TIDMNARS
RNS Number : 7473P
Nationwide Accident Repair Srvs PLC
31 March 2009
NARS
31 March 2009
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Preliminary Results for the year to 31 December 2008
Nationwide provides automotive crash repair and accident administration services
principally to the UK insurance industry. With a national network of accident
repair centres located across England, Scotland and Wales employing over 2,400
people, it is the largest dedicated provider of accident repair services in the
UK.
Financial summary
+--------------------------------------------+-----------+------------+
| | 2008 | 2007 |
+--------------------------------------------+-----------+------------+
| Revenue | GBP179.3m | GBP151.9m |
+--------------------------------------------+-----------+------------+
| | | |
+--------------------------------------------+-----------+------------+
| Operating profit before non-recurring | GBP7.5m | GBP6.6m |
| item* | | |
+--------------------------------------------+-----------+------------+
| Profit before tax before non-recurring | GBP7.8m | GBP6.8m |
| item* | | |
+--------------------------------------------+-----------+------------+
| Earnings per share before non-recurring | 12.8p | 11.3p |
| item* | | |
+--------------------------------------------+-----------+------------+
| | | |
+--------------------------------------------+-----------+------------+
| Operating profit after non-recurring item | GBP6.7m | GBP6.6m |
+--------------------------------------------+-----------+------------+
| Profit before tax after non-recurring item | GBP7.1m | GBP6.8m |
+--------------------------------------------+-----------+------------+
| Earnings per share after non-recurring | 11.6p | 11.3p |
| item | | |
+--------------------------------------------+-----------+------------+
* A non-recurring charge of GBP750,000 has been made in relation to a bad debt
provision against the debt of a customer that went into administration in March
2009
Key Points
* Revenue up 18% to GBP179.3m (2007: GBP151.9m)
* Gross profit margin maintained at 46.5%
* Profit before tax before non-recurring item* up 14% to GBP7.8m (2007: GBP6.8m)
* Earnings per share before non-recurring item* up 13% to 12.8p (2007: 11.3p)
* Strong balance sheet with net cash at year end of GBP5.4m (2007: GBP5.2m)
* Recommended final dividend of 3.3p per share, making total for the year of 5.0p,
an 11% increase (2007: 4.5p)
* Contract wins and contract extensions signed in 2007 enjoyed in 2008
* Accident management operations, including our mobile divisions, continue to
demonstrate encouraging growth
* Six new bodyshops acquired in the year: Scunthorpe, Gravesend, Bristol, Redruth,
Kettering and Perth
* Well positioned to weather the current economic environment
Michael Marx, Chairman, commented,
"I am pleased to report that, in a challenging trading environment, financial
results for the year ended 31 December 2008 recorded a new high for the Group.
Although our business is not immune to the current economic downturn, the nature
of our business, based as it is around accident repairs, should afford us
protection. In addition, we benefit from good cash generation, a strong balance
sheet and no bank debt. Accordingly, the Directors are confident that the
business is well placed for long term growth."
Enquiries:
+-------------------+------------------------------+----------------------+
| Nationwide | Michael Wilmshurst, Chief | T: 020 7448 1000 |
| Accident Repair | Executive | today |
| Services plc | David Loftus, Finance | Thereafter: 01993 |
| | Director | 701720 |
+-------------------+------------------------------+----------------------+
| | | |
+-------------------+------------------------------+----------------------+
| Biddicks | Katie Tzouliadis/ Sophie | T: 020 7448 1000 |
| | Lane | |
+-------------------+------------------------------+----------------------+
| | | |
+-------------------+------------------------------+----------------------+
| Arbuthnot | James Steel/ Alasdair Younie | T: 020 7012 2000 |
| Securities | | |
+-------------------+------------------------------+----------------------+
Chairman's Statement
Introduction
I am pleased to report that, in a challenging trading environment, financial
results for the year ended 31 December 2008 recorded a new high for the Group.
Financial Results
Revenue for the year ended 31 December 2008 increased by 18% to GBP179.3 million
(2007: GBP151.9 million). This included a combined contribution of GBP5.0
million from the six new sites acquired during the year. Revenue on a
like-for-like basis increased by 15%. Operating profit rose by 2% to GBP6.7
million (2007: GBP6.6 million) and profit before tax rose by 3% to GBP7.1
million (2007: GBP6.8 million). Earnings per share increased by 3% to 11.6 pence
(2007: 11.3 pence).
These results for the year ended 31 December 2008 are after the deduction of
GBP750,000 in respect of a bad debt provision made against the debt of a
customer that went into administration in March 2009.
