TIDMNARS
RNS Number : 8601B
Nationwide Accident Repair Srvs PLC
09 April 2013
NARS
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Preliminary Results
For the 12 months to 31 December 2012
Nationwide provides integrated automotive accident repair
management services to the UK insurance industry, fleet and retail
customers. It is the largest dedicated provider of accident repair
services in the UK.
Key Points
-- Resilient performance in line with market expectations, in a challenging marketplace
-- Revenue decreased to GBP155.9m (2011: GBP173.4m) -
principally reflecting site closures in 2011
Like-for-like(1) revenue decreased by 3% to GBP155.9m (2011:
GBP160.0m):
- insurance like-for-like(1) revenue decreased by 9% to
GBP116.0m (2011: GBP127.9m)
- strong growth in fleet like-for-like1 revenue, up by 21% to
GBP35.2m (2011: GBP29.1m)
- encouraging progress with retail like-for-like(1) revenue up
by 53% to GBP4.7m (2011: GBP3.0m)
-- Underlying(2) operating profit increased by 9% to GBP6.8m (2011: GBP6.2m)
-- Underlying(2) profit before tax increased to GBP5.5m (2011: GBP5.4m)
Statutory profit before tax of GBP5.1m (2011: loss of
GBP2.6m)
-- Non-recurring net charge of GBP0.4m (2011: GBP8.1m), with the
successful exit of three onerous leases
-- Underlying(2) earnings per share increased by 15% to 9.9p (2011: 8.6p)
Statutory earnings per share increased to 9.2p (2011: loss per
share of 6.1p)
-- Cash at 31 December 2012 of GBP5.1m (2011: GBP8.0m)
-- Pension deficit reduced by GBP3.4m to GBP22.7m (2011: GBP26.1m)
-- Final dividend of 3.6p per share recommended (2011: 3.6p),
which will result in a total dividend of 5.5p per share (2011:
5.5p)
-- Difficult short term market conditions but the Board remains
confident of the Group's growth prospects in the medium and long
term
Notes: 1. Like-for-like revenue calculated as this year's
revenue compared to last year for all sites that are at least 12
months old at the beginning of our financial year. Bodyshops closed
during the two years are excluded from both periods.
2 .'Underlying' is calculated before non-recurring items.
Michael Marx, Chairman, commented,
"The Group continues to strengthen its position as the largest
provider of integrated automotive accident repair management
services in the UK.
Vehicle claims frequency continues to decline, albeit at a
slower pace, whilst overcapacity in the automotive repair market
has not yet been balanced with demand. Consequently in the short
term, in this difficult trading environment with margins under
pressure, we remain cautious. At the same time, we have a
progressive strategy to further develop an integrated and
complementary range of services, which will help to support the
further development of the Group.
An attractive pipeline of opportunities is available to the
Group and its efficient operating platform, strong management team
and clear plan to invest for future growth provide positive medium
and long term prospects".
Enquiries:
Nationwide Accident Michael Wilmshurst, Chief T: 01993 701720
Repair Services Executive
plc David Pugh, Group Finance
Director
Biddicks Katie Tzouliadis / Alex T: 020 3178
Shilov 6378
Westhouse Securities Antonio Bossi T: 020 7601
Henry Willcocks 6100
CHAIRMAN'S STATEMENT
Introduction
The Group continues to strengthen its position as the largest
provider of integrated automotive accident repair management
services in the UK.
Structural pressures in the motor insurance claims market remain
and have resulted in reduced volumes in the marketplace. Against
this backdrop Nationwide has maintained its market share by
delivering strong year-on-year revenue growth in both the fleet and
retail markets. We maintain our focus on gaining competitive
advantage and delivering operating efficiency, both of which have
contributed to the growth in earnings.
With a proven track record of establishing and successfully
growing a complementary range of integrated services, we are now
looking to support our strategic partners by extending the
solutions that the Group is able to offer. Core to our success is
the Group's focus on providing customers with integrated services
that deliver value, speed, service and quality. Our high customer
satisfaction levels have continued to increase and we are
encouraged by a substantial pipeline of opportunities.
Financial Results
Group revenue for the year decreased to GBP155.9m (2011:
GBP173.4m) primarily due to the closures of crash repair centres in
2011. On a like for like basis, excluding the closed sites, the
2.6% fall in Group revenue to GBP155.9m (2011: GBP160.0m) reflected
a decrease in insurance revenue due to the effect of a declining
motor claims frequency and the non renewal of a significant
contract with Aviva. It is notable that the Group has maintained
its overall market share through strong like-for-like growth of
21.1% in fleet sales to GBP35.2m and in retail sales by 53.0% to
GBP4.7m, further supporting the strategy to have developed into
these markets.
The Group gross margin of 35.5% for 2012 was 0.5% higher than
the previous year due to the closure of under-utilised sites.
Overheads also reduced by GBP5.9m to GBP48.5m (2011: GBP54.4m).
These two favourable factors more than outweighed the effect of the
Group revenue decline. Following the closure of sites during 2011
we indicated that the expected annualised savings would be at least
GBP1.9m, I am pleased to report that the GBP2.5m of net savings
actually achieved during 2012 exceeded this target. In addition, we
continue to gain competitive advantage through economies of scale
and the continuous improvement of both operational and
administrative efficiency.
Consequently the Group underlying operating profit, before
non-recurring items, grew by 9.2% to GBP6.8m (2011: GBP6.2m).
Following the implementation of the revised IAS19 employee
benefits accounting standard virtually all of the income statement
charge in respect of pensions is contained within finance costs.
2012 finance costs of GBP1.3m were GBP0.5m adverse to 2011
principally due to the year-on-year effect of a lower discount rate
applied to pension assets.
Underlying profit before tax for the year to 31 December 2012
increased to GBP5.5m (2011: GBP5.4m) and resulted in underlying
earnings per share growth of 15.1% to 9.9p (2011: 8.6p), a pleasing
achievement in a difficult economic environment.
