RNS Number : 9716C
Nationwide Accident Repair Srvs PLC
09 September 2008
NARS
9 September 2008
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide" or "the Company")
Half Year Results
for the Six Months to 30 June 2008
Nationwide provides automotive crash repair and accident administration services to the UK insurance industry. With a national network
of accident repair centres located across England, Scotland and Wales employing over 2,200 people, it is the largest dedicated provider of
accident repair services in the UK.
Financial summary
2008 2007
Revenue £88.3m £75.9m
Operating profit £3.8m £3.3m
Profit before tax £3.9m £3.4m
Earnings per share 6.4p 5.6p
Results under IAS 19 (non*corridor)
Operating profit £4.1m £3.8m
Profit before tax £4.2m £4.0m
Earnings per share 6.9p 6.4p
Key Points
· Revenue up 16% to £88.3m (2007: £75.9m)
· Profit before tax up 14% to £3.9m (2007: £3.4m).
· Earnings per share up 14% to 6.4p (2007: 5.6p).
· Strong balance sheet with net cash of £4.6m (2007: £5.2m).
· Interim dividend of 1.7p per share, representing an increase of 13%
· Benefits of new contracts and contract extension secured in 2007 coming through
· Accident management operations, including our mobile services, progressing well
· Acquisition of four new bodyshops in period and fifth more recently
· Board confident that business is well positioned for ongoing growth
Michael Marx, Chairman, commented,
"We are pleased with the progress the business has made over the first half of the year. Our twin track approach of developing the
business both organically and by acquisition continues to deliver results. The Directors remain confident that the business is well
positioned for ongoing growth."
Enquiries:
Nationwide Accident Repair Michael Wilmshurst, Chief Executive T: 020 7448 1000 today
Services plc David Loftus, Finance Director Thereafter: 01993
701720
Biddicks Katie Tzouliadis/ Sophie Lane T: 020 7448 1000
Arbuthnot Securities James Steel/ Alasdair Younie T: 020 7012 2000
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
CHAIRMAN'S STATEMENT
Introduction
We are pleased to report Nationwide's half year results for the six months to 30 June 2008. Nationwide continues to consolidate its
position as the UK's largest dedicated provider of accident repair services and the results are in line with our robust growth expectations.The strength of our contract base and additional capacity leaves us well positioned for growth.
Financial overview
Sales over the six months grew to £88.3m, representing a 16% increase on last year (2007: £75.9m) and reflecting the additional
contractual volumes secured in 2007. Profit before tax for the period rose to £3.9m, a 14% increase on the same period last year (2007:
£3.4m) with earnings per share increasing by 14% to 6.4p (2007: 5.6p). Our Balance Sheet remains strong with net cash at 30 June 2008 of
£4.6m.
The Company has adopted IAS 19, the 'corridor approach' for its pension obligations. However, in order to provide shareholders with
financial results which can be compared to other companies, results under IAS 19 (non-corridor) are also shown. Under IAS 19 (non-corridor),
profit before tax increased by 5% to £4.2m (2007: £4.0m) and earnings per share increased by 8% to 6.9p (2007: 6.4p).
Dividend
We maintain our progressive dividend policy which broadly reflects the growth of earnings over time. We will, therefore, be declaring an
interim dividend of 1.7p per share, which represents an increase of 13% on last year (2007: 1.5p). The dividend will be paid on 3 November
2008 to shareholders on the register at the close of business on 3 October 2008.
Trading overview
The business enjoyed a good first half as the new contracts and volume extensions agreed last year began to generate the revenues and
profitability anticipated. These included the new wins we secured Zenith and the additional volumes we gained with Norwich Union, AXA and
Zurich. We have also increased our retail sales at our sites and continue to develop this new aspect of our business. During the period, we
acquired an additional four bodyshops in Bristol, Gravesend in Kent, Scunthorpe in Lincolnshire, and, Redruth in Cornwall. More recently, we
acquired a new site at Kettering in Northamptonshire. These acquisitions further extend our capacity and service capability.
Our Network Services Division, which provides accident management services to motor insurers and fleet operators, has enjoyed a
successful six months and we see good potential to develop this business further, particularly in our Mobile Glass Replacement and Mobile
Vehicle Repair offerings.
Outlook
We are pleased with the progress the business has made over the first half of the year. Our twin track approach of expanding the
business both organically and by acquisition continues to deliver results. There remains further scope to increase efficiency within our
existing business. The Directors remain confident that the business is well positioned for ongoing growth.
