RNS Number:7769D
Nationwide Accident Repair Srvs PLC
13 September 2007
NARS.L
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide" or "the Company")
Interim Results for the Six Months
to June 2007
Nationwide provides automotive crash repair and accident administration services
to the UK insurance industry. With a national network of accident repair centres
located across England, Scotland and Wales employing over 2,100 people, it is
the largest dedicated provider of accident repair services in the UK.
Key Points
2007 2006
Sales #75.9m #78.7m
Operating profit after non-recurring items #3.3m #0.1m
Profit before tax after non-recurring items #3.4m #0.1m
Earnings per share after non-recurring items 5.6p 0.2p
Underlying results
Operating profit before non-recurring items #3.3m #3.6m
Profit before tax before non-recurring items #3.4m #3.7m
Earnings per share before non-recurring items 5.6p 6.2p
Underlying results under FRS 17
Operating profit before non-recurring items #3.8m #4.1m
Profit before tax before non-recurring items #4.0m #4.2m
Earnings per share before non-recurring items 6.4p 6.9p
* Proposed interim dividend of 1.50p per share
* Strong balance sheet with net cash at period end of #5.2m (2006: #8.5m)
* Strategic decision to decline the renewal of a contract offered on
commercially unattractive terms. Volumes have been more than replaced on an
annualised basis
* Good growth in insurance customer base including additional volumes with:
- Hastings Direct worth over #15m per annum
- Norwich Union worth over #20m per annum
* Accident management business, Aquilo, acquired December 2006 performing well
* Acquisition of new bodyshops in Llandudno and Lincoln in period
- contract to purchase site in Matlock, Derbyshire in place
* Directors remain confident of future prospects for the business
Michael Marx, Chairman, commented,
"Results for the first half of the year are in line with our expectations and
leave us well positioned for a satisfactory outcome for the year. Looking
further ahead, we remain positive about prospects. We continue with our
twin-track approach to growth and believe there are good opportunities both to
acquire and to develop the business organically."
Enquiries:
Nationwide Michael Wilmshurst, Chief Executive T: 020 7448 1000 today
Accident Repair David Loftus, Finance Director Thereafter: 01993 701 720
Services plc
Biddicks Katie Tzouliadis T: 020 7448 1000
Arbuthnot James Steel T: 020 7012 2000
Securities
CHAIRMAN'S STATEMENT
Introduction
We are pleased to report Nationwide's interim results. Results for the period
are in line with our expectations and leave the Company well positioned for a
satisfactory outcome for the year. The Directors remain confident of future
prospects for the business.
Financial Overview
As anticipated, sales over the six months to 30 June 2007 are marginally lower
than the equivalent period last year at #75.9 million (2006: #78.7 million) and
the operating profit before non-recurring items of #3.3 million reflects a
slight reduction on last last's result (2006: #3.6 million) but is in line with
our expectations. Although operating profit after non-recurring items has
increased considerably from #107,000 in 2006 to #3.3 million in 2007, this
increase is more reflective of the one-off costs incurred last year with regard
to our Initial Public Offering. After non-recurring items, the profit for the
period is #3.4 million against #141,000 last year and earnings per share are
5.6p against 0.2p last year. The Company's balance sheet remains very strong,
with #5.2 million net cash at period end and we continue to manage our
distribution and administration costs effectively.
Dividend
It is our intention to continue to pursue a progressive dividend policy which
broadly reflects the growth in earnings over time and we will, therefore, be
recommending an interim dividend of 1.5p per share for payment in November 2007.
Trading Review
The business enjoyed a good first quarter. The volume reduction in the second
quarter was due to our strategic decision, based on the contract terms on offer,
not to renew Nationwide's contract with Royal Bank of Scotland. This has already
been more than replaced by substantial new agreements, for example, the Hastings
Direct agreement is worth in excess of #15 million per annum. We remain focused
on securing new contracts that will enable us to leverage scale and operational
efficiency to the benefit of our shareholders and customers and I am pleased to
report that the Company is now also repairing additional volumes for Norwich
Union Insurance and expects to sign a three year contract, which once fully in
place, will contribute an additional #20 million of sales per year. Over the
period, we acquired two new repair sites, at Llandudno and Lincoln in January
and March and these are integrating well.
