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Accident Exchange (~268)

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Friday 10 June, 2005

Accident Exchange

Preliminary Results

Accident Exchange Group PLC
10 June 2005

10 June 2005


                           Accident Exchange Group PLC
                ('Accident Exchange', the 'Company' or the 'Group')


             Preliminary Results for the Year Ended 30th April 2005


   Announcement of Underwritten Conditional Placing of 3,478,261 new ordinary
   shares of 5p each at £2.30 to raise £7.7 million net of estimated expenses

                     New Relationship Wins Announced Today

                   Proposed Final Dividend of 1.0p per Share



Financial Highlights



•  Earnings per share up 500% at 7.2p (2004 pro forma*: 1.2p, 2004
statutory:0.8p): Adjusted earnings per share up 592% to 8.3p (2004 pro forma*:
1.2p)



•  Adjusted profit before taxation and goodwill up 573% to £7.4
million (2004 pro forma*: £1.1 million, 2004 statutory: £0.1 million)



•  Turnover increased by 429% to £21.7 million (2004 pro forma*: £4.1
million, 2004 statutory: £0.3 million)



•  Profit before taxation up 509% to £6.7 million (2004 pro forma*:
£1.1 million, 2004 statutory: £0.1 million)



•  Second half revenue of £14.0 million up 182% on the first half
(First Half: £7.7 million) and adjusted profit before taxation and goodwill up
192% to £4.8 million (First Half: £2.5 million)



•  Placing of 3,478,261 new ordinary shares at £2.30 to raise £7.7
million (net of estimated expenses) to facilitate continued high rates of growth



•  First final dividend proposed at 1.0p (2004: nil) making 1.5p for
the year (2004: nil)





Operational Highlights



•  Average fleet utilisation of 87.2% (2004: 78.4%)



•  Car fleet increased from 250 to 1029 vehicles as at today



•  Numerous new agreements signed in the period - see Chairman's Statement for
details





New Relationship Wins Announced Today



•  Agreement with Citygate Ltd, a subsidiary of HR Owen plc to provide
accident management and replacement vehicle service for the customers of its six
Jaguar and Land Rover dealerships



•  Agreement with Holland Park Ltd and Heathrow Ltd, subsidiaries of
HR Owen plc to purchase 110 vehicles over the next twelve months whilst
providing credit hire and accident management services to the customers of their
five BMW and five Mini dealerships in Chelsea, Chiswick, Holland Park, Heathrow
and Western Avenue



•  Further agreement with Inchcape Retail, part of Inchcape plc, to
provide accident management and credit hire services to the customers of a
select number of their dealerships, which is expected to generate a significant
increase in our fleet during this year



•  Completed the lease on our Glasgow operations centre



•  Gained entry into the FTSE AIM 50 and FTSE AIM 100 indices



•  ITM Specialist Accident Management Company of the Year 2005



•  Highly commended as IPO of the Year in the Barclays West Midlands
Business Awards



•  Appointment of Tim Eaves as Corporate Sales Director of Accident
Exchange Limited





Commenting on the results Lord Young of Graffham, Non-Executive Chairman, said:



'This has been a year of unprecedented growth in terms of turnover,
profitability, fleet size, staff and in delivering value to our shareholders.
The outlook is for continued strong growth.



Underpinning the strong financial performance has been the management's focus on
delivering at the operating level.  The proposed fundraising will help sustain
and consolidate the growth that the Company has seen as the Board strives to
continue to deliver significant value to its shareholders.'





For further information, please contact:


Steve Evans                                           Martin Andrews
Chief Executive, Accident Exchange Group Plc          Finance Director, Accident Exchange Group Plc
08700 116 719 / 07801 560 1560                        08700 053 649 / 07730 517 699

Jonathon Brill, Financial Dynamics                    Billy Clegg, Financial Dynamics
0207 269 7170                                         0207 269 7157

Christopher Wilkinson or Charles Farquhar, Numis      020 7776 1500
Securities Limited



*  Pro forma results for the year ended 30 April 2004 prepared for comparative
purposes as if Accident Exchange Limited had been a wholly owned subsidiary
throughout the whole of the year.






CHAIRMAN'S STATEMENT



Introduction



It has been a year of exceptional growth in terms of turnover, profitability,
fleet size, our team and in delivering value to our shareholders.



These results report on the first full year of trading for the Group since it
acquired Accident Exchange Limited on 16th April 2004 (the 'Acquisition') and
since, on the same day, Steve Evans became your Chief Executive and I became
your Non Executive Chairman. The full year results have exceeded our high
expectations for the business.