Net cash increased by GBP0.2 million, producing net cash balances as at 31
December 2008 of GBP5.4 million (2007: GBP5.2 million). This increase in cash is
after an investment of GBP1.7 million in the purchase of the Company's own
shares, deficit pension contributions of GBP2.6 million and the payment of
GBP2.3 million for new site acquisitions.
Dividend
The Board is pleased to recommend a final dividend of 3.3 pence per share (2007:
3.0 pence per share), taking the total dividend for the year to 5.0 pence (2007:
4.5 pence), an increase of 11%. This will be paid, subject to approval by
shareholders at the Annual General Meeting, on 12 June 2009 to shareholders on
the register at the close of business on 15 May 2009.
Trading overview
The business continues to make solid progress and we have increased our market
share. The contract wins and contract extensions signed in 2007 helped to
increase volumes through our repair network notwithstanding a decrease in
accidents during the year. We have also increased our non-insurance work. While
our customer base is biased towards multi-year contracts with the leading
insurance companies, we also provide our services to corporate fleets, brokers,
motor manufacturers and private individuals.
Our national network of bodyshops enables us to service our customers' needs in
an efficient and effective manner and we continue to manage the network
carefully, adding new locations where we have identified customer demand and
closing locations no longer required. During the year we acquired six new
bodyshops and closed one bodyshop. These new acquisitions further extend our
capacity and service capability and will provide improved returns once they are
fully integrated into our network.
A key strength of our bodyshop network is the flexibility it provides us in the
deployment of work across our branches, which allows us to maximise cost
effectiveness. Our size enables us to derive economies of scale and it is
pleasing to note that, despite inflationary pressure, gross margin remained
constant at 46.5% for the second consecutive year. We remain focused on
achieving cost savings and believe there is scope to deliver further
efficiencies within the business.
Our retail initiative progressed well in 2008. Targeted at customers whose
vehicles are already in a bodyshop for an insurance-related repair, revenue from
this new offering has developed well. We are now further developing this
direct-to-consumer offering, which should also enable us to enhance our margins.
Our Network Services division, which acts as a "one-stop shop" for accident
management services, continues to expand. The division gives us a competitive
edge over many of our peers, providing a service tailored to individual
customers' needs, and capturing additional work for the Group's bodyshops.
Outlook
These 2008 results demonstrate the ongoing success of our twin track growth
strategy, organically and via acquisition, and we believe that this strategy
will continue to deliver future growth. Although our business is not immune to
the current economic downturn, the nature of our business, based as it is around
accident repairs, should afford us protection. In addition, we benefit from good
cash generation, a strong balance sheet and no bank debt. Accordingly, the
Directors are confident that the business is well placed for long term growth.
Michael Marx
Chairman
Chief Executive's Report
Introduction
I am pleased to report that 2008 was another record year for the Group, despite
the increasing economic turbulence as the year progressed. However, the results
were affected by the need to make a bad debt provision of GBP750,000 in relation
to a customer which went into administration in March 2009. This provision has
been disclosed as a non-recurring item.
During the twelve months, we benefited from the contract wins and extensions
secured in 2007 and underlying revenue and profits (before non-recurring
items) rose by 18% and 14% respectively. In line with our commitment to a
progressive dividend policy, the proposed final dividend represents an increase
of 11% in the total dividend for the year.
Nationwide's robust performance demonstrates the inherent strengths of the
business model, in particular its resistance to cyclical influences, its good
cash generation, strong balance sheet, and the scale of its operations, which
enables us to extract cost efficiencies.
Operations
Our national network of bodyshops constantly evolves as we identify and acquire
new locations and withdraw from others, either at the end of their lease or
because they require additional capital expenditure which would not deliver a
sufficiently commercial return. During 2008 we acquired six new sites in total
and closed one. Three sites were acquired in the first half of the year, at
Scunthorpe, Gravesend and Redruth. Sites at Bristol, Kettering and Perth were
added in the second half of the year. New sites invariably take a period of time
to integrate within the Nationwide model before making contributions which
mirror those from our more established sites. As expected, the six new sites
reflected this and generated a combined loss of GBP230,000 for the period as
they went through the integration process. However, we expect them to deliver
enhanced returns over 2009. All of these acquisitions were designed to increase
our capacity in areas not served by our existing network and where we have
identified and agreed sufficient customer demand.
We continued to invest in our fully integrated in-house IT platform, 'Voyager'.
This system gives us considerable market advantage, allowing us to offer claims
handling and vehicle repair management without the need for manual data transfer
and double entry inputs. As well as improving our own efficiencies, the platform
also provides additional benefits. Accessible via the web, it allows customers
to track their vehicle repairs at a time and location of their choosing, without
the need to call our sites. Information on the system is automatically updated
throughout the repair process and the system is a good example of how we use our
scale and investment to develop industry leading standards and efficiencies.