Our accident management division is performing well, with the Aquilo business,
which we acquired in December 2006, contributing to the division's success.
Outlook
We continue to pursue our twin track approach of developing the business both
organically and via acquisition. There is good scope both to secure additional
insurance company contracts and to leverage further efficiencies within our
existing businesses. Additionally, we continue to consider suitable acquisitions
and currently expect to complete the purchase of a further bodyshop in Matlock,
Derbyshire at the end of September. Further discussions are in hand regarding
other site acquisitions.
The Directors remain confident that the business is well positioned for ongoing
growth.
Michael Marx
Chairman
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT
For the six month period to 30 June 2007
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2007 2006 2006
Notes #'000 #'000 #'000
Sales revenue 75,880 78,740 151,192
Cost of sales (41,109) (42,432) (80,905)
------------------------------------
Gross profit 34,771 36,308 70,287
Distribution costs (18,901) (19,015) (37,347)
Administrative expenses (12,434) (13,644) (27,063)
Share option charge (120) - (120)
------------------------------------
Operating profit before non
recurring items 3,316 3,649 5,757
Non recurring items 9 - (3,542) (3,542)
------------------------------------
Operating profit 3,316 107 2,215
Finance income 4 146 83 169
Finance costs 4 (37) (49) (14)
------------------------------------
Profit for the period before tax 3,425 141 2,370
Tax expense 5 (912) (64) (978)
------------------------------------
Net profit for the period 2,513 77 1,392
------------------------------------
Earnings per Share 6
Basic 5.6p 0.2p 3.1p
------------------------------------
Diluted 5.1p 0.2p 3.0p
------------------------------------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
UNAUDITED INTERIM CONSOLIDATED BALANCE SHEET
At 30 June 2007
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2007 2006 2006
Notes #'000 #'000 #'000
Assets
Non-current
Goodwill 6,300 4,648 5,821
Property, plant and equipment 7,843 9,030 8,933
Pension and other employee 2
assets 4,541 1,380 3,867
-----------------------------
18,684 15,058 18,621
-----------------------------
Current
Inventories 2,273 2,626 2,548
Trade and other receivables 21,445 21,984 20,490
Cash and cash equivalents 5,167 8,548 6,932
-----------------------------
28,885 33,158 29,970
-----------------------------
Total assets 47,569 48,216 48,591
-----------------------------
Equity
Equity attributable to the
shareholders
Share capital 3 5,609 5,609 5,609
Capital redemption reserve 1,000 1,000 1,000
Share premium account 11,104 11,104 11,104
Revaluation reserve 8 8 8
Retained earnings 5,692 2,791 4,226
-----------------------------
Total equity 23,413 20,512 21,947
-----------------------------
Liabilities
Non-current
Provisions 438 534 508
Deferred tax liabilities 707 160 685
-----------------------------
1,145 694 1,193
-----------------------------
Current
Provisions 44 163 174
Trade and other payables 21,750 26,370 24,710
Current tax liabilities 1,217 477 567
-----------------------------
23,011 27,010 25,451
-----------------------------
Total liabilities 24,156 27,704 26,644
-----------------------------
Total equity and liabilities 47,569 48,216 48,591
-----------------------------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period to 30 June 2007
Share Capital Share Reval. Retained Total
Capital Redemption Premium Reserve Earnings
Reserve Account
#000 #000 #000 #000 #000 #000
Balance at 1 Jan 2006 5,609 1,000 11,104 8 2,714 20,435
Income for the 6 mth
period - - - - 77 77
-------------------------------------------------------
Balance at 30 June
2006 5,609 1,000 11,104 8 2,791 20,512
Share option charge - - - - 120 120
Income for the 6 mth
