The deal is also expected to guarantee the group “substantial” repair volumes from the insurer. The sale involves bodyshops at Cumbernauld and Kidderminster.
“It’s a pretty large agreement involving Norwich Union asking us to repair substantial numbers of vehicles in Scotland, Wales and south-west England,” says Nationwide chief executive Michael Wilmshurst.
He dismisses rumours that Nationwide might sell its entire business to Norwich Union or dedicate sites to the insurer.
Its main partners are RSA, Norwich Union, Equity Red Star, Zurich and RBS and these relationships will continue, although the level of repair volumes may change.
Nationwide’s preliminary financial results for 2006, published last week, show turnover increased to £151.2m against £139.6m in 2005. Operating profit dipped from £7.8m to £2.2m due to the cost of its AIM flotation in July 2005 and non-recurring bonuses. However, underlying operating profit increased from £4.0m to £5.8m, and the business is left with a strong balance sheet and net cash of £6.9m.
Last year Nationwide added sites in Lincoln and Llandudno.