Our continued investment in sites, equipment and IT is key to our continuing
growth. However, it is our skilled and committed team, which includes 116
apprentices, that enables us to deliver success. I would like to extend my
thanks to all of them.
Network Services
Network Services, our support division, offers the following:-
* first contact (known as 'first notification of loss' or 'FNOL' in the industry);
* claims handling;
* replacement vehicles;
* deployment into our own or other networks;
* uninsured loss recovery and
* on-site repair services for minor damage.
The division continues to grow and is unique in the industry, offering accident
management services and also being able to transfer vehicles for repair into our
own wholly owned network of bodyshops. This year we will invest in the further
growth of our 'Mobile Restore' and 'Mobile Solutions' businesses which offer
glass replacement, electronic diagnostics and air conditioning recharge services
as well as off-site repair for minor damage.
Customers
Our strategy of aligning ourselves with our customers' objectives continues to
deliver benefit. Whilst many of our customers share similar aims, including
value for money, customer service and process efficiency, their preferred method
of achieving these remains individual. The flexibility of our business model
allows us to tailor our approach accordingly and our service offering ranges
from vehicle repairs at specific sites to comprehensive claims handling. This
unique capability gives us considerable market advantage and allows us to
develop business relationships with insurance companies, large corporate fleets
and brokers, as well as motor manufacturers and other associated companies.
In 2007 we launched a trial retail offering and, having generated sales of
GBP1.84 million in its first year, income from this initiative over 2008 has
grown by 80% to GBP3.31 million. Our retail offering is based both on
convenience and value as we provide private individuals with additional
services, normally while their vehicle is with us for an insurance-related
repair. We are currently developing two trial sites at Leicester and Kettering
with an enhanced offering which we are provisionally positioning as "Fast Fit
+". Adjoining our existing bodyshop repair facilities, these sites share
infrastructure and capital investment, whilst offering drive-in facilities for
traditional "fast fit" offers, including MOT and some servicing needs. In the
current economic climate, we have based our financial planning on conservative
assumptions. However, we believe that there is demand for cost effective basic
servicing from trustworthy companies.
We put considerable emphasis on the level of service we offer our customers and
measure their satisfaction at every site on a monthly basis. I am pleased to
report that customer satisfaction for 2008 for the Group as a whole was 85% and
our objective is to increase this in 2009.
Outlook
We continued to grow in 2008 for the sixth year in succession.
The current economic environment is clearly difficult. The nature of our work
makes our business model more resistant to cyclical variances than many, but
some claims, such as light cosmetic vehicle damage can be deferred, whilst more
significant damage requires immediate rectification. It is this second category
of work which offers us protection from the extremes of the economic cycle. We
have built a market-leading position which will allow us to use our scale to
maximise cost efficiencies and with no bank debt and a profitable robust
business, we believe that we are well positioned to weather the current
difficult economic environment and to continue to execute our twin track
strategy of organic and acquisitive expansion.
Michael Wilmshurst
Chief Executive
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 December 2008
+----------------------------------------------------+-------+------------+------------+
| | | 2008 | 2007 |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
| |Notes | GBP'000 | GBP'000 |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
| Revenue | | 179,337 | 151,947 |
+----------------------------------------------------+-------+------------+------------+
| Cost of sales | | (95,857) | (81,360) |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
| Gross profit | | 83,480 | 70,587 |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
| Distribution costs | | (46,933) | (38,858) |
+----------------------------------------------------+-------+------------+------------+
| Administrative expenses | | (28,822) | (24,872) |
+----------------------------------------------------+-------+------------+------------+
| Share option charge | | (240) | (240) |
+----------------------------------------------------+-------+------------+------------+
| Operating profit before non-recurring items | | 7,485 | 6,617 |
+----------------------------------------------------+-------+------------+------------+
| Non recurring items | 2 | (750) | - |
+----------------------------------------------------+-------+------------+------------+
| Operating profit | | 6,735 | 6,617 |
+----------------------------------------------------+-------+------------+------------+
| Finance income | 3 | 325 | 237 |
+----------------------------------------------------+-------+------------+------------+
| Finance costs | 3 | (8) | (39) |
+----------------------------------------------------+-------+------------+------------+
| Profit before tax for the year | | 7,052 | 6,815 |
+----------------------------------------------------+-------+------------+------------+
| Tax expense | | (2,030) | (1,744) |
+----------------------------------------------------+-------+------------+------------+
| Net profit for the year | | 5,022 | 5,071 |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
| Earnings per Share arising from both total and | | | |
| continuing operations | | | |
