Cost saving actions at Accident Exchange “have progressed well” and are putting the accident management business on a steadier footing.
A statement from the group today revealed it has cut its workforce by a third, pared down its vehicle fleet by almost a third and reduced its total net debt by 15% to £122.9m.
Improvements have been made to working capital management, but it remains in a review of its financial structure – it still needs to refinance a £40m facility with Morgan Stanley by September 2010 – and has not been profitable for the past four months.
Chief executive Steve Evans expects that now the business is leaner, and providing it can refinance its funding facilities, its referral volumes will return to profitable levels.
Accident Exchange also expects its income from insurers to improve over time because of legal action against Autofocus and former employees of Autofocus, which helped insurers to reduce the hire rates claimed by accident management firms.
One former Autofocus employee has already been sentenced for contempt of court after she signed a witness statement, which was used in court, that implied she had signed off a rates survey, but later admitted in court another employee had done the survey.