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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
AI Claims | LSE:ACS | London | Ordinary Share | GB0009374090 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMACS
RNS Number : 0298C
AI Claims Solutions PLC
01 March 2011
Ai CLAIMS SOLUTIONS PLC
Interim Report for the 6 months ended 31 December 2010
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Revenue 60,139 38,151 91,929 Gross margin 17.6% 19.2% 18.1% Adjusted profit(1) 1,715 906 2,722 Profit before taxation 1,685 855 2,630 Taxation (486) (261) (708) Profit for the period 1,199 594 1,922 Dividends (227) (208) (385) Earnings per share ["EPS"]: 2.01p 1.06p 3.29p - Adjusted basic(2) 1.96p 0.97p 3.14p - Basic Dividend per share 0.33p 0.29p 0.66p
Financial Highlights
-- Revenue increased by 57% to GBP60.1m from GBP38.2m
-- 89% increase in adjusted profits(1) of GBP1.7m (6M to Dec 09: GBP0.9m)
-- Earnings(2) before interest, taxation, depreciation & amortisation ("EBITDA") up 69% to GBP2.7m (6M to Dec 09: GBP1.6m)
-- Gross margin of 17.6% (6M to Dec 09: 19.2%) reflecting change in mix of business
-- Adjusted profit(1) margin of 2.9% (6M to Dec 09: 2.4%)
-- 5.9 percentage points increase in annualised return(2) on shareholders' funds to 14.6% (6M to Dec 09: 8.7%)
-- Adjusted basic EPS of 2.01p (6M to Dec 09: 1.06p)
-- Proposed interim dividend of 0.33p per share, 13.8% up on the prior year (6M to Dec 09: 0.29p per share)
Notes
(1) "Adjusted profit" represents profit before taxation excluding IFRS 2 share option charges
(2) based on profit for the period excluding IFRS 2 share option charges
Operational Highlights
-- Successful implementation of a major broker based scheme from 1 July 2010
-- Settlement reached with major insurer post period end to settle GBP4.9m of GTA(3) debt due at 31 December 2010 and also to enter into a forward payment protocol. The settlement will be concluded with no diminution to the carrying value of the debt.
-- Work-in-Progress ("WiP") days reduced by 3 days to 36 days (30 Jun 10: 39 days) as a result of prompter billing.
-- Non GTA(3) debtor days reduced by 4 days to 48 days (30 Jun 10: 52 days).
-- GTA(3) debtor days increased by 10 days to 133 days (30 Jun 10: 123 days). Adjusting for the post period settlement (to date) with the major insurer (noted above), GTA(3) debtor days, at 31 December 2010, would have been 17 days lower than reported at 116 days (30 Jun 10: 123 days).
-- Contracts renewed with two large referral providers & piloting products with a 2nd large self insured organisation.
-- Retained the business of a large automotive client & continued to work with vehicle manufacturers to develop their branded accident management schemes.
-- Developed & implemented a voice recording solution across all of Ai's operational and claims departments to further improve Ai's customer journey and enhance the ability to collect cash faster than the industry norms.
-- Secured the Investors in People Silver Award.
Note
(3) the Association of British Insurers' General Tariff Agreement
For further information, please contact:
David Sandhu
Ai Claims Solutions plc
0844 571 3108
Peter Harrison
Ai Claims Solutions plc
0844 571 3200
Dru Danford
Stephane Auton
Shore Capital
0207 408 4090
Chairman's Statement
I am delighted to report a record start to the year. The key highlights are:
-- Adjusted profit up 89% to GBP1.7m
-- Revenue up 57% to GBP60.1m
-- Adjusted basic EPS up 90%
-- Major new contract implemented successfully from 1 July 2010
-- Settlement post period end with a major insurer covering 9% of GTA debt and agreement to a forward payment protocol
Results Overview
A significant new scheme, which commenced on 1 July 2010, together with several smaller contract wins led to revenues increasing to GBP60.1m from GBP38.2m for the comparative period, a 57% increase. The new schemes were implemented successfully and are performing well and in line with expectations.
Repair based service revenue grew by 81% to GBP19.9m (6M to Dec 09: GBP11.0m) for the half year and hire services by 53% to GBP39.0m (6M to Dec 09: GBP25.5m). Other income lines declined by GBP0.3m to GBP1.3m (6M to Dec 09: GBP1.6m) due to a decision taken not to develop a strategic IT solution for a particular product line. Repair services now represents 33% of revenue (6M to Dec 09: 29%), hire services 65% (6M to Dec 09: 67%) and other income lines 2% (2009: 4%).
