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Share Name | Share Symbol | Market | Type |
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Austin Resources Ltd | TSXV:AUT | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.06 | 0.04 | 0.09 | 0 | 01:00:00 |
RNS Number:0509P Auto Indemnity Group PLC 27 August 2003 AUTO INDEMNITY GROUP PLC Interim Results 29 June 2003 HIGHLIGHTS 70% Increase in Turnover Significant profits compared to loss in the first half of last year Maiden Interim Dividend of 0.25p Admin expenses reduced from 38% to 28% of turnover Charles Good, Chairman, commented: In the first 6 months of 2003 we achieved market leadership in our industry, regularly achieving a 10% share of the replacement vehicle market and have seen a continuation of the excellent progress which became evident in the second half of last year. We are now recognised as one of the largest volume suppliers of replacement vehicles amongst accident management groups. Whilst the impact of new business will be less dramatic in the second half of 2003, the volumes from new contracts will build up during 2004, and we expect growth rates to accelerate again as our business model continues to produce substantial growth opportunities. The Board is confident that the Company will continue to build on the firm foundations established over the last twelve months HALF YEAR RESULTS Chairman's Statement Results Overview I am pleased to report that Auto Indemnity ("AI") continues to make excellent progress. In the six months to 29 June 2003, turnover grew to #9.9 million from #5.8 million (an increase of 70%) for the same period a year ago. Similarly profit before tax was #572,000, against a loss of #213,000 a year ago and operating profit, before goodwill amortisation and taxation, was #713,000 against a loss of #77,000. Whilst Gross Margins for the latest six months declined to 33.1% from 34.7% in the same period last year (in line with the Board's expectations), administrative expenses have been well controlled and now only represent 28% of turnover compared with over 38% for the same time last year. The large rise in turnover and the tightening of Gross Margins both reflect the continuing successful move away from our traditional Credit Hire business to the high volume lower margin insurer referred business, which is where our future lies. Our core vehicle replacement business currently remains the main driver of growth, nevertheless our additional new services of vehicle repair management, personal injury management and debt recovery, though currently small in absolute terms, are a fast growing component of our business. Dividend and Change of Year End As we announced at the time of our full year results, the Board has decided to change our year-end from end-December to end-June; the current financial reporting period will therefore be for eighteen months. Consequently, we will be presenting to shareholders two sets of interim results to 29 June 2003 and 28 December 2003 followed by a final six month period to 27 June 2004. In line with this the Board is pleased to announce a first interim dividend in respect of the 6 month period to 29 June 2003 of 0.25p per share. The dividend will be paid on 26 September to shareholders on the register as at 5 September with the shares being marked ex-dividend on 3 September. Subject to unforeseen circumstances, it is the intention of the Board to pay a second interim dividend of 0.25p for the six months ending in December 2003 to be followed by a final dividend at an appropriate level, for the six months ending in June 2004. Finance and Cash Management Ensuring that AI is paid for the work it conducts remains a major area for attention. We achieve success here by demonstrating to insurers the high level of technical skills of our call centre staff which ensures that we only contract business with insurers, which is ethical and genuinely eligible for the services provided. This is followed up with keeping insurers actively informed of progress, with full documentary evidence. The positive results being achieved through the application of these procedures can be seen by the reduction in debtor days which are now down to 94 days from 152 days a year ago. Consequently cash flow generated from operations in the first half was #1.49 million which has resulted in a further increase in cash deposited with our bankers, which stood at #2.6 million on 29 June (#1.08 million as at 29 December 2002). We recently have negotiated two further bordereau payment agreements with large insurers, bringing the total to five, further demonstrating the high regard in which AI is held. As result of all of these actions our outstanding debtor days will continue to improve, nevertheless there is still a considerable way to go before we achieve the 30-day payment period described in the ABI General Terms of Agreement. New Business The strategic goal of Auto