+----------------------------------------------------+-------+------------+------------+
| Basic | 4 | 11.6p | 11.3p |
+----------------------------------------------------+-------+------------+------------+
| Diluted | 4 | 11.5p | 11.0p |
+----------------------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------------------+-------+------------+------------+
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED BALANCE SHEET
At 31 December 2008
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| | | 2008 | 2007 |
+-------------------------------------------------+-------+-------------+-------------+
| |Notes | GBP'000 | GBP'000 |
+-------------------------------------------------+-------+-------------+-------------+
| Assets | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Non-current | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Goodwill | | 7,752 | 7,038 |
+-------------------------------------------------+-------+-------------+-------------+
| Property, plant and equipment | | 9,811 | 8,100 |
+-------------------------------------------------+-------+-------------+-------------+
| Pension and other employee assets | 5 | 7,619 | 5,273 |
+-------------------------------------------------+-------+-------------+-------------+
| | | 25,182 | 20,411 |
+-------------------------------------------------+-------+-------------+-------------+
| Current | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Inventories | | 2,678 | 2,591 |
+-------------------------------------------------+-------+-------------+-------------+
| Trade and other receivables | | 29,500 | 26,545 |
+-------------------------------------------------+-------+-------------+-------------+
| Cash and cash equivalents | | 5,395 | 5,152 |
+-------------------------------------------------+-------+-------------+-------------+
| | | 37,573 | 34,288 |
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Total assets | | 62,755 | 54,699 |
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Equity | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Equity attributable to the shareholders | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Share capital | 6 | 5,400 | 5,578 |
+-------------------------------------------------+-------+-------------+-------------+
| Capital redemption reserve | | 1,209 | 1,031 |
+-------------------------------------------------+-------+-------------+-------------+
| Share premium account | | 11,104 | 11,104 |
+-------------------------------------------------+-------+-------------+-------------+
| Revaluation reserve | | 8 | 8 |
+-------------------------------------------------+-------+-------------+-------------+
| Retained earnings | | 8,970 | 7,426 |
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Total equity | | 26,691 | 25,147 |
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Liabilities | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Non-current | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Provisions | | 86 | 125 |
+-------------------------------------------------+-------+-------------+-------------+
| Deferred tax liabilities | | 1,678 | 1,002 |
+-------------------------------------------------+-------+-------------+-------------+
| | | 1,764 | 1,127 |
+-------------------------------------------------+-------+-------------+-------------+
| Current | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Provisions | | 4 | 14 |
+-------------------------------------------------+-------+-------------+-------------+
| Trade and other payables | | 33,728 | 27,380 |
+-------------------------------------------------+-------+-------------+-------------+
| Current tax liabilities | | 568 | 1,031 |
+-------------------------------------------------+-------+-------------+-------------+
| | | 34,300 | 28,425 |
+-------------------------------------------------+-------+-------------+-------------+
| Total liabilities | | 36,064 | 29,552 |
+-------------------------------------------------+-------+-------------+-------------+
| | | | |
+-------------------------------------------------+-------+-------------+-------------+
| Total equity and liabilities | | 62,755 | 54,699 |
+-------------------------------------------------+-------+-------------+-------------+
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year to 31 December 2008
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| | Share | Capital | Share | Revaluation | Retained | Total |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| | capital | redemption | premium | reserve | earnings | |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| | | reserve | account | | | |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Balance at 1 January 2007 | 5,609 | 1,000 | 11,104 | 8 | 4,226 | 21,947 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Income for the year | - | - | - | - | 5,071 | 5,071 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Total recognised income and | - | - | - | - | 5,071 | 5,071 |
| expense for the period | | | | | | |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Share buyback | (31) | 31 | - | - | (271) | (271) |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Share option charge | - | - | - | - | 240 | 240 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Dividend paid | - | - | - | - | (1,840) | (1,840) |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Balance at 31 December 2007 | 5,578 | 1,031 | 11,104 | 8 | 7,426 | 25,147 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Income for the year | - | - | - | - | 5,022 | 5,022 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Total recognised income and | - | - | - | - | 5,022 | 5,022 |
| expense for the period | | | | | | |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Share buyback | (178) | 178 | - | - | (1,688) | (1,688) |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Share option charge | - | - | - | - | 240 | 240 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Dividend paid | - | - | - | - | (2,030) | (2,030) |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
