maximising our potential - redde · close relationships with solicitors who provide personal injury...

Helphire Group plcPinesgateLower Bristol RoadBath BA2 3DP Tel: 01225 321000www.helphire.co.uk

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lc Annual report and accounts 2008

Helphire Group plcAnnual report and accounts 2008

Maximising our potential

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Who we are

Founded in 1992, Helphire is the UK’s marketleader in the provision of accident assistance to not-at-fault drivers involved in road accidents.In partnership with the insurance and motorindustries, we provide accident managementsolutions to motorists, ensuring that they remainmobile until their own vehicles are repaired,or until they are put in a position to obtain a replacement.

Contents

Introduction

01 Business and financial highlights02 At a glance 04 Chairman’s statement

Business review

06 How we are driving ourbusiness forward

11 Our performance 15 Corporate social responsibility (CSR)

Governance

18 Board of Directors 20 Directors’ report23 Corporate governance26 Directors’ remuneration report34 Statement of Directors’ responsibilities

Our results

35 Independent auditors’ report36 Consolidated income statement37 Consolidated statement

of changes in equity38 Consolidated balance sheet39 Consolidated cash flow statement40 Notes to the consolidated

financial statements64 Company income statement64 Company statement of changes

in equity65 Company balance sheet66 Company cash flow statement67 Notes to the Company

financial statements74 Notice of Annual General Meeting76 Shareholder information,

financial calender and advisors

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01Helphire Group plc Annual report and accounts 2008Introduction

IntroductionBusiness and financial highlights

+39%Revenue increased to £405m

Business highlights

� Group-wide reorganisation to give business unitManaging Directors responsibility for profit and cash collection

� Financial agreements entered into with CS2 LawyersLimited, specialist personal injury lawyers

� Acquisition of Cab Aid – specialist providers of replacement public service vehicles

� Successful placing and open offer to raise £42.7m net of expenses

Revenue(£m)

20072006*20052004

290.3

2008

404.9

51.4

169.0118.4

75.3

Operating profit (£m)

20072006*20052004

45.2

2008

51.7

5.0

28.420.4

8.3

*15 month period

+14%Operating profitincreased to £51.7m

� Revenue increased by 39%

� Operating profit increased by 14%

� Diluted EPS increased by 2.8%

� Recommended final dividend of 5.8 pence; full year 12.3 pence, an increase of 11.8%

� 14% reduction in the weighted average age of our outstanding claims

� Over 4.6m car hire days, an increase of 37% on 2007 (3.4m)

Despite a challenging 2008 financial year, Helphire has achieved record revenue and profits. We have taken action to ensure that we continue to drive value for shareholders by implementinga programme of strategic and operational change.

Financial highlights

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02 Helphire Group plc Annual report and accounts 2008 Introduction

IntroductionAt a glance

Our locations

Helphire employs over 2,800 people across operationalsites in Bath, Bristol, Northwich, Peterlee, Chesterfield and Sutton, Surrey. The Group’s national network of 31 branches and fleet of approximately 18,500 vehicles,ensures that replacement vehicles can be delivered to customers within four hours if required.

Main operational sitesBranch sites

Since 1992, Helphire has provided assistance to motorists involved in accidents, where they were not-at-fault.

Our services include vehicle replacement and repairmanagement, full claims handling assistance,uninsured loss recovery and personal injurymanagement, as well as other bespoke services.

We are a first tier supplier under the ABI GeneralTerms of Agreement (GTA) and aim to be the preferredclaims outsourcing partner for UK motor insurers, by providing claims solutions which reduce internalexpenditure and administration.

Main operational sitesBathBristolChesterfieldNorthwichPeterleeSutton (Surrey)

Branch locationsAberdeenAshfordBangorBristol/BathBrightonBirminghamBelfastBridgendCarlisleDoncasterDorchesterEdinburghExeterHaverfordwestHaydockLeicester

LeedsLincolnLondon/ActonLong MarstonMilton KeynesNewcastleNorwichOxfordRainhamSouthamptonStanstedStokeSwift NorthwichSwift ScotlandTruro


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Our operations

At the core of the Group’s operations is its UK AccidentManagement Division.

The UK Accident Management Division comprises three businessunits providing replacement vehicle services, repair managementservices and legal expenses insurance. The business partners of theHelphire UK/Angel Assistance and Albany Assistance business unitsare insurance companies, brokers and other motoring organisations.The Helphire Automotive business unit, whose principal operatingbrand is Swift, serves customers of the automotive sector, such as car dealerships, motor manufacturers and repair centres.

Additionally, the UK Accident Management Division brings together a number of smaller subsidiary companies, providing specialisedservices in the field of accident and insurance claims management.

These customer-facing business units are supported by Helphire Fleet Services which manages the Group’s fleet of approximately18,500 vehicles.

Helphire’s Legal Services Division currently provides customers withaccess to specialist personal injury advice but has the strategic aim ofowning and building a legal business, when the rules governingownership of legal firms permit.

Helphire’s International Division manages the Group’s early-stageoperation in Spain and will investigate the prospects for its accidentmanagement business model in other countries.

Our services

Helphire UKAngel Assistance

Providing• replacement vehicle and repair

management solutions• legal expenses insurance to UK

motorists introduced by insurancecompanies and brokers

AlbanyAssistance

Helphire Automotive

Other

Providing• replacement vehicle and repair

management solutions• legal expenses insurance to UK motorists

introduced by the automotive sector

Includes provision of• fleet accident management services• replacement public hire vehicle and

repair management solutions

Legal Services DivisionArranging legal services for customers of the Group, maintaining close relationships with solicitors who provide personal injurymanagement services pending legal changes to permit ownership of legal businesses.

International DivisionEarly stage operations providing replacement vehicle solutions to not-at-fault motorists in Spain.

Fleet

18,500

Branches

31

People

2,800+Founded

1992

Helphire Group plc provides accident management andrelated services through the three following Divisions:

UK Accident Management Division


04 Helphire Group plc Annual report and accounts 2008 Introduction

Our primary focus is to manage growth and shape the business so that it translates highand increasing levels of activity into both profit and cash, creatingsustainable value forshareholders.

Results and dividendThis year Helphire has been subject to a complex array of influences, some verypositive, others less so. Despite the costpressures we have experienced in the pastyear and the slowdown in motoring activitydue to rapidly rising fuel prices, which becamemore pronounced as the year went on, wehave achieved a creditable profit before tax,on an adjusted* basis, of £46.8m comparedwith £45.0m in the previous financial year.On a statutory basis, profit before tax was£43.0m (2007: £40.3m). Whilst this is a recordresult for the Group, it is not the one we hadhoped for when the year began. We knowthat we have work to do to ensure thatHelphire achieves its considerable potentialand we have initiated a programme designedto improve the Group’s profitability andstrengthen its cash flow.

We are recommending a final dividend of 5.8 pence per ordinary share (2007: 5.8 pence), to be paid on 5 December 2008(except in respect of the shares issued in connection with the recent placing andopen offer), to shareholders on the registerat 31 October 2008. Including the interimdividend, the proposed total dividend for the year is 12.3 pence (2007: 11.0 pence), an increase of 11.8%. It is our intention to pay dividends at or above this level in the future and to improve cash generationsuch that a progressive dividend policycan be maintained.

Industry and businessdevelopmentOver the past 16 years, Helphire has been atthe forefront of the creation of a new industryand throughout that period has remained themarket innovator and leader. At the outset,the accident management industry relied onintroductions from the automotive industry. As the market has developed, an increasinglywide range of intermediaries has begun to introduce cases and in recent years asignificant number of insurers have embracednon-fault accident management services. All leading insurers are now using some or all of the services offered by accidentmanagement companies and over 40%of the cases the Group undertook last yearwere introduced by insurers. We see theservices we provide as important elementsof the process of managing a motor accidentenabling our referrers to provide a muchimproved level of service to motorists.

The accident management industry haswitnessed very high annual growth rates formany years and this growth continued in the2008 financial year. Helphire processed29% more vehicle replacement cases in theyear ended 30 June 2008 than in the previousyear and the Group’s revenue increased by39.5%. This impressive rate of growth hascemented Helphire’s position as the UK’sleading provider of replacement vehicles.Now, as we have long expected, the rate of growth in non-fault accident cases isbeginning to slow as the market matures.

IntroductionChairman’s statement

Rodney Baker-BatesChairman

£46.8mAdjusted* profit beforetax has increased toa record £46.8m

* Adjusted results are presented to provide a betterindication of overall financial performance of thecontinuing operations and to reflect how the businessis managed and measured on a day-to-day basis. The adjusted profit before tax excludes intangibleassets amortisation of £1.5m (2007: £2.3m), shareoption costs of £2.3m (2007: £1.3m), and in the caseof 2007 impairment of intangible assets of £0.4m and abortive acquisition costs of £0.8m.



Whilst we expect revenue to grow less rapidlyfrom this point forward, we see opportunitiesfor growth in profitability and we are takingconcerted action to ensure that the businessbecomes more cash generative.

High growth rates bring challenges. Ourprimary focus is to manage growth and shapethe business so that it translates high andincreasing levels of activity into both profit andcash, thus creating sustainable value forshareholders. Hire and repair services fundedon credit – the core of our service offering – are capital intensive by their nature. Helphirefunds the cost of providing these services todrivers involved in non-fault accidents fromthe inception of cases until claims are settled.The claims handling process can take up to six months or more. Creating value forshareholders depends on controlling thequality of the business we take on, providinghigh quality services to referrers and theircustomers and processing the resulting claimas efficiently and speedily as possible. Due tothe pricing formula of the GTA, acceleratedsettlement will put pressure on gross margins.However, through the imposition of interest onclaims outstanding after 90 days, productivityimprovements and the reduction in financingcosts that improved cash flow would bring,we will seek to protect net margins.

A balance needs to be struck betweenHelphire and insurers in their capacity as both introducers of business and underwritersagainst whom claims are made for the cost of our services. We have not yet achieved theright balance and because claims are not yet

being settled as quickly as we would expect,our capital requirement has grown along with our business volumes. This culminated in the recent issue of new shares to raise£45m (before expenses) which we announced on 9 July 2008 and completed on9 September 2008. We are pleased that our shareholders, both existing and new, have supported us in this fundraising.

We recognise the challenges we now have to meet in order to capitalise on the positionHelphire has created for itself in the accidentmanagement market and we are committedto delivering the improvements in efficiencyand cash generation that will demonstrate the true value of the business.

Board changesIn recent months we have announced a number of changes to Helphire’s Board toaddress the changing needs of the business.

Mark Jackson has decided to retire after more than six years as Chief Executive. A recruitment process is underway and weare pleased that Mark will remain with theCompany until his successor is appointed and the handover is complete. Mark’scontribution to Helphire as a co-founder of the business and as Chief Executive has been enormous. On 8 July 2008 David Lindsay, whose role as Group FinanceDirector was assumed by Mark Adams witheffect from 1 April 2008, decided to leave the Company. David was instrumental in the development of Helphire and we thank him for his invaluable contribution.

Roger Taylor and Richard Burrell, who haveserved as Non-Executive Directors for almostnine years and six years respectively, havedecided to leave the Board following theAnnual General Meeting. Their knowledge and wise counsel have been of great value as the business has grown.

We are also very pleased that Dr ReinerHagemann, who has had a distinguishedcareer within the insurance industry, bothin Europe and the UK, agreed to join theBoard in May.

In the coming weeks, in light of thesechanges, we will be carrying out a review of the composition of the Board.

Our peopleThe past 12 months have been difficult forthe Group’s employees and on behalf of theBoard I would like to thank everyone for theircontribution. We all recognise that there aremore challenges ahead and we look forwardto tackling them together.

Rodney Baker-BatesChairman23 September 2008

We recognise thechallenges we have tomeet to demonstrateHelphire’s value


06 Helphire Group plc Annual report and accounts 2008 Business review

Business reviewHow we are driving our business forward

ObjectivesThe key drivers of an increasing level of profit are:• delivering an excellent accident

management service to motorists;• providing our services at optimum cost;

and• dealing efficiently and openly with

insurers so that claims are settled fairly and in a timely manner.

Having achieved rapid growth in businessvolumes and revenue, the Group’s objectivesare to improve cash flow and to capitalise on its market-leading position in order tocreate value for shareholders.

Our strategyOur strategy entails driving our businessforward in each of our three divisions.

Our UK accident management strategy is to maintain high levels of customer service,continually improve the efficiency of ouroperations and strengthen our relationshipswith our business partners in order to remainthe UK’s leading provider of replacementvehicles and associated accidentmanagement services.

Our strategy includes the ownership ofa legal services business when the regulationsgoverning ownership of solicitors’ firmspermit. We aim to ensure that appropriatereturns can be made from doing so. Havingestablished close links with legal practices,the Group is well positioned to establish a legal services business when the regulationschange. In the meantime, we expect to seeincreased levels of personal injury referrals to CS2 Lawyers and other panel solicitors.

Finally, our strategy involves expandinginternationally in territories where the validity of our model has been adequatelydemonstrated. We will commit limited capitalin order to test the model and will only investfurther if international operations can bedemonstrated to exceed their target return on capital and generate satisfactory cash flow.

We aim to generate value for shareholdersby continuing to provideexcellent accidentmanagement servicesand by improving theefficiency of ouroperations.

Mark AdamsGroup Finance Director

Mark JacksonChief Executive


07Helphire Group plc Annual report and accounts 2008Business review

1. ServicesOur objective is to provide a high quality package of accident management services and to continue to adapt to the changing needs of the marketplace.

The challenge for ourfleet team is to be able to provide a vehiclematched to the client’sneed, on a timely basis,at optimum cost to the Group.

2. Managing the fleet

Delivering the strategyThe following aspects of our business are key to executing our strategy successfully.

1. ServicesWe aim to provide an effective package of high quality accident management servicesto motorists. We will respond to the changingneeds of our customers and businesspartners and adapt our business model asrequired to maintain market leadership in theprovision of replacement vehicles to motorists.

We will ensure that replacement vehicles hiredon credit terms will be provided on the basisof customer need for the period of timerequired by the customer.

As opportunities arise, the Group will seek to extend its range of services to generateprofitable growth and an acceptable level of return on capital.

2. Managing the fleetThe challenge for the team managing the fleetis to maximise the profitability to the Groupof providing replacement vehicles. This meansproviding the correct vehicle on a timely basisto ensure the customer’s needs are met, and doing so at the most advantageous cost to the Group. As the Group is committed toproviding accident victims with replacementcars that are compatible with their needs,unlike typical car hire companies, we have

to maintain a fleet with a wide variety ofclasses of vehicles. In general, the closer the match we can provide, the better theservice to the motorist. However, the closerthe like-for-like match the more difficult it is to achieve high levels of fleet utilisation.

