TIDMNARS
RNS Number : 5406A
Nationwide Accident Repair Srvs PLC
02 April 2012
NARS
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Preliminary Results
For the 12 months to 31 December 2011
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 it is the largest dedicated provider of
accident repair services in the UK.
KEY POINTS
-- Creditable underlying results in challenging year - results
affected by deterioration in trading conditions in H2 after
satisfactory H1
- prompt action in H2 to rebalance cost base, keeping capacity intact
-- Revenues maintained at GBP172.9m (2010: GBP172.3m)
-- Gross profit margin down by one percentage point to 46%
(2010: 47%) - impacted by mix of repair work which showed
significant reduction in higher margin cosmetic repair work
-- Non-recurring items totalled GBP8.1m (2010: GBPnil) - reflect cost reduction programme
- expected annualised savings of GBP1.9m
-- Underlying* profit before tax reduced by 8% to GBP5.5m (2010: GBP6.0m)
Statutory loss before tax of GBP2.6m (after non-recurring items)
(2010: GBP6.0m profit)
-- Underlying* earnings per share of 9.2p (2010: 10.4p)
Statutory loss per share of 5.5p (2010: 10.4p earnings)
-- Net cash up by 6.6% to GBP8.0m (2010: GBP7.5m)
-- Final dividend of 3.6p per share proposed (2010: 3.5p), takes
total to 5.5p per share (2010: 5.3p)
-- Continuing encouraging progress in non-insurance markets
(fleet & retail) - volumes up 25% and 55% respectively
-- Operational efficiencies remained a major focus
-- Board views growth prospects positively
* before non-recurring items
Michael Marx, Chairman, said,
"In a tough year for the industry, Nationwide has performed
robustly and underlying results for the year are creditable, with
profit before tax excluding non-recurring items at GBP5.5 million
on sales of GBP172.9 million. The decisive action we took in the
second half to reduce the cost base was the correct response to
position Nationwide appropriately for the future and while we have
cut back, we have preserved overall capacity. At the same time, we
are continuing to invest for long term growth both in our core
insurance market as well as our newer fleet and retail markets. The
overall market for repairs (both insurance-funded and fleet and
retail) remains substantial and Nationwide has the infrastructure
in place to build market share across all three sectors.
The Group has a strong balance sheet with net cash of GBP8.0
million and good cash generation. Therefore, while we expect
trading to remain challenging in 2012, we believe that the medium
and long term prospects of the Group are positive."
Enquiries:
Nationwide Accident Repair Michael Wilmshurst, Today: 020 3178
Services plc Chief Executive 6378
David Pugh, Finance T: 01993 701
Director 720
Biddicks Katie Tzouliadis/ Sophie T: 020 3178 6378
McNulty
Westhouse Securities Adam Lloyd / Antonio T: 020 7601 6100
Bossi
Chairman's Statement
Introduction
In very tough trading conditions, underlying results for the
year are creditable, with profit before tax excluding non-recurring
items at GBP5.5 million on sales of GBP172.9 million. In addition,
our financial position remains robust with net cash at the year end
standing at GBP8.0 million compared to GBP7.5 million at the same
point in 2010.
Underlying profits however are below our original expectations
for the financial year and reflect a difficult second half where
our more profitable light repair insurance work reduced both in
total and as a proportion of our overall repair volumes, not helped
by the very mild and dry weather. The trend for consumers to avoid
making claims on their motor insurance policies for light cosmetic
damage is a feature very much in play currently. Progress outside
our core insurance market in our newer market segments of fleet and
retail has been encouraging and we are successfully cross-selling
our services into new and existing customers. Over the year, fleet
and retail sales have risen respectively by 25% to GBP24.5 million
and 55% to GBP9.4 million.
In November 2011, in view of economic conditions, we took
decisive action to rebalance the Group's cost base. This was
largely completed in January 2012 and has incurred one-off costs of
GBP8.1 million in the period under review. The expected annualised
savings arising from the cost saving programme is approximately
GBP1.9 million. It is important to note that we have also preserved
our overall operational capacity.
