Helphire Group Plc Annual Report and Accounts 2009 Contents S N Operational and Financial Highlights
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Helphire Group plc Annual Report and Accounts 2009 Contents S N Operational and financial highlights . 01 Independent auditors’ report . 35 T O L I U Business profile . 02 S Consolidated income statement . 36 E R Chairman’s statement . 03 Consolidated statement of changes UR in equity . 37 O INTRODUCT Consolidated balance sheet . 38 Consolidated cash flow statement . 39 Notes to the consolidated financial Group Managing Director’s report . 04 statements . 40 VIEW Chief Financial Officer’s review . 08 E Company income statement . 68 R Company statement of changes in equity . 68 SS E N I Company balance sheet . 69 S U B Company cash flow statement . 70 Notes to the Company financial statements . 71 E Board of Directors . 12 C N Notice of Annual General Meeting . 79 A Directors’ report . 14 N R Shareholder information, financial E Corporate governance . 19 V calendar and advisors . 84 O G Directors’ remuneration report . 24 Directors’ responsibilities statement . 34 01 Helphire Group plc Annual Report and Accounts 2009 INTRODUCTION INTRODUCTION Operational and fi nancial highlights The fi nancial year ended 30 June 2009 has been one of signifi cant challenge and change for the Group. The new team, appointed over the second half of the year, is approaching the end of the Group’s initial restructuring phase, which has aligned the business properly with marketplace activity and positioned it to operate profi tably and cash-positively going forward. We are now embarking on the forward-looking phases of the Group’s recovery. Operational highlights Financial highlights New Board of Executive and Non-Executive ABI Cash recovery increased by 39.0% Directors to £354.7m (2008: £255.1m) Completion of a comprehensive and objective Debtor days reduced by 13.2% to 223 days assessment of the business, focusing on core (2008: 257 days) activities Increase in cash and cash equivalents net Sale of E-Register and closure of Spanish of revolving working capital facility of £39.4m operation announced (2008: £29.6m decrease) Signifi cant restructuring programme underway Fleet revenue utilisation recovered to 81.8% focused on creating value for Business Partners in three months to August (2008: 72.9%) and Shareholders Net debt reduced by £122.8m to £239.5m Considerable improvements achieved in areas (2008: £362.3m) of ABI cash collection and cost reduction Successful placing and open offers to raise £89.1m net of expenses 2009 2008 % movement Operational Hire cases 187,040 191,763 (2.5) – Credit hire 162,489 175,614 (7.5) – Standard hire 24,551 16,149 52.0 Repair cases 71,658 73,961 (3.1) % of credit hire cases 44.1% 42.1% 2.0 PI cases 34,473 34,832 (1.0) % of credit hire cases 21.2% 19.8% 1.4 Hire days 3,986,893 4,689,717 (15.0) Financial Adjusted* revenue (£’000) 368,496 404,935 (9.0) Adjusted* gross margin 26.7% 34.9% (8.2) Direct fl eet holding costs as a % of net hire revenue 28.3 26.2 (2.1) Adjusted* operating margin 1.3% 13.7% (12.4) Adjusted* operating profi t (£’000) 4,663 55,384 (91.6) Exceptional costs (£’000) (143,834) (3,649) – (Loss)/profi t before tax (£’000) (149,004) 43,035 – Debtor days (hire, repair, PI) 223 257 (13.2) Credit cash collected (£’000) 354,702 255,098 39.0 * Adjusted measures exclude the impact of those items described as exceptional. 02 Helphire Group plc Annual Report and Accounts 2009 INTRODUCTION Business profi le INTRODUCTION Founded in 1992, Helphire Group plc is a UK market leader in the provision of accident assistance to not-at-fault drivers involved in road accidents. In partnership with the insurance and motor industries, Helphire provides accident management solutions to motorists, ensuring that they remain mobile until their own vehicles are repaired, or until they are put in a position to obtain a replacement. Our services Our operations The Group offers a comprehensive package of motor Helphire provides replacement vehicle services, repair claims accident management services, including vehicle management services and legal expenses insurance. replacement and repair management, full claims-handling The business partners of the Helphire UK, Angel assistance, uninsured loss recovery and personal injury Assistance and Albany Assistance brands are insurance management, as well as other bespoke services. It is companies, brokers and other motoring organisations. positioned to provide its key business partners with a The Helphire Automotive business unit serves customers range of services, from direct assistance to the not-at-fault of the automotive sector, such as car dealerships, motor motorist, through to partial or fully outsourced case-handling manufacturers and repair centres. The Group also operates facilities. through smaller subsidiary companies, providing specialised services in the fi