With a fleet of approximately 18,500 vehiclesof 140 different classes located in 31 depotsserving a nationwide customer base,managing the fleet is a complex logisticalexercise. The size and range of our fleet isa key competitive advantage. During the past year, we have introduced a new fleetmanagement system to provide the complexmanagement information our team needs to manage the fleet effectively and profitably.This system also allows management tocalculate depreciation for the fleet on thebasis of estimated residual value at theintended date of disposal, sourced from CAP, thereby improving the accuracy of thedepreciation charge, which is a significantcontributor to the Group’s costs.

Helphire is able to buy vehicles (using a variety of financing methods) or acquirethem on contract hire. In the past, as a smaller operator, Helphire favoured contracthire and in 2005 held 69% of the fleet on that basis. However, as the business hasgrown, the benefits of owning the fleet haveincreased considerably and today the Groupowns over 80% of its vehicles.

Our growth has given us considerablepurchasing power such that we are now ableto acquire vehicles at prices comparable tothose paid by the contract hire companies.Contract hire provides a degree of temporaryinsulation from reductions in residual values of ve hicles. However, as there has to be a continual flow of vehicles in and out of ourfleet and trends in vehicle values are reflectedquickly in contract hire rates, any benefit is short-lived. Additionally, whereas contract hire vehicles must be returned at fixed times,the Group has the flexibility to hold thevehicles it owns for the optimum period. While the Group has typically held vehicles for approximately 12 months in the past, thevehicles we own can be held for shorter orlonger periods giving us the ability to respondto opportunities in the market to buy and sellvehicles. In view of current market conditions,we expect to extend holding periods whichbrings the additional benefit of reducing theimpact on utilisation of taking vehicles off-hireas the intended date of disposal approaches.

Every fleet management decision is taken with a view to minimising the whole life vehicleholding cost and managing risk. We willcontinue to contract hire a proportion of thefleet to take advantage of attractive terms as they become available and we may alsomake use of subcontracted daily cross-hirecapacity where it is appropriate to do so.However, in view of the significant advantagesin terms of flexibility and whole life holdingcost, we expect to continue to own themajority of our vehicles.


3. Managing operations

3. Managing operationsHelphire processed 29% more cases in theyear to 30 June 2008 than in the previousyear having grown rapidly in earlier years.Growth at this pace places considerabledemands on the business. In many respects,the business has managed this growth veryeffectively and we have maintained very highlevels of customer satisfaction. As our scalehas increased we have been able to increasethe number of depots, and therefore reducethe distance to our customers, and theincreased breadth of our fleet has improvedour ability to provide like-for-like vehiclematches.

Nevertheless, we are aware that there areareas where operational and productivityimprovements can be made. We mustprocess cases more efficiently so that the opportunities to contest a claim areminimised. Case files must be prepared to a high standard in a timely manner inpreparation for payment by the insurer

or, if payment is not made in the appropriatetimescale, for the issue of legal proceedings.The majority of our receivables derive frominsurance claims. Settlement and cashcollection performance are determined by the efficiency and effectiveness of the claimshandling operation. Implementation of ournew claims handling system, Expedite, isunderway. When, it is fully implemented itsoperational benefits are expected to increasealong with customer service levels.

We have refocused our operational structureto give business unit Managing Directorsmanagement responsibility and accountabilityfor profit and cash flow generated from the accident management business theyundertake. We continue to seek improvementsin operational performance so as to removeobstacles to the timely settlement of claims.We will continue to achieve a high level ofsatisfaction among customers and businesspartners by maintaining effective customer-facing operations.

Business reviewHow we are driving our business forward continued


We aim to accelerate claimssettlement by improvingcustomer service and theefficiency and effectivenessof our claims handlingoperations.


09 Helphire Group plc Annual report and accounts 2008Business review

We will work with insurers to establish a clearunderstanding of claimsprotocol and we aim toissue proceedings on a systematic basis whentimely settlement cannotbe achieved.

4. Working with insurers

The GTA envisages prompt settlement of claims and stipulates escalating late paymentpenalties for payments after 30 days frompresentation of the claim. When the claim has been outstanding for more than 90 daysthe charges revert to the full commercial rate.Notwithstanding this regime, many claims are slow to settle and approximately 68% of the value of the Group’s claims outstandingat 30 June 2008 are represented by claimsthat are more than 90 days old.

The Group has embarked on a programme to instill greater discipline and effectivenessinto the claims process. In order for claims to be settled in a timely manner, we need topresent insurers with clear, high quality claimdocumentation and we are increasing ourefforts to ensure that we do so. When insurers are presented with a fair, properlydocumented claim we expect promptsettlement.

Whilst the GTA stipulates penalty paymentsfor delayed settlement, we also incuradditional costs in pursuing claims for lengthyperiods. Therefore, there is a balance to bestruck to optimise profitability and cash flow.Until recently, there has been little additionalincentive for insurers to settle once the claimreaches its maximum value under the GTA at90 days. However, our terms and processeshave now been amended to introduce aninterest charge at this point to encourageprompt settlement. We expect this change,and a more consistent approach to litigationof long-outstanding claims, to acceleratecash collection.

4. Working with insurersIn 1999, the credit hire and insuranceindustries established the General Terms of Agreement, or GTA, a non-contractual set of protocols governing the provision ofreplacement vehicles to motorists involved in accidents that were not their fault and,where appropriate, the undertaking of repairs.It seeks to limit disputes between credit hirecompanies and insurers in relation to the hirecharges recoverable from the at fault party’sinsurer and to ensure timely payment ofclaims. The GTA was revised in 2001 andagain in 2005. The rates stipulated by theGTA are revised periodically, the latest suchupdate being effective from 1 June 2008.

The GTA provides an important framework for the interaction between accidentmanagement organisations and insurers, but the accident management market hasdeveloped considerably since the GTA wascreated. In 1999, insurers only experience of vehicle replacement was as the underwriterpaying claims, whereas today, all leadinginsurers have a business relationship with the accident management industry in someform, most as introducers of hire cases. There is, therefore, greater appreciation of the benefits that accident managementcan bring to insurers and their customers.Nevertheless, the insurer to the at-fault partyis still faced with the claim and the timelyrecovery of payment remains the Group’sforemost challenge. Our objective is to workwith insurers to reduce their claims costs,whilst maintaining our profitability andenhancing cash flow.

If claims are not paid within the 90 day period required by the GTA, we will preparethe case for litigation and we will arrange for proceedings to be issued in claims stilloutstanding beyond a threshold, which we would expect typically to be 120 days. We will continue to develop our panel ofsolicitors and to increase litigation capacity as required. Litigation is an accepted featureof claims handling in the insurance industryand in some cases it is unavoidable.

In the future, as now, we expect the vastmajority of our cases to be settled withoutrecourse to litigation. However, we anticipatethat by establishing a clearer understandingwith insurers of the rights and responsibilitiesof each of us, we will achieve a fairer result and claims will be settled more quickly.

5. Working capitalAccident management services are, by their nature, capital intensive. The historicalworking capital profile of the business hasbeen such that strong growth has led to an increase in working capital. We are nowvery clearly focused on the challenge ofdriving down working capital, principally by accelerating claims settlement.

We expect the combination of the moremoderate growth we anticipate in the future,along with the concerted action we are takingto reduce the working capital requirements of the business, to result in a healthier working capital and cash flow position and an improved return on capital.

We expect the combinationof more moderate growthand the concerted action weare taking to reduce debtorsto result in an improvementin working capital.

5. Working capital



Business reviewHow we are driving our business forward continued

We are exploring areas related to our core businessinto which we can expand. The provision of legal servicesis a natural development andwe will continue to exploreinternational markets in aclosely controlled manner.

6. Growth

6. GrowthIt is clear that the very rapid rates of growth in the accident management market of recentyears will not continue as the market maturesand that future growth rates, while still healthy,will be lower than in the past. We have,therefore, sought areas related to our corebusiness into which we can expand tocomplement our existing business. We haveseen steadily increasing demand for theprovision of replacement vehicles. Thisincludes vehicles supplied under the terms ofa policy which entitles the holder to a vehiclein the event that their own is unavailable. It also includes like-for-like vehicle provision innon-fault cases being handled directly byinsurers. These types of services are expectedto grow strongly and, although our incomefrom this type of hire is lower, so too are thecosts, meaning that the operating margin weare able to achieve is still attractive.

A proportion of our customers have an injuryclaim arising from an incident. At present we provide motorists with access to the legalservices they require by introducing them to specialist legal firms with whom we haverelationships. Our access to motoringincidents, via our accident managementbusiness, offers us the potential to provide a wider range of services, in particular legalservices, to motorists and insurers.

It is not currently permitted for Helphire to own a solicitor’s practice but momentum tochange the rules whereby only solicitors canown legal practices has been gathering paceover the last few years, in particular with thepublication of the Clementi Report inDecember 2004. The Legal Services Act 2007is the latest statutory enactment laying downthe framework to allow such changes, withentities owning such legal practices known asAlternative Business Structures (‘ABS’). It isanticipated that the earliest date for ABSs toapply for permission to operate will be latein 2011.

In August 2007, we increased our involvementin the legal services market by acquiring theCS2 Group of companies, which provide a range of services in connection with motoraccidents, and by entering into a financialagreement with CS2 Lawyers Limited, a firmof solicitors specialising in the personal injuryfield. Our position in the motor accidentmanagement market and existingrelationships with specialist legal firms, puts us in an ideal position to enter this potentiallyhighly profitable market when the ownershipregulations permit.

International markets present us with a logicalgrowth opportunity. The applicability of ourexisting business model depends upon thelegal regime in a given country. Among severalEuropean countries whose legal systems we believe support the business model,we selected Spain as the most attractiveoverseas market. We have established anoperational centre in Madrid, providingservices to customers introduced in the main by insurance brokers. Initial responsefrom customers and partners has beenencouraging. We have limited the extent ofthe Spanish operation and our commitment ofcapital to it until we have firmly established therecoverability of our claims. We see the needto run cases through regional courts to gainprecedent in our favour and initial results inthis regard are positive. We will continue toexplore other international markets in a closelycontrolled manner.


11 Helphire Group plc Annual report and accounts 2008Business review

Business reviewOur performance

34.9%Gross margin declined from39.7% owing to increased fleet and commission costs and theimpact of the economy on motoring activity

+29%We provided 191,763replacement vehicles in the financial year

Helphire achieved recordprofits in the year ended30 June 2008 althoughincreased cost pressuresprevented profitabilityfrom keeping pace withthe strong growth inbusiness volumes.

OverviewThe past financial year saw continued growthin the UK accident management market andHelphire’s revenue grew strongly. Profit beforetax was impacted by increased operatingcosts, in particular referrer commissions andfleet costs, a slowdown in motoring activityand therefore non-fault accidents, particularlyin the second half of the year, and interestrates running above the level we anticipated.

2008 2007 Change

OperationalHire cases 191,763 148,340 +29%

– Credit hire 175,614 139,925 +26%– Standard hire 16,149 8,415 +92%

Repair cases 73,961 55,116 +34%% of credit hire cases 38% 37%PI Cases 34,832 30,233 +15%% of credit hire cases 18% 20%Hire days 4,689,717 3,424,897 +37%

FinancialRevenue (£’000) 404,935 290,318 +39%Gross margin 34.9% 39.7%Direct fleet holding costs as a %of net hire revenue 27.4% 25.5%Operating margin 12.7% 15.6%Weighted average age of claim (days) 256 296 -14%Debtor days (hire, repair, PI) 235 205 +14%Credit cash collected (£’000) 255,098 185,967 +37%

Key performance indicatorsThe Group monitors a number of keyoperational and financial performanceindicators in order to measure theperformance of the business against its targets.



Business reviewOur performance continued

Operational performanceUK Accident Management DivisionWe have continued to provide motorists andour business partners, who refer motorists tous, with a good service. This is reflected in ourcustomer satisfaction rate of 97% for the yearas a whole. We are now working to ensurethat the claims handling and cash collectionfunctions of our business are equally effective.

The core of our business, the UK AccidentManagement Division, comprises threeprincipal customer-facing business units,Helphire UK/Angel Assistance, AlbanyAssistance and Helphire Automotive, alongwith Helphire Fleet Services, which providesservices to each of them. In May 2008, wecompleted a reorganisation which made theManaging Directors of each of these key unitsresponsible for business generation,profitability and cash flow.

Timely settlement of claims depends uponoperational efficiency within the Group and the co-operation of the insurer to the at-faultparty. Many claims are not contentious and are capable of rapid settlement provided theclaim is properly prepared and documented.However, a proportion of claims will becontested and a small subset of these willrequire the intervention of a court oncenegotiation is exhausted. We haveimplemented measures to improve our ownefficiency in order to encourage promptpayment and we will continue this work in thecoming year. We have introduced an interestcharge payable on claims that are not settledwithin the 90 day period stipulated in the ABIGTA. We are also working towards issuinglegal proceedings as soon as it is clear that a claim will not be settled under the GTA

protocol. We and our insurer partners acceptthat if cases cannot be settled by agreement,they have to be litigated. We are now takinga more systematic approach to litigation with the aim, by 31 March 2009, of issuingproceedings if claims remain outstanding 120 days after submission. Achieving thisobjective will be a key management focus for the coming year. Resource in our legaldepartment, which has been significantlyincreased, will be increased further and cases are also being referred to a panel of solicitors where appropriate.

In November 2007, our accident managementservice was enhanced by the acquisition ofCab Aid. Cab Aid is a provider of replacementvehicles to the taxi market, offering a full rangeof licensed vehicles and also specialising inthe customisation of replacement vehicles forthe specific needs of the relevant localauthorities. This business is performing well.

Legal Services DivisionMany of the Group’s customers require legal help in pursuing a personal injury claim as a result of their accident and we have historically provided this assistance by introducing customers to solicitors. Wehave developed close working relationshipswith solicitors specialising in this marketin preparation for ownership of our own legal business and we intend to enter thispotentially attractive market when theproposed changes in regulation permit us to do so. The provision of legal services is a natural extension of our offering. In August2007, we announced a financial agreementwith CS2 Lawyers Limited, a specialistpersonal injury firm based in Derbyshire, as well as the acquisition of the CS2 Group ofcompanies which provide a range of servicesassociated with personal injury claims.

International DivisionOur Spanish accident management operation, which is based in Madrid, startedtrading in October 2007. It is now processingapproximately 60 hires per month. The resultsto date are encouraging but we will continueto gather further evidence of the success andpotential profitability of the business model inSpain before committing any significant capital.