Michael Marx
Chairman
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
Unaudited Consolidated Income Statement
For the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
Notes £'000 £'000 £'000
Sales revenue 88,342 75,880 151,947
Cost of sales (47,156) (41,109) (81,360)
Gross profit 41,186 34,771 70,587
Distribution costs (22,242) (18,901) (38,858)
Administrative expenses (15,036) (12,434) (24,872)
Share option charge (120) (120) (240)
Operating profit 3,788 3,316 6,617
Finance income 4 142 146 237
Finance costs 4 (36) (37) (39)
Profit for the period before tax 3,894 3,425 6,815
Tax expense 5 (1,101) (912) (1,744)
Net profit for the period 2,793 2,513 5,071
Earnings per Share
Basic 6 6.4p 5.6p 11.3p
Diluted 6 6.3p 5.1p 11.0p
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
Unaudited Consolidated Balance Sheet
As at 30 June 2008
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2008 2007 2007
Notes £'000 £'000 £'000
Assets
Non*current
Goodwill 7,595 6,300 7,038
Property, plant and equipment 8,897 7,843 8,100
Pension and other employee assets 2 6,422 4,541 5,273
22,914 18,684 20,411
Current
Inventories 2,608 2,273 2,591
Trade and other receivables 30,042 21,445 26,545
Cash and cash equivalents 4,592 5,167 5,152
37,242 28,885 34,288
Total assets 60,156 47,569 54,699
Equity
Equity attributable to the shareholders
Share capital 3 5,400 5,609 5,578
Capital redemption reserve 2,959 1,000 1,271
Share premium account 9,354 11,104 10,864
Revaluation reserve 8 8 8
Retained earnings 7,355 5,692 7,426
Total equity 25,076 23,413 25,147
Liabilities
Non-current
Provisions 50 438 125
Deferred tax liabilities 1,506 707 1,002
1,556 1,145 1,127
Current
Provisions 5 44 14
Trade and other payables 32,929 21,750 27,380
Current tax liabilities 590 1,217 1,031
33,524 23,011 28,425
Total liabilities 35,080 24,156 29,552
Total equity and liabilities 60,156 47,569 54,699
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 June 2008
Capital Share
Share redemption premium Revaluation Retained
capital reserve account reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2007 5,609 1,000 11,104 8 4,226 21,947
Income for the six month - - - - 2,513 2,513
period
Total recognised income and - - - - 2,513 2,513
expense for the period
Share option charge - - - - 120 120
Dividend paid - - - - (1,167) (1,167)
Balance at 30 June 2007 5,609 1,000 11,104 8 5,692 23,413
Income for the six month - - - - 2,558 2,558
period
Total recognised income and - - - - 2,558 2,558
expense for the period
Share buyback (31) 271 (240) - (271) (271)
Share option charge - - - - 120 120
Dividend paid - - - - (673) (673)
Balance at 31 December 2007 5,578 1,271 10,864 8 7,426 25,147
Income for the six month - - - - 2,793 2,793
period
Total recognised income and - - - - 2,793 2,793
expense for the period
Share buyback (178) 1,688 (1,510) - (1,688) (1,688)
Share option charge - - - - 120 120
Dividend paid - - - - (1,296) (1,296)
Balance at 30 June 2008 5,400 2,959 9,354 8 7,355 25,076
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
Notes £'000 £'000 £'000
Operating activities
Profit for the period before tax 3,894 3,425 6,815
Adjustments 8 3,464 (2,260) (296)
Outflow from pension obligations (1,274) (1,221) (2,465)
Outflow from provisions (84) (200) (201)
Tax paid (1,038) (240) (963)
4,962 (496) 2,890
Investing activities
Additions to property, plant and (1,513) (537) (1,796)
equipment
Proceeds from the disposal of - - 432
businesses
Proceeds from the disposal of 3 888 930
property, plant and equipment
Acquisition of businesses - cost (992) (599) (2,362)
Interest received - 146 237
(2,502) (102) (2,559)
Financing activities
Dividend paid 7 (1,296) (1,167) (1,840)
Purchase of own shares (1,688) - (271)
Interest paid (36) - -
(3,020) (1,167) (2,111)
Net decrease in cash and cash (560) (1,765) (1,780)
equivalents
Cash and cash equivalents at 5,152 6,932 6,932
beginning of period
Cash and cash equivalents at end of 4,592 5,167 5,152
period
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
Notes to the Unaudited Interim Statement
For the six months ended 30 June 2008
1. Basis of preparation
The unaudited interim accounts have been prepared on the same basis and using the same accounting policies as used in the audited
financial statements for the year ended 31 December 2007.