period - - - - 1,315 1,315
-------------------------------------------------------
Balance at 1 Jan 2007 5,609 1,000 11,104 8 4,226 21,947
Share option charge - - - - 120 120
Income for the 6 mth
period - - - - 2,513 2,513
Dividend paid - - - - (1,167) (1,167)
-------------------------------------------------------
Balance at 30 June
2007 5,609 1,000 11,104 8 5,692 23,413
-------------------------------------------------------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
UNAUDITED INTERIM CONSOLIDATED CASH FLOW STATEMENT
For the six month period ended 30 June 2007
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Operating activities
Profit for the period before tax 3,425 141 2,370
Adjustments (note 8) (2,260) 5,801 6,293
Outflow from pension obligations (1,221) (480) (2,860)
Outflow from provisions (200) (147) (156)
Tax paid (240) (385) (684)
-------------------------------------
(496) 4,930 4,963
-------------------------------------
Investing activities
Additions to property, plant and
equipment (537) (600) (1,653)
Proceeds from the disposal of
property, plant and equipment 888 21 101
Acquisition of businesses (599) - (762)
Interest received 146 83 169
-------------------------------------
(102) (496) (2,145)
-------------------------------------
Financing activities
Dividend paid (1,167) - -
-------------------------------------
(1,167) - -
-------------------------------------
Net (decrease) / increase in cash
and cash equivalents (1,765) 4,434 2,818
Cash and cash equivalents at
beginning of period 6,932 4,114 4,114
-------------------------------------
Cash and cash equivalents at end of
period 5,167 8,548 6,932
-------------------------------------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
NOTES TO THE UNAUDITED INTERIM ACCOUNTS
1. BASIS OF PREPARATION
The unaudited interim accounts have been prepared on the same basis and using
the same accounting policies as used in the audited financial statements for the
year ended 31 December 2006.
The financial information set out in these interim accounts does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
figures for the year ended 31 December 2006 have been extracted from the
statutory financial statements which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unmodified.
2. PENSION AND OTHER EMPLOYEE ASSETS/OBLIGATIONS
The Group operates a defined benefit scheme and a defined contribution pension
scheme in the UK which offers both pensions in retirement and death benefits to
members. Since 1 January 2002 the defined benefit scheme has been closed to new
members. The assets of the schemes are administered by trustees independent of
the Group. The Company made contributions of #1,221,000 (2006: #480,000) to the
defined benefit scheme during the six month period to 30 June 2007 and
#2,860,000 in the year to 31 December 2006. The defined benefit scheme was
closed for future accruals on 31 July 2006 with active members transferred to a
new defined contribution section of the scheme.
The Group has opted to amortise all actuarial gains and losses above the
corridor (10% of the greater of assets and liabilities) over the future working
lifetime of the active membership.
A full actuarial valuation of the defined benefit scheme was carried out as at
31 December 2005 and was updated to 30 June 2007 by a qualified independent
actuary.
30 June 30 June 31 Dec
2007 2006 2006
The major assumptions used by the actuary
were (in nominal terms):
Rate of increase in salaries n/a 3.4% n/a
Rate of increase in pensions - accrued
pre 5 April 1997 3.0% 3.0% 3.0%
Rate of increase in pensions - accrued
post 5 April 1997 2.85% 2.75% 2.85%
Discount rate 6.1% 5.5% 5.4%
Inflation assumption 3.10% 2.75% 2.85%
The assumptions used in determining the overall expected return of the scheme
have been set with reference to yields available on government bonds and
appropriate risk margins.
