25th Feb 2005 07:00
Helphire Group PLC25 February 2005 25 February 2005 Helphire Group plc (the "Company") Sale and Leaseback of Pinesgate Call Centre Facility Update on Albany Integration • Sale and Leaseback generates exceptional profit of £6.4m • Trading from recently acquired Albany exceeding expectations Chairman Michael Symonds said "Our recent move into our new headquarters hasbeen extremely beneficial operationally and has now the added bonus ofgenerating a substantial exceptional profit. Furthermore we are delighted by theprogress in the integration of Albany and its current level of trading." Sale and Leaseback of Pinesgate In the interim results statement, it was reported that the Company had receivedstrong interest from a number of parties with a view to entering into a sale andleaseback arrangement in respect of the Pinesgate premises. The Board is pleasedto confirm that the Company yesterday completed these arrangements with aspecial purpose vehicle incorporated within a Jersey based investment fund. Thesale price achieved of £17.7m has resulted in an exceptional profit of £6.4m.This allows the repayment of associated borrowings of £11.6m and the repaymentof other debt of £6.1m. The lease is for 20 years with rent reviewable at fiveyearly intervals. The initial rent is £1.17m pa. Total indebtedness of the Groupas at 31st December 2004 stood at £69.0m and following this transaction is now£54.8m. As a result, the financial gearing of the Group has fallen from 160% to110%. Albany On 13 October 2004 it was announced that the Company had acquired Albany RTA andAlbany Group Holdings for £45.8m funded by a £47m loan from Bank of Scotland.Albany is a leading participant in the uninsured loss recovery market and hasover 1.5m legal expense insurance policyholders which, like Angel Assistance,generate significant referrals of non-fault claims. Since the acquisition was completed, a thorough review of the businessprocesses, infrastructure and logistics of the business has been completed.Albany's operational cost base is generally lower than that of the HelphireGroup with the exception of fleet costs where economies of scale result in lowervehicle hire, delivery and collection costs for Helphire. The benefit of theselower costs will be shared across the Group once fleet integration is complete,a process which has started and is expected to be completed by July 2005. The Albany Group has historically not included credit repair in its serviceswhich, combined with a greater proportion of personal injury claims, hasresulted in a higher gross margin than Helphire's (historically 52% Albany, 44%Helphire). Since the acquisition, a credit repair service has been introduced toAlbany's customer base which it is anticipated will gradually result in anincrease in its case volumes in the 12 months to 31 March 2006 and an adjustmentin its gross margin towards that of Helphire. Since completion of the acquisition, a fair value exercise has been completed.As expected, appropriate provisions have been made against any Albany debtrelating to claims instigated prior to the formation of protocols with theinsurance industry whilst provision has been made for all liabilities andcontractual obligations relating to the pre-acquisition period. The effect ofthis exercise has been an adjustment to the opening balance sheet of £3.3mresulting in a net liability position of £1.4m. Given the purchase price of£45.8m, goodwill of £47.2m will result. The Albany Group has processed an average of over 2,000 hires and 1,500 personalinjury cases per month since October and overall, the Albany trading performancesince completion of the acquisition has comfortably exceeded managementexpectations. Enquiries: Helphire Group 01225 321 000Mark Jackson CEO 01225 321 205David Lindsay FD 01225 321 298 Binns PR 020 7786 9600Chris Steele 07979 604 687Tarquin Edwards 07879 458 364 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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