Nationwide remains a leading operator in its core market,
benefiting from a comprehensive offering, a national network of
bodyshops and efficient operating systems. We continue to focus on
managing workflows effectively and our growing mobile repair
offering plays an important role in this, as well as aiding our
steady expansion in the fleet and retail markets. We believe that
the strategy of leveraging our infrastructure and systems to grow
sales in non-insurance related markets, where Nationwide is
currently relatively under-represented, continues to offer very
good growth potential over time and progress to date is
encouraging.
The Board is pleased to recommend an increased final dividend of
3.6p per share, taking the total dividend for the year to 5.5p
(2011: 5.3p).
Financial Results
Revenues for the year ended 31 December 2011 were GBP172.9
million (2010: GBP172.3 million). However, as indicated above, the
mix of repair work included a greater proportion of larger repairs,
with lower margins, against light repairs, with higher margins.
This adversely affected gross margins which reduced to 45.6% from
47.2% in 2010. Operating profit before non-recurring items was
GBP5.2 million (2010: GBP6.4 million).
Profit before tax before non-recurring items was GBP5.5 million
(2010: GBP6.0 million) and earnings per share before non-recurring
items were 9.2p per share (2010: 10.4p). During the year, the Group
implemented a cost reduction programme to align Nationwide's cost
base with the current market requirements. The total one-off
non-recurring items relating to this programme were GBP8.1 million,
of which GBP1.8 million was a cash cost in the financial year under
review. The expected annualised savings are GBP1.9 million. Taking
into account non-recurring items, the statutory loss before tax was
GBP2.6 million and the statutory loss per share was 5.5p (2010:
earnings per share of 10.4p).
The Group's balance sheet remains robust, with no borrowings and
net cash of GBP8.0 million as at 31 December 2011 (2010: GBP7.5
million), which was ahead of expectations due to strong year end
customer cash receipts.
Dividend
The Board is pleased to recommend an increased final dividend of
3.6 pence per share (2010: 3.5 pence per share). This takes the
total dividend for the year to 5.5 pence per share (2010: 5.3 pence
per share).
Subject to shareholder approval at the Annual General Meeting on
25 June 2012, the final dividend will be paid to shareholders on 2
July 2012, based on the register at the close of business on 1 June
2012.
Trading Overview
Conditions in our traditional insurance-funded market proved
challenging. During the first half of the year, we achieved a small
increase in volumes, compared to an overall decline in insurance
claims across the industry, however insurance claims frequency
decreased sharply in the second half and our volumes were affected,
particularly for light repairs. In order to win volumes in a market
where claims frequency is under pressure, we launched a number of
sales initiatives and we continued to secure new insurance
contracts over the year. Given the ongoing economic conditions, in
the second half, management took decisive action and initiated a
cost reduction programme to realign Nationwide's cost base with
demand, generating annualised cost savings of approximately GBP1.9
million.
Nationwide remains a leading provider in the insurance
marketplace and notwithstanding the current environment, we believe
that the Group is well placed to build on this position. As
insurers seek to enhance efficiency by consolidating their
suppliers, our integrated offering is attractive.
Our initiative to build our presence in the fleet and retail
markets saw good progress, with pleasing volume increases. Fleet
volumes increased 25% to GBP24.5 million (2010: GBP19.6 million).
We are cross-selling our core competencies to the fleet and retail
markets with increasing success.
Direct retail sales grew by 55% to GBP9.4 million (2010: GBP6.1
million). We have invested in additional resource to support growth
in these markets and it is pleasing to see the benefits of this
coming through. In October 2011, we also opened our third Fast Fit+
branch, which offers vehicle servicing, at our existing bodyshop
site in Redruth, Cornwall.
The mobile service which we re-launched in 2010 has continued to
perform strongly and revenues grew 57% during 2011 to GBP7.5
million (2010: GBP4.8 million). Our mobile offering is attractive
to fleet and retail customers, where speed and convenience are
paramount, but also to our core insurance customers.
The Board
After the year end, at the start of March 2012, Nationwide
announced that it had appointed David Pugh as Finance Director with
effect from 10 April 2012. He succeeds David Loftus, who is
stepping down from the Board and the Company on 10 April. I would
like to reiterate the Board's thanks to David Loftus for his hard
work and contribution to the Group over the last nine years and
welcome David Pugh to the team.