In the Interim Results on the 25th November 2004 I reported that we had had an
extremely rewarding and profitable first half and I commented that I believed 
'the business remains on track to deliver a year of outstanding progress'.



I am delighted to be able to report that our prediction of significantly higher
volumes in the second half has proved correct. Revenue in the second half of the
year of £14.0 million was up 182% on the first half (£7.7 million), adjusted
profit before goodwill and before taxation in the second half of £4.8 million
was up 192% on the first half (£2.5 million). Profit before taxation in the
second half was £4.6 million (first half £2.1 million).





Financial Results



Full year revenue was £21.7 million (pro forma 2004: £4.1 million, statutory
2004: £0.3 million) which has generated an operating profit before goodwill of
£8.4 million (pro forma 2004: £1.4 million, statutory 2004: £0.1 million),
profit before taxation and goodwill of £7.4 million (pro forma 2004*: £1.1
million, statutory 2004: £0.1 million) and statutory profit before taxation of
£6.7 million (pro forma 2004: £1.1 million, statutory 2004: 0.1 million).



Basic earnings per share was 7.2p (pro forma 2004: 1.2p, statutory 2004: 0.8p)
and adjusted earnings per share (based on profit after taxation and before
goodwill amortisation) was 8.3p (pro forma 2004: 1.2p, statutory 2004: 1.4p) up
500% and 592% respectively.



Given the 429% increase in turnover and the generation of operating profit
before goodwill of £8.4 million (pro forma 2004: £1.4 million) we are delighted
with generating £5.5 million of net cash inflow from operating activities (2004:
£190,000).  After the repayment of £5.2 million of hire purchase obligations in
relation to the expanding car fleet, the receipt of £1.0 million from the sale
of cars, and the payment of £1.0 million of interest, together with sundry
capital expenditure, the payment of our interim dividend and taxation
liabilities, the Group ended the year with a net consumption of cash of £339,000
(2004: increase of £380,000).



Our closing invoiced trade debtors (excluding work in progress) represent 119
outstanding invoiced debtor days.  Year end balance sheet net debt, including
hire purchase obligations, was £17.3 million (2004: £3.9 million) representing a
gearing level of 93.5% (2004: 26%).



Following the maiden interim dividend of 0.5 pence per share (2004: nil)
declared on 25th November 2004 and paid on 5th January 2005, I am pleased to
announce our maiden year end dividend of 1.0 pence per share (2004: nil), making
a total dividend of 1.5 pence per share for the year.  We intend to pay the year
end dividend on 22nd July 2005 to shareholders on the register on 24th June
2005.  The shares will go ex dividend on 22nd June 2005.




Operational highlights



Underpinning the strong financial performance has been the management team's
focus on delivering at the operating level. This approach has resulted in a
number of significant commercial deals and internal developments which have
driven the fleet size from 250 to 961 at the year end.



In November 2004, the Company reached an agreement with Glasgow Audi for the
provision of accident management and business support services to its customers
in Scotland. Glasgow Audi is the world's largest Audi retail venue.



In December 2004, the Company launched a new service to BMW dealers, following
the announcement by BMW that it intended to withdraw from its own BMW Accident
Management service in January 2005.



In March 2005, the Company reached an agreement with Helston Garages Ltd in the
West Country for the provision of credit hire and business support services.
Helston is a privately owned franchised dealer group with 22 dealerships, 3
bodyshop locations and a significant prestige customer base.



In May 2005, after the balance sheet date, the Group reached a similar agreement
with The Cooper Group Ltd, one of the largest BMW retailers in the UK, with
eight prestigious dealerships extending from Reading, across London, and into
Kent.



In addition, the business delivered fleet utilisation of 87.2% in the year
(2004: 78.4%), we invested in internal strategic vision exercises for the sales
and support teams to drive sustainable and defensible sales growth, we obtained
Financial Services Authority authorisation for claims handling services and we
agreed protocol agreements with Norwich Union Insurance.



'The relentless pursuit of excellence', a Group wide initiative to ensure that
our business relationships continue to thrive and that those relationships and
the business volumes that they bring are defensible and sustainable has been
successfully rolled out. We believe this initiative is protecting, strengthening
and expanding our customer referral base and related business volumes.



We are delighted to be able to announce today several new relationship wins,
details of which are given in the Chief Executive's statement.





Management and Employees



Our people remain our strongest asset. We started this financial year with 62
employees, and as at today, this has risen to 164. We plan to recruit a further
100 or so people within the next six months.