FleetThe difficult economic climate had an adverseimpact on the prices of new and usedvehicles during the period. A fall in the priceof new vehicles reduces the Group’s holdingcosts and is therefore welcome. Our vehiclesare depreciated to forecast residual value ondisposal over the expected holding period.Accordingly, the fall in residual values over theperiod led to depreciation and, therefore, fleetcosts exceeding our expectations. However,by owning rather than contract hiring themajority of its vehicles, the Group has theflexibility to hold vehicles for the optimumperiod, allowing management to avoid sellingvehicles when residual values are weak and to continue generating revenue from thoseassets in the meantime. The Group’s financialresults for the past year reflect the trend invehicle prices up to 30 June 2008, and weconsider it likely that the effect of any furtherweakness in residual values in the current yearwill be largely offset by the benefit of reducedprices of new vehicles or mitigated byextending vehicle holding periods. Fleetcomposition is managed with a view to maximising utilisation, whilst maintainingacceptable like-for-like matching andminimising fleet holding costs.

Cab AidAcquired Cab Aid, a provider of replacement taxis

97%Customer satisfaction rate


13Helphire Group plc Annual report and accounts 2008Business review

TradingOver the past financial year, the Groupprovided services to drivers involved in almost 200,000 accidents. We processed175,614 non-fault vehicle replacement cases(2007: 139,925), 16,149 standard vehiclereplacement cases (2007: 8,415), 73,961repairs (2007: 55,116) and 34,832 personalinjury cases (2007: 30,233). Over 98% ofvehicle replacements were fulfilled using theGroup’s own fleet.

On a like-for-like basis, business volumes from our leading ten existing businesspartners grew by over 19% compared to theprevious year. We continued to consolidateour longstanding relationships with thesepartners and the average age of these is nowover five years. All these partners undertookformal audits during the year, which wealways welcome since such engagementsfrequently reveal continuous improvementopportunities for both parties. We have alsosigned a number of new referrer contractsduring the year. Standard hires have increasedsharply from a low base as we work withinsurers to meet their vehicle replacementrequirements.

Financial reviewPerformanceRevenue increased by 39.5% from £290.3mto £404.9m as a result of the growth inbusiness volumes. There was little impact of increased GTA rates between our 2007and 2008 financial years. Rates had beenincreased in March 2006 and, followinglengthy negotiations, were increased by 3.5%with effect from 1 June 2008. As anticipatedat the time of our interim results, growth inrevenue in the second half of the year wassomewhat lower than in the first half and we expect that trend to continue.

Gross profit increased by 22.6% from£115.2m to £141.2m while gross margindeclined to 34.9% in the period from 39.7%in 2007. Gross margin is shown after chargingcommissions and fleet costs (includingdepreciation and finance charges on vehiclefinancing) and reflects the impact on revenueand profit of the measures that have beentaken to reduce the average age of claims.Increases in all of these expenses havecontributed to the reduction in gross margin.Commissions have increased sharply in recent years, particularly following the increasein GTA rates in March 2006, and were higherin the period than in 2007. Interest ratesincreased during the year and, as a result, the fleet finance element of direct costs also increased.

Administrative expenses increased moreslowly than business levels but more quicklythan gross margin, so despite a smallincrease in other operating income, theoperating margin fell to 12.8% from 15.6%.

Net finance costs increased to £8.6m(2007: £5.0m). This excludes finance costsassociated with the fleet that are chargedwithin gross margin. The increased costreflects the higher debt levels required to fundthe growth in working capital arising fromhigher business volumes, together with thefinancing of the acquisitions in the year.

Profit before tax for the year was £43.0mcompared with £40.3m in 2007. Afteradjusting for amortisation of intangible assetsand share-based payment charges (and, in 2007, abortive acquisition costs andimpairment of intangible assets), profit beforetax was £46.8m (2007: £45.0m).

The total tax charge of £12.6m (2007: £10.7m)represents an effective tax rate of 29.3%(2007: 26.6%). The increase in the effectivetax rate year on year is largely a reflection ofthe 2007 rate being positively impacted byone-off items.

Adjusted diluted EPS was 24.2 pence(2007: 23.7 pence) while statutory diluted EPS was 21.6 pence (2007: 21.0 pence).

A final dividend of 5.8 pence per share is recommended and, if approved byshareholders at the Annual General Meeting,will be paid on 5 December 2008 (except in respect of the shares issued in connectionwith the recent placing and open offer) toshareholders on the register at 31 October2008. Including the interim dividend, theproposed total dividend for the year is 12.3 pence (2007: 11.0 pence), an increase of11.8%. The £16.9m total dividend relating tothe year is covered 2.0 times (2007: 2.2 times),by earnings before amortisation of intangibleassets and share-based payment charges.

Revenue

£404.9m

Adjusted profit before tax

£46.8m



Business reviewOur performance continued

Balance sheetInvestment in our fleet continued in the period,supporting the growth in our core business,and was broadly matched by increases infinance leases and drawdown on our fleetbank facility. The net movement in debtorsand creditors during the period was anincrease of £75.4m.

The largest element of our working capitalbalance and the most significant driver of cash flow performance is our tradereceivables, comprising the value of hirescurrently in progress, the value of hirescompleted for which claims are beingprepared and receivables in respect of claims made but not yet settled. Net tradereceivables at 30 June 2008 were £267.9m(2007: £178.5m).

We track a number of key measures of ourdebtors which are reflected in two keyindicators – debtor days (calculated on acountback basis) and the average age of ouroutstanding claims. Our targets are to reducethe overall level of debtors in relation to ourrevenue, which would be reflected in lowerdebtor days, and to settle older claims, whichwill result in a reduction in the average age of a claim. Initiatives are in progress to tackleeach element of our receivables balance. Asat 30 June 2008, the weighted average age of an outstanding claim was 256 days, animprovement of 14% on the figure a yearearlier of 296 days reflecting the actionmanagement has taken to settle the Group’s

oldest outstanding claims. Our debtor daysfigure stood at 235, an increase of 14%compared with the position at 30 June 2007.

The management reorganisation and insurer-facing initiatives which we haveintroduced, have not yet reversed the risingdebtor trend, but we expect them to impacton working capital in the near future.Our receivables are enforceable insuranceclaims rather than contractual debts and therate of settlement is related to the resourcecommitted to claims management. We havesignificantly increased the litigation capacityavailable to us and we will continue toenhance our claims handling capability.

Cash flowNet working capital movements of £75.4m(2007: £48.5m) reduced cash generated fromoperations to £22.3m (2007: £20.9m). In theabsence of growth-related working capitaloutflows, which we are committed torestricting in the future, the business wouldhave generated positive cash improvements in flows after dividends in the year.

FinancingTotal net debt at 30 June 2008 was £362.3m(2007: £222.6m), comprising fleet funding of£187.6m (2007: £126.2m) and other netborrowings of £174.7m (2007: 96.4m).Net debt can also be viewed as comprising£198.8m of finance leases, cash of £7.9mand mortgage, term loan, fleet and revolvingcredit borrowings of £171.4m. In August

2008, we renewed certain of our bankfacilities and we now have aggregatemortgage, term loan, fleet and revolving creditfacilities of £192.7m. In September 2008 wecompleted a placing and open offer to raise£42.7m (net of expenses) from new andexisting shareholders, which has increasedour financing headroom.

OutlookIn the year ahead we look forward toimproving further the service we offer to ourbusiness partners and their customers and to strengthening relationships with insurers to our mutual advantage. We expect demandfor replacement vehicle services to continue to grow, albeit less rapidly than in the past.However, the difficult trading conditions weexperienced in the second half of the pastyear, as a result of the impact of the generaleconomic slowdown on motoring activity,have continued into the current year and itremains to be seen when previous levels ofmotoring activity will return.

As growth in our core business moderates toa more sustainable rate, our focus is firmly onenhancing cash flow and profitability. We mayexperience pressure on gross margins as wesucceed in settling claims more quickly andincreasing cash generation but we will seek tomaintain net margin by improving productivity.We recognise that our central challenge is to translate profits into cash and we areconfident that the measures we are taking will achieve this objective in the year ahead.

Mark B Jackson Mark A AdamsChief Executive Group Finance Director

OutlookOur central challenge is to translate profitsinto cash


Business review 15Helphire Group plc Annual report and accounts 2008Business review

The Board of Directors and the seniormanagement team fully recognise therequirement of the Group to balance thediverse interests of its stakeholder groups,including its employees, business partners,clients, shareholders, the wider communityand the environment in which it operates.

Given the scale and geographic scope of the business, Helphire has undertaken a review of current performance in the area of Corporate Social Responsibility (CSR), with a view to supporting the achievement of our business goals.

The Group has undertaken the followinginitiatives to support and achieve these aims.

Business partners andcustomersDuring the last year, over 6,100 customersprovided us with valuable feedback about our call-handling and replacement vehicleservices. The Group is proud to maintain a customer satisfaction rate of 97%, asreported by customers who said that theywere satisfied or very satisfied with theirexperience of our services.

We employ dedicated relationshipmanagement teams with specific industryexpertise to ensure that our services evolve and continue to meet the needs of our partners and their customers. Ourrelationships are supported with service levelagreements and management information that transparently tracks our performanceagainst these criteria.

Helphire and the environmentWe recognise that our business has anunavoidable impact on the environment and that we need to minimise these effectswherever and whenever practicable.

The Group is committed to the followingenvironmental standards:• full compliance with all existing

requirements;• the provision of industry-standard and

well-maintained fuel-efficient replacementvehicles on a like-for-like basis in line withcustomer requirements; and

• the establishment and monitoring ofenvironmental objectives and targets.

Our vehicle fleet of 18,500 vehicles meansthat measuring and minimising the impact of our vehicles on the environment is a priority.According to calculations by the EnergySavings Trust based on the Group’s data, our fleet was used by motorists to provideclose to 230 million miles of mobility over thelast year, producing approximately 70,000tonnes of CO2 emissions. The majority (around 85 per cent) of customer emissions aregenerated by passenger car vehicles, whichwe estimate typically produce 0.27 tonnes of CO2 for each hire we provide.

Business reviewCorporate social responsibility (CSR)

Whilst the Group’s control over the use ofreplacement vehicles is limited, the averageage of our vehicles and their regularmaintenance mean that our passenger fleethas an average emissions level of 163.1g/km(average of new UK car purchases 164.9 g/km),including a small fleet of hybrid vehicles that is expected to grow in the future.

The Group also recognises its responsibility to source and use its energy requirementsresponsibly. An independent assessmentundertaken by the Carbon Trust based on2007 figures, estimated energy consumptionacross our premises to be 4,705 MWh,producing CO2 emissions of approximately2,220 tonnes. Electricity contracts for theGroup have been centralised and during thenext year we will investigate the sourcing of allour energy needs from renewable sources.

All office sites have readily available recyclingfacilities for confidential waste, waste paper,cardboard, cans, plastic drinking cups andtoner cartridges. During next year, we aim toreduce the quantity of paper used relative tothe size of our business and source in excessof 95% of our paper from sustainable sources.

Helphire’s CSR strategy aims to focus on the following key areas:

• delivering a consistent quality of service to our business partners and individualcustomers

• measuring and minimising the environmentalimpact of the Group’s business units

• establishing Helphire Group plc as anemployer of choice

• engaging with and contributing to the wider communities in which we operate

• managing our supply chain responsibly


16 Helphire Group plc Annual report and accounts 2008 Business reviewHelphire Group plc Annual report and accounts 2008

Our peopleThe Group recognises the vital contribution of its people to the sustainability of its successand as the Group continues to grow to over2,800 employees, ensuring that we continueto be an employer of choice for our peopleremains a priority for senior management.

Reflecting this priority, Helphire’s ChiefExecutive has launched a company-wideproject to achieve a ‘Times Top 100 BestCompany to Work For’ placing within the next three years. Progress towards this targetwill be measured through the Helphire annualEmployee Survey. The second survey wasundertaken in September 2007 providingvaluable feedback from 1,441 respondents(overall participation level of 59%). Resultshave been cascaded across the businessunits and teams and specific action planshave been put in place to address concernsraised and further improve our workingenvironment.

The Group is fully committed to the principleand practice of equal opportunities and does not tolerate discrimination, bullying orharassment of any form, and has establishedpolicies which comply fully with the relevantUK and EU legislation. Our latest employeesurvey supports this, with 82.3% ofrespondents confirming they believe thatpeople are treated fairly and equally.

Helphire in the communityThe Group believes it can and should make a positive contribution to the localcommunities in which it operates, makingcharitable donations at national and regionallevel on a regular basis, whilst also supportinglocal staff initiatives through sponsorship.

In 2007/8, business units across the Group continued to support a number of charitable causes, raising in excess of £14,000 from monthly ‘dress-down’ Friday charity collections and one-off initiatives led by our people across thebusiness, contributing to a broad number of national and regional charities. In additionto current activity, the Group is reviewing its Group Charities Policy and is evaluating the selection of a longer-term strategicpartnership with a charitable organisation with which it is felt there is alignment with our core business and our values.

Our sponsorship strategy is designed to support our people in taking part insponsored events for charity. As a result,we provide support to a broad range of localinitiatives which create a positive profile in our key areas of operation.

Business reviewCorporate social responsibility (CSR)continued

Managing our supply chain responsiblyHelphire manages a diverse range of suppliersand contractors, operating a selection policythat always considers quality, delivery andwarranty elements of proposals, as well ascost. We maintain, and regularly review,service level agreements with our strategicsuppliers, ensuring the highest possibleservice standards for our internal and external customers. Our supplier policy will be reviewed during the next financial year to incorporate wider ethical andenvironmental considerations, with a processbeing implemented to audit our strategicsuppliers against these standards.

We have policies and processes in place toensure that our people reject any attempt atimproper business practice and avoid usingtheir position for personal gain.

82.3%of employee surveyrespondents believe thatHelphire people are treatedfairly and equally


17Helphire Group plc Annual report and accounts 2008Business review Helphire Group plc Annual report and accounts 2008Business review

2008

Our business partners and customersCustomer Satisfaction Index Score 97%Average length of business partner relationships (years)† 5

Our peoplePercentage of people engaging in Employee Survey 59%Percentage of survey respondents who believe Helphire contributes to the local community to an appropriate level 44.3%Percentage of survey respondents who believe that people are treated fairly and equally regardless of their age, race, gender etc. 82.3%Incident rate for all reportable accidents (per 000 employees*) 2.25

The environmentGroup Office energy usage (tonnes CO2 per head*) 0.83Fleet carbon footprint:– Customer fleet (tonnes CO2 per car hire day) 0.015– Group vehicles NewOffice paper:– Quantity purchased (reams per head*) 15.30– Sourced from sustainable sources (%) NewRecycling:– Ratio of recycled waste vs. landfill waste New

Our suppliersStrategic suppliers audited against Group standards (%) New

Our communitiesTotal investment in community & charitable investment (£’000) 14People participating in payroll giving scheme New

† Based on Helphire’s ten leading business partners, in terms of case volumes.* Headcount based on average number of employees for the year (2,672).