Outlook
In a tough year for the industry, Nationwide has performed
robustly and the decisive action we took in the second half to
reduce the cost base was the correct response to position
Nationwide appropriately for the future. At the same time, we are
continuing to invest for long term growth both in our core
insurance market as well as our newer fleet and retail markets. The
overall market for repairs (both insurance-funded and fleet and
retail) remains substantial and Nationwide has the infrastructure
in place to build market share across all three sectors.
In addition, the Group has a strong balance sheet with net cash
of GBP8.0 million and good cash generation.
Therefore, while we expect trading to remain challenging in
2012, we believe that the medium and long term prospects of the
Group are positive.
Michael Marx
Chairman
Chief Executive's Report
Introduction
2011 proved to be a challenging year for the automotive repair
sector and the number of people claiming on their insurance,
especially for smaller repairs, continued to decline. Nationwide is
not immune to this industry-wide trend and our profitability was
affected, especially in the second half of the year although it was
creditable to maintain overall sales at GBP173 million. Management
responded decisively to the trading conditions in order to ensure
Nationwide's capacity matched current demand more closely and we
implemented a cost reduction programme in the second half to
protect and improve profitability going forward. This will generate
annualised cost savings of approximately GBP1.9 million per annum,
although the non-recurring costs incurred in 2011 impacted results
for the year.
Our strategy to grow our overall market share by entering the
fleet and retail markets is proving a successful and key driver for
future growth. By leveraging our core competencies, we have
achieved further progress in these sectors during the year. The
strong growth in both fleet and retail sales helped to offset the
weakening insurance volumes and we continue to see significant and
encouraging expansion opportunities. We also believe that the
current challenging market will create opportunities to grow our
presence in our traditional insurance-funded market and have
launched a number of sales initiatives in order to further increase
market share. After the year end, in February 2012, we were pleased
to be appointed by Hastings Direct as sole provider for all vehicle
repairs. This nearly doubles the size of Nationwide's contract with
Hastings Direct. As insurers seek to enhance their service
standards, secure quality capacity and use information technology
to improve their efficiency, we remain well-placed to develop both
our existing and new relationships.
Managing Cash and Dividends
At 31 December 2011, Nationwide's net cash balances stood at
GBP8.0 million (31 December 2010: GBP7.5 million). Credit control
and cash management remain a key focus for the Group and this
result demonstrates our continued success in this area. It is
particularly pleasing in view of both the additional investment in
our mobile capacity and resource to support our fleet and retail
expansion, and the one-off costs incurred during our cost reduction
programme. (Details of our investment and cost reduction programme
are given in the operational review below.)
We are pleased to recommend an increased final dividend of 3.6
pence per share, taking the total dividend for the year to 5.5
pence (2010: 5.3 pence per share).
Operations Review
The core insurance-funded market saw repair volumes decline
during the year as a whole. In the first half, Nationwide
maintained some volume growth, against the industry trend, but
volumes decreased markedly in the second half, influenced by a
number of factors including the unusually mild and dry weather
conditions. Not surprisingly, the current economic climate has
resulted in customers deferring the repair of light, more cosmetic
damage and the proportion of larger, lower margin repairs
increased. This resulted in a lower overall gross margin for the
year at 45.6% down from 47.2% in 2010.
In November 2011 we announced a cost reduction programme which
included the closure of eight under-utilised and, therefore,
non-core sites, with the transfer of volumes to other sites. We
largely completed the programme by the year end, incurring a total
of GBP8.1 million one-off costs, whilst maintaining the overall
capacity of our network. This will deliver cost savings of GBP1.9
million on an annualised basis.
We have continued to focus on improving our operational
efficiency. Key areas include enhancing parts margins, conversion
ratios, speed of repair, customer satisfaction and, of course,
securing additional sales from both new and existing customers.
As the UK's largest accident repair group our purchasing of
parts is significant and economies of scale are an important
element of our competitive advantage. During 2011, we further
improved our parts margin (by almost 1%), a useful contribution in
a challenging market.