In November your Board was strengthened by the appointment of Martin Andrews as
Finance Director. Martin has already made a significant contribution to the
Company. I am pleased to welcome Tim Eaves to the Board of Accident Exchange
Limited as Corporate Sales Director. Tim has extensive sales experience with
large corporate accounts having previously been employed as Sales Director of
Europcar and as Sales Director of Kenning Car and Van Rental Limited.



The ability and quality of our people is a prime driver of operational
efficiency and financial performance.  A commitment and dedication to deliver
consistently in line with both operational targets and management expectations
has been a key component of our success this year.  Whilst the rate of growth in
people will continue to bring its own challenge I am confident in the ability of
our senior management to recruit, train, motivate and reward an expanding team
whilst preserving the dedication, focus, spirit and commitment necessary to meet
the targets set by the Board.  We will maintain, if not improve, on our delivery
standards which, I believe, lead the sector.



The financial results that we achieved this year are a credit to our team and I
would like to extend my personal thanks, and those of the Board and
shareholders, to all of our people.





Background to and Reasons for the Conditional Placing



We are pleased to announce today a conditional placing of 3,478,261 new ordinary
shares ('New Ordinary shares') at £2.30 per share which, after estimated
expenses, will raise approximately £7.7 million in new funds for the Group (the
'Placing').



Since the Company acquired Accident Exchange Limited in April 2004, and the
principal activity of the Group became the provision of prestige cars on credit
hire to victims of 'non-fault' car accidents, we have grown at rates that
significantly exceeded the expectations of the market and of management.  At the
time of this acquisition the Company raised £1.5 million (before expenses),
which was used primarily to strengthen the balance sheet and to finance the
working capital requirements of the rapid growth of the business.



There are several drivers for the fundraising announced today.  The net proceeds
will be used in the following areas:



•   To facilitate the financing of management's aggressive growth plans
going forward as we continue to grow the fleet size unabated;



•   Strengthening the balance sheet to reduce gearing levels and to better
position the Group in negotiating commercial terms on hire purchase and other
debt to finance fleet growth;



•   To provide working capital flexibility during a continuing rapid growth
phase;



•   To broaden the share ownership of the business to a wider audience of
institutional shareholders and to increase liquidity in the Company's shares;
and



•   To better position the Group to respond to acquisition opportunities
that arise as the credit hire market place consolidates.



The funds from the Placing will enable the Company to continue to capitalise on
its strong growth prospects.  The current financial year will benefit from the
level of trading and profitability that we enjoyed in the final months of the
last financial year and from the commercial relationships closed in the last
quarter of this financial year, which are yet to generate volume at full
potential.  The Directors believe that this additional volume will flow during
2006 and that the new referring partner wins also announced today will add
materially to our growth prospects.  We are negotiating a number of other
commercial relationships which we expect to announce in the first half of this
financial year.



In addition, there is demand from our commercial partners to expand the reach of
the business to include mainstream vehicles as well as prestige vehicles and
this is a market we expect to move into further during this financial year.





The Secondary Placing



Alongside the Placing, up to 3,043,479 existing shares have been placed with
institutional investors on behalf of certain existing shareholders (the 
'Secondary Placing').  It is important to note that none of your Directors have
placed any shares as part of the Secondary Placing.  However, as a result of
dilution from the issue of the New Ordinary Shares, the shareholding of Steve
Evans will reduce from 51.1% to 48.5% of the enlarged Ordinary share capital.
Martin Andrews, the Group Finance Director, has acquired 17,391 shares as part
of the Placing and Secondary Placing.



The shareholders who have participated in the Secondary Placing, together with
Steve Evans and Martin Andrews, have all agreed to an extension of certain lock
in provisions whereby they have irrevocably agreed not to sell shares, which
represent 73.3% of the enlarged share capital, until after 31st December 2005 at
a price of £3 or lower, except with the consent of Numis Securities Limited and
thereafter for a further period of 12 months only to sell such shares through
Numis (or the Company's broker at such time).





Outlook



The outlook for your Company is for continued strong growth. Trading during the
first month of the new financial year has started strongly with the impact of
some of the commercial agreements signed at the end of last year coming through.



The proposed fundraising will sustain and consolidate the growth the Company has
seen as the Board strives to continue to deliver significant value to its
shareholders.





The Rt Hon. Lord Young of Graffham
Non-Executive Chairman
10th June 2005






CHIEF EXECUTIVE'S STATEMENT



I believe that the startling progress we have made for our shareholders in our
first full year of trading as a publicly quoted company is attributable to four
simple factors.



