Chairman's statement - September 2005
Overview
The six months to 31 July 2005 show a considerable improvement in the Company's performance. Increased credit hire sales, new personal injury referral commission, enhanced financial management of key client relationships and the growth in experience and competence of our sales team have contributed to a good interim result.Turnover for the half year to 31 July 2005 was £4.42 million, compared with £3.83 million for the same period last year, an increase of 15.5%. Profit before tax was £0.76 million, an increase of 29.4% on 2004's first half figure of £0.59 million.
In April, we announced that we had entered into an agreement with Eastern Western Motor Group to supply their Accident Management Programme. Established in 1927, Eastern Western is Scotland's largest privately-owned prestige dealer group with 25 prestige outlets. Their new purpose-built, state-of-the-art accident repair centre at Broxburn in West Lothian won them the United Kingdom's Bodyshop of the Year Award 2004. The new centre, that has attracted such an accolade, represents a perfect fit with Bristol & London's premium capabilities. The agreement is now running well and provides Bristol & London with a strategic partner through which to expand business in Scotland further. Bristol & London has met all the requirements for the agreement from its Scottish depot.
Credit Hire
The sector continues to grow in the UK as awareness among prestige car drivers increases. However, competition is intense and we are addressing this by recruiting and training the best sales people. New personnel at all levels of the sales function are beginning to make significant progress and these results are evidence of that.We are the only major specialist prestige credit hire company in the UK and will continue to maintain this focus.
Personal Injury Referral Commission
We began to benefit from this new revenue stream in the half year just ended. The commission comes from our own client base alone. It provides Bristol & London with a level of profit, which should grow as our business expands.Insurance Companies
We enjoy positive relationships with a substantial majority of UK motor insurers. The improved management of these relationships has resulted in a reduction in debtor days, a substantial fall in outstanding debt and improved profitability.Staff
Our policy has been, and will continue to be, to develop our sales team. Our national team is now split into four regions, each with its own regional manager. One of these regions is Scotland, which has recently been successful in gaining the account of the Eastern Western Motor Group.In April, we announced that we were in the process of implementing software across our business and this has begun to transform fleet utilisation and improve Bristol & London's leading positions further in cash management and customer service.
Fleet
Our strategy remains to achieve better utilisation of our fleet of hire vehicles. During the first half of this year, we have identified ways in which we can better match vehicle makes and models to our client requirements.
These changes will be undertaken during the second half and should deliver additional profits in the longer term.
Dividend
In line with its stated dividend policy, the Board is recommending the payment of an interim dividend of 1.57p per share (2004: 1.11p per share) to be paid on 26 September 2005 to shareholders on the register at the close of business on 23 September 2005.
Outlook
The prestige motor credit hire sector continues to grow due to the increase in awareness among prestige car drivers who are involved in non-fault accidents. We have every reason to believe that this trend will continue.
We believe our position within this market will be enhanced as a result of the changes to our people and systems that should enable us to take advantage of our niche expertise.
Executive Chairman