| Balance at 31 December 2008 | 5,400 | 1,209 | 11,104 | 8 | 8,970 | 26,691 |
+---------------------------------+---------+------------+---------+-------------+----------+---------+
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 December 2008
+----------------------------------------------------+----------+----------+----------+
| | | 2008 | 2007 |
+----------------------------------------------------+----------+----------+----------+
| | | GBP'000 | GBP'000 |
+----------------------------------------------------+----------+----------+----------+
| Operating activities | | | |
+----------------------------------------------------+----------+----------+----------+
| Profit for the year before tax | | 7,052 | 6,815 |
+----------------------------------------------------+----------+----------+----------+
| Adjustments to arrive at operating cash flow: | | | |
+----------------------------------------------------+----------+----------+----------+
| Net finance costs | | 8 | (237) |
+----------------------------------------------------+----------+----------+----------+
| Depreciation | | 2,303 | 2,225 |
+----------------------------------------------------+----------+----------+----------+
| Profit on sale of businesses | | - | (165) |
+----------------------------------------------------+----------+----------+----------+
| Loss/(profit) on sale of property, plant and | | 35 | (548) |
| equipment | | | |
+----------------------------------------------------+----------+----------+----------+
| Changes in inventories | | (87) | (43) |
+----------------------------------------------------+----------+----------+----------+
| Changes in trade and other receivables | | (2,955) | (5,155) |
+----------------------------------------------------+----------+----------+----------+
| Changes in trade and other payables | | 6,369 | 2,670 |
+----------------------------------------------------+----------+----------+----------+
| Changes in provisions | | - | (342) |
+----------------------------------------------------+----------+----------+----------+
| Movement in pension fund asset - IAS 19 | | 209 | 1,059 |
+----------------------------------------------------+----------+----------+----------+
| Share option scheme charge | | 240 | 240 |
+----------------------------------------------------+----------+----------+----------+
| Outflow from pension obligations | | (2,555) | (2,465) |
+----------------------------------------------------+----------+----------+----------+
| Outflow from provisions | | (49) | (201) |
+----------------------------------------------------+----------+----------+----------+
| Net cash flow from operating activities | | 10,570 | 3,853 |
+----------------------------------------------------+----------+----------+----------+
| Tax paid | | (1,817) | (963) |
+----------------------------------------------------+----------+----------+----------+
| Investing activities | | | |
+----------------------------------------------------+----------+----------+----------+
| Additions to property, plant and equipment | | (2,788) | (1,796) |
+----------------------------------------------------+----------+----------+----------+
| Proceeds from the disposal of businesses | | - | 432 |
+----------------------------------------------------+----------+----------+----------+
| Proceeds from the disposal of property, plant and | | 273 | 930 |
| equipment | | | |
+----------------------------------------------------+----------+----------+----------+
| Acquisition of businesses - cost | | (2,269) | (2,362) |
+----------------------------------------------------+----------+----------+----------+
| | | (4,784) | (2,796) |
+----------------------------------------------------+----------+----------+----------+
| Financing activities | | | |
+----------------------------------------------------+----------+----------+----------+
| Dividend paid | | (2,030) | (1,840) |
+----------------------------------------------------+----------+----------+----------+
| Interest paid | | (8) | - |
+----------------------------------------------------+----------+----------+----------+
| Interest received | | - | 237 |
+----------------------------------------------------+----------+----------+----------+
| Purchase of own shares | | (1,688) | (271) |
+----------------------------------------------------+----------+----------+----------+
| | | (3,726) | (1,874) |
+----------------------------------------------------+----------+----------+----------+
| Net increase/(decrease) in cash and cash | | 243 | (1,780) |
| equivalents | | | |
+----------------------------------------------------+----------+----------+----------+
| Cash and cash equivalents at beginning of year | | 5,152 | 6,932 |
+----------------------------------------------------+----------+----------+----------+
| Cash and cash equivalents at end of year | | 5,395 | 5,152 |
+----------------------------------------------------+----------+----------+----------+
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
NOTES TO THE PRELIMINARY STATEMENT
1. BASIS OF PREPARATION
This preliminary statement has 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 2007.
This preliminary statement does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985. The figures for the year ended 31
December 2007 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. NON RECURRING ITEM
+-----------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+-----------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------+-----------+-----------+
| Bad debt provision for debtor in administration | 750 | - |
+-----------------------------------------------------+-----------+-----------+
This provision was made to provide against the debt of a customer that went into
administration in March 2009.