The first is that we did not over promise.  Three times throughout the last year
we have seen our expectations of the year end outturn upgraded positively.
Despite that, our results show profit before taxation and goodwill of £7.4m and
adjusted EPS of 8.3p against consensus forecasts of £7.01m and 7.84p
respectively.  Statutory profit before taxation and basic EPS were £6.7 million
and 7.2p respectively.



Secondly, we have invested significantly in building both a talented and
motivated team whose efforts have helped us create a culture, shape a story and
build a fortress which they defend passionately.  After six months of attracting
an enlarged customer base, our strategic vision exercise, which we started in
November 2004, allowed us to focus our efforts on consolidating relationships
with those customers and then on growing the level of organic business from
them, before looking to increase the size of our distribution channel further.



Thirdly, our senior management team, cumulatively, probably have more experience
in the sector than any of our competitors.  We have strengthened that team
through the year and they have worked hard to define, implement and execute our
strategy.  Our use of technology is core to the level of commercial efficiency
at which we operate and I genuinely believe that to replicate our IPR would
require significant investment by a competitor or new entrant over several
years.



And finally, over the last twelve months we have so differentiated our service
proposition and our approach to our distribution channel that not only have we
helped define the competitive arena in terms of relationships with franchised
dealership groups but we have also built a significant amount of clear space
between us and our most direct competitors.  In the next twelve months I am
confident that we will consolidate and grow our revenue opportunity and achieve
an even more influential position in the market place.



I outlined the fundamental nature of our strategy in my last report.  At that
time we felt that we would only prosper in this environment if we changed the
rules of the game and focused on taking a holistic approach to our customers.
Today's superb results give me confidence in our strategy and for our future.



We assess our performance rigorously against a series of factors: We test
whether our core business is generating sufficient earnings to allow us to
invest in further growth.  We monitor whether we have engendered a strong
performance orientation to push profits higher in the next few years.  We test
whether our cost structure is competitive with that of the rest of our industry
and whether our operating performance has been stable.  We consistently assess
whether our market share has grown and we insist that we are reasonably well
protected from new competitors, technologies or regulations that could change
the rules of the game.



We are satisfied with our performance against these metrics.  We also recognise
that we operate in a competitive environment and we have respect for our
competitors and for their approach to the market.  We continually assess our
competitors' approach and results against our own metrics to determine how we
flex our strategic marketing philosophy.  In three years we have built a
business that has increased its annual turnover from £0.8m to £21.7m and
profitability (before taxation and goodwill) from £0.2m to £7.4m.  It is clear
that we now represent a different scale of challenge to some of our competitors
but we will continue to stay loyal to our core beliefs.  We will do all of this
because we believe in our mission, which is to become number one in our chosen
market sector by continuing to build and develop an unbeatable team with shared
values and with accountability for consistently delivering record-breaking
levels of personal and operational performance.



I believe that we currently have a market share of around 6% of the prestige
credit hire market. In terms of our future prospects, we have crafted our
strategic plan recognising that to carry on growing we must master the art of
managing our pipeline so that income streams are replenished and strengthened at
exactly the right moment.  Our vision for the evolution of our sector, for our
position in that marketplace and for controlling our revenue streams is very
clear to us and stretches into the next decade, although our emphasis will
clearly be weighted this year towards further growing our market share in
prestige vehicles and the future of the mainstream market.





Operational Report



Turning back to our performance over the last year, it is worth reflecting on
the fact that it was only in April 2004 that Accident Exchange moved into the
public domain with its successful acquisition by the Company, which was listed
on the Alternative Investment Market.  Raising just £1.5 million before costs at
the time, we have developed and matured the business and increased the strength
of its senior management team whilst at the same time managing to propel the
Company from an initial market capitalisation of £15.4 million to a current
value of £154 million based on the placing price and the enlarged share capital.
  We believe that our vision, strategy and execution has created a significant
return for those initial investors who purchased shares during the IPO.  Our
progress last year saw us enter both the FTSE AIM 50 and FTSE AIM 100 Indices in
our first year as a public company.



During the latter half of last year we focussed on defining and building our
strategic vision and implemented the first phase of our strategy across our
sales and development team.  We are now building the development and succession
plan for our management team to ensure that we deliver the increased
profitability that we know we can generate and that we do so with an eye to
other opportunities.



During the year our growth in fleet, revenue and profitability showed how we can
execute on our strategy.