Conversion rates, i.e. the number of opportunities that we
convert into repairs, increased overall from 84.4% in 2010 to 86.7%
in 2011 and we are encouraged by the increasing effectiveness of
our 'up stream' Network Services call centres in securing and
converting claims. This integrated offer, comprising call centres
and repair capability (fixed site and mobile), is proving
attractive to both insurers and the fleet market and continues to
support growth. The speed at which we repair vehicles is important
to the majority of markets we service and offers us operational and
commercial benefits. In 2010 the average "full cycle" period (from
the point of claim to the point of repair completion) was 23.57
days. By balancing capacity with demand through our call centres
and increasingly sophisticated IT platform, the continued roll-out
of our mobile repair service (which is a particularly rapid
solution) and working with our insurance customers to streamline
processes, we have reduced this to 20.33 days in 2011. Measuring
our "key to key" average (which is the average time taken to
complete a repair, from the day we receive a vehicle to the day it
is returned to a customer), we have reduced the average to 11.68
days from 12.93 days in 2010. There are opportunities to further
improve both the "full cycle" and "key to key" averages,
particularly for those repairs deployed centrally through our
Network Services division.
Customer satisfaction levels across the business saw an increase
in 2011 to 85.9% (2010: 85.3%), as measured by independent
telephone surveys of approximately 17,000 of our customers. The
same customers also rated the "quality of repair" at 91%, similar
to 2010. We also scored strongly in insurers' own benchmarks.
Our enhanced offer includes the mobile repair service, now
integrated within our fixed site repair network. Sales have
increased by 57% to GBP7.54 million, demonstrating the
attractiveness of this service as part of our 'one stop shop'
offer. Our dedicated glass repair offering, Motorglass, performed
very strongly with sales of GBP4.37 million, an increase of 71% on
2010, when it launched. The increased mobile capacity enables the
Group to manage its workflows more efficiently and provides
customers with a quick and convenient service. Both our mobile and
Motorglass operations are now making a good contribution to Group
performance and we remain confident of further growth
opportunities.
The fleet and retail markets are a natural extension to our core
insurance business and the mobile offering is highly attractive to
all three target segments. We achieved excellent growth in both
fleet and retail sales during the year.
Our fleet sales increased by 25% to GBP24.5 million and we now
have established a presence in the rental vehicle, governmental and
private commercial sectors. We also secured a number of new fleet
customers and should see the full benefit of these relationships
coming through in 2012 and beyond. As a result of our success in
this area a number of insurance customers, including AXA and
Zurich, have engaged with us to work on this important sector of
the market.
Direct retail sales have improved by 55% over last year to
GBP9.4 million as we continue to strengthen our offer and sales
process. These sales typically involve undertaking additional
repairs for private individuals while their vehicles are being
repaired under an insurance claim and are targeted to provide
convenience, quality and value for money. Nationwide now has a
proven track record of successfully integrating additional
automotive support services within our offer. This process
continues and in 2011 we opened our third Fast Fit+ branch in
Redruth, Cornwall, offering MOTs and other vehicle services such as
the supply and fitting of exhausts and tyres.
Outlook
Nationwide has the foundations in place on which to build, both
operationally and financially. Although the downturn in insurance
repair volumes is not expected to reverse in the short term,
management has taken the necessary actions to align our bodyshop
network with demand, whilst maintaining capacity and investing in
growth areas such as fleet and retail.
The Group is increasingly well positioned to offer existing and
potential customers an integrated, automotive support service, has
a strong balance sheet, with net cash and no borrowings, and good
cash conversion. We remain confident that medium and long term
prospects for Nationwide to capture market share in its three
target markets, insurance, fleet and retail, are positive.