As a result of changes in customer needs we closed one crash
repair centre during the first half of 2012 giving rise to a
non-recurring income statement charge of GBP0.9m. During the
previous year 9 sites were closed. With the successful exit in
December 2012 of three of the onerous leases associated with closed
sites, we were able to realise a GBP0.8m release of provisions to
non-recurring items. The net effect of these actions was such that
the 2012 non-recurring income statement charge of GBP0.4m
predominantly reflects compensation for loss of office paid to a
former director. Statutory profit before tax for the year to 31
December 2012 of GBP5.1m (2011: loss of GBP2.6m), after
non-recurring items, results in statutory earnings per share of
9.2p (2011: loss per share of 6.1p).
As at 31 December 2012 the Group cash position remained strong
at GBP5.1m (2011: GBP8.0m). This is after cash outflows during the
year of GBP2.8m in respect of non-recurring items and pension
deficit contributions of GBP2.6m.
Dividend
The Board is pleased to recommend a maintained final dividend of
3.6p (2011: 3.6p) per share which, subject to shareholder approval
at the Annual General Meeting on 18 June 2013, will be paid on 25
June 2013 to shareholders on the register at the close of business
on 24 May 2013. This takes the total dividend for the year to 5.5p
per share (2011: 5.5p).
Strategy
We believe that further progress can be achieved in existing
markets through our strong focus on customer satisfaction,
economies of scale and flow, effective cost control and technology
solutions.
The automotive insurance repair market is substantial and
presents an opportunity for a progressive and robust operator to
emerge with significant market share. Nationwide is uniquely
positioned to stay at the forefront of this sector.
Demand from the fleet and retail markets is highly fragmented
and provides opportunities both to form strategic partnerships with
corporates on a national scale and to satisfy local customers who
value the quality of service that the Group has to offer. We plan
to substantially increase our presence in these markets such that
over time the Group's revenue profile increasingly reflects the
share that each sector has in relation to the total UK automotive
accident management market.
One of the Group's competitive advantages is that it provides
customers with an integrated solution. Our individual business
segments - Network Services, Nationwide Crash Repair Centres
("NCRC") and Motorglass - already successfully work together with
such activity representing more than 16% of Group revenue. In
addition, cross-selling opportunities are prevalent and converted.
An important element of our strategy is to build upon this success
to provide existing and prospective customers with an integrated
solution. We are investing further in our sales team, operational
infrastructure and I.T. platform to deliver the strategy of
developing complementary revenue streams and broadening our
customer footprint within the automotive support service
market.
Outlook
Vehicle claims frequency continues to decline, albeit at a
slower pace, whilst overcapacity in the automotive repair market
has not yet been balanced with demand. Consequently in the short
term, in this difficult trading environment with margins under
pressure, we remain cautious. At the same time, we have a
progressive strategy to further develop an integrated and
complementary range of services, which will help to support the
further development of the Group.
An attractive pipeline of opportunities is available to the
Group and its efficient operating platform, strong management team
and clear plan to invest for future growth provide positive medium
and long term prospects.
Michael Marx
Chairman
9 April 2013
CHIEF EXECUTIVE'S STATEMENT & OPERATING REVIEW
Introduction
Three years ago I reported that we had commenced a growth plan
which aimed to broaden our customer base, including building fleet
and retail revenues. The expansion of mobile repair services and
Motorglass were also targeted. We assumed that the economy would
remain difficult but planned to increase our share of the motor
insurance repair market by developing existing and new
relationships as well as capitalising on operational efficiencies.
I am pleased to outline below our progress during the past three
years:
-- Fleet and retail revenue growth of 101.5% to GBP39.9m (2009: GBP19.8m)
-- Mobile repair and Motorglass revenue growth of 422.2% to GBP9.4m (2009: GBP1.8m)
-- Insurance market share increased to around 5% in some of the
toughest conditions the industry has ever experienced
-- Underlying earnings per share increase of 11.2% to 9.9p (2009: 8.9p)
We now enter the next phase of this progressive strategy by
continuing to build in the target markets identified three years
ago. In addition, through organic developments and by considering
acquisitions in related areas, we plan to stimulate further growth
by extending the range of complementary services as the next step
towards our vision to create the leading integrated, automotive,
support service group.
Market Overview
The markets in which the Group operates are distinguished by the
characteristics of each customer, namely:
-- Insurance
-- Fleet
-- Retail
Cyclical and structural factors have combined in recent years
resulting in shrinkage of the total UK market for automotive
accident repair services to approximately GBP3.5bn. Whilst the
number of vehicles (vehicle parc) has continued to increase there
has been a decline in claims frequency. Cyclical factors such as
lower disposable incomes and higher fuel prices have manifested
themselves in fewer total miles travelled and higher insurance
policy excesses, thus curtailing the prospect for claims. However,
the declining trend in claims frequency over more than 10 years is
clear evidence that structural pressures prevail due to a
combination of factors including advances in vehicle technology and
enhancements to road traffic management.
The decline in automotive claims frequency is less for light
commercial vehicles ("LCVs") than for the motor car sector. Claims
frequency during 2012 for LCVs was 19.8% whilst for motor cars it
was 12.6%. Contributing factors for a higher rate of claims for
commercial vehicles include a greater number of miles travelled per
vehicle, productivity pressures, brand image and driver
behaviour.
Insurance funded automotive accident repair currently accounts
for approximately 60% of the total UK market. Nationwide's
insurance revenue of GBP116m represents a market share of around 5%
and we are the clear market leader. Capacity continues to exceed
demand and this creates structural pressures across the market,
however there are some early signs that insurance organisations
wish to secure their supply channels with providers who deliver a
combination of financial stability, value, service and speed. We
are well positioned to satisfy demand through our flexible working
practices and integrated range of services.
The self insured fleet market accounts for approximately 26% of
the total UK repair market. From an almost standing start, we have
achieved considerable growth during the past three years and yet
only have a market share of around 4%. We will continue to
penetrate this highly fragmented market and during 2013 the Group
is investing in commercial, operational and I.T. resources to
secure and support further growth.
The retail market accounts for approximately 14% of the total UK
repair market. Retail revenue of GBP4.7m during 2012 represents
less than 1% market share. During the past three years we have
converted an increasing number of 'upsell' opportunities and, with
the launch of our new website towards the end of last year, we are
confident that further progress can be achieved.