It is rewarding for this success to be acknowledged by external observers.
During the year we were awarded the prestigious Specialist Accident Management
Company of the Year by the Institute of Transport Management and we were also
Highly Commended in the Barclays Bank West Midlands Business Awards as IPO of
the Year in 2004.



In December we announced that we were extending the product range to include a
white label Accident Management service which would be distributed to the
customers of some of our new and existing dealers.  Accident Management is
marketed under the dealers' own brand identities and we provide a complete 24/7
response service to customers on behalf of the dealer.  Having gone live very
recently the service is already being extremely well received by our referring
partners and will contribute to the revenue and to the number of hire starts
that we will see as we progress through our 2006 financial year.



In February 2005 we recruited a Performance Manager whose core responsibilities
are helping us grow, train and develop the human resource that is so much a
feature of our success.  The Performance Management team now already comprises
four people and is a significant aid to our operational managers as they
confront the scale of our rapid growth.



In April we completed on the lease of a new operations centre in Glasgow. We had
some difficulties in terms of access to an earlier premise that we had
identified but we are delighted to have completed in the unit based at Cardonald
Park which will allow us to position several hundred cars in Scotland and build
stronger relationships in the far North of England and Scotland, areas that we
have hitherto served from Birmingham.




New Relationship Wins



Lord Young has outlined the relationship wins that we have already announced
this year in his Chairman's report.  I am delighted to be able to announce new
relationship wins as follows:



We have signed an agreement with HR Owen plc for the provision of accident
management and replacement vehicle services for the customers of their six Ford
and Jaguar dealerships. The agreement extends our accident management customer
base.



We have also signed a separate agreement with Holland Park Ltd and Heathrow Ltd,
subsidiaries of HR Owen plc to purchase 110 vehicles over the next twelve months
whilst providing credit hire and accident management services to the customers
of their five BMW and five Mini dealerships in Chelsea, Chiswick, Holland Park,
Heathrow and Western Avenue.



We have also today signed a further agreement with Inchcape Retail, part of
Inchcape plc, to provide accident management and credit hire services to the
customers of a select number of their dealerships, which is expected to generate
a significant increase in our fleet during the year.



We continue to negotiate a number of other significant contracts, which we
expect to announce in the first half of the year.





Outlook



The current year has started well.  Without doubt, we are energised by the
performance we delivered in the last quarter of the financial year and the
momentum of our business.  We are encouraged by the relationships with our
existing referral sources and by the number of new opportunities that we see
before us.  We are confident that the combination of our team, knowledge,
partnerships, customers and strategic plan will enable us to execute
successfully on our strategy for 2006 and beyond.





Steve Evans
Chief Executive
10th June 2005






CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30th April 2005
                                                                                         Restated     Pro forma
                                                                   Year ended      9 Months ended    Year ended
                                                                     30 April            30 April      30 April
                                                                         2005                2004          2004
                                                           Note         £'000               £'000         £'000
Turnover
Existing operations                                                    21,680                 347         4,123
Cost of sales                                                 1       (8,749)               (156)       (1,498)
Gross profit                                                           12,931                 191         2,625

Administrative expenses:
Other administrative expenses                                 1       (4,554)                (76)       (1,242)
Amortisation of goodwill                                                (656)                (25)          (25)
Administrative expenses                                               (5,210)               (101)       (1,267)

Operating profit                                                        7,721                  90         1,358
Net interest payable                                                  (1,016)                (20)         (245)
Profit on ordinary activities before taxation                           6,705                  70         1,113
Taxation                                                      2       (2,241)                (34)         (374)
Profit on ordinary activities after taxation                            4,464                  36           739
Equity dividends                                              3         (926)                   -             -
Profit on ordinary activities for the financial period                  3,538                  36           739
Basic and diluted earnings per share                          4          7.2p                0.8p          1.2p
Adjusted earnings per share                                   4          8.3p                1.4p          1.2p



There were no recognised gains or losses other than the profit for the financial
periods and therefore no separate Statement of Total Recognised Gains and Losses
is presented.



There is no difference between the reported profit on ordinary activities before
taxation and the historical cost profit on ordinary activities before taxation.






