Credit hire firm gets tough to combat £62.4m outstanding claims bill
Helphire has plunged deep into the red with an annual pre-tax loss of £149m for the year ending 30 June as it struggled to settle outstanding claims with insurers.
This follows a £59.3m loss for the second half of 2008, as reported by Insurance Times in March this year.
Helphire, which is the UK’s largest credit hire operator, was forced to write down £140m from several expenses, including £62.4m in outstanding claims. It also took a £27.9m hit from a reduction in hire days as the economic downturn encouraged people to stay off the roads.
This year’s results contrast sharply to the firm’s pre-tax profit of £43m in 2007/08, and have forced the company to slash costs.
It has reduced its fleet, plans for a new IT system have been scrapped, and the Bristol business has been merged into the Bath head office.
Group managing director Martin Ward commented: “The financial consequences of the very tough measures which we have taken are evident in our financial statements.”
He added that the group was cracking down on insurers haggling over outstanding claims.
He said: “We have engaged the insurer community to outline our strategy on dealing with claims, making clear to insurers that if we are unable to make a timely recovery, the claim will be passed to solicitors to commence proceedings.
“As a result, we now have 27,632 cases with a value of £47.1m in the hands of our solicitors, and our in-house case count has reduced from 99,277 cases in June 2008 to 81,650 cases in June 2009.”
Ward confirmed that AA and Saga had been lost as referrers, but Helphire had made up lost ground with new signings.
Debt burden has been reduced from £362.3m to £239.5m, and a tranche of repayments are scheduled up to 2012. The board will not be declaring a dividend.