The financial information set out in these interim accounts does not constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The figures for the year ended 31 December 2007 have been extracted from the statutory financial statements which have
been filed with the Registrar of Companies. The auditors' report on those financial statements was unmodified.
2. Pension and other employee assets/obligations
The Group operates a defined benefit scheme and a defined contribution pension scheme in the UK which offers both pensions in retirement
and death benefits to members. Since 1 January 2002 the defined benefit scheme has been closed to new members. The assets of the schemes are
administered by trustees independent of the Group. The Company made contributions of £1,274,000 (2007: £1,221,000) to the defined benefit
scheme during the six month period to 30 June 2008 and £2,465,000 in the year to 31 December 2007. The defined benefit scheme was closed for
future accruals on 31 July 2007 with active members transferred to a new defined contribution section of the scheme.
The Group has opted to amortise all actuarial gains and losses above the corridor (10% of the greater of assets and liabilities) over
the future working lifetime of the active membership.
A full actuarial valuation of the defined benefit scheme was carried out as at 31 December 2005 and was updated to 30 June 2008 by a
qualified independent actuary.
30 Jun 30 Jun 31 Dec
2008 2007 2007
% % %
The major assumptions used by the actuary were (in
nominal terms):
Rate of increase in salaries n/a n/a n/a
Rate of increase in pensions - accrued pre 5 April 3.0 3.0 3.0
1997
Rate of increase in pensions - accrued post 5 April 3.75 2.85 3.15
1997
Discount rate 6.8 6.1 6.1
Inflation assumption 3.75 3.10 3.15
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.
30 Jun 30 Jun 31 Dec
2008 2007 2007
£'000 £'000 £'000
Total market value of assets 50,518 54,645 54,733
Present value of defined obligations (funded (61,946) (63,725) (65,040)
plans)
Present value of unfunded obligations (11,428) (9,080) (10,307)
Unrecognised actuarial losses 17,850 13,621 15,580
Net asset in balance sheet 6,422 4,541 5,273
Reconciliation of opening and closing balances of the present value of the defined benefit obligations
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Benefit obligation at beginning of period 65,040 70,928 70,928
Interest cost 1,971 1,905 3,786
Actuarial gain (4,222) (8,346) (8,042)
Benefits paid (843) (762) (1,632)
Balance at end of period 61,946 63,725 65,040
Reconciliation of opening and closing balances of the fair value of plan assets
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Fair value of scheme assets at beginning of 54,733 50,360 50,360
period
Expected return on scheme assets 2,113 1,868 3,747
Actuarial (loss)/gain (6,759) 1,958 (207)
Contributions by employers 1,274 1,221 2,465
Benefits paid (843) (762) (1,632)
Assets at end of period 50,518 54,645 54,733
The amounts recognised in the income statement are:
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Interest on obligation 1,971 1,905 3,786
Expected return on assets (2,113) (1,868) (3,747)
Actuarial loss recognised in period 267 511 1,020
125 548 1,059
Charged to:
Administration expenses 267 511 1,020
Finance income (142) - -
Finance costs - 37 39
125 548 1,059
Effect on profitability: comparison between IAS19 (corridor) and IAS19 (non-corridor)
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Operating profit before non recurring items 3,788 3,316 6,617
as stated
Add back actuarial loss recognised under 267 511 1,020
IAS 19 (corridor)
Operating profit under IAS 19 4,055 3,827 7,637
(non-corridor)
Finance income 142 146 237
Finance costs (36) (18) (39)
Profit before tax under IAS 19 4,161 3,955 7,835
(non-corridor)
Tax expense as stated (1,101) (912) (1,744)
Deferred tax IAS 19 (corridor) reversed 322 202 316
Deferred tax under IAS 19 (non-corridor) (396) (361) (777)
Profit after tax under IAS 19 2,986 2,884 5,630
(non-corridor)
3. Equity
30 June 2008 30 June 2007 31 December 2007
Shares £'000 Shares £'000 Shares £'000
Authorised
Ordinary shares of 12.5p each 64,000,000 8,000 64,000,000 8,000 64,000,000 8,000
Issued and fully paid
Ordinary shares of 12.5p each 43,197,220 5,400 44,872,220 5,609 44,622,220 5,578
On 15 January 2008 the Company purchased 975,000 of its own shares at a price of 120p per share and 450,000 shares on 25 January 2008 at
a price of 115p per share. All shares purchased have been cancelled.