Gross margin % reduced from 19.2% to 17.6% due to the change in business mix towards repair, although it is slightly ahead of the margin achieved in the 6 months to 30 June 2010 of 17.4%.
The increase in volume has enabled us to leverage our operational cost base leading to a reduction in the operating cost ratio from 16.5% to 14.1%. Overall, we achieved a 0.5 percentage point increase in adjusted profit margin to 2.9% (6M to Dec 09: 2.4%).
Annualised return (post tax, interest and IFRS2) on shareholders' funds of 14.6% has improved from 8.7% in the comparative period, an increase of 68% in this measure.
As anticipated, our growth resulted in an increased working capital funding requirement which led to an operational cash outflow (i.e. before interest and tax) of GBP2.0m (6M to Dec 09: GBP2.5m outflow). Net debt stood at GBP23.0m compared to GBP19.4m at 30 June 2010. The overdraft of GBP21.7m (30 Jun 10: GBP18.1m) remains comfortably within the GBP30.0m facility. Gearing stood at 132% (30 Jun 10: 120%), in line with our expectations.
We continue to place significant management focus on improving our level of WiP and trade receivables. WiP days improved by 3 days during the period to 36 days (30 Jun 10: 39 days). Debtor days on cases managed under the GTA lengthened to 133 days (30 Jun 10: 123 days). Debtor days on non GTA billings reduced by 4 days to 48 days (30 Jun 10: 52 days). Total debtor days increased to 114 days (30 Jun 10: 103 days).
I am pleased to report that we have recently achieved a settlement of all outstanding debt and implemented a forward protocol to pay our invoices within 15 days with a major insurer. Had the settlement to date been received by 31 December 2010, GTA debtor days would have been 17 days lower at 116 days (30 Jun 10: 123 days) at the period end &, likewise, total debtor days would have been 10 days lower at 104 days (30 Jun 10: 103 days). This settlement, covering 9% of our total GTA debt at the 31 December 2010 was achieved with no diminution in the carrying value of the debt.
We continue to see significant variability between insurers with regard to payment patterns for the same population of claims. It takes some insurers a lot longer to pay than others but, in Ai's experience, this does not have a material impact on the level it ultimately collects at. This means certain insurers are faced with unnecessarily higher internal claims administration costs, reserving uncertainty and increased capital requirements than the more efficient members of their peer group.
Ai is committed to working with Insurers to resolve outstanding claims. We maintain it is more efficient to manage all claims through the GTA Protocol, even after the initial 90 day period. Litigation is used by Ai as a last resort and only after negotiations break down. In the 6 month period to 31 December 2010, we have litigated 33 cases (representing 0.07% of Ai's total claims settled for that period). 13 cases were resolved before trial and only 1 case has actually been heard at court. Resolved cases have, on average, achieved 114% of the original debt but it takes about 5 months before we issue proceedings and then a further 5 months to the trial date. It is, therefore, a relatively slow process and does not make the recovery process more efficient, in fact it slows down cash receipts.
Prospects and Dividends
Ai is not immune from the pressures facing the economy, and in particular the impact on motorists of rising insurance premiums and fuel prices. We maintain prudent forecasting parameters and are confident of delivering a full year result comfortably in line with market estimates.
The Board is pleased to announce an interim dividend of 0.33p per share (6M to Dec 09: 0.29p), an increase of 13.8%. The dividend will be paid on 14 July 2011 to shareholders on the register at 17 June 2011.
Steve Broughton
Chairman
1 March 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 MONTHS TO 31 DECEMBER 2010
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 Revenue 60,139 38,151 91,929 Cost of sales (49,555) (30,839) (75,265) ----------- ----------- --------- Gross profit 10,584 7,312 16,664 Administrative expenses (8,515) (6,281) (13,600) ----------- ----------- --------- Operating profit 2,069 1,031 3,064 Financial expenses (384) (176) (434) ----------- ----------- --------- Profit before taxation 1,685 855 2,630 Income tax 4 (486) (261) (708) ----------- ----------- --------- Profit for the period 1,199 594 1,922 ----------- ----------- --------- Basic earnings per ordinary 3 1.96p 0.97p 3.14p share ----------- ----------- --------- Diluted earnings per ordinary 3 1.95p 0.96p 3.11p share ----------- ----------- ---------
All income arises from continuing operations.
There are no items to be recognised in a separate consolidated statement of comprehensive income and, accordingly, this statement has been combined with the consolidated statement of income in this preliminary announcement.