Review of Operations by Business Segment
During 2012 insurance revenue for NCRC ("Nationwide Crash Repair
Centres") declined, however in all other respects each of our three
business segments grew both revenue and gross margin across all of
their markets. Like-for-like Group revenue for the year to 31
December 2012 declined by 2.6% to GBP155.9m due to this fall in
NCRC insurance sales. Operational efficiencies and economies of
scale continue to be delivered and limit the extent of margin
erosion which is also being experienced across the industry.
Indeed, the closure of under performing sites helped to increase
the Group gross margin to 35.5% (2011: 35.0%).
Group operating profit, before non-recurring items, increased by
9.2% to GBP6.8m (2011: GBP6.2m) due to overhead savings of GBP5.9m
during the year. Costs were lower in 2012 compared to the
corresponding period principally due to: the closure of ten crash
repair centres including nine during 2011; actions taken following
the non renewal of a major contract during 2012; and savings made
following the centralisation of finance and administration
functions to one site in Bristol.
After the effect of pension charges on finance costs, underlying
Group profit before tax increased to GBP5.5m (2011: GBP5.4m) and,
with a favourable tax rate, this resulted in underlying earnings
per share growth of 15.1% to 9.9p (2011: 8.6p).
During the year we strengthened our management team and
established an organisation structure with three reporting
segments. The following sections review the performance and
developments of each.
Network Services
Network Services is our "upstream" accident management service
for insurance companies and fleets. Operating a 24 hour call centre
facility the business receives first notification of loss, deploys
vehicle damage work to NCRC and an approved network of repairers,
handles claims, organises courtesy and hire vehicles, provides
engineering services and facilitates salvage.
The number of billings for claims, repairs, engineering and
other services during 2012 grew by 34.5% to 140,026 (2011: 104,103)
of which 56% (2011: 51%) were routed through NCRC's bodyshops.
Network Services increased total revenue by 4.0% to GBP39.1m (2011:
GBP37.6m) with growth in both insurance and fleet markets. Gross
profit was up by 7.7% to GBP4.2m, representing a gross margin of
28.9% (2011: 24.9%). The business delivers strong operating cash
flow from an efficient infrastructure with investment in I.T. being
its main capital resource.
During the year we were pleased to announce the renewal of two
major contracts, with existing customers Hastings Direct and Zurich
Insurance, worth a combined total of approximately GBP30m in sales
a year and utilising the Group's integrated service offering.
Overall conversion rates, i.e. the number of opportunities that we
convert into repairs, remained at a high level of around 86%
throughout 2012. Network Services has a substantial pipeline of
opportunities with both existing and prospective customers which
will facilitate further revenue growth across Nationwide.
NCRC ("Nationwide Crash Repair Centres")
NCRC comprises our national network of 60 bodyshops, our mobile
repair fleet and three Fast Fit Plus vehicle service centres which
undertake maintenance, MOT, tyre replacement etc. work. NCRC is our
largest revenue generating business segment with sales for the year
ended 31 December 2012 of GBP136.2m (2011: GBP140.3m like-for-like
("lfl") excluding closed sites).
The frequency of motor accident claims continues to decline and
this has again contributed to a reduction in NCRC's revenue from
insurance customers by 9.4% to GBP106.1m (2011: lfl GBP117.1m). In
response to changing customer demand in the market we closed a
further site in early 2012 following nine closures during 2011.
These sites had undertaken GBP13.4m of sales in 2011. In addition,
following completion of a re-tendering process by Aviva PLC
("Aviva"), Nationwide experienced a significant reduction in the
volume of vehicle accident repair work undertaken for Aviva in the
second half of 2012, as the volumes were awarded on terms that were
commercially unattractive to the Group. The earnings impact of this
reduced volume was largely mitigated by the scaleability of the
Group's operating costs, flexible working practices and tactical
deployments from Network Services. NCRC's gross margin increased
during 2012, due to the aforementioned closure of under utilised
sites, to 36.6% (2011: 36.3%).
We are pleased with the strong year-on-year growth of NCRC's
sales to fleet customers which increased by 25.7% to GBP25.4m
(2011: lfl GBP20.2m). Several initiatives during recent years,
including investment in commercial 'high top' ovens that are
suitable for light commercial vehicle repairs and our increasing
number of mobile repair vans, have given us competitive advantage
in satisfying the needs of our corporate clients.
Overall customer satisfaction levels, as measured by independent
telephone surveys which rate the overall NCRC quality of repair,
increased during 2012 to 86.5% (2011: 85.9%). The speed of repair
has also improved further during the year with a "key-to-key"
repair time (time taken from receipt of vehicle) of 11.06 days
(2011: 11.68 days) and a "full cycle" time (time taken from the
notification of claim) of 15.99 days (2011: 20.33). These numbers
would reduce significantly were we to remove those vehicles damaged
but delayed by contested liability cases or long term parts
sourcing issues.
The 56.7% increase in retail sales to GBP4.7m (2011: lfl
GBP3.0m) is encouraging, particularly as we only relaunched our
website in November 2012. The online platform has been designed to
facilitate the use of smart phones and other mobile devices and
enables consumers to request a quotation for body, glass and paint
repairs. It also enables them to make their own initial assessment
of the approximate cost of a light repair job from a menu of online
prices, as well as book an appointment for an engineer's visit (at
home or work) or with a bodyshop. As part of this, customers are
able to send photographs and details of damage and receive an
efficient response.
We are confident that NCRC will continue to grow sales with new
and existing customers as well as building upon the success of its
mobile repair offering. The rate of decline in the motor accident
claims frequency is slowing but market capacity continues to exceed
demand. NCRC's continuous pursuit of further competitive advantage
will persist through development of its industry leading I.T.
platform, workflow management and economies of scale - all of which
help to mitigate the prevailing margin pressures.
Motorglass
Motorglass operates a fleet of specialist vans for automotive
glass repair and replacement which is coordinated from a call
centre using the Group's common I.T. platform.