eld of accident and insurance claims The Company is a fi rst tier supplier under the ABI General management, namely Total Accident Management Terms of Agreement and aims to be the preferred claims and Cab Aid. outsourcing partner for UK motor insurers, by providing claims solutions which reduce internal expenditure and These customer-facing brands are supported by the administration. Fleet Services Division which manages the Group’s fl eet of approximately 16,500 vehicles. Main operational sites Our locations Branch sites Helphire Group plc employs over 2,900 people across operational sites in Bath, Epsom, Northwich and Peterlee. With a national network of 30 branches and a fl eet of over 16,500 vehicles, the Group is well-placed to ensure that replacement vehicles can be delivered to customers within four hours if required. Main Brighton Lincoln operational Birmingham London/Acton sites Belfast Long Marston Bath Bridgend Milton Keynes Epsom Carlisle Newcastle Northwich Doncaster Northwich Peterlee Dorchester Norwich Edinburgh Oxford Branch sites Epsom Rainham Aberdeen Exeter Southampton Ashford Haydock Stansted Bangor Leicester Stoke Bristol/Bath Leeds Truro 03 Helphire Group plc Annual Report and Accounts 2009 INTRODUCTION INTRODUCTION Chairman’s statement Richard Rose Chairman The clear message this year has been one of challenge Despite the economic situation, the underlying market and change. The Group is reporting a statutory pre-tax for our service remains strong and, whilst insurers have loss of £149.0m for the year ended 30 June 2009 historically resisted settling of cases, we are seeing more (2008: £43.0m profi t), largely resulting from a number of engagement with insurers in shaping a way forward that non-cash exceptional charges as detailed in this report. eliminates frictional costs. These developments are at an early stage and require commercial balance, but nonetheless Adjusted* operating profi t for the year was £4.7m represent a directional change in our marketplace. The (2008: £55.4m). acceptance of the role some credit hire organisations Entering into the role of Chairman in January of this year, play can potentially broaden the size of our market as it quickly became clear that there was an urgent need to the services provided become established and expected take strong action to bring about change. We appointed a by the driving public. new management team, constructed an entirely new Board, with relevant experience, and focused on the critical issues Dividend resulting in our turnaround plans. Key decisions have been, Given the results reported for the year, the Board is not and are being taken to restore stability to the business and declaring a dividend. It remains the Board’s intention to pay to bring about a step change in performance. dividends in the future, as profi t and cash fl ow generated from operations permit. I am pleased to report that thus far we have made considerable progress, especially in cash recovery, lower Outlook debt and overhead reduction. We implemented our Project Century plan to reduce working capital by £100.0m by June Although, as previously reported, we have lost a signifi cant 2010, and had already achieved a reduction of approximately referrer, we have renewed contracts with others and are £70.0m by the end of August 2009. As a result of our focus actively seeking opportunities for growth, albeit at the right on cash collection, debtor days have also continued to fall level of return. and at 30 June 2009 stood at 223 days (2008: 257 days). The lower cost base is enabling us to trade profi tably Total net debt has fallen signifi cantly and at 30 June 2009 despite the lower case volumes. So far, the current year was £239.5m (2008: £362.3m). has started with trading in line with our expectation and We have embarked upon a major business restructuring we are continuing to generate operating cash. programme aimed at signifi cantly cutting fi xed overheads and improving productivity and effi ciency. I am pleased to Our people report that thus far we are ahead of our plans both in The Group’s restructuring has resulted in more than 700 terms of timescale and quantum. people leaving the Group this year, many through voluntary redundancy and we are sorry to have had to make these The changes needed as a result of the multitude of legacy diffi cult decisions. Despite this, our people have continued issues faced have resulted in a number of exceptional to serve our business partners well with no disruption to charges as detailed later in this report. service and have been very supportive during our diffi cult Improved working capital contributed to cash generation times. Going forward, we will continue to strengthen our from operations of £57.2m (2008: £22.3m). After other position and complete our restructure to achieve our goal operating outfl ows of interest and tax paid, together with of being a low-cost provider.