External benchmarkingThe Group is proud to continue to be a member company of the FTSE4Good Index1.FTSE Group confirms that Helphire has beenindependently assessed according to theFTSE4Good criteria, and has satisfied therequirements to become a constituent of theFTSE4Good Index Series. Companies in theIndex met stringent social, ethical andenvironmental criteria, and are positioned to capitalise on the benefits of responsiblebusiness practice.

CSR key performance indicatorsThe following KPIs have been developed to support the five main areas of the CSRstrategy outlined previously. Where certain KPIs have been monitored internally for sometime, data is readily available, whereas others are being introduced for the next reportingperiod. For the latter, procedures are being implemented to measure our performance in these areas:

1 Created by the global index companyFTSE Group, FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognisedcorporate responsibility standards.


18 Helphire Group plc Annual report and accounts 2008 Governance

GovernanceBoard of Directors

1

2

3

4

5

1 Rodney P Baker-BatesChairmanRodney, 64, was previously Chief Executive of Prudential Financial Services from 1998 to 2001 and prior to that he was Finance andInformation Technology Director for the BritishBroadcasting Corporation between 1993 and 1998. He is currently consultant to theBoard of C. Hoare & Co and holds a numberof other chairmanships, which include AssuraGroup Limited, Britannia Building Society,Stobart Group Limited, e.g. Solutions plc, G’s Marketing Limited and First AssistInsurance Services Limited. Rodney wasappointed Non-Executive Chairman inDecember 2005.

2 Mark B JacksonChief ExecutiveMark, 51, qualified in medicine from OxfordUniversity in 1980, and subsequently pursueda career in general medical practice with a period spent completing a doctorate in epidemiology. He co-founded Helphire in 1992 and became a full time ExecutiveDirector and Deputy Chief Executive in 1998.He became Chief Executive in 2001.

3 Mark A AdamsGroup Finance DirectorMark, 44, qualified as a Chartered Accountant with Spicer and Oppenheim in 1988. He hasheld a number of senior finance appointmentsacross a range of sectors, most recentlyGroup Finance Director of Alpha AirportsGroup plc. He has previously served asFinance Director at three other publiccompanies (Burnfield plc, Field Group plc and Prism Rail plc) and immediately prior tojoining Alpha Airports spent over five years as CFO at another international business, STA Travel Group. He was appointed Group Finance Director in April 2008.

4 David A RobertsonGroup Commercial DirectorPrior to joining Helphire in August 1997, David, 48, had a career which encompassedsenior management positions in the servicesector before moving into managementconsulting. As a consultant, he advised someof the largest companies in Europe, both withCoopers & Lybrand and latterly as a directorof his own consulting business. David wasGroup Operations Director until April 2008when he was appointed Group CommercialDirector.

5 Peter F HoldingGroup Legal DirectorPeter, 44, was formerly a partner inShoosmiths & Harrison Solicitors, Peter joinedHelphire as Group Legal Director in December1997. He is a member of the Association ofPersonal Injury Lawyers.


19Helphire Group plc Annual report and accounts 2008Governance

6

7

8 10

9

6 Roger J TaylorDeputy ChairmanRoger, 66, was appointed as a Non-ExecutiveDirector of Helphire in February 2000. He iscurrently Chairman of Amlin plc, prior to which,from 1986 to 1998, he was a director of Royal & Sun Alliance, where he also served as Deputy Chairman of the group andChairman of the Management Board. From1997 to 1998 he was Chairman of the ABI.He is currently a director of Yura InternationalHolding B.V., the White EnSign Association Ltdand Yam Invest NV.

7 Richard C M Burrell Non-Executive DirectorRichard, 42, was appointed as a Non-Executive Director of Helphire in January 2002.Richard is Chief Executive of Assura GroupLimited and a non-executive director ofStobart Group Limited. Prior to joining Assura Group, Richard was with ING Baringsand UBS Warburg.

8 David V PaigeNon-Executive DirectorDavid, 57, was appointed as a Non-ExecutiveDirector of Helphire in February 2007. Heserved as Group Risk Director with Royal andSun Alliance Insurance Group plc from 2005until December 2006 having previously beenwith Aviva as their Global Finance TransformationDirector and Group Business Risk Director.David has also held posts with Zurich FinancialServices, as the head of group risk andinternal audit; National Westminster Bank, asthe Chief Financial Officer of the Retail Businessand Director of Global Group Audit. From 1979to 1997, David was a partner at Coopers &Lybrand in both London and Toronto. Davidis currently a non-executive director of Aegon UK plc, Yorkshire Building Society and Edgecumbe Consulting Group Limited.

9 Michael K O’Leary Non-Executive DirectorMichael, 55, spent 15 years on the main boardof Misys (1986-2000), running their insurancedivision for a decade and also their US basedhealthcare division for three years. He alsoserved as CEO of the Huon Corporation(enterprise IT supplier to P&C insurersworldwide) and Marlborough Stirling (softwareand outsourcing supplier to the UK andCanadian life assurance industry). Michael iscurrently a non-executive director of HeadlamGroup plc, Psion plc and Stroud and SwindonBuilding Society. He is also non-executivechairman of Digital Healthcare Limited.

10 Dr Reiner HagemannNon-Executive DirectorReiner, 60, was appointed as a Non-ExecutiveDirector of Helphire on 1 May 2008.From January 1995 to December 2005,Reiner was a member of the executive board of Allianz AG. He was responsible fornon-life business in Germany and for Allianz’soperations in the UK, Ireland, Switzerland and Austria. From September 1998 untilDecember 2005, he was also a member ofthe supervisory board of directors of Euler-Hermes-Credit Insurance S.A. He currentlyholds a number of non-executive positionsincluding positions with Fortis NV, VHVAllgemeine AG, Bayer ScheringPharmaceutical AG, Wüstenrot &Württembergische AG, E.ON Energie AG and Hochtief Facility Management GmbH.



The Directors present their Annual Report and the audited financial statements for the year ended 30 June 2008.

Principal activitiesThe principal activities of the Group are the provision of non-fault accident management assistance and related services, the main incomebeing derived from replacement vehicle hire, the financing of vehicle repairs arising from insurance claims and the management of personalinjury claims.

Business reviewThe review of the business and likely future developments, as required by Section 234 of the Companies Act 1985, can be found in thefollowing pages and are incorporated into this report by reference:• Chairman’s Statement on pages 4 to 5;• Business Review on pages 6 to 14 .

Results and dividendsThe profit before tax for the year ended 30 June 2008 was £43.0m (2007: £40.3m) and a profit for the period of £30.4m (2007: £29.5m) wastransferred to reserves.

The Directors recommend a final dividend of 5.8 pence per share (except in respect of the shares issued in connection with the recent placingand open offer) which, together with the interim dividend of 6.5 pence per share paid on 1 May 2008, gives a total dividend for the year of12.3 pence per share (2007: 11.0 pence). If approved by the shareholders, the final dividend will be paid on 5 December 2008 to shareholderson the register at 31 October 2008.

Principal risks and uncertaintiesIn seeking to grow and develop the business, the Group faces a range of risks and uncertainties. The processes that the Board hasestablished to safeguard both shareholder value and the assets of the Group are described in the Corporate Governance Report. Set outbelow are those specific risks and uncertainties that the Directors believe could have the most significant impact on the Group’s business.The risks and uncertainties described below are not intended to be an exhaustive list.

CompetitionBarriers to entry into the vehicle replacement and repair management markets are relatively low and the Group may face increasedcompetition in the future. In addition, insurers may seek to adopt alternative means of providing replacement vehicles or repairing damagedvehicles. As a result, the Group may lose market share or face increased pricing pressure. The Group is sensitive to changes in customerrequirements and the competitive environment and will adapt its service offering as appropriate to maintain its position.

Customer and referrer relationshipsThe loss of a major partner could impact the Group’s fortunes. However, business is referred from a number of sources and the Group doesnot consider itself to be dependent on any one particular business partner. In addition, the Group seeks to minimise the potential risk of anyloss of business by entering into agreements with these business partners. In the past, new business commission rates have risen sharply and the cost of acquiring business has increased. If commission rates prove to be higher than anticipated, there could be an adverse impacton the Group’s operating results.

Insurance industry protocolsThe Group is a subscriber to voluntary protocols established by accident management companies and the ABI, known as the GTA. There isno guarantee that insurers and accident management companies will continue to subscribe to the GTA and they may seek to enter intobilateral arrangements. Such a development may be positive for the Group but could result in changes to the terms of business and, therefore,adversely affect the Group’s operating results.

RegulationCertain of the Group’s activities and arrangements are subject to regulation. Whilst the Group seeks to conduct its business in compliancewith all applicable regulations, there remains a risk that regulators will find that the Group has not complied fully with such regulations.Any failure by the Group to fully comply could have a materially adverse effect on the Group’s business.

LegalA number of existing and historical cases have challenged the legality of credit hire and related services and the hire rates which can berecovered by accident management companies. The majority of the Group’s claims are initially pursued under the terms of the GTA and the Group believes that its credit hire and repair arrangements are enforceable. If further challenges were to be brought to the legality of credit hire and repair arrangements or the rates payable, the Group’s business could be adversely affected, even if such challenges wereultimately unsuccessful.

Recovery of receivablesThe Group’s accident management business involves the provision of goods and services on credit. As the sum receivable by the Group isrecorded as a claim based on the assessment of liability for the accident and the customer’s need, there is a risk that the sum is not fullyrecoverable from the party at fault. Significant delays in the receipt of payment or failure to recover the sums claimed could adversely impactthe financial condition of the Group. The Group manages this risk by ensuring that services are only provided to customers after a full riskassessment process.

Directors’ report

Helphire_AR08_BK Txt_USE:8587_Helphire_AR08_1 9/10/08 17:14 Page 20


Fleet costs and residual valuesThe cost to the business of holding vehicles is dependent on a number of factors including the purchase price of vehicles, the level of discountsavailable from dealers and manufacturers, financing costs and the residual value at the date of disposal. There is a risk that changes in any of these factors could mean that the Group’s fleet costs are increased. The Group’s fleet management system gives the business the tools to manage the fleet effectively and to maximise the utilisation of its vehicles in order to minimise the cost to the business of holding vehicles.Risk can be further mitigated by changing vehicle holding periods as required.

Operational risks and systemsOperational risks are present in all of the Group’s businesses, including the risk of direct and/or indirect loss resulting from inadequate or failed internal and external processes, systems, from fraud or human error or from external events. The Group’s business is dependent on processing a large number of claims and vehicle hires. Any failure, weakness in or security breach of the Group’s systems, processes or business continuity arrangements, could adversely affect the Group’s business. However, the Group’s systems and processes are designedto ensure that the operational risks associated with its activities are appropriately controlled.

ManagementThe Group’s future success is substantially dependent on the continued services and performance of its Executive Directors and seniormanagement and its ability to continue to attract and retain highly skilled and qualified personnel. The loss of the services of the ExecutiveDirectors, members of the senior management and other key employees could adversely affect the Group’s business. In this regard, it shouldbe noted that on 9 July 2008, Mark Jackson, Chief Executive, informed the Board of his intention to retire when a successor is appointed and David Lindsay left the Company on 8 July 2008. Measures are in place to reward and retain key individuals and to protect the Group fromthe impact of staff turnover.

FinancialThe principal financial risks and uncertainties include capital risk, interest rate risk, credit risk and liquidity risk. Further details of these risks and their management are contained in note 28 on page 60.

DirectorsThe Directors of the Company who served during the year and their interests (as at 30 June 2008) in the Company’s shares were as follows:

2008 2007

Rodney P Baker-Bates 67,300 26,000Roger J Taylor 45,217 45,217Mark B Jackson 1,261,498 1,151,498Richard C M Burrell 53,630 33,630Peter F Holding 120,311 92,811David A Robertson 168,486 76,011Michael K O’Leary Nil NilDavid V Paige 17,500 NilMark A Adams (appointed 1 April 2008) 60,000 N/ADr Reiner Hagemann (appointed 1 May 2008) Nil N/ADavid E Lindsay (resigned 8 July 2008) 249,860 199,860

Directors are appointed by ordinary resolution at an Annual General Meeting. The Directors have the power to appoint a Director during theyear but any person so appointed must be put up for appointment at the next Annual General Meeting. All Directors must retire from office at least every three years. A retiring Director is eligible to stand for re-appointment.

In accordance with the above provisions, Richard Burrell and Mark Jackson will retire at the Annual General Meeting and, although both areeligible, only Mark Jackson will offer himself for re-election. Mark Adams and Dr Reiner Hagemann will stand for election at the Annual GeneralMeeting following their appointment to the Board during the year. In addition, Roger Taylor will retire, with immediate effect, after the AnnualGeneral Meeting at which time Michael O’Leary will take over as Senior Independent Director.

The names and biographies of the current Directors appear on pages 18 to 19. Details of the remuneration of the Directors and their servicecontracts are contained in the Directors’ Remuneration Report on pages 26 to 33.

Directors’ interests in contractsThere were no contracts of significance in relation to the Company’s business in which any Director was materially interested.

Directors’ liability insuranceThe Company maintains insurance cover for all Directors and Officers of the Group in respect of legal action that might be brought againstthem arising from their employment.

Supplier payment policyThe Company’s policy, which is also applied by the Group, is to settle terms of payment with suppliers when agreeing the terms of eachtransaction, to ensure that suppliers are made aware of the terms of payment and to abide by those terms.

As at 30 June 2008, the Group’s trade creditors, expressed as a number of days, was 27 days (2007: 21 days).

Charitable and political donationsCharitable donations made during the year totalled £14,000 (2007: £28,000). There were no political donations (2007: £nil).



Substantial shareholdings As at 19 September 2008, the Company had been notified in accordance with chapter 5 of the Disclosure and Transparency Rules that thefollowing persons are interested directly or indirectly in 3% or more of the issued share capital of the Company:

Number of Percentage ofOrdinary issued share

shares capital

Legal & General Group PLC 35,567,444 19.78%Amvescap PLC 33,737,058 18.76%Schroders PLC 24,937,852 13.87%Jupiter Asset Management 21,096,953 11.73%HSBC Investments Ltd 12,914,513 7.18%Henderson 7,568,171 4.21%Aviva 7,140,961 3.97%HBOS 6,320,040 3.51%

Share capital and rights attaching to the Companies sharesAs at 30 June 2008, the Company’s issued share capital consisted of a single class of ordinary shares with a nominal value of 5 pence each. At a general meeting of the Company, every member has one vote on a show of hands and on a poll, one vote for each share held. Thenotice of general meeting specifies deadlines for exercising voting rights either by proxy or present in person in relation to resolutions to bepassed at a general meeting. Details of the authorised and issued share capital of the Company together with details of shares issued duringthe year can be found in note 19 on page 55.

