Ai profits fall

BLACKPOOL motor claims specialist Ai Claims Solutions has seen half year profits fall by 15% and warned that the second half of the year will be a challenge.

Pre-tax profit fell to £668,000 for the six months to the end of December 2008, from £789,000 a year earlier, despite revenue increasing by 25% to £24m, from £19.2m in 2007.

The company said the growth in revenue was down to the full roll out of a major insurer contract awarded in 2008 but added that trading volumes in the first quarter were impacted by a reduction in referrals.

It  put this down to a fall in the number of accidents as oil prices meant people used their cars less but said referrals had now returned to expected levels as oil prices have dropped again.

The company has recently been selected to provide claims management services to three major motor manufacturers, taking the total number of contracts to four, and said it continues to make progress in this area.

Chairman Steve Broughton said: “I am pleased to say that Ai’s business model continues to be resilient in very challenging economic and financial conditions.”

Net borrowings increased to £6.1m from £2.9m. The company said this was down to  an increase in debtor days and a capital expenditure of £577,000.

“Net debt remains at a manageable level and our current overdraft of £5.1m leaves a considerable amount of headroom within our overall overdraft facility of up to £10m,” said Mr Broughton.

The company warned that the second half of the year would “continue to be challenging”. 

Mr Broughton said: “While continuing to pursue operational growth, a strong focus will be on operational delivery and to ensure we manage our cash and costs effectively.”

The company is paying an interim dividend of 0.26p for each share.