Strong revenue growth of 17.6% to GBP6.0m (2011: GBP5.1m) was
achieved with 24.0% growth in fleet sales to GBP3.1m (2011:
GBP2.5m) and 16.0% growth in insurance sales to GBP2.9m (2011:
GBP2.5m). Customer satisfaction levels remain high at 89.2% and we
are discussing cross selling revenue opportunities with a number of
existing and prospective customers. The efficient operating
structure of Motorglass's business also contributed to an enhanced
gross margin during 2012 of 23.3% (2011: 22.4%). The business model
for Motorglass is scaleable, utilising the Group's existing
integrated I.T. platform, requiring very little capital investment
as vans are held under operating lease.
Engaging with Stakeholders
Effective communication with our internal and external
stakeholders is considered fundamental to the successful
development of Nationwide.
An open and honest corporate culture is promoted, encouraging
our people to share their feedback and facilitating regular
dialogue between teams and with management at all levels. Regular
roadshows, conferences and informal meetings are undertaken by
senior management, team meetings occur at all levels throughout the
year, regular newsletters are distributed and we recognise our
people's contributions to the Group through a number of different
annual awards.
We are committed to working with our customers, suppliers and
business partners in mutually beneficial ways such that, wherever
suitable, all parties benefit from long-term relationships. Our
independently measured customer satisfaction is a key performance
indicator and we value informal and measured feedback from both
customers and supply partners. The commitment of Nationwide to the
communities in which it operates is demonstrated in many ways
including a good and improving carbon emission ranking and
recognition of achievement by industry bodies.
The legacy defined benefit pension scheme represents a
significant commitment for the Group. Triennial valuations of
scheme commitments are undertaken in conjunction with the trustees.
The most recent of these, as at 31 December 2011, has yet to be
finalised and discussions continue between the Company, the
trustees and their advisers regarding appropriate assumptions and
the consequent prudent valuation of the deficit and ensuing deficit
reduction plan.
Engagement with the investment community is important and, on
behalf of the board, the Group Finance Director and I have regular
dialogue and meetings throughout the year with existing and
prospective institutional shareholders, analysts and banks where a
wide range of relevant issues including strategy, performance,
management and governance are discussed whilst respecting the
regulatory constraints placed upon a public company.
Outlook & Strategy
Continued structural changes in the motor insurance claims
market are anticipated to persist in the near term, presenting a
challenging environment for the industry. Many of our competitors
are under increasing pressure due to the prevailing conditions.
Against this backdrop we remain cautious but believe that by
investing for the future, continuously improving our efficiency and
nurturing customer relationships across our markets we can achieve
competitive advantage. From a position of financial strength we
anticipate opportunities to build market share.
Our progressive strategy of successfully developing
complementary services and penetrating new markets has already
established Nationwide as the leading, integrated, automotive,
accident repair management Group in the UK. We retain and attract
industry leading people who work together in a divisional structure
which is conducive for further growth. Substantial resources are
engaged across our businesses including 2,687 courtesy vehicles,
1,920 employees and 74 property locations of which many have the
scope for further utilisation. Across the Group we have contact
with approximately 300,000 vehicles each year and we are one of the
UK's largest consumers of after market automotive parts. We plan to
expand the range of services available to support our customers
with a vision to develop Nationwide as the UK's leading integrated,
automotive support service group.
Michael Wilmshurst
Chief Executive
9 April 2013
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 December 2012
2012 2011
Restated
(1)
Notes GBP'000 GBP'000
Revenue 2 155,874 173,386
Cost of sales (100,567) (112,752)
----------------------------------------- ------ ---------- ----------
Gross profit 55,307 60,634
Distribution costs (30,606) (34,952)
----------------------------------------- ------ ---------- ----------
Administrative costs (17,925) (19,437)
Share option charge (13) (49)
Non-recurring administrative costs 3 (376) (8,093)
----------------------------------------- ------ ---------- ----------
Total administrative costs (18,314) (27,579)
Operating profit/(loss) 6,387 (1,897)
Finance costs 4 (1,255) (751)
----------------------------------------- ------ ---------- ----------
Profit/(loss) before tax 5,132 (2,648)
Income tax (expense)/credit 5 (1,148) 29
----------------------------------------- ------ ---------- ----------
Profit/(loss) for the year attributable
to equity holders of the parent 3,984 (2,619)
----------------------------------------- ------ ---------- ----------
Defined benefit plan actuarial
gains/(losses) 2,185 (13,777)
Tax on other comprehensive income (1,024) 3,163
----------------------------------------- ------ ---------- ----------
Other comprehensive income 1,161 (10,614)
----------------------------------------- ------ ---------- ----------
Total comprehensive income for
the year 5,145 (13,233)
----------------------------------------- ------ ---------- ----------
Attributable to:
Equity holders of the parent 5,145 (13,233)
----------------------------------------- ------ ---------- ----------
Earnings per Share
Basic 6 9.2p (6.1p)
Diluted 9.2p (6.1p)
----------------------------------------- ------ ---------- ----------
(1) See note 1
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2012
2012 2011 2010
Restated Restated
(1) (1)
Notes GBP'000 GBP'000 GBP'000
----------------------------------------- ------ --------- --------- ---------
Assets
Non--current assets
Goodwill 6,266 6,266 7,768
Property, plant and equipment 9,970 11,353 12,066
Deferred tax asset 5,736 6,846 3,764
21,972 24,465 23,598
----------------------------------------- ------ --------- --------- ---------
Current assets
Inventories 2,594 2,459 3,148
Trade and other receivables 21,147 28,113 27,322
Current tax receivable - 692 -
Cash and cash equivalents 5,071 7,995 7,459
----------------------------------------- ------ --------- --------- ---------
28,812 39,259 37,929
----------------------------------------- ------ --------- --------- ---------
Total assets 50,784 63,724 61,527
----------------------------------------- ------ --------- --------- ---------
Liabilities
Non--current liabilities
Long-term provisions 1,207 2,621 40
Pension fund deficit 8 22,698 26,095 14,060
---------
23,905 28,716 14,100
----------------------------------------- ------ --------- --------- ---------
Current Liabilities
Short-term provisions 725 1,353 31
Trade and other payables 24,725 35,740 33,800
Current tax liabilities 732 - 164
----------------------------------------- ------ --------- --------- ---------
26,182 37,093 33,995
----------------------------------------- ------ --------- --------- ---------
Total liabilities 50,087 65,809 48,095
----------------------------------------- ------ --------- --------- ---------
Net assets/(liabilities) 697 (2,085) 13,432