3. FINANCE INCOME AND FINANCE COSTS
+-----------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+-----------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------+-----------+-----------+
| Finance Income | | |
+-----------------------------------------------------+-----------+-----------+
| Interest receivable on bank balances | - | 237 |
+-----------------------------------------------------+-----------+-----------+
| Pension costs: (see note 5) | | |
+-----------------------------------------------------+-----------+-----------+
| - Interest on obligation | 3,911 | - |
+-----------------------------------------------------+-----------+-----------+
| - Expected return on assets | (4,236) | - |
+-----------------------------------------------------+-----------+-----------+
| | 325 | 237 |
+-----------------------------------------------------+-----------+-----------+
| Finance Costs | | |
+-----------------------------------------------------+-----------+-----------+
| Interest payable on bank balances | 8 | - |
+-----------------------------------------------------+-----------+-----------+
| Pension costs: (see note 5) | | |
+-----------------------------------------------------+-----------+-----------+
| - Interest on obligation | - | 3,786 |
+-----------------------------------------------------+-----------+-----------+
| - Expected return on assets | - | (3,747) |
+-----------------------------------------------------+-----------+-----------+
| | 8 | 39 |
+-----------------------------------------------------+-----------+-----------+
4. EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share has been calculated using the net results attributable
to the shareholders of the Company of GBP5,022,000 (2007: GBP5,071,000). The
weighted average number of outstanding shares used for the basic earnings per
share amounted to 43,264,023 (2007: 44,864,001).
Diluted earnings per share
Diluted earnings per share has been calculated using the net results
attributable to the shareholders of the Company of GBP5,022,000 (2007:
GBP5,071,000). The weighted average number of outstanding shares used for the
diluted earnings per share amounted to 43,672,070 (2007: 46,108,171) and assumes
the exercise of all the share options detailed in note 6 since the date they
were granted and the average market price of GBP1.23.
Underlying earnings per share
The underlying earnings per share has been calculated as follows:
+-------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+-------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------+-----------+-----------+
| Profit before tax (as stated) | 7,052 | 6,815 |
+-------------------------------------------------+-----------+-----------+
| Non recurring item | 750 | - |
+-------------------------------------------------+-----------+-----------+
| | 7,802 | 6,815 |
+-------------------------------------------------+-----------+-----------+
| Tax expense (as stated) | (2,030) | (1,744) |
+-------------------------------------------------+-----------+-----------+
| Tax effect on non recurring item | (214) | - |
+-------------------------------------------------+-----------+-----------+
| | 5,558 | 5,071 |
+-------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------+-----------+-----------+
| Adjusted earnings per share | 12.8p | 11.3p |
+-------------------------------------------------+-----------+-----------+
The weighted average number of outstanding shares used for the basic earnings
per share amounted to 43,264,023 (2007: 44,864,001).
5. 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 GBP2,555,000 (2007: GBP2,465,000)
to the defined benefit scheme during the year. 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. In 2005 the Company agreed with
the trustees of the pension scheme to make annual contributions of approximately
GBP2.3 million (increasing annually by the Retail Price Index) with a view to
eradicating the Scheme Specific Funding deficit over a period of approximately
7.5 years.
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 31 December 2008 by a qualified independent
actuary.
+----------------------------------------+----------+----------+----------+----------+
| IAS 19 | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | 2008 | 2007 | 2006 | 2005 |
+----------------------------------------+----------+----------+----------+----------+
| | % | % | % | % |
+----------------------------------------+----------+----------+----------+----------+
| The major assumptions used by the | | | | |
| actuary were (in nominal terms): | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Rate of increase in salaries | n/a | n/a | n/a | 3.3 |
+----------------------------------------+----------+----------+----------+----------+
| Rate of increase in pensions - accrued | 3.0 | 3.0 | 3.0 | 3.0 |
| pre 5 April 1997 | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Rate of increase in pensions - accrued | 2.70 | 3.15 | 2.85 | 2.65 |
| post 5 April 1997 | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Discount rate | 6.5 | 6.1 | 5.4 | 5.0 |
+----------------------------------------+----------+----------+----------+----------+
| Inflation assumption | 2.70 | 3.15 | 2.85 | 2.65 |
+----------------------------------------+----------+----------+----------+----------+
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. The pre and post retirement mortality assumptions use
the A92 and PA92 tables respectively. The 1992 series of mortality tables were
published by the Continuous Mortality Investigation Bureau and are based on
mortality data from life assurance companies over the years 1991 to 1994
inclusive. The "A92" tables are based on the mortality experience of life
assurance policyholders. The "PA92" tables are based on the mortality experience
of pension annuity policyholders.
