Ai Claims interim turnover up 59%

Ai Claims Solutions has reported a 59% increase in turnover to £38.2m (2008: £24m) in its interim results for the six months ended 31 December 2009.

Hire revenue increased 57% from £16.2m to £25.5m to comprise 66.8% of total revenue (2008: 67.6%). Ai said the hire performance benefited from the roll out of new business across the insurer and broker channels.

Gross margin in the period was 19.2% (2008: 30.4%). Operating margin was 2.7% (2008: 3.2%). The company said both were in line with its management budget.

EBITDA increased by 26% to £1.548m (2008: £1.225m) and adjusted pre-tax profit increased by 27% to £906k before IFRS 2 charges (2008: £713k).

The company posted total net borrowings of £12.7m (30 June 2009: £9.1m). While earnings per share increased by 31% to 0.97p (2008: 0.74p).

Debtor days deteriorated slightly to 101 days (30 June 2009: 95 days). "Whilst this is significantly lower than the sector (which averages over 200 days), it is relatively high for Ai. Ai's claims remain very well controlled and our average hire duration remains around 16 days," the company said. It also posted a reduction in work in progress days from 46 days to 37 days.

Chairman Steve Broughton said: "I am pleased to report a strong growth in revenue and profit against a backdrop of structural challenges affecting our competitors and from which our distinctive business model gives us a good measure of protection.

"Referrals have already begun from a major intermediary source with whom we expect to sign a contract imminently. This will produce growth in hire and new repair business with a significant impact on next year's forecast.

"Our focus over the past few months has been on improving the debtor position and we have been in extensive and constructive discussions with all the leading insurers. Since the period end agreement has been reached with one leading insurer and good progress made with several others."

He contined: "Whilst competitors have been litigating against insurers to recover payment on credit hire cases, Ai remains committed to working positively with insurers to recover amounts due. We do however see significant variability between insurers in the payment of credit hire claims under the GTA protocol for the same population of claims. Where settlement time is unreasonable and there is a failure to engage then Ai will resort to litigation. Although claims are taking slightly longer to settle, we are not experiencing any deterioration in the amounts collected.

"We are making progress in our engagement with insurers to ensure they have sufficient resources to deal with our claims and this is bringing tangible results. We have recently agreed terms with a top four insurer to bring their account up to date and accelerate payment at no diminution to the value of Ai's debt. Similar discussions are being held with other companies."