----------------------------------------- ------ --------- --------- ---------
Equity
Equity attributable to the shareholders
of the parent
Share capital 5,400 5,400 5,400
Capital redemption reserve 1,209 1,209 1,209
Share premium account 11,104 11,104 11,104
Revaluation reserve 8 8 8
Retained earnings (17,024) (19,806) (4,289)
----------------------------------------- ------ --------- --------- ---------
Total equity 697 (2,085) 13,432
----------------------------------------- ------ --------- --------- ---------
(1) See note 1
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2012
Share Capital Share Revaluation Retained Total
Group capital redemption premium reserve Earnings
reserve account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Balance at 1 January 2011 5,400 1,209 11,104 8 12,975 30,696
Effect of change in accounting
policy - - - - (17,264) (17,264)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Balance at 1 January 2011
(Restated) 5,400 1,209 11,104 8 (4,289) 13,432
Share option charge - - - - 49 49
Dividend paid (see note
7) - - - - (2,333) (2,333)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Transactions with owners - - - - (2,284) (2,284)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Loss for the year - - - - (2,619) (2,619)
Other comprehensive income - - - - (10,614) (10,614)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Total comprehensive income
for the year - - - - (13,233) (13,233)
Balance at 31 December
2011 5,400 1,209 11,104 8 (19,806) (2,085)
Share option charge - - - - 13 13
Dividend paid (see note
7) - - - - (2,376) (2,376)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Transactions with owners - - - - (2,363) (2,363)
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Profit for the year - - - - 3,984 3,984
Other comprehensive income - - - - 1,161 1,161
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Total comprehensive income
for the year - - - - 5,145 5,145
-------------------------------- -------- ----------- -------- ------------ --------- ---------
Balance at 31 December
2012 5,400 1,209 11,104 8 (17,024) 697
-------------------------------- -------- ----------- -------- ------------ --------- ---------
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 December 2012
2012 2011
Restated
(1)
------------------------------------------------------ --------- ---------
GBP'000 GBP'000
------------------------------------------------------ --------- ---------
Operating activities
Profit/(loss) for the year 3,984 (2,619)
Adjustments to arrive at operating cash flow:
Other comprehensive income 1,161 (10,614)
Finance costs 34 -
Depreciation 2,395 2,380
Goodwill written off on sites (non-recurring
item) - 1,502
(Profit)/loss on sale of property, plant and
equipment (incl. non-recurring items) (38) 410
Deferred tax on pension deficit 1,024 (3,163)
Taxation recognised in profit or loss 1,148 (29)
Changes in inventories (135) 689
Changes in trade and other receivables 6,966 (791)
Changes in trade and other payables (11,015) 1,940
Changes in provisions 85 3,903
Movement in pension fund liability (797) 14,635
Share option scheme charge 13 49
Outflow from pension obligations (2,600) (2,600)
Outflow from provisions (2,127) -
Net cash flow from operating activities 98 5,692
Tax received/(paid) 362 (746)
------------------------------------------------------ --------- ---------
460 4,946
Investing activities
Additions to property, plant and equipment (1,024) (2,396)
Proceeds from the disposal of property, plant
and equipment 50 319
------------------------------------------------------ --------- ---------
(974) (2,077)
------------------------------------------------------ --------- ---------
Financing activities
Dividend paid (2,376) (2,333)
Interest paid (34) -
(2,410) (2,333)
------------------------------------------------------ --------- ---------
Net (decrease)/increase in cash and cash equivalents (2,924) 536
Cash and cash equivalents at beginning of year 7,995 7,459
------------------------------------------------------ --------- ---------
Cash and cash equivalents at end of year 5,071 7,995
------------------------------------------------------ --------- ---------
(1) See note 1
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
NOTES TO THE PRELIMINARY STATEMENT
1. BASIS OF PREPARATION
The financial information set out in this report does not
constitute the Company's statutory accounts for the years ended 31
December 2012 or 2011 but is derived from those accounts. Statutory
accounts for 2011 have been delivered to the registrar of
companies, and those for 2012 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.
This preliminary statement has been prepared under the
historical cost convention. With the exception of the
early-adoption of IAS 19 (Employee Benefits, revised), the
accounting policies have remained unchanged from the previous
year.
During the year, the Group has early-adopted IAS 19 (Employee
Benefits, revised). The amendment no longer allows the "corridor"
approach and so all actuarial gains and losses will be recognised
in the period in which they arise. The amendment has had a material
impact on the consolidated and company Statement of Financial
Position. The revised standard also requires interest income or
expense to be calculated on the net balance recognised, with the
rate used to discount the defined-benefit obligation.
The tables below show the impact of the change in accounting
policy:
Group
----------------------------------------- --------
2011
GBP'000
----------------------------------------- --------
Loss before change in accounting policy (2,382)
Decrease in administration costs 980
Increase in finance costs (1,040)
Decrease in income tax credit (177)
----------------------------------------- --------
Loss after change in accounting policy (2,619)
Loss per share (basic and diluted) (6.1)p
----------------------------------------- --------
As reported before change in accounting
policy (5.5)p
Adjustment due to change in accounting
policy (0.6)p
----------------------------------------- --------
2011
GBP'000
-------------------------------------- ---------
Net pension asset
Net pension asset before change in
accounting policy 11,391
Adjustment during the year due to
change in accounting policy (13,837)
Cumulative effect from prior years (23,649)
-------------------------------------- ---------
Net pension liability (26,095)
-------------------------------------- ---------
Deferred tax liability
Deferred tax liability before change
in accounting policy (2,525)
Adjustment during the year due to
change in accounting policy 2,986
Cumulative effect from prior years 6,385
-------------------------------------- ---------
Deferred tax asset 6,846
-------------------------------------- ---------
2011
GBP'000
------------------------------------ ---------
Shareholders' equity
Shareholders' equity before change
in accounting policy 26,030
Adjustment during the year due to
change in accounting policy (10,851)
Cumulative effect from prior years (17,264)
------------------------------------ ---------
Shareholders' equity (2,085)
------------------------------------ ---------
The Group has also early-adopted the amendment to IAS 1 under
the Annual Improvements to IFRSs 2009-2011. The application of this
means that although the Group and Company are required to present
an additional Statement of Financial Position due to the change in
accounting policies, they are not required to present the related
notes to the opening Statement of Financial Position as at the
beginning of the preceding period.