The assets in the scheme and the expected rate of return were:
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| | 2008 | 2007 | 2006 | 2005 |
+--------------+---------------------+---------------------+---------------------+---------------------+
| | Long | Value | Long | Value | Long | Value | Long | Value |
| | term | GBP'000 | term | GBP'000 | term | GBP'000 | term | GBP'000 |
| | rate | | rate | | rate | | rate | |
| | of | | of | | of | | of | |
| | return | | return | | return | | return | |
| | expected | | expected | | expected | | expected | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Equities | 9.6% | 26,575 | 8.5% | 37,044 | 8.1% | 34,525 | 8.0% | 29,340 |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Bonds | 5.2% | 9,668 | 5.3% | 9,664 | 4.8% | 9,341 | 4.4% | 9,493 |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Property | 9.6% | 4,378 | 8.5% | 6,055 | 8.1% | 6,400 | 8.0% | 5,454 |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Other | 4.2% | 3,047 | 4.3% | 1,970 | 3.3% | 94 | 3.0% | 232 |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Total market | | 43,668 | | 54,733 | | 50,360 | | 44,519 |
| value of | | | | | | | | |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Present | | (60,131) | | (65,040) | | (70,928) | | (65,552) |
| value of | | | | | | | | |
| defined | | | | | | | | |
| obligations | | | | | | | | |
| (funded | | | | | | | | |
| plans) | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Present | | (16,463) | | (10,307) | | (20,568) | | (21,033) |
| value of | | | | | | | | |
| unfunded | | | | | | | | |
| obligations | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Unrecognised | | 24,082 | | 15,580 | | 24,435 | | 23,024 |
| actuarial | | | | | | | | |
| losses | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Net asset in | | 7,619 | | 5,273 | | 3,867 | | 1,991 |
| balance | | | | | | | | |
| sheet | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
| Actual | | (11,783) | | 3,540 | | 4,719 | | 5,584 |
| return on | | | | | | | | |
| assets in | | | | | | | | |
| period | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+----------+----------+
The overall expected rates of return were determined by the Directors of the
Group, with the advice of their actuarial advisers. The expected return
available on equities has been taken as the dividend yield on the FTSE Actuaries
All Share Index plus real dividend growth of 2.1% plus price inflation.
Reconciliation of opening and closing balances of the present value of the
defined benefit obligations
+--------------------------------+------------+------------+------------+------------+
| | 2008 | 2007 | 2006 | 2005 |
+--------------------------------+------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------------+------------+------------+------------+
| Benefit obligation at | 65,040 | 70,928 | 65,552 | 61,984 |
| beginning of year | | | | |
+--------------------------------+------------+------------+------------+------------+
| Service cost | - | - | 613 | 1,148 |
+--------------------------------+------------+------------+------------+------------+
| Interest cost | 3,911 | 3,786 | 3,262 | 3,344 |
+--------------------------------+------------+------------+------------+------------+
| Contributions by scheme | - | - | 212 | 328 |
| members | | | | |
+--------------------------------+------------+------------+------------+------------+
| Actuarial (gain)/loss | (6,983) | (8,042) | 3,351 | 323 |
+--------------------------------+------------+------------+------------+------------+
| Curtailments and settlements | - | - | (611) | - |
+--------------------------------+------------+------------+------------+------------+
| Benefits paid | (1,837) | (1,632) | (1,451) | (1,575) |
+--------------------------------+------------+------------+------------+------------+
| Balance at end of year | 60,131 | 65,040 | 70,928 | 65,552 |
+--------------------------------+------------+------------+------------+------------+
Reconciliation of opening and closing balances of the fair value of plan assets
+--------------------------------+-----------------+-----------+-----------+---------+
| | 2008 | 2007 | 2006 | 2005 |
+--------------------------------+-----------------+-----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-----------------+-----------+-----------+---------+
| Fair value of scheme assets at | 54,733 | 50,360 | 44,519 | 37,601 |
| beginning of year | | | | |
+--------------------------------+-----------------+-----------+-----------+---------+
| Expected return on scheme | 4,236 | 3,747 | 3,248 | 2,471 |
| assets | | | | |
+--------------------------------+-----------------+-----------+-----------+---------+
| Actuarial (loss)/gain | (16,019) | (207) | 972 | 3,113 |
+--------------------------------+-----------------+-----------+-----------+---------+
| Contributions by employers | 2,555 | 2,465 | 2,860 | 2,581 |
+--------------------------------+-----------------+-----------+-----------+---------+
| Contributions by scheme | - | - | 212 | 328 |
| members | | | | |
+--------------------------------+-----------------+-----------+-----------+---------+
| Benefits paid | (1,837) | (1,632) | (1,451) | (1,575) |
+--------------------------------+-----------------+-----------+-----------+---------+
| Asset at end of year | 43,668 | 54,733 | 50,360 | 44,519 |
+--------------------------------+-----------------+-----------+-----------+---------+
The amounts recognised in the income statement are:
+-----------------------------------------------------------+----------+----------+
| | 2008 | 2007 |
+-----------------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+----------+----------+
| Current service cost | - | - |
+-----------------------------------------------------------+----------+----------+
| Interest on obligation | 3,911 | 3,786 |
+-----------------------------------------------------------+----------+----------+