Under the Company’s Articles of Association, any share in the Company may be issued with such rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time determine by ordinary resolution.

Disabled employeesApplications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and thatappropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should,as far as possible, be identical to that of other employees.

Employee consultationThe Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affectingthem as employees and on the various factors affecting the performance of the Group. This is achieved through presentations, informalmeetings and Company notice boards. The Group also consults with its Staff Association made up of elected representatives from the wholebusiness. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests. Employeeshare schemes have been running successfully since their inception in 1997. These are open to all employees after completion of one year ofservice and have enabled a large number of employees to participate in the significant growth in share price since flotation. In 2002, the Groupcommenced a share save scheme. There have been three grants under this scheme, which is widely supported by all levels of staff.

AuditorsA resolution will be put forward at the Annual General Meeting to re-appoint Deloitte & Touche LLP as auditors for the year ending 30 June 2009.

Disclosure of information to auditorsEach of the persons who is a Director at the date of approval of this report confirms that:

• So far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and• The Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit

information and to establish that the Company’s auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of S234ZA of the Companies Act 1985.

Subsequent eventsThe conditional placing and open offer of 40,871,027 new ordinary shares to raise approximately £42.7m (net of expenses) announced by the Board on 9 July 2008 was approved at a general meeting of the Company on 8 September 2008 and the shares were admitted to trading on 9 September 2008.

The Group’s bank facilities were revised by removing £35m of the undrawn fleet financing facility and £10m of the undrawn acquisition facility,revising covenants and increasing interest rates to reflect market conditions.

Annual General MeetingThe Annual General Meeting will be held on 13 November 2008. The Notice convening the meeting and information about the proposedresolutions is contained in the Notice of Meeting on pages 74 to 75.

By order of the Board

Nick Tilley Company Secretary 23 September 2008

Directors’ reportcontinued



Statement of Compliance with the 2006 Combined Code on Corporate Governance (the ‘Code’) and the application of its principles The Company has, throughout the financial year ended 30 June 2008, complied with the provisions of Section 1 of the Code except thatthe Board did not have at least the same number of independent Non-Executive Directors as Executive Directors between 1 April 2008, when Mark Adams was appointed as an Executive Director, and 1 May 2008 when Dr Reiner Hagemann was appointed as an independent Non-Executive Director.

The Company has applied both the main and supporting principles of Section 1 of the Code and an explanation of how these principles have been applied is set out both below and in the Directors’ Remuneration Report.

The Board The Board is responsible for directing the affairs of the Company and the Group in a manner that is in the best interests of shareholders,meets legal and regulatory requirements and is consistent with good corporate governance.

The Board held six scheduled meetings during the year under review. A table at the end of this report shows individual attendance at all meetings.

Board decisions are generally on matters of strategy, policy, people and budgets. Each Director receives detailed information on matters to be discussed well in advance of each Board meeting to ensure that there is a full debate at Board level and, in particular, so that the Non-Executive Directors can contribute fully, as required by the Code.

Between 1 July 2007 and October 2007 decisions on the day-to-day management of the Group were delegated to an Operating Boardcomprising the Executive Directors and senior managers, which met every month. From October 2007, a new Business Unit Board wascreated comprising the senior managers responsible for (i) each major business unit of the Group (Helphire UK, Albany Assistance andHelphire Automotive) and (ii) Fleet Services, together with the Executive Directors. With effect from 1 July 2008 the Business Unit Boardbecame the main operating forum of the Group.

The Board has formally reserved specific matters for determination and has approved terms of reference for all other Board committees; these are available on request and are published on the Company’s web site at www.helphire.co.uk/investor_relations.htm.

The Non-Executive Directors’ terms and conditions of appointment are available for inspection as required by the Code.

There is a formal policy in place to ensure that all Directors have access to independent professional advice, if they have the need to seek it.There is a formal induction process for new Directors and training is available when required.

Chairman, Chief Executive and Senior Independent DirectorThe roles of Chairman (Rodney Baker-Bates) and Chief Executive (Mark Jackson) are separated. The division of responsibilities is clearlydefined in writing and has been approved by the Board.

The Non-Executive Directors, led by Roger Taylor, the Senior Independent Director, meet regularly in the absence of the Executive Directors.

Board balance During the period under review, the Board comprised a Non-Executive Chairman, between four and five full-time Executive Directors andbetween four and five Non-Executive Directors. All of the Non-Executive Directors, Roger Taylor, Richard Burrell, Michael O’Leary, David Paigeand Dr Reiner Hagemann were viewed as independent of management and free from any business or other relationship, which could materiallyinterfere with the exercise of their independent judgment. The Board has taken into account the cross-directorships of Rodney Baker-Batesand Richard Burrell (Assura Group Limited and Stobart Group Limited).

Nomination Committee Board appointments and succession planning is the responsibility of the Nomination Committee. This Committee currently comprises theChairman (who chairs this Committee), two Non-Executive Directors, Roger Taylor and Michael O’Leary and the Chief Executive. During the period under review the Committee met three times.

During the period under review the Committee has, from candidates recommended by an external search consultancy, engaged oneExecutive Director, Mark Adams, who was appointed with effect from 1 April 2008 and one Non-Executive Director, Dr Reiner Hagemann, who was appointed as an additional Non-Executive Director with effect from 1 May 2008. Following the announcement on 9 July 2008 of Mark Jackson’s intention to retire, the Committee is currently seeking a successor.

Corporate governance


Performance evaluationAn evaluation of the Board and its committees has been conducted by an external consultant. As part of this process, each Directorcompleted a Board Performance Evaluation Questionnaire, reviewing the constitution of the Board, its strengths and weaknesses, the mannerof conducting and preparing for meetings, the performance of the Board as a whole and of each committee. The Chairman also met with theNon-Executive Directors, both individually and together, during the year without the presence of the Executive Directors, in order to assess theperformance of the Executive Directors. The Non-Executive Directors, led by Roger Taylor, met during the year without the presence of theChairman in order to assess his performance.

The external consultant, who also conducted last year’s review, compiled a summary report that was presented to and discussed with theBoard. Further recommendations were discussed by the Board and implemented.

Election and re-election All Directors must submit themselves for re-election at least every three years. The Nomination Committee has recommended to the Boardthat Mark Jackson should be nominated for re-election at the Annual General Meeting and that Mark Adams and Dr Reiner Hagemann, whowere appointed to the Board during the period under review, should be nominated for election at the Annual General Meeting.

Remuneration Committee The Remuneration Committee currently comprises exclusively Non-Executive Directors, Roger Taylor (Committee Chairman), Richard Burrelland Michael O’Leary. The Committee held six scheduled meetings during the period under review.

The Committee’s role is to set the Chairman’s remuneration and to determine remuneration packages for Executive Directors to enable theGroup to attract, retain and motivate Executives of the necessary calibre without paying more than is necessary for this purpose. Furtherinformation is given in the Directors’ Remuneration Report on page 26. A public statement regarding the use of remuneration consultants is available on the Company’s web site at www.helphire.co.uk/investor_relations.htm.

The remuneration of the Non-Executive Directors is a matter reserved for the whole Board.

Relations with shareholders The Company is committed to maintaining good relations with all of its shareholders through the provision of regular interim and annualreports, other trading statements and the Annual General Meeting. The Company also arranges individual and group meetings with itsinstitutional shareholders. The views of analysts, brokers and major shareholders are relayed to the Board through the Chairman,Chief Executive and Group Finance Director.

Constructive use of the Annual General Meeting The Company holds its Annual General Meeting once a year providing an opportunity for all shareholders and particularly private investors, to be updated on the Group’s progress and ask questions of the Board.

Financial reporting The Board has ultimate responsibility for both the preparation of financial statements and the monitoring of systems of internal financial control.The Board seeks to present a balanced and understandable assessment of the Group and Company’s position and its prospects and presentprice sensitive information in an appropriate way. The Company publishes interim reports and statements so that the Company’s financialposition can be monitored regularly by shareholders.

Internal control The Board is responsible for the Group’s system of internal control and has, during the period covered by this report, applied principle C2 ofthe Combined Code by maintaining an ongoing and planned process, which has identified, evaluated, reported and managed the significantrisks faced by the Group during the financial period up to the date of approval of this report. The process is in accordance with the FinancialReporting Council’s guidance: Internal Control, Revised Guidance for Directors on the Combined Code.

During the reporting period, the Group’s Risk Committee supervised the Group’s ongoing risk management processes to ensure that theywere operated in accordance with the Group’s Risk Management Policy. During the period the Group’s Internal Auditor took over responsibilityfor the management of the Group’s risk process. The Risk Committee has approved a change in the risk management approach for thecoming financial year, to provide a standardised, timely analysis of risk indicators through the utilisation of a ‘balanced scorecard’ approach.

In accordance with provision C2.1 of the Combined Code, the Board confirms that through the Audit Committee, it has reviewed theeffectiveness of the Group’s system of internal controls for assessing significant operational and strategic risks. The controls reviewed coverthe financial, operational, compliance, fraud and risk management systems that have been in operation during this reporting period. The review considered all significant aspects of the internal controls. Whilst certain areas for improvement were identified, no significant failings or weakness were found. The Audit Committee reports back to the Board following its review.


Corporate governancecontinued



The identification, management and monitoring of strategic risks remained the sole responsibility of the Board. The Group’s senior managersimmediately below Board level are responsible for assessing, monitoring and managing operational risks. These senior managers submittedregular risk management reports to the Operating Board, which comprised those senior managers and the Executive Directors and to theBusiness Unit Board. Minutes of Operating Board meetings were also sent to the Board.

The Board, in seeking to achieve the Group’s business objectives, cannot offer an absolute guarantee that the application of a riskmanagement process will overcome, eliminate or mitigate all significant risks. However, by further developing and operating an annual andongoing risk management process to identify, report and manage significant risks, the Board is able to provide a reasonable assurance againstmaterial misstatement or loss.

In the period under review, the Group has not had any significant problems that required specific disclosure in the Annual Report so has nothad to apply any specific processes to deal with material internal control issues that might have arisen from such disclosure.

Audit Committee and auditors The Audit Committee currently comprises David Paige (Chartered Accountant with recent and relevant financial experience and CommitteeChairman), Roger Taylor, Richard Burrell and Michael O’Leary. The Committee met four times in the year under review. The required financiallyqualified member of this Committee is David Paige. Further details about, and the qualifications of, the Committee Chairman and the otherCommittee members can be found in their biographies on pages 18 and 19. Commonly these meetings are attended by some or all of theChief Executive, Group Finance Director, external auditors and the Head of Internal Audit.

The Board has, through the Audit Committee, established formal and transparent arrangements for financial reporting, the review of formalannouncements relating to the Company’s financial performance, internal control and external auditing. As required by its terms of reference,the Committee has during the period under review, considered the Group’s Risk Management activities as a whole (see also the InternalControl section of this report) and the monitoring of the internal audit function, in addition to the financial aspects of internal control.

The Company has a formal policy regarding the use of auditors for non-audit work.

The Committee has reviewed the scope and results of the audit services, the cost effectiveness and independence and objectivity of theauditors and has approved their fees. The Committee has also reviewed the Company’s arrangements to enable employees to raiseconfidentially, concerns about possible improprieties. This year the Company appointed a specialist, independent organisation to whichemployees can report their concerns. The Committee has reviewed the interim and final results published in respect of the period under review and has considered its own effectiveness. It has reviewed the internal auditors’ work for the period under review and approved their current program of work. A third full time internal auditor was appointed during the year.

The Committee receives reports from Executive Directors, the Risk Committee and also receives reports from and meets (in the absence ofmanagement) external auditors and internal auditors.

Attendance tableNo. of

Meeting type RBB RCB PFH MBJ DEL MOL DVP DAR RJT RH MAA meetings

Board 6 5 6 6 6 6 6 6 5 1 1 6Audit Co N/A 4 N/A N/A 3 4 4 N/A 4 N/A N/A 4Rem Co N/A 5 N/A N/A N/A 6 N/A N/A 6 N/A N/A 6Nom Co 3 N/A N/A 3 N/A 3 N/A N/A 3 N/A N/A 3

Note: Mark Adams was appointed with effect from 1 April 2008 and Dr Reiner Hagemann was appointed with effect from 1 May 2008. There was only one Board Meeting(during the year) following their appointment.

Going concernThe Directors continue to prepare accounts on the going concern basis because, based on current financial projections and available facilities,they reasonably expect the Company and the Group to have adequate resources to remain in operation for the foreseeable future.


David V PaigeChairman Audit Committee 23 September 2008


Directors’ remuneration report


IntroductionThis report has been prepared in accordance with Schedule 7A of the Companies Act 1985 (the ‘Regulations’) as well as the Listing Rules of the Financial Services Authority. It deals with the remuneration of both Executive and Non-Executive Directors.

The report has been divided into separate sections for audited and unaudited information.

A resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be approved.

Information in this report relates to the 2007/8 financial year (‘Financial Year’) unless otherwise stated.

Unaudited informationRemuneration CommitteeThe Remuneration Committee operates under written terms of reference approved by the Board. It meets as and when required (but at least twice a year) and during the Financial Year comprised Roger Taylor (Committee Chairman), Richard Burrell and Michael O’Leary, all Non-Executive Directors considered by the Company to be independent.

No Committee member has any personal financial interest, save in respect of interests in shares, conflicts of interest arising from cross-directorships (save Rodney Baker-Bates and Richard Burrell) or any day-to-day involvement in the running of the Group. The previouslyreported cross-directorships involving Richard Burrell and Mark Jackson ended on 7 March 2008. The Committee makes recommendations to the Board. No Director plays a part in any discussion about his own remuneration.

In determining the Directors’ remuneration for this Financial Year, the Committee consulted Mark Jackson (Chief Executive) about its proposals(save in respect of matters directly relating solely to Mark Jackson’s remuneration). The Committee also took advice from Hewitt New BridgeStreet Consultants LLP (who have been appointed by the Committee) on the structure of the Directors’ remuneration packages. Hewitt NewBridge Street Consultants also advise the Company in relation to the operation of the Company’s share incentive schemes generally.

Remuneration policyThe Company’s remuneration policy remains that Executive remuneration packages are designed to attract, motivate and retain the highcalibre Directors, from what is a small pool of candidates with relevant experience at this level needed to maintain the Company’s position as a leading accident management company and to reward them for enhancing value to shareholders. The performance evaluation of the Executive Directors and the determination of their annual remuneration packages is undertaken by the Committee.

The Committee has responsibility for the remuneration packages of the Chairman, the Executive Directors and executives immediately belowBoard level. The Board also sets the remuneration of the Non-Executive Directors.