Indemnity remains to grow our share of the accident management market by securing commission-free referrals from insurers. Winning these contracts is by definition a slow and careful process for both parties. Whilst the first half has benefited from deals reached with insurers in 2002 and earlier, this has now been followed by reaching agreement with two new 'top 20' insurers to provide them with accident management services, including personal injury management, vehicle repair as well as our core replacement vehicle management service. These are mainly direct billing contracts that do not depend on credit hire payment periods. The impact on our trading will increasingly be felt from the beginning of the last quarter of 2003. We continue to have active discussions with a number of other top 20 insurers with the aim of developing full service agreements in due course. Operations and Claims Management We continue to make progress in the efficiency of our operation. By the end of this reporting period the average length of hire of a vehicle had reduced to between 13 and 14 days down from 16 days in calendar 2002. We understand that this is very much lower than the average length of hire of our principal competitors. This has been achieved by improving communication between vehicle repairer, insurance company and policyholder. Our ability to reduce insurers costs by tight controls in this area is increasingly recognised by the insurance market and is leading to new business opportunities. As would be expected in a business at the forefront of change, IT and management systems are continually undergoing upgrading and improvement. During the last six months we have put in a number of processes to improve further the manner in which we manage risk and recovery within the business. We have undertaken a review of our IT systems to ensure that they will be capable of accommodating both existing and future growth rates, at the same time keeping our market-leading customer service levels, for which we are already recognised. Procurement During the first six months of the year we completed a comprehensive tender process for the provision of replacement vehicles. This will ensure that we have adequate forward supplies to meet our expected growth and at the same time secure the most favourable rates in the market. The outcome of the tender process was most satisfactory and we welcome National Car Rental as a supply partner; they will complement the service we currently enjoy from AVIS. Both suppliers are governed by comprehensive supply level agreements to ensure complete customer satisfaction. In order to be sure that we can accommodate the continuing high levels of growth we anticipate, we are in the final stages of negotiation to purchase a further 15,000 sq ft call centre and head office facility in Blackpool next to our current offices. Given the present circumstances of our cash position, it is intended that this building will be purchased out of internal cash flow at a likely cost of around #2 million, including infrastructure, and should meet our space requirements for the next two to three years, based on our current projections for growth. Prospects In the first 6 months of 2003 we achieved market leadership in our industry, regularly achieving an 8% share of the replacement vehicle market and have seen a continuation of the excellent progress which became evident in the second half of last year. We are now recognised as one of the largest volume suppliers of replacement vehicles amongst accident management groups. Whilst the impact of new business will be less dramatic in the second half of 2003, the volumes from new contracts will build up during 2004, and we expect growth rates to accelerate again as our business model continues to produce substantial growth opportunities. The Board is confident that the Company will continue to build on the firm foundations established over the last twelve months Charles Good Chairman 26 August 2003. CONSOLIDATED PROFIT AND LOSS ACCOUNT Six months Six months to 29 June to 30 June Year to 2003 2002 29 Dec 2002 Note Unaudited Unaudited Audited #'000 #'000 #'000 Turnover 9,932 5,845 14,752 Cost of sales (6,642) (3,819) (9,853) Gross profit 3,290 2,026 4.899 Administrative expenses (2,743) (2,245) (4,565) Group operating profit/(loss): Before amortisation of goodwill 713 (77) 642 Amortisation of goodwill (166) (142) (308) Group operating profit/(loss): 547 (219) 334 Interest receivable and similar income 25 7 21 Interest payable and similar charges - (1) (14) Profit/(loss) on ordinary activities before 572 (213) 341 taxation Tax on profit on ordinary activities 2 (82) - 451 Profit/(loss) after taxation 490 (213) 792 Dividends proposed 3 (153) - (153) Profit/(loss) for the period 337 (213) 639 Basic and diluted earnings per share 1 0.80p (0.35)p 1.30p Basic and diluted eps before taxation and amortisation of goodwill 1 1.21p (0.13)p 1.06p