Helphire slashes debts by £20m

Helphire has trimmed its debt by £20m to £192m.

The credit hire company reduced the debt for from the start of the year to the end of March.

As part of a programme to slash costs, Helphire, has reduced working capital by £8.8m in the first three months of the year. It plans to reduced working capital by £100m, from the period of February last year to June this year.

Reporting its third quarter results, in the three month period to 31 March, case volumes of 38,867 were 18.4% below the comparable period in 2009 and hire days of 932,398 were 8.7% below the same period.

Hire length of 24.0 days was 11.9% ahead of the comparable period in 2009 reflecting, principally, the impact of the severe weather on body shop repair times which have since returned to more normalised conditions.

Group managing director Martin Ward said: “The benefits from the restructuring plan are self evident and the Group continues to make solid progress. Working capital has been substantially reduced, debt levels continue to fall and utilisation is at an all time high. The number of case closures is increasing and we are encouraged by the better dialogue we now have with insurers.

“We renewed all significant key accounts as they have fallen due with the exception of one where the proposed terms were unprofitable. This business has since been replaced and there is no impact to our expected results. The new protocols with some insurers are still at an early stage but proving effective.”

Other highlights

• Claims cases at 31 March were 88,800 down from 113,600 at the comparable prior year point of which 12,000 are issued into court (14%) versus 8,400 (7%) at the comparable prior year point.
• Despite lower revenues and an increase in litigated cases which increases the ABI cash collection cycle, annualised debtor days at 31 March were 248 days versus 267 at the comparable prior year point.
• Management continues to make good progress under the Project Century initiative to reduce Operating Working Capital by £100m from February 2009 through June 2010 with a reduction through 31 March of £98.8m, an improvement of £8.8m in the period since 31 December.