CONSOLIDATED BALANCE SHEET
As at 30th April 2005
                                                               Note     30 April 2005     30 April 2004
                                                                                £'000             £'000
Fixed assets
Intangible assets                                                 5            12,562            13,103
Tangible assets                                                   6            16,413             4,337
                                                                               28,975            17,440

Current assets
Debtors                                                           7            12,272             2,941
Cash at bank and in hand                                                            -               322
                                                                               12,272             3,263
Creditors:
Amounts falling due within one year                               8           (9,736)           (2,630)
Net current assets                                                              2,536               633

Total assets less current liabilities                                          31,511            18,073

Creditors:
Amounts falling due after more than one year                      9          (12,009)           (2,815)

Provisions for liabilities and charges                           10             (936)             (295)
 Net assets                                                                    18,566            14,963

Capital and reserves
Called up share capital                                                         3,713             3,707
Share premium                                                                     410             2,913
Other reserves                                                                 10,856            10,846
Profit and loss account                                                         3,587           (2,503)
Equity shareholders' funds                                       11            18,566            14,963






CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30th April 2005


                                                                                 Year ended      9 Months ended
                                                                                   30 April            30 April
                                                                                       2005                2004
                                                                         Note         £'000               £'000

Net cash inflow from operating activities                                  12         5,552                 190

Returns on investments and servicing of finance
Interest received                                                                         2                   2
Interest on bank loans and overdrafts                                                  (39)                   -
Interest element of finance leases                                                    (979)                (22)
Net cash outflow from returns on investments and servicing                          (1,016)                (20)
of finance

Taxation                                                                               (81)                   -

Capital expenditure and financial investment
Purchase of tangible fixed assets                                                     (314)                (15)
Proceeds from sale of investments                                                         -                 338
Proceeds of disposals of fixed assets                                                   987                   -
Net cash inflow from capital expenditure and financial                                  673                 323
investment

Acquisitions
Purchase of subsidiary undertaking                                                        -               (413)
Overdraft acquired with subsidiary undertaking                                            -               (852)
Net cash outflow from acquisitions                                                        -             (1,265)

Equity dividends paid                                                                 (309)                   -

Net cash inflow / (outflow) before financing                                          4,819               (772)

Financing
Issue of ordinary shares                                                                  -               1,500
Share issue costs                                                                         -               (192)
Capital element of hire purchase contracts                                          (5,158)               (156)
Net cash (outflow) / inflow from financing                                          (5,158)               1,152

(Decrease) / increase in cash                                              13         (339)                 380






NOTES TO THE PRELIMINARY ANNOUNCEMENT
For the year ended 30th April 2005





1. BASIS OF PREPARATION



The preliminary announcement has been prepared under the historical cost
convention and in accordance with applicable accounting standards.  The
principal accounting policies of the Group are set out in the Group's 2005
annual report which will be sent to shareholders on or before 22nd June 2005.



In the last month of the comparative period, on 16th April 2004, the Company
completed the acquisition of Accident Exchange Limited, and changed its name to
Accident Exchange Group Plc.  For comparison purposes we have therefore
disclosed pro forma results for the year ended 30th April 2004, compiled on the
basis as if Accident Exchange had been owned for the whole of the comparative
period.



The comparative figures for the nine months ended 30th April 2004 have been
restated to reclassify certain costs from overheads to cost of sales so as to be
consistent with the classifications used for the current financial year.  This
reclassification has no impact on reported profitability for either period.



The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985.  The consolidated balance sheet at 30th April 2005 and the consolidated
profit and loss account, consolidated cash flow statement and associated notes
for the year then ended have been extracted from the Group's 2005 statutory
financial statements upon which the auditors opinion, dated 10th June 2005, is
unqualified and does not include any statement under Section 237 of the
Companies Act 1985.




2. TAXATION ON PROFIT ON ORDINARY ACTIVITIES



The tax charge represents:
                                                                                Year     9 Months         Pro
                                                                               ended        ended       Forma
                                                                            30 April     30 April        Year
                                                                                2005         2004       ended
                                                                               £'000        £'000

UK corporation tax at 30%                                                      1,636            9         103
Prior year adjustment                                                           (36)            -          16
Total current tax                                                              1,600            9         119
Deferred taxation provision                                                      641           25         278
Prior year adjustment                                                              -            -        (23)
Total deferred tax                                                               641           25         255
Taxation on profit on ordinary activities                                      2,241           34         374

The tax assessed for the period differs from the standard rate of corporation tax in the UK as
follows:

Profit on ordinary activities before tax                                       6,705           70       1,113
Profit on ordinary activities multiplied by standard rate of                   2,012           21         334
corporation

tax in the UK of 30%
Effect of:
Expenses not deductible for tax purposes                                         260           12          58
Capital allowances in excess of depreciation                                   (627)         (27)       (267)
Prior year adjustment                                                           (36)            -           3
(Utilised) / Unutilised losses                                                   (9)            4           -
Marginal relief                                                                    -          (1)         (9)
Current tax charge for the period                                              1,600            9         119