The main elements of the Executive Directors’ remuneration packages for the Financial Year (which are set out in more detail below) were:• basic salary and benefits;• annual bonus payments not to exceed 100% of basic salary; • long Term Incentive Plans; and• pension arrangements.

The Committee currently intends that the same will apply to the 2008/9 financial year.

The Company’s policy is, and it is intended that it shall continue to be, that a significant element of the Executive Directors’ remuneration is to be performance related.

Whilst the Committee has, as required, stated its remuneration policy for future years, it is conscious that any remuneration policy needs to be flexible. Any changes to this policy will be disclosed in subsequent reports.

Executive Directors are entitled to accept appointments outside the Group so long as the Company’s permission is sought. Any fees payableare shared with the Company. Mark Jackson was Chairman of Assura Group Limited until 7 March 2008. He retained £28,333 being half of the fees paid in respect of the period until his appointment ended and received no other remuneration from Assura Group Limited.



Unaudited information continued

Basic salaryExecutive Directors’ salaries are determined by the Committee and generally take effect from the start of each financial year. The Committeeapproved Mark Adams’ salary immediately prior to his appointment. Before setting these basic salaries, the Committee considers payconditions in the Group as a whole, individual performance and relies on objective, independent advice and research which gives up to dateinformation on remuneration policies adopted by similar companies.

Increases in the basic salary of all Executive Directors during the Financial Year, were made after considering advice from Hewitt New BridgeStreet, with regard to the levels of salaries in comparator businesses, the Company’s continued success and the Executive Directors’ specialist industry knowledge. Basic salaries of Executive Directors were not increased at the normal review date in the current financial year.

Basic salaries for the financial year were: Chief Executive £450,000; Group Finance Director £325,000 (with effect from his appointment); other Executive Directors £287,280. Further details of Directors’ remuneration appear in the audited section of this report.

Executive Directors’ contracts of service (which include details of their remuneration) will be available for inspection at the Annual General Meeting.

In addition to their basic salaries, Executive Directors receive certain benefits, comprising a car (or cash allowance in lieu), fuel card, privatemedical, life, loss of income and permanent health insurances and pension contributions (or cash in lieu of such contributions).

Annual bonus paymentsAll Executive Directors are entitled to participate in the annual bonus scheme which for this Financial Year provided for a bonus of up to a maximum of 100% of basic salary to be paid upon the achievement of challenging earnings targets by reference to profit before tax andamortisation and after all costs including exceptional items which were set by the Committee.

Despite an increase in profits during the year which was sufficient for 45% of each Executive Director’s bonus to vest, Mark Jackson,Mark Adams, David Robertson and Peter Holding have agreed to forgo the payments due to them.

The Committee will set appropriately challenging bonus targets based on profit before tax, cash collection, personal targets and controllershipto be applied in the forthcoming financial year, with the same maximum bonus potential of 100% of salary applying.

Share-based incentivesThe Company’s current share-based incentive arrangements comprise principally (i) the Equity Partnership Plan 2002 (‘EPP’), (ii) the HelphirePerformance Share Plan 2006 (‘PSP’) and (iii) the Share Save Scheme (‘SAYE’). The Helphire Executive Share Option Scheme 2002 (the ‘2002Scheme’) is still available for use but, as stated in previous reports, save in exceptional circumstances, it is unlikely that any further options willbe granted to Executive Directors under the 2002 Scheme and no such awards were made in the Financial Year.

Awards were made to Executive Directors during the Financial Year under the EPP and PSP. The Committee has responsibility for supervisingthe EPP and PSP and the grant of awards made under their terms.

Under the EPP, as now operated, Executives may voluntarily acquire new or pledge existing shares they already hold (known as ‘InvestmentShares’), worth up to 100% of basic salary and may be awarded up to two conditional shares for every one Investment Share (a 4:1 matchapplied to initial awards made in the previous year only).

Under the PSP, the Company may grant conditional awards of shares worth up to 150% (200% in exceptional circumstances) of gross basic salary.

Awards under both the EPP and the PSP will normally vest on or shortly following the third anniversary of grant, subject to the achievement of demanding performance conditions based on a sliding scale of challenging total shareholder return (TSR) and earnings per share (EPS)-based targets (set out in full in the table below).

Contrary to the statement in last year’s Annual Report, the Committee has decided that it is appropriate for two grants to be spread over each financial year under the PSP with one third (50% of basic salary, being one third of the normal, maximum entitlement) in the first half of the financial year and two thirds (100% of basic salary, being two thirds of the normal maximum) in the second half. It is currently intendedthat this policy will continue during the next financial year but will be kept under review.



The performance condition applied to awards under both the EPP and PSP made during the financial year to 30 June 2007, was(as summarised above) based on a mixture of absolute EPS and relative TSR targets set out below:

Adjusted EPS for the financial year ended 30 June 2009 Percentage of one half of an award (subject to the EPS condition) that vests

Less than 27.5p 0%27.5p 25%between 27.5p and 35p Between 25% and 100% on a straight line basis35p or higher 100%

Rank of the Company’s TSR against the FTSE 250(excluding investment trusts) over the three year performance period Percentage of one half of an award (subject to the TSR condition) that vests

Below median 0%Median 25%Between median and upper quartile Between 25% and 100% on a straight line basisUpper quartile or above 100%

Adjusted EPS for the financial year ended 30 June 2010 Percentage of one half of an award (subject to the EPS condition) that vests

Less than 35.0p 0%35.0p 25%Between 35.0 and 40.0p Between 25% and 100% on a straight line basis40p or higher 100%

Rank of the Company’s TSR against the FTSE 250(excluding investment trusts) over the three year performance period Percentage of one half of an award (subject to the TSR condition) that vests

Below median 0%Median 25%Between median and upper quartile Between 25% and 100% on a straight line basisUpper quartile or above 100%

These targets were chosen as the Committee believes they provide incentives for the Executives to generate above market returns to shareholders while also delivering substantial, real EPS growth.

These targets are not capable of re-testing and to the extent that they are not met, awards will lapse.

As part of its responsibilities in respect of the Company’s share-based incentive arrangements, the Committee will assess the extent to whichthe relevant performance conditions that apply to awards are met, seeking advice from third parties where necessary. The Committee will alsoregularly review the operation of these arrangements to ensure they take appropriate account of the Company’s strategic goals and best practice.

Any awards made under the EPP or the PSP in the forthcoming year will be subject to similarly challenging EPS and TSR based targets,taking account of the circumstances that prevail at the relevant time.

Details of share options, EPP and PSP awards granted to Executive Directors appear in the audited section of this report. Although he served for only part of the Financial Year, as permitted by the scheme rules, Mark Adams was given a PSP award of twice his annual salary on recruitment. The normal maximum award is one and a half times annual salary.

Pension arrangementsAll Executive Directors, (save for the Chief Executive who takes the same contribution as a salary supplement in lieu of a contribution to a pension scheme), received a contribution of 20% of basic salary to be used for personal money purchase schemes.


Directors’ remuneration reportcontinued




Directors’ contractsIn accordance with general practice, it is the Company’s policy that all Executive Directors should have contracts with an indefinite termproviding for a maximum one year notice period. All Executive Directors, including Mark Adams, who is proposed for election at the nextAnnual General Meeting, have contracts which are subject to one year’s notice.

Details of the Executive Directors’ contracts are summarised below:

Name Contract date Notice period

M B Jackson 28 February 1997 One yearD A Robertson 10 February 1998 One yearP F Holding 28 January 1998 One yearM A Adams 1 April 2008 One yearD E Lindsay 28 February 1997 One year

The Executive Directors’ contracts have no express provision for the payment of compensation in the event of early termination. In the event of termination of an Executive Director’s service contract, when determining the compensation payable to the Executive Director, it is the policyof the Committee to take account of the principles of mitigation of loss.

All Non-Executive Directors have specific terms of engagement. Originally, appointments were for periods of three years but, as now requiredby the Companies Act 2006, new appointments have a maximum one year’s notice period (with a requirement for re-election every threeyears). As Non-Executive Directors come up for re-election, they are moved onto the new regime. Their fees are disclosed in the auditedsection of this report and, save in the case of the Chairman whose remuneration is set by the Committee, are set by the Board as a wholeafter taking account of independent surveys of fees paid to Non-Executive Directors of similar companies and of the time commitment of theNon-Executive Directors. Non-Executive Directors cannot participate in any of the Company’s incentive schemes. Dates of the Non-ExecutiveDirectors’ original letters of appointment and the current unexpired period of their appointments (from the 2008 Annual General Meeting) are setout below:

Name Date of letter Unexpired term as at the date of the AGM

R P Baker-Bates 02 December 2005 One year M K O’Leary 20 September 2006 One yearD V Paige 2 February 2007 One yearR Hagemann 1 May 2008 Fixed one year term and thereafter one yearR J Taylor 11 September 2002 RetiringR C M Burrell 11 September 2002 Retiring

Performance graphThe Regulations require this report to contain a graph showing the performance of the Company and a ‘broad equity market index’ over the pastfive years. As the Company is a constituent of the FTSE SmallCap Index (in FTSE 250 between September 2005 and March 2008), this index is at present considered an appropriate form of ‘broad equity market index’ against which the Company’s performance should be compared.Performance, as required by the Regulations, is measured by Total Shareholder Return (share price growth plus dividends reinvested).

This graph shows the value at 30 June 2008, of £100 invested in Helphire on 1 July 2003 compared with the value of £100 invested in theFTSE Small Cap Index.

Helphire’s total shareholder return against the FTSE small cap(Normalised)


Audited informationAggregate Directors’ remunerationThe total amounts for Directors’ remuneration and other benefits were as follows:

2008 2007£’000 £’000

Emoluments 2,134 2,845Gains on exercise of options 1,269 4,713Money purchase pension contributions 187 120

Total remuneration 3,590 7,678

Directors’ emolumentsFees/Basic# Taxable 2008 2007

salary Bonus§ benefits Total TotalName of Director £’000 £’000 £’000 £’000 £’000

Executive:M B Jackson 550 – 37 587 863M A Adams* 81 – 17 98 –D E Lindsay 292 – 79 371 554D A Robertson 292 – 79 371 550P F Holding 292 – 74 366 552

Non-Executive:R P Baker-Bates 128 – – 128 118R J Taylor 73 – – 73 73R C M Burrell 42 – – 42 43M K O’Leary 42 – – 42 32D V Paige 49 – – 49 18Dr R Hagemann** 7 – – 7 –A Mathers† – – – – 42

Total emoluments 1,848 – 286 2,134 2,845

* From 1 April 2008.** From 1 May 2008.† To 1 June 2007.# Includes one week annual bonus paid to all staff which was shown in the bonus column in previous years (with the exception of M A Adams). Includes basic salary

plus 20% supplement in lieu of a pension contribution in respect of M B Jackson.§ Performance related bonuses vested in part but were waived; see unaudited section of this report.

Directors’ Share OptionsThe aggregate emoluments disclosed do not include any amounts for the value of options to acquire ordinary shares in the Company grantedto or held by Directors.

The Directors no longer hold any HM Revenue & Customs approved options.

Details of Gains under the 2002 Scheme:Gains on Gains on

Market price at exercise exerciseNumber of Exercise exercise 2008 2007

Name Scheme options price £ date £ £’000 £’000

M B Jackson Unapproved 56,000 2.2250 4.42 – 123Unapproved 491,000 1.0600 4.42 – 1,650Unapproved 272,000 2.0900 3.65 424 –Unapproved 279,700 2.1450 3.65 420 –

D A Robertson Unapproved 28,000 0.9813 4.14 – 88Unapproved 36,000 2.2250 4.14 – 69Unapproved 195,000 1.0000 4.14 – 612Unapproved 257,000 0.7600 4.14 – 869Unapproved 70,000 1.0600 4.255 223 –

P F Holding Unapproved 36,000 2.2250 3.78 – 56Unapproved 50,000 1.0000 3.78 – 139Unapproved 77,000 0.7600 3.78 – 233Unapproved 180,000 0.7600 4.00 – 583Unapproved 107,000 1.0600 3.78 – 291Unapproved 65,000 1.0600 4.16 202 –

Total gains on exercise 1,269 4,713





Audited information continued

Directors’ Share Options continuedDetails of the Directors’ options under the Unapproved part of the 2002 Scheme and the Company’s previous Executive Share OptionScheme are as follows:

Options Options Options Options Optionsheld at granted exercised lapsed held at Date from

1 July 2007 in the year in the year in the year 30 June 2008 Exercise which ExpiryName ’000 ’000 ’000 ’000 ’000 price exercisable date

M B Jackson 272 – (272) – – £2.09 08/07/06 08/07/13280 – (280) – – £2.45 13/12/07 13/12/14

Total 552 – (552) – –

D E Lindsay 36* – – – 36 £2.225 20/05/02 20/05/09292 – – – 292 £1.06 19/07/05 19/07/12167 – – – 167 £2.09 08/07/06 08/07/13196 – – – 196 £2.145 13/12/07 13/12/14

Total 691 – – – 691

D A Robertson 292 – (70) – 222 £1.06 19/07/05 19/07/12162 – – – 162 £2.09 08/07/06 08/07/13196 – – – 196 £2.145 13/12/07 13/12/14

Total 650 – (70) – 580

P F Holding 185 – (65) – 120 £1.06 19/07/05 19/07/12162 – – – 162 £2.09 08/07/06 08/07/13196 – – – 196 £2.145 13/12/07 13/12/14

Total 543 – (65) – 478

Entries marked with an * were grants under the pre-2002 Scheme; all other entries were grants made under the 2002 Scheme.

The exercise of the options granted under the Company’s previous Executive Share Option Scheme is subject to an average growth rate of 7.5% plus inflation in the Company’s earnings per share in the three years prior to the date of exercise.

The exercise of the options granted under the 2002 Scheme which are exercisable between 19 July 2005 and 13 December 2012 wasdependent on the achievement of a sliding scale of absolute EPS targets as follows.

EPS for financial year ending 31 March 2005* Proportion of option exercisable

Less than 7p 07p One third9p Two thirds12p All

* The Committee assessed these targets as having been met in full.

The exercise of the options granted under the 2002 Scheme which are exercisable between 8 July 2006 and 8 July 2013 was dependent on the achievement of a sliding scale of absolute EPS targets as follows:

EPS for financial year ending 31 March 2006* Proportion of option exercisable

Less than 6 06 One third9 Two thirds12 All

* Although there was no financial year ending on 31 March 2006, the target was set before the change in the year end was known and as EPS was measured to this date and on the most diluted calculation exceeded the highest target, the Committee assessed these targets as having been met in full.



