Credit hire company Auto Indemnity has secured an additional £2.6m from its shareholders to fund a dash for growth.

The money was raised when the company placed 26 million new 10p shares on the Alternative Investment Market.

Commercial director Chris Ashworth said: “The £2.6m will be used to expand Auto Indemnity. We are actively recruiting additional staff and increasing the number of vehicles we have for hire.”

Auto Indemnity has also revealed it finally moved into profit in the last quarter of 2000, after receiving increasing volumes of referrals from insurers. New weekly hires rose by 375% for the second half of 2000.

However, company chairman Charles Goodis said cash collection remained a problem, despite its membership of the ABI's code on credit hire rates.

He added that Auto Indemnity had struck deals with five insurers for the settlement of older debt and was in negotiations with another 15.

“We believe we should not have to make further significant provisions against the value of our debt book,” he said.

He added that the company had also agreed some outsourcing deals.