenue 126,514 89,754 231,387Cost of sales (73,745) (51,693) (133,903)Gross profit 52,769 38,061 97,484 Administrative Expenses: Amortisation of intangible assets (1,148) (1,097) (2,870) Impairment of intangible assets (406) - - IFRS 2 share-based payment (164) (248) (722)charge (766) - - Abortive acquisition costs - - (578) Albany claims (31,723) (23,743) (63,351) Other (34,207) (25,088) (67,521)Other operating income 1,743 1,239 3,452 Operating profit 20,305 14,212 33,415 22,789 15,557 37,585Adjusted operating profit* Finance costs (2,238) (2,033) (5,048) Profit on ordinary activities before taxation Tax on profit on ordinary activities 18,067 12,179 28,367 3 (5,784) (2,283) (5,484)Profit for the period 12,283 9,896 22,883 Earnings per share Basic 9.01p 7.59p 17.67pDiluted 8.74p 7.43p 17.27pAdjusted basic (see note 4) 10.84p 8.63p 20.89pAdjusted diluted (see note 4) 10.51p 8.44p 20.42p *Adjusted operating profit is stated before the charges for amortisation ofintangible assets, impairment of intangible assets, IFRS 2 share-based paymentcharges, abortive acquisition costs and Albany claims. All activities relate to continuing operations. consolidated balance sheet as at 31 December 2006 Unaudited Unaudited Audited 6 months ended 6 months ended 15 months ended 31 December 31 December 30 June 2006 2005 2006 Total Total Total £'000 £'000 £'000AssetsNon-current assets:Goodwill 67,052 66,413 67,052Other intangible assets 6,793 5,676 6,259Property, plant and equipment 101,373 44,407 50,702(including vehicles) 300 300 300Investments 4,877 5,493 6,733Deferred tax asset 180,395 122,289 131,046 Current assets:Trade and other receivables 156,291 114,767 125,938Cash and cash equivalents 6,326 8,264 8,758 162,617 123,031 134,696 Total assets 343,012 245,320 265,742 LiabilitiesCurrent liabilities:Trade and other payables (37,433) (27,554) (37,928)Tax liabilities (3,161) (1,855) (3,076)Obligations under finance leases (89,649) (34,488) (37,230)Short term borrowing and (40,243) (46,280) (48,966)overdrafts (170,486) (110,177) (127,200) Net current (liabilities) / assets (7,869) 12,854 7,496 Non-current liabilities: Bank loans (38,939) (17,730) (15,487)Deferred tax liability (5,024) (1,602) (2,467)Obligations under finance leases (9,899) (6,907) (9,755) (53,862) (26,239) (27,709) Total liabilities (224,348) (136,416) (154,909) Net assets 118,664 108,904 110,833 EquityShare capital 6,849 6,781 6,799Share premium account 67,326 65,665 66,106Equity reserve 4,317 2,832 4,583Retained earnings 40,172 33,626 33,345Total equity 118,664 108,904 110,833 consolidated statement of changes in equity for the six months ended 31 December2006 Share Share premium Equity Retained capital account reserve earnings Total £'000 £'000 £'000 £'000 £'000 Six months ending 31 December2005 5,907 23,940 2,582 28,102 60,531Balance at 1 July 2005 - - - 9,896 9,896Profit for the period 874 41,725 - - 42,599Issue of new ordinary shares - - 248 - 248Share based incentive plans - - 2 - 2Deferred tax-share basedincentive plan - - - (4,372) (4,372)Dividend Balance at 31 December 2005 6,781 65,665 2,832 33,626 108,904 Fifteen months ended 30 June2006 5,907 23,936 1,585 22,982 54,410Balance at 1 April 2005 - - - 22,883 22,883Profit for the period 892 42,170 - - 43,062Issue of new ordinary shares - - 722 - 722Share based incentive plans - - 2,276 - 2,276Deferred tax-share basedincentive plan - - - (12,520) (12,520)Dividend Balance at 30 June 2006 6,799 66,106 4,583 33,345 110,833 Six months ended 31 December2006 6,799 66,106 4,583 33,345 110,833Balance at 1 July 2006 - - - 12,283 12,283Profit for the period 50 1,220 - - 1,270Issue of new ordinary shares - - 164 - 164Share based incentive plans - - (430) - (430)Deferred tax-share basedincentive plan - - - (5,456) (5,456)Dividend Balance at 31 December 2006 6,849 67,326 4,317 40,172 118,664 consolidated cash flow statement for the six months ended 31 December 2006 Unaudited Unaudited Audited 6 months ended 6 months ended 15 months ended 31 December 31 December 30 June 