Directors’ Share Options continuedThe exercise of the options granted under the 2002 Scheme which are exercisable between 13 December 2007 and 13 December 2014 wasdependent on the achievement of a sliding scale of absolute EPS targets as follows:

EPS for the last financial year of the Company ending before the third anniversary of the grant date* Proportion of option exercisable

Less than 15.5p 015.5p One third17.0p Two thirds18.7p All

* This wording, in respect of grants made in December 2004, reflects the then proposed change of financial year end date in the 2005/6 financial year. The Committee assessed these targets as having been met in full.

The exercise price of options granted under the 2002 Scheme is equal to the market value of the Company’s shares at the time when theoptions were granted.

Details of the Directors’ options under the Company’s SAYE Scheme are as follows:

Options Options Options Options Options Date fromheld at granted in exercised in lapsed in held at Exercise which

Name 1 July 2007 the year the year the year 30 June 2008 price exercisable Expiry date

M B Jackson 3,035 – – (3,035) – £3.08 01/06/09 01/12/09

– 6,153 – – 6,153 £1.56 01/06/11 01/12/11

D E Lindsay 3,035 – – (3,035) – £3.08 01/06/09 01/12/09

– 6,153 – – 6,153 £1.56 01/06/11 01/12/11

D A Robertson 3,035 – – (3,035) – £3.08 01/06/09 01/12/09

– 6,153 – – 6,153 £1.56 01/06/11 01/12/11

P F Holding 3,035 – – (3,035) – £3.08 01/06/09 01/12/09

– 6,153 – – 6,153 £1.56 01/06/11 01/12/11

Total 12,140 24,612 – (12,140) 24,612

Details of the awards made under the EPP are as follows:

Nos. shares Nos. sharesover which over which Awards Awards Share price

awards held at awards granted exercised lapsed Awards held at at date Date from 1 July 2007 in the year in the year in the year 30 June 2008 of award which

Name ’000 ’000 ’000 ’000 ’000 – pence exercisable Expiry date

M B Jackson 390 – – – 390 381.50 20/12/09 20/06/10– 248 – – 248 413.83 02/11/10 02/05/11

390 248 – – 638

M A Adams – 120 – – 120 179.41 02/04/11 02/10/11

– 120 – – 120

D E Lindsay 273 – – – 273 381.50 20/12/09 20/06/10– 158 – – 158 413.83 02/11/10 02/05/11

273 158 – – 431

D A Robertson 273 – – – 273 381.50 20/12/09 20/06/10– 158 – – 158 413.83 02/11/10 02/05/12

273 158 – – 431

P F Holding 273 – – – 273 381.20 20/12/09 20/06/10– 103 – – 103 413.83 02/11/10 02/05/11

Total 1,209 787 – – 1,996

The exercise price of options granted under the 2002 Scheme is equal to the market price of the Company’s shares at the date when theoptions were granted.






Directors’ Share Options continuedDetails of the awards made under the PSP are as follows:

Nos. shares Nos. sharesover which over which Awards Awards Awards Share price

awards held at awards granted exercised lapsed held at at date Date from 1 July 2007 in the year in the year in the year 30 June 2008 of award which

Name ’000 ’000 ’000 ’000 ’000 – pence exercisable Expiry date

M B Jackson 43 – – – 43 436.0 13/04/10 13/10/10– 109 – – 109 433.5 02/11/10 02/05/11– 123 – – 123 187.5 02/04/11 02/10/11

43 232 – – 275

M A Adams – 355 – – 355 187.5 02/04/11 02/10/11

– 355 – – 355

D E Lindsay 30 – – – 30 436.0 13/04/10 13/10/10– 69 – – 69 433.5 02/11/10 02/05/11– 79 – – 79 187.5 02/04/11 02/10/11

30 148 – – 178

D A Robertson 30 – – – 30 436.0 13/04/10 13/10/10– 69 – – 69 433.5 02/11/10 02/05/11– 79 – – 79 187.5 02/04/11 02/10/11

30 148 – – 178

P F Holding 30 – – – 30 436.0 13/04/10 13/10/10– 69 – – 69 433.5 02/11/10 02/05/11– 79 – – 79 187.5 02/04/11 02/10/11

30 148 – – 178

Total 133 1,031 – – 1,164

The performance conditions to which the EPP and PSP awards are subject are set out on page 28.

EPP and PSP awards are structured as options with a nil or nominal (not exceeding £1 for the entire award) exercise price.

Nothing has been paid by any Director for the award of any share awards (although the requirement to pledge Investment Shares for thepurposes of the EPP should be taken into account). Participation and the pledging of Investment Shares is voluntary.

All share options are in respect of ordinary shares. The market price of the ordinary shares at 30 June 2008 was 158.25 pence and the rangeduring the year was 433.5 pence to 152.5 pence.

There have been no variations to the terms and conditions or performance conditions for share options during the financial year.

Sanne Trust Company Limited currently holds 2,493,768 shares in the Company which are available to satisfy awards under the EPP or PSP.

Directors’ pension entitlementsAll Executive Directors are members of personal money purchase schemes. Contributions paid by the Company in respect of such Directorswere as follows:

2008 2007Name of Director: £’000 £’000

M A Adams 16 –D E Lindsay 57 40D A Robertson 57 40P F Holding 57 40

Total 187 120

Pension entitlement of Mark Jackson is dealt with by way of salary supplement as described above.


Mark A AdamsGroup Finance Director23 September 2008



Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual report, Directors’ Remuneration report and the financial statements in accordance withapplicable law and regulations.

Company law requires the Directors to prepare financial statements for each Financial Year. The Directors are required by the IAS Regulation to prepare the Group financial statements under International Financial Reporting Standards (‘IFRSs’) as adopted by the European Union and have also elected to prepare the Parent Company financial statements in accordance with IFRSs adopted by the European Union. The financial statements are also required by law to be properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation.

International Accounting Standard 1 requires that financial statements present fairly for each financial period the Company’s financial position,financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions inaccordance with the definitions and recognition criteria or assets, liabilities, income and expenses set out in the International AccountingStandards Board’s ‘Framework for the preparation and presentation of financial statements’. In virtually all circumstances, a fair presentationwill be achieved by compliance with all applicable International Financial Reporting Standards. However, Directors are also required to:

• properly select and apply accounting policies;• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable

information; and• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand

the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, and enable them to ensure that the financial statements comply with the Companies Act 1985. They are alsoresponsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of corporate and financial information included on the Company website.Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in otherjurisdictions.

Directors’ responsibility statementWe confirm to the best of our knowledge:

1. the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true andfair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidationtaken as a whole; and

2. the Business Review, which is incorporated into the Directors’ Report includes a fair review of the development and performanceof the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together witha description of the principal risks and uncertainties they face.


Mark B Jackson Mark A AdamsChief Executive Group Finance Director23 September 2008 23 September 2008


To the members of Helphire Group plcWe have audited the Group and Parent Company financial statements (the ‘financial statements’) of Helphire Group plc for the year ended 30 June 2008 which comprise the consolidated income statement, the consolidated statement of changes in equity, the consolidated balancesheet, the consolidated cash flow statement, the Parent Company income statement, the Parent Company statement of changes in equity,the Parent Company balance sheet, the Parent Company cash flow statement and the related notes 1 to 47. These financial statements havebeen prepared under the accounting policies set out therein. We have also audited the information in the Directors’ Remuneration Report thatis described as having been audited.

This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit workhas been undertaken so that we might state to the Company’s members those matters we are required to state to them in an Auditors’ Reportand for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Companyand the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorsThe Directors’ responsibilities for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordancewith applicable law and International Financial Reporting Standards (‘IFRS’) as adopted by the European Union, are set out in the Statement of Directors’ Responsibilities.

Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be audited in accordance withrelevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation. We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report includes that specificinformation presented in the Chairman’s Statement and Business Review that is cross referred from the Business Review section of theDirectors’ Report.

In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and othertransactions is not disclosed.

We review whether the Corporate Governance Statement reflects the Company’s compliance with the nine provisions of the 2006 CombinedCode specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required toconsider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’scorporate governance procedures or its risk and control procedures.

We read the other information contained in the Annual Report as described in the contents section, and consider whether it is consistent withthe audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or materialinconsistencies with the financial statements. Our responsibilities do not extend to any further information outside the Annual Report.

Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Directors’ Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements made by theDirectors in the preparation of the financial statements and of whether the accounting policies are appropriate to the Group’s and Company’scircumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provideus with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’ Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluatedthe overall adequacy of the presentation of information in the financial statements and the part of the Directors’ Remuneration Report to be audited.

OpinionIn our opinion:• the financial statements give a true and fair view, in accordance with IFRS’s as adopted by the European Union, of the state of the Group’s

and the Parent Company’s affairs as at 30 June 2008 and of the Group’s and the Parent Company’s profit for the year then ended;• the financial statements and part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with

the Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation; and• the information given in the Directors’ Report is consistent with the financial statements.

Deloitte & Touche LLPChartered Accountants and Registered AuditorsBristol, United Kingdom23 September 2008

Independent auditors’ report

35Helphire Group plc Annual report and accounts 2008Our results


36 Helphire Group plc Annual report and accounts 2008 Our results

Consolidated income statementfor the year ended 30 June 2008

2008 2007Continuing operations Note £’000 £’000

RevenueExisting operations 390,819 290,318 Business combinations 14,116 –

Total revenue 3 404,935 290,318

Cost of sales (263,704) (175,118)

Gross profit 141,231 115,200

Administrative expensesShare-based payment charge (2,253) (1,275)Amortisation of intangible assets (1,463) (2,296)Abortive acquisition costs – (766)Impairment of intangible assets – (406)Other (92,089) (69,107)

(95,805) (73,850)Other operating income 3 6,242 3,889

Operating profit – continuing operations 4 51,668 45,239 Finance costs 6 (8,633) (4,975)

Profit before tax 43,035 40,264Tax 7 (12,620) (10,727)

Profit for the period attributable to equity holders of the parent 30,415 29,537

Earnings per shareBasic 9 21.95 21.55Diluted 9 21.63 21.04

Adjusted earnings per shareBasic 9 24.57 24.25 Diluted 9 24.22 23.67



Share Share premium ESOP Equity Retainedcapital account reserve reserve earnings

Note 19 Note 20 Note 21 Note 22 Note 23 Total £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 July 2006 6,799 66,106 – 4,583 33,345 110,833 Profit for the period – – – – 29,537 29,537Issue of new ordinary shares 111 2,558 – – – 2,669 Share-based incentive plans – – – 1,275 – 1,275 Deferred tax – share-based incentive plans – – – (1,424) – (1,424)Current tax – share-based incentive plans – – – 1,772 – 1,772 Dividend paid – – – – (12,622) (12,622)

Balance at 30 June 2007 6,910 68,664 – 6,206 50,260 132,040 Profit for the period – – – – 30,415 30,415 Issue of new ordinary shares 35 1,381 – – – 1,416 Share-based incentive plans – – – 2,253 – 2,253 Helphire Group plc shares acquired by ESOP – – (7,499) – – (7,499)Deferred tax – share-based incentive plans – – – (1,180) – (1,180)Current tax – share-based incentive plans – – – 134 – 134 Dividend paid – – – – (16,852) (16,852)

Balance at 30 June 2008 6,945 70,045 (7,499) 7,413 63,823 140,727

Consolidated statement of changes in equityfor the year ended 30 June 2008



2008 2007Note £’000 £’000

Non-current assetsGoodwill 10 74,445 67,052 Intangible assets 11 10,474 7,502 Property, plant and equipment (including vehicles) 12 214,514 144,109 Investments 13 300 300 Deferred tax asset 18 1,198 2,054 Other receivables – 2,023

300,931 223,040

Current assetsTrade and other receivables 14 297,473 191,494 Current tax receivable – 432 Other financial assets 28 67 – Cash and cash equivalents 7,920 4,895

305,460 196,821

Total assets 606,391 419,861

Current liabilitiesTrade and other payables 15 (75,703) (52,865)Current tax liabilities (8,640) – Obligations under finance leases 16 (156,215) (126,237)Short-term borrowings and overdrafts 17 (110,619) (47,221)

(351,177) (226,323)

Net current liabilities (45,717) (29,502)

Non-current liabilitiesLong-term borrowings and overdrafts 17 (60,845) (33,498)Obligations under finance leases 16 (42,582) (20,606)Deferred tax liability 18 (11,060) (7,394)

(114,487) (61,498)

Total liabilities (465,664) (287,821)

Net assets 140,727 132,040

EquityShare capital 19 6,945 6,910 Share premium account 20 70,045 68,664 ESOP reserve 21 (7,499) – Equity reserve 22 7,413 6,206 Retained earnings 23 63,823 50,260

Total equity 140,727 132,040

The financial statements were approved by the Board and authorised for issue on 23 September 2008. They were signed on its behalf by:


Consolidated balance sheetas at 30 June 2008



2008 2007Note £’000 £’000 £’000 £’000

Cash flows from operating activitiesOperating profit 51,668 45,239 Depreciation, amortisation and impairment charges 44,098 23,352 Gains on sale of tangible fixed assets (373) (440)Share-based payment charge 2,253 1,275 Increase in debtors (94,633) (67,541)Increase in creditors 19,259 19,014

Cash generated from operations 22,272 20,899

Bank and loan interest paid (7,817) (4,438)Interest element of finance lease rentals (883) (537)

(8,700) (4,975)

Taxation paid (3,044) (4,094)

Net cash flow from operating activities 10,528 11,830

Cash flows from investing activitiesPurchase of property, plant and equipment (22,970) (2,161)Purchase of other intangible assets (2,320) (3,945)Proceeds from sale of plant and equipment 93,392 32,137Acquisitions (14,922) –Cash and cash equivalents acquired 1,850 –

Net cash flow from investing activities 55,030 26,031

Cash flows from financing activitiesNet proceeds from issue of ordinary share capital 1,417 2,444Net proceeds from issue of new loans 61,224 16,444Own shares purchased (7,499) –Repayment of borrowings (7,347) (25,599)Finance lease principal repayments (126,134) (37,536)Dividends paid to shareholders (16,852) (16,701)

Net cash flow from financing activities (95,191) (60,948)

Net decrease in cash and cash equivalents 30 (29,633) (23,087)

Cash and cash equivalents at beginning of period (37,510) (14,423)

Cash and cash equivalents at end of period (67,143) (37,510)

Cash and cash equivalents consists of:Cash at bank and in hand 7,620 4,459 Cash held in restricted deposit 300 436 Bank overdraft (75,063) (42,405)

(67,143) (37,510)

Consolidated cash flow statementfor the year ended 30 June 2008



1 Significant accounting policiesBasis of accountingThe financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The financial statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore the Groupfinancial statements comply with Article 4 of the EU IAS Regulation.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

Adoption of new and revised standardsIn the current year the Group has adopted IFRS 7, Financial Instruments: Disclosures, which is effective for annual reporting periodsbeginning on or after 1 January 2007, and the related amendment to IAS1, Presentation of Financial Statements. The impact of theadoption of IFRS 7 and the changes to IAS1 has been to expand the disclosures provided in these financial statements regarding theGroup’s financial instruments and management of capital (see note 28). Four interpretations issued by the International Financial ReportingInterpretations Committee are effective under the current period. These are: IFRIC 7 Applying the Restatement Approach under IAS 29,Financial Reporting in Hyperinflationary Economies; IFRIC 8 Scope of IFRS 2; IFRIC 9 Reassessment of Embedded Derivatives; and IFRIC 10 Interim Financial Reporting and Impairment. The adoption of these interpretations has not led to any changes in the Group’saccounting policies.