Michael Wilmshurst
Chief Executive
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 December 2011
2011 2010
Notes GBP'000 GBP'000
Revenue 172,937 172,251
Cost of sales (94,080) (90,901)
----------------------------------------------- ------ --------- ---------
Gross profit 78,857 81,350
Distribution costs (45,461) (46,492)
Administrative expenses (28,131) (28,335)
Share option charge (49) (98)
----------------------------------------------- ------ --------- ---------
Operating profit before non-recurring items 5,216 6,425
Non-recurring items - administrative expenses 2 (8,093) (5)
----------------------------------------------- ------ --------- ---------
Operating (loss)/profit (2,877) 6,420
Finance income 3 289 5
Finance costs 3 - (391)
----------------------------------------------- ------ --------- ---------
(Loss)/profit before tax (2,588) 6,034
Income tax credit/(expense) 206 (1,550)
----------------------------------------------- ------ --------- ---------
(Loss)/profit for the period (2,382) 4,484
----------------------------------------------- ------ --------- ---------
Other comprehensive income - -
----------------------------------------------- ------ --------- ---------
Total comprehensive income for the period (2,382) 4,484
----------------------------------------------- ------ --------- ---------
Attributable to:
Equity holders of the parent (2,382) 4,484
----------------------------------------------- ------ --------- ---------
Earnings per Share
Basic 4 (5.5p) 10.4p
Diluted 4 (5.5p) 10.4p
----------------------------------------------- ------ --------- ---------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2011
2011 2010
Notes GBP'000 GBP'000
----------------------------------------- ------ -------- --------
Assets
Non--current assets
Goodwill 6,266 7,768
Property, plant and equipment 11,353 12,066
Pension assets 11,391 9,589
----------------------------------------- ------ -------- --------
29,010 29,423
----------------------------------------- ------ -------- --------
Current assets
Inventories 2,459 3,148
Trade and other receivables 28,113 27,322
Current tax receivable 692 -
Cash and cash equivalents 7,995 7,459
----------------------------------------- ------ -------- --------
39,259 37,929
----------------------------------------- ------ -------- --------
Total assets 68,269 67,352
----------------------------------------- ------ -------- --------
Liabilities
Non--current liabilities
Long-term provisions 2,621 40
Deferred tax liabilities 2,525 2,621
----------------------------------------- ------ -------- --------
5,146 2,661
----------------------------------------- ------ -------- --------
Current Liabilities
Short-term provisions 1,353 31
Trade and other payables 35,740 33,800
Current tax liabilities - 164
----------------------------------------- ------ -------- --------
37,093 33,995
----------------------------------------- ------ -------- --------
Total liabilities 42,239 36,656
----------------------------------------- ------ -------- --------
Net assets 26,030 30,696
----------------------------------------- ------ -------- --------
Equity
Equity attributable to the shareholders
of the parent
Share capital 6 5,400 5,400
Capital redemption reserve 1,209 1,209
Share premium account 11,104 11,104
Revaluation reserve 8 8
Retained earnings 8,309 12,975
----------------------------------------- ------ -------- --------
Total equity 26,030 30,696
----------------------------------------- ------ -------- --------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2011
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
2010 5,400 1,209 11,104 8 10,596 28,317
Share option charge - - - - 98 98
Dividend paid - - - - (2,203) (2,203)
-------------------------- -------- ----------- -------- ------------ --------- --------
Transactions with owners - - - - (2,105) (2,105)
-------------------------- -------- ----------- -------- ------------ --------- --------
Profit for the year - - - - 4,484 4,484
Other comprehensive - - - - - -
income
-------------------------- -------- ----------- -------- ------------ --------- --------
Total comprehensive
income for the year - - - - 4,484 4,484
Balance at 31 December
2010 5,400 1,209 11,104 8 12,975 30,696
Share option charge - - - - 49 49
Dividend paid - - - - (2,333) (2,333)
-------------------------- -------- ----------- -------- ------------ --------- --------
Transactions with owners - - - - (2,284) (2,284)
-------------------------- -------- ----------- -------- ------------ --------- --------
Loss for the year - - - - (2,382) (2,382)
Other comprehensive - - - - - -
income
-------------------------- -------- ----------- -------- ------------ --------- --------
Total comprehensive
income for the year - - - - (2,382) (2,382)
-------------------------- -------- ----------- -------- ------------ --------- --------
Balance at 31 December
2011 5,400 1,209 11,104 8 8,309 26,030
-------------------------- -------- ----------- -------- ------------ --------- --------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 December 2011
2011 2010
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Operating activities
(Loss)/Profit for the year (2,382) 4,484
Adjustments to arrive at operating cash flow:
Net finance income - (5)
Depreciation 2,380 2,144
Goodwill written off on sites (non-recurring 1,502 -
item)
Loss/(Profit) on sale of property, plant and
equipment (incl. non-recurring items) 410 (820)
Taxation recognised in profit or loss (206) 1,550
Changes in inventories 689 (831)
Changes in trade and other receivables (791) (3,862)
Changes in trade and other payables 1,940 4,230
Changes in provisions 3,903 37
Movement in pension fund asset - IAS 19 798 1,661
Share option scheme charge 49 98
Outflow from pension obligations (2,600) (2,600)
Outflow from provisions - (83)
------------------------------------------------------ -------- --------
Net cash flow from operating activities 5,692 6,003
Tax paid (746) (1,187)
------------------------------------------------------ -------- --------
4,946 4,816
Investing activities
Additions to property, plant and equipment (2,396) (4,325)
Proceeds from the disposal of property, plant
and equipment 319 897
Interest received - 5
------------------------------------------------------ -------- --------
(2,077) (3,423)
------------------------------------------------------ -------- --------
Financing activities
Dividend paid (2,333) (2,203)
(2,333) (2,203)
------------------------------------------------------ -------- --------
Net increase/(decrease) in cash and cash equivalents 536 (810)
Cash and cash equivalents at beginning of year 7,459 8,269
------------------------------------------------------ -------- --------
Cash and cash equivalents at end of year 7,995 7,459
------------------------------------------------------ -------- --------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
NOTES TO THE PRELIMINARY STATEMENT
1. BASIS OF PREPARATION
This preliminary statement has been prepared under the
historical cost convention. The accounting policies have remained
unchanged from the previous year.