3. EQUITY DIVIDENDS                                                                              Pro forma
                                                                           Year      9 Months         Year
                                                                           ended        ended        Ended 
                                                                        30 April     30 April     30 April   
                                                                            2005         2004         2004
                                                                           £'000        £'000        £'000
Ordinary shares
Interim dividend 0.5p per share paid - paid 5 January 2005 (2004:            309            -            -
nil)
Proposed final dividend of 1p per share (2004: nil)                          617            -            -
                                                                             926            -            -



The Directors are recommending the payment of a final dividend of 1p (2004: nil)
per share. If approved at the AGM, payment will be made on 22nd July 2005 to
shareholders on the register on 24th June 2005.







4. EARNINGS PER SHARE



Basic and diluted earnings per share



The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.



Whilst 197,861 share options were issued in aggregate in March and April 2005,
the dilutive effect of these potential ordinary shares is not material, and
consequently there is no material difference between basic earnings per share
and diluted earnings per share.



Details of the earnings and weighted average number of shares used in the
calculations are set out below:
                                                                                                 Pro forma
                                                                                  9 Months            Year
                                                                  Year ended         ended           Ended
                                                                    30 April      30 April        30 April
                                                                        2005          2004            2004

Profit on ordinary activities after taxation (£'000)                   4,464            36             739
Weighted average number of shares                                 61,710,273     4,467,920      61,710,273
Basic and diluted earnings per share (pence)                            7.23          0.81            1.20

Adjusted earnings per share


The calculation of the adjusted earnings per share is based on earnings before goodwill as set out below:


Profit on ordinary activities after taxation (£'000)                   4,464            36             739
Goodwill (£'000)                                                         656            25              25
Adjusted profit on ordinary activities after taxation                  5,120            61             764
(£'000)
Weighted average number of shares                                 61,710,273     4,467,920      61,710,273
Basic and diluted earnings per share (pence)                            7.23          0.81            1.20
Goodwill (pence)                                                        1.07          0.56            0.04
Basic earnings per share (pence)                                        8.30          1.37            1.24



For comparison purposes, both earnings per share and adjusted earnings per share
for the pro forma year ended 30th April 2004 have been calculated using the same
weighted average number of shares in issue as for the current year.







5. INTANGIBLE FIXED ASSETS
                                                            Software           Goodwill             Total
                                                               £'000              £'000             £'000
Cost
At 1 May 2004                                                      -             13,128            13,128
Transferred during the year                                      285                  -               285
Fair value adjustment                                              -               (50)              (50)
At 30 April 2005                                                 285             13,078            13,363
Amortisation
At 1 May 2004                                                      -                 25                25
Transferred during the year                                       79                  -                79
Amortised in the year                                             41                656               697
At 30 April 2005                                                 120                681               801
Net book amount at 30 April 2005                                 165             12,397            12,562
Net book amount at 30 April 2004                                   -             13,103            13,103


Goodwill above relates to the following:
                                                             Date of          Period of     Original cost
                                                         acquisition       amortisation             £'000

Accident Exchange Limited                              16 April 2004           20 Years            13,128



On the basis of the strength of the relationship Accident Exchange Limited has
with both its customers and the major insurance companies, and its underlying
technology platform, the Directors consider that the useful economic life of the
goodwill is at least 20 years.



During the year a review of fair values of the assets and liabilities acquired
in relation to Accident Exchange Limited was undertaken.  As a result trade
creditors acquired have been reduced by £50,000 impacting both goodwill and the
parent company value of investment.



During the year certain software was transferred from tangible fixed assets to
intangible fixed assets, and the useful life extended to five years reflecting
the value to the business.






6. TANGIBLE FIXED ASSETS

Group                                                   Computer    Fixtures and           Motor          
                                                       Equipment        Fittings        Vehicles         Total
                                                           £'000           £'000           £'000         £'000
Cost
At 1 May 2004                                                310              88           3,984         4,382
Additions in the year                                        221              93          15,453        15,767
Transferred in the year                                    (285)               -               -         (285)
Disposals in the year                                          -               -         (1,473)       (1,473)
At 30 April 2005                                             246             181          17,964        18,391
Depreciation
At 1 May 2004                                                  7               1              37            45
Charged in the year                                           78              37           2,297         2,412
Transferred in the year                                     (79)               -               -          (79)
Disposals                                                      -               -           (400)         (400)
At 30 April 2005                                               6              38           1,934         1,978
Net book amount at 30 April 2005                             240             143          16,030        16,413
Net book amount at 30 April 2004                             303              87           3,947         4,337