Share options
Number of Exercise Exercise
shares price Period
M A Wilmshurst Approved 25,751 £1.165 2009-16
Unapproved 2,217,860 £1.11 2009-16
D J Loftus Approved 25,751 £1.165 2009-16
Unapproved 1,096,055 £1.11 2009-16
S D G Thompson Approved 25,751 £1.165 2009-16
Unapproved 871,693 £1.11 2009-16
4,262,861
All the above options were issued on 4 July 2006 and no additional share options have been issued since this date.
In total, £120,000 of employee compensation expense has been included in the consolidated income statement for the six month period and
£240,000 in the year to 31 December 2007. The corresponding credit is taken to shareholders' funds. No liabilities were recognised due to
share based transactions.
Each Director has been granted two tranches 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.
4. Finance income and finance costs
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Finance income
Interest receivable on bank balances - 146 237
Pension costs (note 2):
- interest on obligation (1,971) - -
- expected return on assets 2,113 - -
142 146 237
Finance costs
Interest payable on bank balances 36 - -
Pension costs (note 2):
- interest on obligation - 1,905 3,786
- expected return on assets - (1,868) (3,747)
36 37 39
5. Income tax expense
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Current tax:
United Kingdom corporation tax at 28.5% 775 890 1,624
(2007: 30%)
Adjustments in respect of prior years (178) - (197)
597 890 1,427
Deferred tax:
Movement relating to pension asset 322 202 422
Deferred tax resulting from reduction in - - (78)
tax rate
On share options (34) (34) (67)
Timing differences origination and reversal 216 (146) 40
1,101 912 1,744
6. Earnings per share and dividends
Basic earnings per share
The basic earnings per share has been calculated using the net profit attributable to the shareholders of the Company of £2,793,000 for
the six month period (2007: £2,513,000) (12 months to 31 December 2007: £5,071,000).
The weighted average number of outstanding shares used for the basic earnings per share amounted to 43,331,561 (2007: 44,872,220) (12
months to 31 December 2007: 44,864,001). This number takes into account the share buybacks that occurred on 15 January 2008 and 25 January
2008 as detailed in note 3.
Diluted earnings per share
The diluted earnings per share has been calculated using the net results attributable to the shareholders of the Company of £2,793,000
(2007: £2,513,000) (12 months to 31 December 2007: £5,071,000).
The weighted average number of outstanding shares used for the diluted earnings per share amounted to 44,381,802 (2007: 49,135,081) (12
months to 31 December 2007: 49,135,081) and assumes the exercise of all the share options detailed in note 3 since the date they were
granted and the average market price of £1.47. This number takes into account the share buybacks that occurred on 15th January 2008 and 25
January 2008 as detailed in note 3.
7. Dividends
In June 2008, the Company paid a dividend of £1,296,000 to its equity shareholders. This comprised a final dividend in respect of 2007
of 3.0p per share. The Directors declare an interim dividend of 1.7p per share, which will be paid on 3 November 2008 to shareholders on the
register at the close of business on 3 October 2008.
8. Cash flow statement
The following non*cash flow adjustments have been made to the pre*tax result for the year to arrive at operating cash flow:
6 months 6 months 12 months
to 30 Jun To 30 Jun to 31 Dec
2008 2007 2007
£'000 £'000 £'000
Adjustments:
Movement in pension fund asset - IAS19 125 547 1,059
Share option scheme charge 120 120 240
Depreciation 1,151 1,208 2,225
Changes in inventories (17) 275 (43)
Changes in trade and other receivables (3,497) (955) (5,155)
Changes in trade and other payables 5,549 (2,960) 2,670
Changes in provisions - - (342)
Profit on sale of businesses - - (165)
Profit on sale of property, plant and (3) (349) (548)
equipment
Finance income - (146) (237)
Finance charges 36 - -
Total 3,464 (2,260) (296)
This information is provided by RNS
The company news service from the London Stock Exchange
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