Dividend per share 3 0.25p - 0.25p All operations are continuing. There were no recognised gains and losses other than the results above. CONSOLIDATED BALANCE SHEET 29 Dec Note 29 June 2003 30 June 2002 2002 Unaudited Unaudited Audited #'000 #'000 #'000 Fixed assets Intangible assets 5,648 5,964 5,814 Tangible assets 278 344 306 5,926 6,308 6,120 Current assets Debtors 6,633 5,879 6,997 Cash at bank and in hand 2,559 553 1,082 9,192 6,432 8,079 Creditors: amounts falling due within one year (4,204) (3,018) (3,625) Net current assets 4,988 3,414 4,454 Total assets less current liabilities 10,914 9,722 10,574 Capital and reserves Called up share capital 6,109 6,107 6,107 Share premium account 1,552 1,551 1,551 Merger reserve 690 1,003 847 Profit and loss account 2,563 1,061 2,069 Shareholders' funds 4 10,914 9,722 10,574 CONSOLIDATED CASH FLOW STATEMENT Six months Year to to 29 June Six months to 29 Dec 2003 30 June 2002 2002 Unaudited Unaudited Audited #'000 #'000 #'000 Reconciliation of operating cash flow Operating profit/(loss) 547 (219) 334 Goodwill amortisation 166 142 308 Depreciation of fixed assets 69 70 149 Profit on disposal of fixed assets - (10) (12) Decrease / (increase) in debtors 282 461 (206) Increase in creditors 426 317 944 Net cash inflow from operating activities 1,490 761 1,517 Returns on investments and servicing of finance 25 6 7 Capital expenditure (41) (41) (80) Acquisitions & disposals - (708) (892) 1,474 18 552 Financing 3 - (7) Increase in cash 1,477 18 545 NOTES TO THE INTERIM REPORT TO 29 JUNE 2003 1 EARNINGS PER SHARE Six months Year to Six months to to 30 June 29 Dec 29 June 2003 2002 2002 Unaudited Unaudited Audited #'000 #'000 #'000 These have been calculated on earnings of: 490 (213) 792 The weighted average number of shares used was:- '000 '000 '000 Basic 61,069 60,559 60,800 Share option adjustment 247 - - Fully diluted 61,316 60,559 60,800 2 TAXATION The tax charge of #82,000 is based on an estimated effective tax rate on profit for the 18 month period to 27 June 2004 of 14%. The charge arises from a reduction in the deferred tax asset held on the balance sheet of the Group to #369,000 as at 29 June 2003 which is included in debtors. The rate is lower than the standard UK corporation tax rate due to the utilisation of brought forward losses not previously recognised as an asset in the balance sheet. The recoverability of the possible deferred tax asset attributable thereto was not assessed as sufficiently certain to warrant recognition in the financial statements under accounting standard FRS 19 'Deferred Tax'. 3 DIVIDENDS The Company proposes to pay an interim dividend of 0.25 pence per share to shareholders on the share register at 5 September 2003. On the number of shares currently in issue this amounts to #153,000. 4 MOVEMENT IN SHAREHOLDERS' FUNDS Six months Year to Six months to to 30 June 29 Dec 29 June 2003 2002 2002 Unaudited Unaudited Audited #'000 #'000 #'000 Profit/(loss) for the period 337 (213) 639 Issue of share capital (net of issue costs) 3 300 300 Net addition to shareholders funds 340 87 939 Opening shareholders' funds 10,574 9,635 9,635 Closing shareholders' funds 10,914 9,722 10,574 5 INTERIM REPORT This interim report was approved by the Board on 26 August 2003. It has been prepared using accounting policies that are consistent with those adopted in the statutory accounts for the year ended 29 December 2002. The figures for the year ended 29 December 2002 were derived from the statutory accounts for that year. The statutory accounts for the year ended 29 December 2002 have been delivered to the Registrar of Companies and received an audit report which was unqualified and did not contain statements under sections 237 (2) or (3) of the Companies Act 1985. 6 DESPATCH OF DOCUMENTS Copies of the interim results will be despatched to shareholders and the AIM Team. Copies will also be available to the public at the company's registered office; Indemnity House, Sir Frank Whittle Way, Blackpool, FY4 2FB INDEPENDENT REVIEW REPORT TO AUTO INDEMNITY GROUP PLC Introduction We have been instructed by the Company to review the financial information, which comprises the Profit and Loss account, the Balance Sheet, the Cash Flow Statement, the Reconciliation of Shareholders' Funds and the related notes that have been reviewed. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the AIM Rules. The directors are also responsible for ensuring that the accounting policies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 29 June 2003. RSM Robson Rhodes LLP Chartered Accountants Manchester, England 26 August 2003 For further information please contact: Adrian Palmer - Auto Indemnity Group PLC - 0870 889 2200 Peter Ward - Insinger de Beaufort - 0207 377 6161 This information is provided by RNS The company news service from the London Stock Exchange END IR SEIFWMSDSELA
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