The financial information set out in this report does not
constitute the Company's statutory accounts for the years ended 31
December 2011 or 2010 but is derived from those accounts. Statutory
accounts for 2010 have been delivered to the registrar of
companies, and those for 2011 will be delivered in due course. The
auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include reference to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
2. non-recurring itemS - Administrative costs
2011 2010
GBP'000 GBP'000
-------------------------------------------- -------- --------
Profit on assets destroyed in fire - 845
Redundancy costs (996) (337)
Site closure costs (5,595) (513)
Goodwill impaired relating to closed sites (1,274) -
Goodwill impaired relating to current site (228) -
-------------------------------------------- -------- --------
(8,093) (5)
-------------------------------------------- -------- --------
Eight sites were closed in December 2011 and one site in June
2011. The redundancy costs relate to amounts paid in 2011 in
relation to these closures as well as costs in relation to the
centralisation of the Group's finance and administration staff in
Bristol. The site closure costs include GBP471k of asset loss on
disposals and impairments, operating losses since the date of the
closure announcement of GBP800k and provisions made for future
rental commitments, dilapidations and closure costs of GBP4.3m. The
future rental commitments have been subject to a discounted cash
flow calculation using a rate of 5%.
Goodwill relating to the closed sites was impaired in 2011 by
GBP1,274k. In addition, following an assessment of the work
provision at the Gravesend site, which was acquired in February
2008, the goodwill was impaired by the full carrying amount of
GBP228k.
In 2009, the Company suffered two fires at its sites in
Manchester (August 09) and Norwich (September 09). The Group's
insurers accepted liability. Both claims were fully settled in
2010, covering both the loss of assets and business interruption
(lost profits).
The Norwich site reopened in May 2010 and a profit on disposal
of assets of GBP167k has been recognised in 2010 (12 months to
December 2009 GBP200k). The combined profit of GBP367k has arisen
as the insurance proceeds of GBP470k less costs of GBP56k are in
settlement of fixed assets with a net book value of GBP47k. The
Manchester site was fully operational in July 2010 and a profit on
disposal of assets of GBP678k has been recognised in 2010, which
comprises insurance proceeds of GBP749k less costs of GBP56k in
settlement of fixed assets with a net book value of GBP15k.
3. FINANCE INCOME AND FINANCE COSTS
2011 2010
GBP'000 GBP'000
-------------------------------------- -------- --------
Finance income
Interest receivable on bank balances - (5)
-------------------------------------- -------- --------
Pension costs (see note 5):
Interest on obligation 4,031 -
Expected return on assets (4,320) -
-------------------------------------- -------- --------
(289) (5)
-------------------------------------- -------- --------
Finance costs
Pension costs (see note 5):
Interest on obligation - 4,331
Expected return on assets - (3,940)
-------------------------------------- -------- --------
- 391
-------------------------------------- -------- --------
4. EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share has been calculated using the net loss
attributable to the shareholders of the Company of (GBP2,382,000)
(2010: GBP4,484,000 profit). The weighted average number of
outstanding shares used for basic earnings per share amounted to
43,197,220 (2010: 43,197,220).
