About 70 staff including the five board directors of car hire company Helphire have been buying up shares in the group this week after the price initially collapsed following the Dimond v Lovell judgement, according to a spokesperson.
Shares in the group nose-dived from 200p to just 59p at one stage after the House of Lords ruled the credit hire industry's replacement vehicle charges should not exceed the spot rate for ordinary car hire. But shares had recovered to just over a £1 by Thursday of this week, buoyed by better than expected year results ending 31 March. A spokesperson said the dip was caused because the Stock market wrongly assumed the Dimond v Lovell case would affect Helphire.
The case involved a subsidiary of the Helphire group, 1st Automotive which brought the case against CIS Insurance to recover the cost of credit hire. It was disputed by CIS on the ground of the enforceability of the credit hire under the Consumer Credit Act (CCA).
Helphire chief executive Michael Symonds said the company could justify its hire rates by comparison with other national car hire companies and that the position will continue post Dimond v Lovell. "Challenges have always been made on rates by insurers and nothing in the House of Lords judgement has led Helphire to feel the need to change its bad debt provisioning policy on this issue," said Symonds.
Helphire's pre-tax profits increased by 32% to £6m compared to £4.5m for the same period last year. Turnover increased by 46% to £69.6m and earnings per share increased by 13% to 5.4p. Symonds said: "The core business of credit hire and credit repair has achieved significant growth in both turnover and profitability whilst the higher margin legal services business has further increase its share of the group profits."
Helphire also plans to step up its legal services push through its subsidiary Angel Assistance. This includes the updating of the product range to provide for litigation insurance cover at higher premiums recoverable from third party's insurers.
"The Angel Assistance national sales team is now complete and fully integrated with the Helphire (UK) team to provide a seamless service to bodyshops and brokers," said Symonds. "New products and new key partners in distribution of these products are continuously being developed."