2006 2005 2006 Total Total Total £'000 £'000 £'000Cash flows from operating activities: Operating profit 20,305 14,212 33,415Depreciation, amortisation and impairment 10,464 5,437 14,486charges (300) (195) 4Gains on sale of tangible fixed assets 164 248 722Shared based payment charge (30,353) (22,829) (39,361)Increase in debtors 3,584 4,270 5,851Increase in creditors Cash generated from operations 3,864 1,143 15,117Bank and loan interest paid (2,009) (1,787) (4,511)Interest element of finance lease rentals (229) (246) (537) Taxation paid (1,716) - (2,322) Net cash flow from operating activities (90) (890) 7,747Cash flows from investing activities:Purchase of property, plant and equipment (6,103) (913) (6,071)Purchase of other intangible assets (2,088) (664) (2,585)Proceeds from sale of plant and equipment 12,124 4,124 14,716Acquisitions - (17,574) (17,574)Cash and cash equivalents required - 395 395Net cash inflow/(outflow) from investing 3,933 (14,632) (11,119)activitiesCash flows from financing activities: 1,270 39,374 39,837Net proceeds from issue of ordinary sharecapital (20,899) - -Repayment of loan notes 19,859 (13,000) (19,372)Bank and other loans (12,739) (5,746) (23,270)Finance lease principal repayments (9,535) (4,372) (8,441)Dividends paid to shareholders Net cash flow from financing activities (22,044) 16,256 (11,246) Net (decrease)/increase in cash & cash (18,201) 734 (14,618)equivalents (14,423) (15,708) 195Cash and cash equivalents at beginning ofperiodCash and cash equivalents at end of period (32,624) (14,974) (14,423) Cash and cash equivalents consist of: 6,326 8,264 4,736Cash at bank and in hand - - 4,022 Cash held in restricted deposit (38,950) (23,238) (23,181)Bank overdraft (32,624) (14,974) (14,423) notes to the interim report 1 BASIS OF PREPARATION The unaudited interim financial statements have been prepared on the basis ofall International Financial Reporting Standards ("IFRS") that are expected to beapplicable for the Company's statutory accounts for the year ending 30 June2007. These standards are subject to ongoing review and possible amendment.Further standards and/or interpretations could be issued that could apply tothat year. If any such amendments, new standards or new interpretations areissued these may require the financial information provided in this interimreport to be changed. Helphire will also continue to review it's accountingpolicies in light of emerging industry consensus on the practical application ofIFRS. The Directors have chosen not to comply with IAS 34. Accordingly, the interimfinancial statements do not comply with all the disclosures in IAS 34 on interimreporting and are therefore not in full compliance with IFRS. The interim financial information for the six months ended 31 December 2006 andthe six months ended 31 December 2005 has not been audited and does notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985. The information for the fifteen-month period ended 30 June 2006 does notconstitute statutory accounts as defined by Section 240 of the Companies Act1985. A copy of the statutory accounts, which were prepared under IFRS and onwhich the Company's auditors gave an unqualified report, have been filed withthe Registrar of Companies. 2 ACCOUNTING POLICIES The accounting policies followed in the preparation of this interim report havebeen applied consistently to all periods presented and do not differsignificantly from those applying in the last financial statements for thefifteen-month period ended 30 June 2006. 