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Accident Exchange post full year results

Accident Exchange posted a full year reported loss before tax of £55.4 million after exceptional charges in comparison to a £9.9m profit the year before.

Steve Evans, Accident Exchange chief executive, told AM: "Clearly we're not pleased when a negative result is produced.

"But there are signs of encouragement. The City is looking past the exceptionals and i think they realise there is a stable business underneath. We've managed to take some massive cost out of the business and we've managed to win some big accounts."

The company has implemented cost reduction programmes to balance the size of the business which has seen its total fleet reduce by 18% to 4,865 vehicles.

The main focus for the business now is to improve the amount of cash collections and achieve cash-flow break even “as soon as possible” and Evans believes this will be well before the end of this year.

Accident Exchange has won a contract with a prestige manufacturer and is now in talks for contracts with four more.

David Galloway, Accident Exchange non-executive chairman, said: “The difficulties in the domestic and global economy in general and the automotive and banking markets in particular made this a challenging year.

“Nevertheless, rental day activity to date in the new financial year is holding up well with new account wins compensating so far for the seasonal reduction in volumes normally seen at this time of year.”

Key points

Financial

  • Adjusted* revenue: £167.0 million (2008: £161.9 million).
  • Adjusted* gross margin: 35.1% (2008: 31.9%).
  • Adjusted* profit before tax: £13.3 million (2008: £13.9 million).
  • Net exceptional costs and other items: £68.7 million (2008: £4.0 million).
  • Reported revenue: £132.0 million (2008: £161.9 million).
  • Reported loss before tax: £55.4 million (2008: profit of £9.9 million).
  • Cash at bank and working capital headroom against bank facilities: £17.2 million. (2008: £37.0 million).
  • Total net debt: £149.8 million (2008: £149.0 million).
  • Adjusted cash outflow from operations – after fleet related cash flows – reduced to £13.7m (2008: £20.1m)
  • No final dividend is recommended (2008: 1.5p).

*Adjusted revenue, adjusted gross profit, adjusted gross margin, adjusted operating profit and adjusted profit before tax are all stated before amortisation of acquired intangible assets, cost of share based payments, change in fair value of derivative financial liability and exceptional items.

Operational

  • Implemented cost reduction programmes to balance the size of the business with the group's expected share of a temporarily contracted market.
  • Reduced total fleet by 18% to 4,865 vehicles (2008: 5,935 vehicles); composition adjusted to match current rental day mix.
  • Eliminated more than £40m of future fleet purchase commitments.
  • Implemented 2.75% increase to the ABI GTA tariff with effect from 1 July 2009.
  • Continued to drive a robust strategy of pursuing claims through litigation where insurers fail to settle existing claims within the terms of the ABI general terms of agreement.
  • Increased cash collections by 18% to £157.2 million (2008: £133.0 million) in spite of the significant illiquidity issues faced by insurers as a result of the credit crunch.
  • Supplied rental vehicles to 38,500 customers (2008: 41,000 customers).
  • Recorded 1.1 million rental days (2008: 1.1 million).
  • Contracted with a prestige automotive manufacturer to launch a unique ‘non credit hire’ insurance based mobility proposition to all of their new car customers from October 1,2009.
  • Effected renewal of top four largest automotive dealer referral contracts in the period.

 

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