Diluted earnings per share
Diluted earnings per share has been calculated using the net
loss attributable to the shareholders of the Company of
(GBP2,382,000) (2010: GBP4,484,000 profit). The weighted average
number of outstanding shares used for diluted earnings per share
amounted to 43,197,220 (2010: 43,197,220).
In the current year due to the average market price of GBP0.92,
the share options are not included in the dilutive earnings per
share calculation. In 2010, the average market price was GBP0.90
and similarly, due to the share options being anti-dilutive, the
diluted earnings per share is the same as the basic earnings per
share.
Underlying earnings per share
The underlying earnings per share has been calculated as
follows:
2011 2010
GBP'000 GBP'000
(Loss)/Profit before tax (as stated) (2,588) 6,034
Non recurring items (note 2) 8,093 5
-------------------------------------- -------- --------
5,505 6,039
Tax credit/(expense) (as stated) 206 (1,550)
Tax effect on non recurring items (1,747) (1)
-------------------------------------- -------- --------
3,964 4,488
====================================== ======== ========
Adjusted earnings per share 9.2p 10.4p
====================================== ======== ========
5. PENSION and other employee assets/obligations
The Company operates a funded pension scheme in the UK. The Fund
has both defined benefit and defined contribution sections. Since 1
January 2002 the Fund has been closed to new members. Active
members of the Fund ceased to accrue further benefits in the
defined benefit section on 31 July 2006. Under the current Schedule
of Contributions, contributions to the Fund for the year beginning
1 January 2012 will be GBP2.6m. This disclosure is in respect of
the defined benefit section of the Fund only.
The Company has opted to amortise all actuarial gains and losses
above the corridor (10% of the greater of assets and liabilities)
over a term of 15 years (2010: 17 years).
A full actuarial valuation of the scheme was carried out as at
31 December 2011 by a qualified independent actuary. The major
assumptions used by the actuary were (in nominal terms) as
follows:
IAS 19 2011 2010 2009 2008
% % % %
---------------------------------------------- ------ ------------ ------------ ------------
The major assumptions used by the actuary
were (in nominal terms):
Discount rate 4.8 5.6 6.0 6.5
Rate of increase to pensions in payment 3.0 3.0 3.0 3.0
RPI rate of inflation 2.80 3.30 3.5 2.7
CPI rate of inflation 2.10 2.60 n/a n/a
Assumed life expectancies on retirement at age 65 are:
31 Dec 2011 31 Dec
2010
Current Pensioners Current
Pensioners
---------------------- ---------------------- ----------- --------------------- ------------
Retiring today: Males 21.2 21.1
Females 23.8 23.7
--------------------------------------------- ----------- --------------------- ------------
31 Dec 2011 31 Dec
2010
Future Pensioners Future
Pensioners
---------------------- ---------------------- ----------- --------------------- ------------
Retiring today: Males 20.9 20.8
Females 23.5 23.4
Retiring in 20 years
time: Males 22.8 22.7
Females 25.4 25.3
--------------------- ------------
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:
2011 2010 2009 2008
----------------- --------------------------- ---------------------- ---------------------- ----------------------
Long term Long Long Long
rate of Value term Value term Value term Value
return expected GBP'000 rate GBP'000 rate GBP'000 rate GBP'000
of return of return of return
expected expected expected
----------------- ---------------- --------- ----------- --------- ----------- --------- ----------- ---------
Equities 8.7% 37,563 8.5% 39,723 9.2% 33,940 9.6% 26,575
Bonds 3.9% 13,093 4.9% 13,220 5.2% 12,776 5.2% 9,668
Property 8.7% 4,704 8.5% 4,570 9.2% 4,212 9.6% 4,378
Other 2.9% 1,796 3.9% 1,793 4.2% 2,012 4.2% 3,047
----------------- ---------------- --------- ----------- --------- ----------- --------- ----------- ---------
Total market
value of
assets 57,156 59,306 52,940 43,668
---------
Present value
of defined
obligations
(funded plans) (83,251) (73,366) (73,195) (60,131)
---------
Present value
of unfunded
obligations (26,095) (14,060) (20,255) (16,463)
---------
Unrecognised
actuarial
losses 37,486 23,649 28,904 24,082
---------
Net asset
in balance
sheet 11,391 9,589 8,649 7,619
----------------- ---------------- --------- ----------- --------- ----------- --------- ----------- ---------
Actual return
on assets
in period (1,967) 5,781 8,752 (11,783)
----------------- ---------------- --------- ----------- --------- ----------- --------- ----------- ---------