The profit for the period is fully attributable to the owners of the parent.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
31 Dec 31 Dec 30 Jun 10 09 10 Note GBP'000 GBP'000 GBP'000 Assets Non-current assets Goodwill 6,726 6,726 6,726 Other intangible assets 3,760 3,376 3,530 Property, plant & equipment 2,443 2,238 2,463 Deferred tax asset 111 28 111 --------- --------- --------- 13,040 12,368 12,830 --------- --------- --------- Current assets Trade & other receivables 5 64,368 38,748 55,998 Cash & cash equivalents 50 103 183 --------- --------- --------- 64,418 38,851 56,181 --------- --------- --------- Total assets 77,458 51,219 69,011 ========= ========= ========= Liabilities Current liabilities Interest bearing loans & borrowings 6 (22,014) (11,938) (18,582) Trade & other payables 7 (36,602) (22,575) (32,646) Income tax liability (592) (715) (479) --------- --------- --------- (59,208) (35,228) (51,707) --------- --------- --------- Non-current liabilities Interest bearing loans & borrowings 6 (1,036) (918) (1,001) --------- --------- --------- Total liabilities (60,244) (36,146) (52,708) ========= ========= ========= Total assets less total liabilities 17,214 15,073 16,303 --------- --------- --------- Shareholders' equity Share capital 6,142 6,142 6,142 Share premium account 1,579 1,579 1,579 Other reserves 201 275 269 Retained earnings 9,320 7,131 8,341 Treasury shares (28) (54) (28) --------- --------- --------- Total shareholders' equity 17,214 15,073 16,303 --------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOW
6 MONTHS TO 31 DECEMBER 2010
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 Cash flows from operating activities Profit for the period 1,199 594 1,922 Adjustments for: Depreciation of property, plant & equipment 287 225 453 Amortisation of other intangibles 300 292 604 Share compensation charge 30 51 92 Cash settled share options (91) - - Share options exercise - - 26 Financial expense 384 176 434 Taxation 486 261 708 Increase in trade & other receivables (8,370) (7,652) (24,687) Increase in trade & other payables 3,729 3,539 13,552 Interest paid (384) (176) (434) Taxation paid (373) - (753) ----------- ----------- --------- Net cash outflow from operating activities (2,803) (2,690) (8,083) ----------- ----------- --------- Cash flows from investing activities Purchases of property, plant & equipment (79) (47) (154) Purchases of other intangible assets (531) (545) (1,089) ----------- ----------- --------- Net cash outflow from investing activities (610) (592) (1,243) ----------- ----------- --------- Cash flows from financing activities Repayment of borrowings (99) (52) (216) Finance lease principal repayments (16) (57) (93) Dividends paid - (160) (385) ----------- ----------- --------- Net cash outflow from financing activities (115) (269) (694) ----------- ----------- --------- Net decrease in cash & cash equivalents (3,528) (3,551) (10,020) Cash & cash equivalents at the start of the period (18,146) (8,126) (8,126) ----------- ----------- --------- Cash & cash equivalents at the end of the period (21,674) (11,677) (18,146) ----------- ----------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 MONTHS TO 31 DECEMBER 2010
Share Share Other Treasury Retained capital premium reserves shares earnings Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2009 6,142 1,579 248 (54) 5,944 13,859 Profit & total comprehensive income for the period - - - - 847 847 Share based payments - - 97 - - 97 Tax on items charged to equity - - - - (8) (8) Dividends to equity holders - - - - (159) (159) -------- -------- --------- -------- --------- --------- At 30 June 2009 6,142 1,579 345 (54) 6,624 14,636 Profit & total comprehensive income for the period - - - - 594 594 Share based payments - - (70) - 121 51 Dividends to equity holders - - - - (208) (208) -------- -------- --------- -------- --------- --------- At 31 December 2009 6,142 1,579 275 (54) 7,131 15,073 Profit & total comprehensive income for the period - - - - 1,328 1,328 Share based payments - - (6) 26 47 67 Tax on items charged to equity - - - - 12 12 Dividends to equity holders - - - - (177) (177) -------- -------- --------- -------- --------- --------- At 30 June 2010 6,142 1,579 269 (28) 8,341 16,303 Profit & total comprehensive income for the period - - - - 1,199 1,199 Share based payments - - (68) - 7 (61) Dividends to equity holders - - - - (227) (227) -------- -------- --------- -------- --------- --------- At 31 December 2010 6,142 1,579 201 (28) 9,320 17,214 -------- -------- --------- -------- --------- ---------
NOTES TO THE INTERIM STATEMENT: 6 MONTHS TO 31 DECEMBER 2010
1. Basis Of Preparation
The results for the six months to 31 December 2010, which are unaudited, have been prepared on a basis consistent with the recognition and measurement principles of International Financial Reporting Standards (IFRS); this is consistent with the accounting policies set out in the audited annual accounts.
