Accident management firm Helphire may have overstated amounts receivable from ABI debtors by £25m.
The firm also expects its profits for the year to 30 June 2011 to be “significantly below market expectations”.
Helphire revealed in its interim management statement covering 1 January to 20 April that, following the completion of its restructuring, it had become aware that there may be a “material overvaluation” in the carrying value of ABI debtors in its financial systems when compared with its operating systems.
It said preliminary findings a £25m overstatement, representing 15% of the group’s receivables at 31 December 2010.
Helphire has hired accountancy firm KPMG to help identify the cause and amount of the overstatement. It added that the finding does not affect the settlement of claims nor its cash position.
The company also announced that market conditions had been weaker than expected, and that in recent weeks it had seen a reduction in hire length, which affects revenue. As a result, Helphire said financial performance had been lower than expected and therefore full-year earnings would be below market expectations.
Helphire attributed the reduction in hire length to fewer accidents, which in turn is being driven by lower car use because of the economic climate and higher petrol prices.
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