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Total market value of assets 54,645 45,613 50,360
Present Value of defined obligations
(funded plans) (63,725) (61,704) (70,928)
------------------------------
Present value of unfunded obligations (9,080) (16,091) (20,568)
Unrecognised actuarial losses 13,621 17,471 24,435
------------------------------
Net asset in balance sheet 4,541 1,380 3,867
------------------------------
Reconciliation of opening and closing balances of the present value of
the defined benefit obligations
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Benefit obligation at beginning of period 70,928 65,552 65,552
Service cost - 558 613
Interest cost 1,905 1,619 3,262
Contributions by scheme members - 163 212
Actuarial (gain) / loss (8,346) (5,497) 3,351
Curtailments and settlements - - (611)
Benefits paid (762) (691) (1,451)
----------------------------------
Obligations at end of period 63,725 61,704 70,928
----------------------------------
Reconciliation of opening and closing balances of the fair value of plan
assets
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Fair value of scheme assets at beginning of
period 50,360 44,519 44,519
Expected return on scheme assets 1,868 1,570 3,248
Actuarial gain/(loss) 1,958 (428) 972
Contributions by employers 1,221 480 2,860
Contributions by scheme members - 163 212
Benefits paid (762) (691) (1,451)
--------------------------------
Assets at end of period 54,645 45,613 50,360
--------------------------------
The amounts recognised in the income statement are:
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Current service cost - 558 613
Interest on obligation 1,905 1,619 3,262
Expected return on assets (1,868) (1,570) (3,248)
Curtailments and settlements - - (611)
Actuarial loss recognised in period 511 484 969
---------------------------------
548 1,091 985
---------------------------------
Charged to:
Administration expenses 511 1,042 971
Finance costs 37 49 14
---------------------------------
548 1,091 985
---------------------------------
Effect on profitability: comparison between IAS19 and FRS 17:
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Operating profit before non recurring
items as stated 3,316 3,649 5,757
Add back actuarial loss recognised under
IAS 19 511 484 969
Additional curtailment gain under FRS 17 - - 300
---------------------------------
Operating result before non recurring
items under FRS 17 3,827 4,133 7,026
Non recurring items - (3,542) (3,542)
---------------------------------
Operating result under FRS 17 3,827 591 3,484
Finance Income 146 83 169
Finance costs under FRS 17 (18) (34) (7)
---------------------------------
Income before tax under FRS 17 3,955 640 3,646
Tax expense as stated (912) (64) (978)
Deferred tax IAS 19 reversed 202 (183) 563
Deferred tax under FRS 17 (361) 34 (946)
---------------------------------
Income after tax under FRS 17 2,884 427 2,285
---------------------------------
Effect on total equity: comparison between 30 June 30 June 31 Dec
IAS19 and FRS 17: 2007 2006 2006
#'000 #'000 #'000
Total equity as stated 23,413 20,512 21,947
Less IAS 19 asset (4,541) (1,380) (3,867)
Add back IAS 19 deferred tax provision 1,362 414 1,160
FRS 17 deficit (8,940) (15,823) (20,088)
Deferred tax under FRS 17 2,682 4,747 6,026
---------------------------------
Total equity under FRS 17 13,976 8,470 5,178
---------------------------------
3. EQUITY
Share Capital
30 June 2007, 30 June 2006
and 31st December 2006
Shares #'000
Authorised
Ordinary shares of 12.5p each 64,000,000 8,000
-----------------------------
Issued and fully paid
Ordinary shares of 12.5p each 44,872,220 5,609
-----------------------------
Share Options
No of Exercise Exercise
Shares Price Period
M A Wilmshurst Approved 25,751 #1.165 2009-16
Unapproved 2,217,860 #1.11 2009-16
D J Loftus Approved 25,751 #1.165 2009-16
Unapproved 1,096,055 #1.11 2009-16
S D G Thompson Approved 25,751 #1.165 2009-16
Unapproved 871,693 #1.11 2009-16
----------
4,262,861
----------
All the above options were issued on 4 July 2006
4. FINANCE INCOME AND FINANCE COSTS
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
Finance Income #'000 #'000 #'000
Interest receivable on bank balances 146 83 169
-------------------------------
Finance Costs
Pension costs (see note 2):
- interest on obligation 1,905 1,619 3,262
- expected return on assets (1,868) (1,570) (3,248)
-------------------------------
37 49 14
-------------------------------
5. INCOME TAX EXPENSE
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
Current Tax: #'000 #'000 #'000
United Kingdom corporation tax at 30%
(2006:30%) 890 247 636
Adjustments in respect of prior years - - -
-------------------------------
890 247 636
-------------------------------
Deferred Tax:
Movement relating to pension asset
(IAS 19) 202 (183) 563
Timing differences origination and
reversal (180) - (221)
-------------------------------
912 64 978
-------------------------------
6. EARNINGS PER SHARE AND DIVIDENDS
Basic earnings per share
The basic earnings per share has been calculated using the net profit
attributable to the shareholders of the Company of #2,513,000 for the six month
period (2006: #77,000) (12 months to 31 December 2006: #1,392,000).