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year to 30 June 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Segmental Reporting
The Group operates in one operating segment, being the delivery of accident management and other solutions to the automotive and insurance sectors, conducted wholly in the United Kingdom. Accordingly no segmental information for operating segments is disclosed.
3. Earnings Per Share
Basic Earnings Per Ordinary Share
The calculation of basic earnings per ordinary share at 31 December 2010 is based on the profit for the period attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding during the period, calculated as follows:
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited Profit for the period attributable to ordinary shareholders GBP1,199,000 GBP594,000 GBP1,922,000 Weighted average number of ordinary shares 61,274,522 61,116,189 61,151,965 Basic earnings per share 1.96p 0.97p 3.14p
Diluted Earnings Per Ordinary Share
The calculation of diluted earnings per ordinary share at 31 December 2010 is based on the profit for the period attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding during the period including share options with a dilutive effect, calculated as follows:
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited Profit for the period attributable to ordinary shareholders GBP1,199,000 GBP594,000 GBP1,922,000 Weighted average number of ordinary shares - diluted 61,515,091 61,676,769 61,709,295 Diluted earnings per share 1.95p 0.96p 3.11p
Adjusted Basic Earnings Per Ordinary Share
The calculation of adjusted basic earnings per ordinary share at 31 December 2010 is based on the profit for the period attributable to equity holders of the parent(1) and a weighted average number of ordinary shares outstanding during the period, calculated as follows:
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited Profit for the period attributable to ordinary shareholders(1) GBP1,229,000 GBP645,000 GBP2,014,000 Weighted average number of ordinary shares 61,274,522 61,116,189 61,151,965 Adjusted basic earnings per share 2.01p 1.06p 3.29p
(1) excluding IFRS 2 share option charges
4. Taxation
6 Months 6 Months To Dec To Dec Year To 10 09 Jun 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Current period tax charge 486 261 708 ---------- ---------- --------
The tax charge is based on the estimated expected tax rate for the period. The effective tax rate for the 6 months to 31 December 2010 is 28.8% (6M to 31 Dec 2009: 30.5%). The effective rate of tax for the year to 30 June 2010 was 26.9%. The basic rate of corporation tax for both the 6 months to 31 December 2010 & the 6 months to 31 December 2009 was 28.0%. The effective rate used varies from this due to non-deductible expenditure.
5. Trade & Other Receivables
31 Dec 31 Dec 30 Jun 10 09 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Trade receivables 48,812 24,492 40,956 Other receivables 1,514 2,763 1,617 Prepayments and accrued income 14,042 11,493 13,425 ---------- ---------- -------- 64,368 38,748 55,998 ---------- ---------- --------
6. Financial Liabilities - Borrowings
31 Dec 31 Dec 30 Jun 10 09 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Current liabilities Current portion of secured bank loans 99 104 103 Current portion of finance lease liabilities 191 54 150 Bank overdraft 21,724 11,780 18,329 ---------- ---------- -------- 22,014 11,938 18,582 ---------- ---------- -------- 31 Dec 31 Dec 30 Jun 10 09 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Non-current liabilities Bank loans 740 826 776 Finance lease liabilities 296 92 225 ---------- ---------- -------- 1,036 918 1,001 ---------- ---------- --------
7. Trade & Other Payables
31 Dec 31 Dec 30 Jun 10 09 10 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Current liabilities Trade payables 18,380 7,439 12,914 Other taxation and social security 8,098 3,717 5,822 Other payables 714 407 609 Dividend declared 227 208 - Accruals and deferred income 9,183 10,804 13,301 ---------- ---------- -------- 36,602 22,575 32,646 ---------- ---------- --------
8. Interim Report
This interim report was approved by the Board on 1 March 2011.
INDEPENDENT REVIEW REPORT TO AI CLAIMS SOLUTIONS PLC
Introduction
We have been engaged by the Company to review the financial information in the half-yearly financial report for the six months to 31 December 2010 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flow and the related Notes 1 to 8. We have read the other information contained in the half-yearly financial report which comprises the Group Financial Summary & Highlights and the Chairman's Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts. As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months to 31 December 2010 is not prepared, in all material respects, in accordance with the basis of preparation described in Note 1.
Grant Thornton UK LLP
Registered Auditor, Manchester, United Kingdom
1 March 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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