The Group recategorised certain items of income and expense from
distribution costs and administration expenses to revenue and cost
of sales. The reclassification was considered to improve
communication of fixed and variable costs within the business. The
consolidated statement of comprehensive income has been restated
accordingly for the twelve months to 31 December 2011 as
follows:
12 months Revenue Cost Distribution Administrative Share Underlying Finance
to 31 December of sales costs costs option operating income/
2011 charge profit (costs)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
As previously
reported 172,937 (94,080) (45,461) (28,131) (49) 5,216 289
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
Inter-segment
revenues
reclassified (227) 227 - - - - -
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
Sundry
income
moved to
Revenue 676 - - (676) - - -
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
Effect
of early
adoption
IAS 19
on pension
service
costs - - - 980 - 980 (1,040)
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
Costs reclassified - (18,899) 10,509 8,390 - - -
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
Restated 173,386 (112,752) (34,952) (19,437) (49) 6,196 (751)
-------------------- -------- ---------- ------------- --------------- -------- ----------- ---------
2. Segment analysis
The chief operating decision maker, as defined by IFRS 8, has
been identified as the Executive Directors of Nationwide Accident
Repair Services plc. The information reported below is consistent
with the reports regularly provided to the Board of Directors. The
Group operates three main operating segments, Nationwide Crash
Repair Centres ("NCRC" which incorporates Mobile Repairs), Network
Services and Motorglass (which incorporates Windscreen Invoice
Control Service "WICS"). The segments are identified by their
distinct functions within the Group, being site-based repairs,
supported by mobile vehicle repairs, accident administration and
glass services respectively. NCRC comprises a dedicated network of
repair centres across England, Scotland and Wales. Network Services
provides accident administration services to insurance companies
and fleet operators, including deploying work to Nationwide Crash
Repair Centres Limited, while Motorglass and WICS provide glass,
air conditioning and auto-electronic services to the automotive
industry. The income and costs of the holding company are shown
within NCRC, which acts as the support function for the Nationwide
Crash Repair Centres bodyshops.
Intra-group transactions with Network Services are accounted for
including VAT, as the segment is within a separate VAT group. All
intra-group transactions are invoiced or recharged at cost.
The revenues and net result generated by the three business
segments are summarised as follows:
NCRC Network Services Motorglass Total
Year to 31 December GBP'000 GBP'000 GBP'000 GBP'000
2012
Revenue from external
customers 136,106 14,601 5,167 155,874
-------------------------- -------- ----------------- ----------- --------
Inter-segment revenues - 24,482 829 25,311
-------------------------- -------- ----------------- ----------- --------
Total revenues 136,106 39,083 5,996 181,185
========================== ======== ================= =========== ========
Depreciation 2,135 130 130 2,395
Non-recurring items 376 - - 376
-------------------------- -------- ----------------- ----------- --------
Underlying profit before
tax 4,633 515 360 5,508
-------------------------- -------- ----------------- ----------- --------
Total assets 41,694 6,307 2,783 50,784
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 957 - 67 1,024
-------------------------- -------- ----------------- ----------- --------
Year to 31 December
2011
Revenue from external
customers 153,667 15,564 4,155 173,386
-------------------------- -------- ----------------- ----------- --------
Inter-segment revenues 857 22,028 966 23,851
-------------------------- -------- ----------------- ----------- --------
Total revenues 154,524 37,592 5,121 197,237
========================== ======== ================= =========== ========
Depreciation 2,151 150 79 2,380
Non-recurring items 8,093 - - 8,093
-------------------------- -------- ----------------- ----------- --------
Underlying profit before
tax 5,067 212 166 5,445
-------------------------- -------- ----------------- ----------- --------
Total assets 56,885 4,531 2,308 63,724
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 2,239 - 157 2,396
-------------------------- -------- ----------------- ----------- --------
3. Non-Recurring Administrative costs
2012 2011
GBP'000 GBP'000
-------------------------------------------- -------- --------
Site closure costs (933) (5,595)
Release of closure provision 848 -
Redundancy costs - (996)
Employee settlements (291) -
Goodwill impaired relating to closed sites - (1,274)
Goodwill impaired relating to current site - (228)
-------------------------------------------- -------- --------
(376) (8,093)
-------------------------------------------- -------- --------
Eight sites were closed in December 2011 and one site in June
2011. In addition, one further site was closed in April 2012. The
site closure costs of GBP933,000 include an additional provision
for future rental commitments, dilapidations and costs in relation
to the 2012 closure. The release of GBP848,000 of the closure
provision to non-recurring items followed a reassessment of the
provision for the sites closed in 2011.
The employee settlement of GBP291,000 in 2012 arose due to a
change in the senior management of the Group and the payment of
compensation for loss of office.
The redundancy costs relate to amounts paid in 2011 in relation
to the 2011 closures as well as costs in relation to the
centralisation of NCRC's finance and administration staff in
Bristol. The site closure costs in 2011 include GBP471,000 of asset
loss on disposals and impairments, operating losses since the date
of the closure announcement of GBP800,000 and provisions made for
future rental commitments, dilapidations and closure costs of
GBP4,324,000. 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
GBP1,274,000. 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
GBP228,000.