The weighted average number of outstanding shares used for the basic earnings
per share amounted to 44,872,220 (2006: 44,872,220) (12 months to 31 December
2006: 44,872,220).
Diluted earnings per share
The diluted earnings per share has been calculated using the net results
attributable to the shareholders of the Company of #2,513,000 (2006:#77,000) (12
months to 31 December 2006: #1,392,000).
The weighted average number of outstanding shares used for the diluted earnings
per share amounted to 49,135,081 (2006: 44,872,220) (12 months to 31 December
2006: 46,974,453),and assumes the exercise of all the share options detailed in
note 3 since the date they were granted.
Underlying earnings per share
The underlying earnings per share has been calculated as follows:
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Profit before tax (as stated) 3,425 141 2,370
Non recurring items - 3,542 3,542
----------------------------------
3,425 3,683 5,912
Tax expense (as stated) (912) (64) (978)
Tax effect on non recurring items - (858) (888)
----------------------------------
2,513 2,761 4,046
----------------------------------
Adjusted earnings per share 5.6p 6.2p 9.0p
----------------------------------
The weighted average number of outstanding shares used for the basic earnings
per share amounted to 44,872,220 (2006: 44,872,220) (12 months to 31 December
2006: 44,872,220).
Underlying earnings per share (FRS 17 basis)
The underlying earnings per share on an FRS 17 basis has been calculated as
follows:
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Operating profit before non recurring
items under FRS 17 (see note 2) 3,827 4,133 7,026
Finance Income 146 83 169
Finance costs under FRS 17 (18) (34) (7)
-------------------------------
Underlying Profit before tax under FRS
17 3,955 4,182 7,188
Tax expense as stated (912) (64) (978)
Deferred tax IAS 19 reversed 202 (183) 563
Deferred tax under FRS 17 (361) 34 (946)
Tax effect on non recurring items - (858) (888)
-------------------------------
2,884 3,111 4,939
-------------------------------
Adjusted earnings per share 6.4p 6.9p 11.0p
-------------------------------
The weighted average number of outstanding shares used for the basic earnings
per share amounted to 44,872,220 (2006: 44,872,220) (12 months to 31 December
2006: 44,872,220).
7. DIVIDENDS
In May 2007, the Company paid dividends of #1,167,000 to its equity
shareholders.
8. CASH FLOW STATEMENT
The following non-cash flow adjustments have been made to the pre-tax result for
the year to arrive at operating cash flow:
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
Adjustments: #'000 #'000 #'000
Movement in pension fund asset- IAS19 547 1,091 985
Share option scheme charge 120 - 120
Depreciation 1,208 1,275 2,407
Changes in inventories 275 141 219
Changes in trade and other receivables (955) 178 2,949
Changes in trade and other payables (2,960) 3,059 (360)
Changes in provisions - 148 142
Profit on sale of property, plant and
equipment (349) (8) -
Finance Income (146) (83) (169)
-------------------------------
Total (2,260) 5,801 6,293
-------------------------------
9. NON RECURRING COSTS
6 mths to 6 mths to 12 mths to
30 June 30 June 31 Dec
2007 2006 2006
#'000 #'000 #'000
Flotation costs - (683) (683)
Non recurring bonuses - (2,859) (2,859)
--------------------------------
Total - (3,542) (3,542)
--------------------------------
The costs relating to the flotation on AIM on 4 July 2006 of #683,000 were
included in the 2006 Interim Accounts. In addition, as noted in paragraph 8.10
part IV of the Admission document, the 2006 Interim Accounts include
non-recurring bonuses totalling #2,859,000. Of this amount #2,407,000 was
payable to Troy Solutions Limited, a company where Mr M A Wilmshurst is a
director and #400,000 was paid to D.J. Loftus.
10. COPIES OF INTERIM REPORT AND FINANCIAL STATEMENTS
The Interim Report will be sent to shareholders by the end of September 2007.
Further copies will be available to the public, free of charge at the Group's
registered office, 17A Thorney Leys Park, Witney, Oxfordshire OX28 4GE.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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