Nationw.acc Share Price (NARS)

Nationwide Accident Repair Services said revenue fell 12.9 per cent to 80.7m pounds, primarily due to site closures in 2011. On a like-for-like basis revenue fell 4.7%, hit by poor LFL insurance revenue but boosted by strong LFL growth in fleet revenue. The gross profit margin increased from 35.5% to 36.3%. Underlying profit before tax was down to £2.8m (2011: £3.5m), while statutory profit before tax of £2.1m (2011: £3.0m). Net cash at June 30th increased to £8.0m (2011: £7.3m). Motive Television, a digital television technology, software and services provider, suffered a decline in revenue in the first half of 2012 on the back of the difficult economic environment for its broadingcasting clients. As such, turnover forthe period fell to £0.49m from £1.09m the same period the previous year. Gross profit from continuing operations fell to £0.12m from £0.39m the same half the previous year. Loss per share from continuing activities came in at 0.05p (H1 2011: 0.12p) after losses attributable to continuing activities reduced by 18% to £1.39m (H1 2011: £1.7m). WANdisco, a California-based collaboration software developer with operations in Sheffield, posted a 53% rise in revenue for the six months ended June 30th, from $1.91m to $2.92m, with cash bookings up 57% from $2.16m to $3.39m year-on-year. However the loss for period totalled $3.64m compared to $1.2m the same period the previous year, hit by increased operating expenses. Net cash soared to $22.0m from $0.12m a year earlier.

In a highly fragmented and difficult market, we are confident that the group strategy of leveraging our integrated offer, market leading position and efficient operating systems will deliver market share gains in the insurance, fleet and retail sectors."

The firm was keen to emphasise that Aviva will continue to support around £5.0m per annum of group revenue and that the changes will not affect capacity across its branch network. The impact of the reduced volume is largely mitigated by the scalability of the group's operating costs and flexible working practices, the company said. Speaking in a statement, the group said: "With the continuing, and expected, downward trend in motor insurance claims frequency, we remain focused on securing new business in the retail and fleet markets, as well as in the insurance-funded market, and on ensuring that our cost base is aligned with demand.

Nationwide Accident Repair Services has said that it continues to trade in line with its expectations and maintains a strong cash position, boosted by the mobile repair and glass businesses, which continues to make an increasing contribution to the overall group performance. However, following completion of a re-tendering process by Aviva, Nationwide will see a significant reduction in the volume of vehicle accident repair work undertaken for Aviva in the second half, as the volumes were awarded on terms that are commercially unattractive to the group. This will result in a shortfall in revenue of around £10m for the current financial year, ended December 2012.

Michael Marx, Chairman, commented, "We are now in the second year of our three year growth plan and, as the Group's results for the first half of the year indicate, progress towards its objectives has been good. Underlying profit before tax has risen by 16% to £3.5m for the six months to 30 June 2011, with revenues increasing by 6% to £92.3 million over the same period. The results show the continuing steady progress we are making to develop our core insurance market and, while sensibly leveraging our infrastructure and systems to build sales in non-insurance funded markets, especially fleet and retail, where our presence is relatively low currently. While we expect current economic conditions to create some challenges, we believe that the Group is well positioned for the remainder of the year and remain very positive about the Group's long term prospects."

Key Points · Strong profit* growth - reflects continuing progress with expansion strategy, now in second year - presence in fleet and retail markets developing alongside core insurance market · Revenue up 6% to £92.3m (2010: £87.2m) · Gross profit margin maintained at 46% (2010: 46%) · Underlying* profit before tax up by 16% to £3.5m (2010: £3.0m) Statutory profit before tax of £3.0m (2010: £3.0m) · Non-recurring items of £514,000 (2010: credit of £23,000) · Underlying* earnings per share up 22% to 6.1p (2010: 5.0p) Statutory earnings per share maintained at 5.1p (2010: 5.1p) · Strong operating cash flows of £3.0m (2010: £3.3m) · Net cash at 30 June 2011 of £7.29m (2010: £8.15m) · Interim dividend of 1.9p (2010: 1.8p)