Reconciliation of opening and closing balances of the present
value of the defined benefit obligations
2011 2010 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- --------
Benefit obligation at beginning
of year 73,366 73,195 60,131 65,040
Interest cost 4,031 4,331 3,842 3,911
Contributions by scheme members - - - -
Actuarial (gain)/loss 8,637 (2,145) 11,284 (6,983)
Benefits paid (2,783) (2,015) (2,062) (1,837)
--------------------------------- -------- -------- -------- --------
Balance at end of year 83,251 73,366 73,195 60,131
--------------------------------- -------- -------- -------- --------
Reconciliation of opening and closing balances of the fair value
of plan assets
2011 2010 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- ---------
Fair value of scheme assets at
beginning of year 59,306 52,940 43,668 54,733
Expected return on scheme assets 4,320 3,940 3,352 4,236
Actuarial gain/(loss) (6,287) 1,841 5,400 (16,019)
Contributions by employers 2,600 2,600 2,582 2,555
Contributions by scheme members - - - -
Benefits paid (2,783) (2,015) (2,062) (1,837)
---------------------------------- -------- -------- -------- ---------
Asset at end of year 57,156 59,306 52,940 43,668
---------------------------------- -------- -------- -------- ---------
The amounts recognised in the statement of comprehensive income
are:
2011 2010
GBP'000 GBP'000
----------------------------------- -------- --------
Current service cost - -
Interest on obligation 4,031 4,331
Expected return on assets (4,320) (3,940)
Curtailments and settlements - -
Actuarial loss recognised in year 1,087 1,270
----------------------------------- -------- --------
798 1,661
----------------------------------- -------- --------
Charged to:
Administration expenses 1,087 1,270
Finance costs (289) 391
----------------------------------- -------- --------
798 1,661
----------------------------------- -------- --------
History of scheme assets, obligations and experience
adjustments
2011 2010 2009 2008 2007
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- --------- --------- --------- --------- ---------
Present value of defined benefit
obligations (83,251) (73,366) (73,195) (60,131) (65,040)
Fair value of scheme assets 57,156 59,306 52,940 43,668 54,733
----------------------------------- --------- --------- --------- --------- ---------
Deficit in scheme (26,095) (14,060) (20,255) (16,463) (10,307)
----------------------------------- --------- --------- --------- --------- ---------
Experience adjustments arising on
scheme liabilities 8,637 (2,145) 11,284 (6,983) (8,042)
Experience item as a % of scheme
liabilities 10% (3%) 15% (12%) (12%)
Experience adjustments arising on
scheme assets (6,287) 1,841 5,400 (16,019) (207)
Experience item as a % of scheme
assets (11%) 3% 10% (37%) 0%
----------------------------------- --------- --------- --------- --------- ---------
6. EQUITY
Share capital
2011 2010
--------------------- ---------------------
Shares GBP'000 Shares GBP'000
---------------------------------------- ----------- -------- ----------- --------
Authorised
Ordinary shares of 12.5p (2010: 12.5p)
each 64,000,000 8,000 64,000,000 8,000
---------------------------------------- ----------- -------- ----------- --------
Issued and fully paid
Ordinary shares of 12.5p (2010: 12.5p)
each 43,197,220 5,400 43,197,220 5,400
---------------------------------------- ----------- -------- ----------- --------
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 Number of Exercise Exercise
Share Options Share Options Price Period
2011 2010
---------------- ------------ -------------- -------------- --------- ---------
M A Wilmshurst Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 1,096,055 2,217,860 GBP1.11 2009-16
D J Loftus Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 535,150 1,096,055 GBP1.11 2009-16
S D G Thompson Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 422,973 871,693 GBP1.11 2009-16
----------------------------- -------------- -------------- --------- ---------
2,131,431 4,262,861
----------------------------- -------------- -------------- --------- ---------
All the above options were issued on 4 July 2006 and no
additional share options have been granted since this date.
2,131,430 TSR options lapsed in 2011.
In total, GBP49,000 of employee compensation expense has been
included in the consolidated statement of comprehensive income for
2011 (2010: GBP98,000). 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 30 April 2012 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
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