4. Finance Costs
2012 2011
Restated
(1)
----------------------------------- -------- ---------
GBP'000 GBP'000
----------------------------------- -------- ---------
Interest payable on bank balances (34) -
----------------------------------- -------- ---------
Pension costs (see note 8):
Interest expense (3,924) (4,031)
Interest income 2,703 3,280
----------------------------------- -------- ---------
(1,255) (751)
----------------------------------- -------- ---------
(1) See note 1
5. Tax expense/(credit)
2012 2011
GBP'000 GBP'000
------------------------------------------------ -------- --------
Current tax:
United Kingdom corporation tax at 24.5% (2011:
26.5%) 1,032 (102)
Adjustments in respect of prior years 31 (8)
------------------------------------------------ -------- --------
1,063 (110)
Deferred tax:
Movement relating to pension asset (IAS 19) 278 436
Temporary differences origination and reversal (601) 32
Losses carried forward 408 (589)
On share options - 202
------------------------------------------------ -------- --------
1,148 (29)
------------------------------------------------ -------- --------
6. EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP3,984,000 (2011: (GBP2,619,000) loss). The weighted average
number of outstanding shares used for basic earnings per share
amounted to 43,197,220 (2011: 43,197,220).
Diluted earnings per share
Diluted earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP3,984,000 (2011: (GBP2,619,000) loss). The weighted average
number of outstanding shares used for diluted earnings per share
amounted to 43,197,220 (2011: 43,197,220).
In the current year due to the average market price of GBP0.63,
the share options are not included in the dilutive earnings per
share calculation. In 2011, the average market price was GBP0.92
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:
2012 2011
GBP'000 GBP'000
Profit/(loss) before tax (as stated) 5,132 (2,648)
Non-recurring items (note 3) 376 8,093
-------------------------------------- -------- --------
Underlying profit before tax 5,508 5,445
Tax (expense)/credit (as stated) (1,148) 29
Tax effect on non-recurring items (92) (1,747)
-------------------------------------- -------- --------
Underlying profit 4,268 3,727
====================================== ======== ========
Underlying earnings per share 9.9p 8.6p
====================================== ======== ========
7. DIVIDENDS
During 2012, the Group paid dividends of GBP2,376,100 (2011:
GBP2,333,000) to its equity shareholders.
These comprised:
a final dividend in respect of 2011 of 3.6p per share paid in
June 2012 (GBP1,555,100); and
an interim dividend in respect of 2012 of 1.9p per share paid in
November 2012 (GBP821,000).
The Board is proposing a final dividend in respect of the
results for the year ended 31 December 2012 of 3.6p per share.
8. 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 2013 will be GBP2.6m. This disclosure is in respect of
the defined benefit section of the Fund only.
As outlined within the accounting policies, the Group has chosen
to early-adopt IAS 19 (Employee benefits, revised)
A full actuarial valuation of the scheme was carried out as at
31 December 2012 by a qualified independent actuary. The major
assumptions used by the actuary were (in nominal terms) as
follows:
2012 2011
% %
-------------------------------------------- ------------------- -------------------
Discount rate 4.70 4.80
Pension increases - fixed 3.00 3.00
Pension increases - 5% LPI 2.75 2.80
Pension increases -2.5% LPI 2.50 2.50
RPI rate of inflation 2.75 2.80
CPI rate of inflation 2.25 2.10
Assumed life expectancies on retirement
at age 65 are:
Current Pensioners Current Pensioners
------------------------------ ------------ ------------------- -------------------
Retiring today: Males 21.3 21.2
Females 23.9 23.8
------------------------------------------- ------------------- -------------------
Future Pensioners Future Pensioners
------------------------------ ------------ ------------------- -------------------
Retiring today: Males 21.0 20.9
Females 23.6 23.5
Retiring in 20 years
time: Males 22.9 22.8
Females 25.5 25.4
------------------------------------------- ------------------- -------------------
The assets in the scheme were:
Restated Original
Balance Sheet Balance Sheet
--------------------------- ------------- ------------- --------------- ---------------
Value at Value at Value at Value at
31/12/2012 31/12/2011 31/12/2010 31/12/2010
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- --------------- ---------------
UK Equities 21,237 18,890 19,445 19,445
Overseas Equities 21,397 18,673 20,278 20,278
Corporate Bonds 15,233 13,093 3,772 3,772
Cashflow Matching
Bonds - - 9,448 9,448
Property 4,636 4,704 4,570 4,570
Insured Annuities 738 - - -
Other 1,212 1,796 1,793 1,793
--------------------------- ------------- ------------- --------------- ---------------
64,453 57,156 59,306 59,306
--------------------------- ------------- ------------- --------------- ---------------
The actual return
on assets over
the period was 7,117 (1,860) 5,781 5,781
--------------------------- ------------- ------------- --------------- ---------------
Present value
of defined benefit
obligation:
Deferred members 55,912 55,857 50,580 50,580
Pensioner members 30,501 27,394 22,786 22,786
Insured Pensioners 738 - - -
Funded plans 87,151 83,251 73,366 73,366
Unfunded plans - - - -
-------------
Total 87,151 83,251 73,366 73,366
-------------
Present value
of unfunded obligations: 22,698 26,095 14,060 14,060
-------------
Unrecognised actuarial
gains/(losses) - - - (23,649)
--------------------------- ------------- ------------- --------------- ---------------
Net (liability)/asset
in balance sheet (22,698) (26,095) (14,060) 9,589
=========================== ============= ============= =============== ===============
Reconciliation of opening and closing balances of the present
value of the defined benefit obligations
2012 2011
GBP'000 GBP'000
---------------------------------------- -------- --------
Benefit obligation at beginning of
period 83,251 73,366
Service cost 167 107
Interest expense 3,924 4,031
Actuarial loss arising from changes
in financial assumptions 2,015 7,787
Actuarial loss arising from experience
on the plan's liabilities 214 850
Benefits paid (3,158) (2,890)
Inclusion of insured annuities 738 -
Benefit obligation at end of period 87,151 83,251
---------------------------------------- -------- --------
Reconciliation of opening and closing balances of the fair value
of plan assets
2012 2011
GBP'000 GBP'000
------------------------------------------ -------- --------
Fair value of plan assets at beginning
of period 57,156 59,306
Interest income 2,703 3,280
Return on plan assets excluding interest
income 4,414 (5,140)
Contributions by employer 2,600 2,600
Benefits paid (3,158) (2,890)
Inclusion of insured annuities 738 -
Benefit asset at end of period 64,453 57,156
------------------------------------------ -------- --------
The amounts recognised in the statement of comprehensive income
are:
2012 2011
GBP'000 GBP'000
----------------------------------------- -------- --------
Current service cost 167 107
Net interest on the net defined benefit
liability/(asset) 1,221 751
Total expense 1,388 858
----------------------------------------- -------- --------
Charged to:
Administration expenses 167 107
Finance costs 1,221 751
----------------------------------------- -------- --------
1,388 858
----------------------------------------- -------- --------
Remeasurements recognised in the statement of comprehensive
income are:
2012 2011
GBP'000 GBP'000
------------------------------------------ --------- ---------
Remeasurements recognised at the
beginning of the period (27,878) (17,264)
Actuarial loss arising from changes
in financial assumptions (2,015) (7,787)
Actuarial loss arising from experience
on the plan's liabilities (214) (850)
Return on plan assets excluding interest
income 4,414 (5,140)
Remeasurements recognised at the
end of the period (25,693) (31,041)
------------------------------------------ --------- ---------
Deferred tax on actuarial loss (1,024) 3,163
------------------------------------------ --------- ---------
Cumulative gains and (losses) recognised
in other comprehensive income (26,717) (27,878)
------------------------------------------ --------- ---------
History of scheme assets, obligations and experience
adjustments
2012 2011
GBP'000 GBP'000
----------------------------------- --------- ---------
Present value of defined benefit
obligations 87,151 83,251
Fair value of scheme assets 64,453 57,156
Deficit in scheme (22,698) (26,095)
Experience adjustments arising on
scheme liabilities 2,229 8,637
Experience item as a % of scheme
liabilities 3% 10%
Experience adjustments arising on
scheme assets 4,414 (5,140)
Experience item as a % of scheme
assets 7% (9%)
----------------------------------- --------- ---------
The following disclosure is in respect of the defined benefit
section of the Fund only.