| Expected return on assets | (4,236) | (3,747) |
+-----------------------------------------------------------+----------+----------+
| Curtailments and settlements | - | - |
+-----------------------------------------------------------+----------+----------+
| Actuarial loss recognised in year | 534 | 1,020 |
+-----------------------------------------------------------+----------+----------+
| | 209 | 1,059 |
+-----------------------------------------------------------+----------+----------+
| Charged to: | | |
+-----------------------------------------------------------+----------+----------+
| Administration expenses | 534 | 1,020 |
+-----------------------------------------------------------+----------+----------+
| Finance income | (325) | - |
+-----------------------------------------------------------+----------+----------+
| Finance costs | - | 39 |
+-----------------------------------------------------------+----------+----------+
| | 209 | 1,059 |
+-----------------------------------------------------------+----------+----------+
History of scheme assets, obligations and experience adjustments
+-----------------------------------+----------+----------+----------+----------+----------+
| | 2008 | 2007 | 2006 | 2005 | 2004 |
+-----------------------------------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------+----------+----------+----------+----------+----------+
| Present value of defined benefit | (60,131) | (65,040) | (70,928) | (65,552) | (61,984) |
| obligations | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
| Fair value of scheme assets | 43,668 | 54,733 | 50,360 | 44,519 | 37,601 |
+-----------------------------------+----------+----------+----------+----------+----------+
| Deficit in scheme | (16,463) | (10,307) | (20,568) | (21,033) | (24,383) |
+-----------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
| Experience adjustments arising on | (6,983) | (8,042) | 3,351 | 323 | 1,954 |
| scheme liabilities | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
| Experience item as a % of scheme | (12%) | (12%) | 5% | 0% | 3% |
| liabilities | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
| Experience adjustments arising on | (16,019) | (207) | 972 | 3,113 | 1,270 |
| scheme assets | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
| Experience item as a % of scheme | (37%) | 0% | 2% | 7% | 3% |
| assets | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+
6. EQUITY
Share Capital
+----------------------------------+------------+----------+---+------------+-----------+
| | 2008 | | 2007 |
+----------------------------------+-----------------------+---+------------------------+
| | Shares | GBP'000 | | Shares | GBP'000 |
+----------------------------------+------------+----------+---+------------+-----------+
| Authorised | | | | | |
+----------------------------------+------------+----------+---+------------+-----------+
| Ordinary shares of 12.5p (2007: | 64,000,000 | 8,000 | | 64,000,000 | 8,000 |
| 12.5p) each | | | | | |
+----------------------------------+------------+----------+---+------------+-----------+
| Issued and fully paid | | | | | |
+----------------------------------+------------+----------+---+------------+-----------+
| Ordinary shares of 12.5p (2007: | 43,197,220 | 5,400 | | 44,622,220 | 5,578 |
| 12.5p) each | | | | | |
+----------------------------------+------------+----------+---+------------+-----------+
On 15 January 2008 the Company purchased 975,000 of its own shares at a price of
120p per share and 450,000 shares on 25 January 2008 at a price of 115p per
share. All shares purchased have been cancelled.
Of the 20,802,780 shares authorised, but not issued, 4,262,861 are reserved for
issue in respect of the share options.
Share Options
+---------------------+------------------------+-----------+-----------+-----------+
| | | Number of | Exercise | Exercise |
| | | | | |
+---------------------+------------------------+-----------+-----------+-----------+
| | | Shares | price | Period |
+---------------------+------------------------+-----------+-----------+-----------+
| M A Wilmshurst | Approved | 25,751 | GBP1.165 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| | Unapproved | 2,217,860 | GBP1.11 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| D J Loftus | Approved | 25,751 | GBP1.165 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| | Unapproved | 1,096,055 | GBP1.11 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| S D G Thompson | Approved | 25,751 | GBP1.165 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| | Unapproved | 871,693 | GBP1.11 | 2009-16 |
+---------------------+------------------------+-----------+-----------+-----------+
| | | 4,262,861 | | |
+---------------------+------------------------+-----------+-----------+-----------+
All the above options were issued on 4 July 2007 and no additional share options
have been issued since this date.
In total, GBP240,000 of employee compensation expense has been included in the
consolidated income statement for 2008 (2007: GBP240,000). The corresponding
credit is taken to shareholders' funds. No liabilities were recognised due to
share based transactions.
Each Director has been granted two transfers of options. The first tranche is
not subject to any vesting conditions and the second tranche is subject to
achievement of a Total Shareholder Return performance condition. Under both
tranches, vested options can be exercised at any time between the third and
tenth anniversary of the date of the grant.
7. FINANCIAL STATEMENTS
The audited financial statements will be posted to shareholders on 24 April 2009
and along with this announcement will be available from the registered office
of Nationwide Accident Repair Services plc at 17A Thorney Leys Park, Witney,
Oxfordshire, OX28 4GE and on the Company's website, www.narsplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKKKKABKDNNN
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