The figures stated above include assets held under hire purchase contracts as
follows:
                                                                                                         Motor
                                                                                                      Vehicles
                                                                                                         £'000
Net book amount at 30 April 2005                                                                        16,030
Net book amount at 30 April 2004                                                                         3,947







7. DEBTORS
                                                                            30 April        30 April
                                                                                2005            2004
                                                                               £'000           £'000

Trade debtors                                                                 11,810           2,722
Other debtors                                                                    265             152
Prepayments and accrued income                                                   197              67
                                                                              12,272           2,941






8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
                                                                             30 April        30 April
                                                                                 2005            2004
                                                                                £'000           £'000

Bank loans and overdrafts                                                          17               -
Trade creditors                                                                 1,124             524
Corporation tax                                                                 1,636             119
Social security and other taxes                                                   650             187
Other creditors                                                                   179             198
Dividends payable                                                                 617               -
Amounts due under hire purchase contracts                                       5,323           1,451
Accruals and deferred income                                                      190             151
                                                                                9,736           2,630







9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

                                                                             30 April        30 April
                                                                                 2005            2004
                                                                                £'000           £'000

Amounts due under hire purchase contracts                                      12,009           2,815

Borrowings are repayable as follows:

Within one year:
Bank loans and overdrafts                                                          17               -
Hire purchase                                                                   6,665           1,745
After one and within two years:
Hire purchase                                                                  12,274           2,561
After two and within five years:
Hire purchase                                                                      52             341
Less hire purchase interest on the above                                      (1,659)           (381)
                                                                               17,349           4,266




10. PROVISIONS FOR LIABILITIES AND CHARGES
                                                                                    Deferred taxation
                                                                                                £'000

At 30 April 2004                                                                                  295
Provided in the year                                                                              641
At 30 April 2005                                                                                  936






11. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
                                                                                       30 April     30 April
                                                                                           2005         2004
                                                                                          £'000        £'000

Retained profit for the period                                                            3,538           36
Cost of employee share schemes                                                               10            -
Issue of ordinary share capital (including movement on other                                 55       14,866
reserves)
Net increase in shareholders' funds                                                       3,603       14,902
Equity shareholders' funds at 30 April 2004                                              14,963           61
Equity shareholders' funds at 30 April 2005                                              18,566       14,963







12. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES


                                                                                         Year        9 Months
                                                                                        ended           ended
                                                                                     30 April        30 April
                                                                                         2005            2004
                                                                                        £'000           £'000
Reconciliation of operating profit to net cash inflow

from operating activities
Operating profit                                                                        7,721              90
Amortisation and impairment of goodwill                                                   656              25
Amortisation of intangible assets                                                          41               -
Depreciation                                                                            2,412              45
Profit on disposal of investments                                                           -            (18)
Loss on sale of tangible fixed assets                                                      20               1
Increase in debtors                                                                   (6,446)            (24)
Increase in creditors                                                                   1,148              71
Net cash inflow from operating activities                                               5,552             190






13. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS / (DEBT)


                                                                                        Year        9 Months
                                                                                       ended           ended
                                                                                    30 April        30 April
                                                                                        2005            2004
                                                                                       £'000           £'000

(Decrease) / increase in cash in period                                                (339)             380
Capital element of hire purchase contracts                                             5,158             156
Cash flow from liquid resources                                                            -           (338)
Change in net debt resulting from cash flows                                           4,819             198
Hire purchase acquired with subsidiary                                                     -         (3,804)
Inception of hire purchase contracts                                                (18,224)           (433)
Other non-cash items                                                                       -           (167)
Movement in net debt in period                                                      (13,405)         (4,206)
Net debt at 30 April 2004                                                            (3,944)             262
Net debt at 30 April 2005                                                           (17,349)         (3,944)







14. ANALYSIS OF CHANGES IN NET FUNDS / (DEBT)

                                         As at                        Non-cash              As at
                                 30 April 2004         Cashflows         items      30 April 2005
                                         £'000              £'000        £'000              £'000

Cash at bank and in hand                   322              (322)            -                  -
Bank overdraft                               -               (17)            -               (17)
                                           322              (339)            -               (17)
Hire purchase                          (4,266)              5,158     (18,224)           (17,332)
Net debt                               (3,944)              4,819     (18,224)           (17,349)








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