(1) Characteristics of the Fund and the risks associated with
the Fund
a) Information about the characteristics of the Fund
i. The Fund provides pensions in retirement and death benefits
to members. Pension benefits are linked to a member's final salary
at retirement (or leaving if earlier) and their length of service.
Since 31 July 2006 the Fund has been closed to future accrual.
ii. The Fund is a registered scheme under UK legislation and is
contracted out of the State Second Pension. The Fund is subject to
the scheme funding requirements outlined in UK legislation. The
last scheme funding valuation of the Fund was as at 31 December
2008 and identified a deficit of GBP25.4m. In the recovery plan
dated 22 March 2010 the Company agreed to pay contributions of
GBP2.6m each year with the view to eliminating the shortfall by 31
December 2018.
iii. The Fund was established from 1 April 1973 under trust and
is currently governed by the Fund's trust deed and rules dated 11
October 2011. The Trustees are responsible for the
operation and the governance of the Fund, including making
decisions regarding the Fund's funding and investment strategy in
conjunction with the Company.
b) Information about the risks of the Fund to the Company
The ultimate cost of the Fund to the Company will depend upon
actual future events rather than the assumptions made. Many of the
assumptions made are unlikely to be borne out in practice and as
such the cost of the Fund may be higher (or lower) than disclosed
In general, the risk to the Company is that the assumptions
underlying the disclosures, or the calculation of contribution
requirements are not borne out in practice and the cost to the
Company is higher than expected. This could result in higher
contributions required from the Company and a higher deficit
disclosed. This may also impact the Company's ability to grant
discretionary benefits or other enhancements to members.
More specifically, the assumptions not being borne out in
practice could include:
i. The return on the Fund's assets being lower than assumed,
resulting in an unaffordable increase in the required Company
contributions.
ii. Falls in asset values (particularly equities) not being
matched by similar falls in the value of liabilities.
iii. Unanticipated future changes in mortality patterns leading
to an increase in the Fund's liabilities. Future mortality rates
cannot be predicted with certainty. This is especially so bearing
in mind that the youngest Fund members could be expected to still
be alive in 60 years or more and it is not possible to reliably
predict what medical advances may or may not have occurred by this
time.
iv. The potential exercise (by members or others) of options
against the Fund, for example taking early retirement or exchanging
a portion of pension for a cash lump sum.
c) Information about any amendments, curtailments and
settlements
There were no Fund amendments, curtailments or settlements
during the reporting period.
d) Expected future cashflows to and from the Fund
In accordance with the schedule of contributions and recovery
plan both dated 22 March 2010 the Company is expected to pay
contributions of GBP2.6m over the next accounting period. In
addition, the Company is expected to meet the cost of
administrative expenses and insurance premiums for the Fund. The
Fund's Pension Protection Levies are met from the Fund's
assets.
The liabilities of the Fund are based on the current value of
expected benefit payment cashflows to members of the Fund over the
next 60 to 70 years. The average duration of the liabilities is
approximately 19 years.
(2) The Fund's investment strategy
The Fund's investment strategy is to invest broadly 75% in
return seeking assets (equities and property) and 25% in matching
assets (corporate bonds). This strategy reflects the Fund's
liability profile and the Trustees' and Company's attitude to risk.
As the Fund matures, the Trustees and the Company expect to
gradually reduce the proportion allocated to return seeking assets
and increase the proportion allocated to matching assets.
(3) Sensitivity analysis
The results in these disclosures are inherently volatile,
particularly the figures shown on the balance sheet. The results
disclosures are dependent on the assumptions chosen by the
Directors. The table below shows the sensitivity of the balance
sheet position to changes in assumptions to illustrate this
volatility:
GBP'000 % change
---------------------------------------- -------- ---------
Liabilities as at 31 December 2012 87,151
Sensitivity to: 64,453 57,156
Discount rate -0.25% pa 91,111 +4.5%
(4.5% p.a.)
Inflation +0.25% pa 89,071 +2.2%
(RPI 3.00% pa / CPI 2.50% pa)
Inflation +0.25% pa 89,071 +2.2%
Mortality age rating -1 year 89,608 +2.8%
(Members assumed to experience the
life expectancy of
someone 1 year younger)
Cash commutation 93,074 +6.8%
(The cash commutation assumption as
at 31 December 2012 is that 90% of
members commute 30% of their pension)
9. FINANCIAL STATEMENTS
The audited financial statements will be posted to shareholders
on 30 April 2013. This announcement and the preliminary results
presentation are 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 UGUMUCUPWGRR
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