3 TAXATION Unaudited Unaudited Audited 6 months ended 6 months ended 15 months ended 31 December 31 December 30 June 2006 2005 2006 Total Total Total £'000 £'000 £'000 Current year UK corporation tax 2,106 2,078 4,473Current year deferred tax 3,678 205 1,011 Total tax charge 5,784 2,283 5,484 4 EARNINGS PER SHARE The calculation of basic earnings per share is based on the profit after tax andthe weighted average number of ordinary shares during each period. The number ofshares is 136,251,504 for the six months ended 31 December 2006, 130,304,837 forthe six months ended 31 December 2005 and 129,523,905 for the fifteen monthsended 30 June 2006. The calculation of diluted earnings per share is based on140,471,360 potential ordinary shares for the six months ended 31 December 2006,133,198,556 potential ordinary shares for the six months ended 31 December 2005and 132,511,891 potential ordinary shares for the fifteen months ended 30 June2006. Adjusted earnings per share is based on the profit for the period adjusted forthe following factors and the weighted average number of ordinary shares shownabove. For the six months ended 31 December 2006, adjusted profit for the periodis before intangible asset amortisation of £1,148,000 (2005: £1,097,000),intangible asset impairment charge of £406,000 (2005: £Nil), share-based paymentcharge of £164,000 (2005: £248,000) and abortive acquisition costs of £766,000(2005: £Nil). For the fifteen month period ended 30 June 2006, adjusted profitfor the period is before intangible asset amortisation of £2,870,000,share-based payment charge of £722,000 and Albany claims of £578,000. 5 DIVIDENDS Unaudited Unaudited Audited 6 months ended 6 month ended 15 months ended 31 December 31 December 30 June 2006 2005 2006 Total Total Total £'000 £'000 £'000 Amounts recognised as distributions toequity holders in the period:Final dividend for 15 month period ended 5,456 - -30 June 2006 of 4.0p per ordinary share Final dividend for the year ended 31 - 4,372 4,372March 2005 of 3.7p per ordinary share Interim dividends for the 15 month period - - 8,148 ending 30 June 2006 of 6.0p per ordinaryshare 5,456 4,372 12,520 A proposed interim dividend of 5.2p was approved by the Board on 7 March 2007and has not been recognised as a liability at 31 December 2006. It will be paidon 1 May 2007 to shareholders on the register on 30 March 2007. The final dividend for the fifteen month period ended 30 June 2006 of £5,456,000was paid during the six month period ended 31 December 2006, together with£4,079,000 of the interim dividends for that period, which was recognised as aliability at 30 June 2006. 6 ANALYSIS AND RECONCILIATION OF NET DEBT 30 June Other non-cash 31 December 2006 Cash flow changes 2006 £'000 £'000 £'000 £'000 Cash at bank and in hand 4,736 1,590 - 6,326Cash held in restricted deposit 4,022 (4,022) - -Overdrafts (23,181) (15,769) - (38,950) (14,423) (18,201) - (32,624) Debt due after more than one year (15,487) (23,452) (38,939)Debt due within one year (25,785) 24,492 (1,293)Finance leases (46,985) 12,739 (65,302) (99,548) Net debt (102,680) (4,422) (65,302) (172,404) Independent review report to Helphire group plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 31 December 2006 which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated statement of changesin equity, the consolidated cash flow statement and the related notes 1 to 6. Wehave read the other information contained in the interim report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe financial information. This report is made solely to the Company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe Company, for our review work, for this report, or for the conclusions wehave formed. Director's Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the Directors. The Directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with the guidance Bulletin 1999/4 issuedby the Auditing Practices Board for use in the United Kingdom. A review consistsprincipally of making enquiries of group management and applying analyticalprocedures to the financial information and underlying financial data and, basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with the International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot express an audit option on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2006. Deloitte and Touche LLPChartered Accountants Bristol19 March 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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