Universal Salvage PLC
23 April 2002
UNIVERSAL SALVAGE PLC
Trading during the final quarter of the year, and in particular over the last
six weeks, has been below management expectations and below the level of the
comparable period last year.
Historically our gross margins have improved in the final two months of the
financial year, but in March and April 2002 our profit per unit has remained
constant. Accordingly, the Board believes that the underlying profit for the
year ended 27 April 2002, before taking into account two non-recurring charges
totalling approximately £665,000, will amount to £7.2 million. The one-off items
arise from expenses associated with cost reduction measures and from costs
relating to an abortive site acquisition in Scotland.
In addition, we have unexpectedly been given notice by Direct Line of its
intention to terminate its contract with the company. Collections of vehicles
will cease on 30 June 2002, with the contract in 'run-off' during the remainder
of the first half of the new financial year. Direct Line currently accounts for
approximately 50,000 vehicles per annum of our annual throughput. We understand
that an alternative tender, offering significantly higher prices for the salvage
vehicles, has been accepted by Direct Line. We are naturally disappointed by
this development, but we remain confident of replacing the business over the
next six to nine months as we successfully achieved last year following the
termination of the Norwich Union contract.
The management remains committed to growing the business whilst at the same time
maintaining high standards within the industry.
The group's results for the year to 27 April 2002 are expected to be announced
on 25 June 2002.
For further information, please contact:
Universal Salvage plc
Martin Hynes, chief executive Tel: 01234 762283
Jonathan Cook, finance director Tel: 01234 762245
Biddicks Tel: 020 7448 1000
Katie Tzouliadis or Zoe Biddick
This information is provided by RNS
The company news service from the London Stock Exchange