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

IFRS 8 – Operating segmentsIFRIC 11 – IFRS 2 – Group and Treasury Share TransactionsIFRIC 12 – Service Concession ArrangementsIFRIC 14 – IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on thefinancial statements of the Group except for additional segment disclosures when IFRS 8 comes into effect for periods commencing on or after 1 January 2009.

Basis of consolidationThe consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company madeup to 30 June each year. Control is achieved where the Company has the power to govern the financial and operating policies of an entityso as to obtain benefits from its activities.

The results of entities acquired or disposed of during the period are included in the Consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal as appropriate. Where necessary, adjustments are made to the financialstatements of controlled entities to bring the accounting policies used into line with those used by the Group. All intra group transactions,balances, income and expenses are eliminated on consolidation.

Business combinationsThe acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate fairvalues, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchangefor control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the businesscombination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.

Investments Non-current investments in unlisted companies are included in non-current assets and stated at cost less any provision for impairment.

Notes to the consolidated financial statements



1 Significant accounting policies continued

GoodwillGoodwill arising on consolidation represents the excess of the cost of the acquisition over the Group’s interest in the fair value of theidentifiable assets and liabilities of a controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated losses for impairment. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to benefit from thesynergies of the combination. Cash generating units to which goodwill has been allocated are tested for impairment annually, or morefrequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than thecarrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit andthen to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognisedfor goodwill is not reversed in a subsequent period.

Revenue recognitionRevenue comprises fees earned for services provided in the normal course of business and is measured at the fair value of theconsideration derived from the provision of goods and services to third party customers. Revenue is stated exclusive of VAT, sales tax and trade discounts. The particular recognition policies applied are:• Credit hire – on a daily basis over the period of hire of the vehicle to the third party, net of any expected adjustment arising

on settlement of claims and after an allowance for any discounts under the terms of the ABI GTA;• Credit repair – over the course of the related service net of any expected adjustment arising on settlement of claims;• Other accident management activities – on the provision of the related service; and• Legal and insurance policy income – over the period during which the claim is pursued.

Other operating income relates to fees earned for non-core accident management services that are not always provided in the normalcourse of business and is stated exclusive of VAT. The particular recognition policies applied are:• Medical referral fees – on the provision of the referral to the third party; and • Collision Damage Waiver – over the period of hire of the vehicle to the third party.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Operating profitOperating profit is stated after charging administrative costs but before non-vehicle finance costs.

LeasesLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimumlease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as toachieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Rentals under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Borrowing costsBorrowing costs are recognised in the income statement in the period in which they are incurred. Issue costs arising from the raising ofborrowings are included in borrowing costs at a constant rate of charge on the outstanding borrowings.

Retirement benefit costsThe Group contributes to the personal pension plans of employees at a fixed percentage of basic earnings. The cost is charged to theincome statement as the contributions fall due.




TaxationThe tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statementbecause it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are nevertaxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in thefinancial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balancesheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets arerecognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can beutilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from theinitial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is ableto control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probablethat sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilitiesand when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets andliabilities on a net basis.

Intangible assetsIntangible assets are recognised when a non-monetary asset is separable, or arises from contractual or other legal rights, and where it is probable that future economic benefits attributable to the asset will flow to the Group and the asset cost can be measured reliably.Intangible assets are amortised over their estimated useful economic life on a straight-line basis as follows:

Customer contracts 23-48 monthsSoftware development Not amortised as not available for use at 30 June 2008

Property, plant and equipmentProperty, plant and equipment is stated at cost, less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, other than land, over their estimated useful lives, using the straight-linemethod, on the following bases:

Freehold buildings 2%Leasehold improvements Over the term of the leaseFurniture, fixtures and equipment 15% to 33.33%Hire fleet See below

Non-hire fleet assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or,where shorter, over the term of the relevant lease.

Fleet vehicles are depreciated by equal monthly instalments to write down the cost of the vehicles to their estimated residual value over the expected holding period. Residual value is based on current estimates of the net disposal value of the vehicle as if the vehicle werealready of the age and in the condition expected at the date of disposal. Management review these estimates at each reporting date byreference to publicly available data on second-hand vehicle sales. The depreciation charge is adjusted prospectively to reflect movementsin the residual value.

Notes to the consolidated financial statementscontinued




Impairment of tangible and intangible assetsAt each balance sheet date the Group reviews the carrying amount of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that areindependent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the assets.

If the recoverable amount of an asset (cash generating unit) is estimated to be less than its carrying amount, the carrying amount of theasset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revisedestimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have beendetermined had no impairment loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss isrecognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairmentloss is treated as a revaluation increase.

Financial instrumentsFinancial assets and liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisionsof the instrument.

Financial assetsFinancial assets are classified into the following specified categories: ‘held to maturity’ investments, ‘loans and receivables’ and ‘assetsheld at fair value through profit or loss’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest rate methodThe effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees onamounts paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)through the expected life of the financial asset or, where appropriate, a shorter period.

Held to maturity investmentsInvestments in unlisted entities are classified as held to maturity investments and are recorded at amortised cost using the effective interestrate method less any impairment. Revenue is recognised on an effective yield basis.

Loans and receivablesTrade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in the active market are loans and receivables. Loans and receivables are measured at amortised cost using the effective interest rate method, less anyimpairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assetsFinancial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there isobjective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimatedfuture cash flows of the investment have been impacted.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually aresubsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could includethe Group’s past experience of collecting payments and observable changes in national or local economic conditions that correlate withdefault on receivables.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of tradereceivables for claims from insurers, where the carrying amount is reduced by an adjustment arising on the settlement of claims.Subsequent recoveries of amounts previously written off are credited against this adjustment. Changes in the carrying amount of thisadjustment are recognised in profit or loss.




Financial instruments continuedCash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits and any other short-term highly liquid investments that are readilyconvertible into a known amount of cash and are subject to an insignificant risk of changes in value.

Derecognition of financial assetsThe Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or if it transfers thefinancial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Financial liabilities and equityFinancial liabilities are classified according to the substance of the contractual arrangements entered into.

Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Financial liabilitiesFinancial liabilities are classified as ‘other financial liabilities’. Other financial liabilities, including borrowings, are initially measured at fairvalue, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method,with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost ofa financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discountsestimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.

Derecognition of financial liabilitiesThe Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

Derivative financial instrumentsThe Group enters into interest rate swaps to manage its exposure to interest rate risk. Further details of derivative instruments are disclosed in note 28 to the financial statements. Derivatives are initially recognised at fair value at the date a derivative contract is enteredinto and are subsequently measured at their fair value at each balance sheet date. The resulting gain or loss is recognised in profit or lossimmediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profitor loss depends on the nature of the hedging relationship. The Group’s interest rate swaps are classified as financial assets held at fair valuethrough profit or loss.

Cash flow hedgeThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity.The gain or loss relating to any ineffective portion is recognised immediately in profit or loss. Amounts deferred in equity are recycled in profitor loss in the period in which the hedged item is recognised in profit or loss in the same line of the income statement as the hedged item.Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging relationship expires or is sold, terminatedor exercised or no longer qualifies for hedge accounting.

Share-based paymentsThe Group has applied the requirements of IFRS 2, share-based payments. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that had not vested at 1 April 2005.

The Group issues equity-settled share-based payments to certain Directors and employees. These payments are measured at fair value (excluding the effects of non market-based vesting conditions) at the date of grant. The fair value determined at the date of grant isexpensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

For options, fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.For other long-term incentive schemes under which shares are awarded to Directors and employees subject to performance conditions, the fair value is determined to be the market price of the shares at the date of grant. However, for awards that are subject to market-basedperformance conditions the Stochastic Model is used, which applies the performance condition to a large number of possible pricemovements and uses the average result to estimate the fair value of an award.





Critical accounting judgements and key sources of estimation uncertaintyIn the application of the Group's accounting policies described above, the Directors are required to make judgements, estimates and assumptionsabout the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions arebased on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the periodin which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affectsboth current and future periods.

The critical judgements affecting the Group's financial statements are impairment of software development costs (see note 11), depreciationof the vehicle fleet (see note 12) and expected adjustments arising on settlement of insurance claims (see note 14).

2 Segmental informationThe financial statements are in respect of the Group’s sole business segment of accident management services, conducted in the United Kingdom.

3 Revenue and other income2008 2007£’000 £’000

An analysis of the Group’s revenues and other income is as follows:Accident management assistance and related services, primarily vehicle hire 293,792 214,765 Vehicle repairs 111,143 75,553

Revenue 404,935 290,318Other operating income 6,242 3,889

411,177 294,207

4 Operating profit2008 2007£’000 £’000

Operating profit has been arrived at after charging/(crediting):Depreciation of property, plant and equipment 42,635 20,650Amortisation of intangible assets – from business combinations 1,463 2,296Impairment of intangible assets – internally generated – 406Auditors’ remuneration for audit services 257 220Profit on sale of vehicle hire fleet (373) (440)

Operating lease rentals:vehicles 10,718 10,959 property 3,392 3,286

Staff costs (note 5) 60,610 49,702 Share-based payment charge (note 5) 2,253 1,275

A more detailed analysis of auditors’ remuneration is provided below:2008 2007£’000 % £’000 %

Audit services:statutory audit 217 75% 185 29%audit-related regulatory reporting 40 14% 35 5%

257 89% 220 34%

Further assurance services – acquisition services 33 11% 415 65%IT – 0% 8 1%

290 100% 643 100%



5 Staff costs2008 2007

Number Number

The average number of employees (including Executive Directors) was:Operational 2,171 1,656Office administration 392 152Management 200 139

2,763 1,947

2008 2007£’000 £’000

Their aggregate remuneration comprised:Wages and salaries 54,265 44,638 Social security costs 5,472 4,366 Other pension costs 873 698 Share-based payment charge 2,253 1,275

62,863 50,977

6 Finance costs2008 2007£’000 £’000

Interest on bank overdrafts and loans 7,807 2,261Interest on loan notes 10 2,177Interest on obligations under finance leases 15,663 6,693

23,480 11,131Reclassification of interest on obligations under finance leases to cost of sales (14,780) (6,156)Change in fair value of financial assets (67) –

8,633 4,975

7 Tax2008 2007£’000 £’000

Current taxUK corporation tax on profits for the period 10,055 5,532Adjustments in respect of prior periods (379) (2,987)

Total current tax 9,676 2,545

Deferred taxOrigination and reversal of timing differences 2,944 8,182

12,620 10,727




7 Tax continued

2008 2007£’000 £’000

Reconciliation of tax chargeProfit before tax 43,035 40,264

Tax at the weighted average UK corporation tax rate of 29.5% (2007: 30%) 12,695 12,079

Tax deductions not previously recognised (900) (2,668)Impact of change in tax rate on brought forward deferred tax asset – 69Tax effect of expenses that are not deductible in determining taxable profit 1,327 358Tax effect of utilisation of tax losses not previously recognised (397) (74)Recognition of tax losses (105) 963

Tax expense for the period 12,620 10,727

As shown in note 18, in addition to the amount charged to the income statement of £197,000 (2007: credit of £333,000) in respect ofdeferred tax on share-based payments, a further charge of £1,180,000 (2007: £1,124,000) has been charged directly to equity.

The current year tax charge reflects a claim for capital allowances at a hybrid rate of 23.75% in line with the reduction in capital allowancerates from 25% to 20% applicable from 1 April 2008. The weighted average rate of UK corporation tax applying to the Group for the yearending 30 June 2009 will be reduced from 29.5% to 28% due to legislative changes.

8 Dividends2008 2007£’000 £’000

Amounts recognised as distributions to equity holders in the period:Final dividend for the year ended 30 June 2007 of 5.8 pence per share

(2007: 4.0 pence per share for the period ended 30 June 2006) 7,982 5,456Interim dividend for the year ended 30 June 2008 of 6.5 pence per share

(2007: 5.2 pence per share for the year ended 30 June 2007) 8,870 7,166

16,852 12,622

The proposed final dividend for year ended 30 June 2008 is 5.8 pence (2007: 5.8 pence) per share. The proposed dividend is subject to approval by shareholders at the Annual General Meeting and so has not been included as a liability in these financial statements.

9 Earnings per shareThe calculation of the basic and diluted earnings per share is based on the following data:

2008 2007£’000 £’000

EarningsEarnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders 30,415 29,537

Number of shares Number Number

Weighted average number of ordinary shares for the purposes of basic earnings per share 138,593,997 137,079,912Effect of dilutive potential ordinary shares – share options 1,930,048 2,549,480Effect of dilutive potential ordinary shares – other share plans 73,703 774,371

Weighted average number of ordinary shares for the purposes of diluted earnings per share 140,597,748 140,403,763

The dilutive potential ordinary shares relating to other share plans have been reduced by the number of shares held by the ESOP which are intended to be used to satisfy awards under these plans.

Details of the number of shares held by the ESOP are provided in note 21.



9 Earnings per share continued

Adjusted earnings per shareAdjusted earnings per share is based on the weighted average number of shares as for the unadjusted earnings per share and the profit for the period adjusted for the following expenses.

2008 2007£’000 £’000

Share-based payment charge 2,253 1,275 Amortisation of intangible assets 1,463 2,296Impairment of intangible assets – 406 Aborted acquisition costs – 766

Adjustment to profit before tax 3,716 4,743 Tax credits attributable to the above expenses (79) (1,040)

3,637 3,703

10 Goodwill

£’000

CostAt 1 July 2006 and 30 June 2007 68,505Recognised on business combinations 7,393

At 30 June 2008 75,898

Accumulated impairment lossesAt 1 July 2006, 30 June 2007 and 30 June 2008 (1,453)

Carrying amountAt 30 June 2008 74,445

At 30 June 2007 67,052

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefitfrom that business acquisition. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:

2008 2007£’000 £’000

Albany CGU 43,405 43,405 Swift CGU 23,647 23,647 CS2 CGU 4,579 – Cab Aid CGU 2,814 – Previous Acquisitions segment (comprising several CGUs) 1,453 1,453

75,898 68,505

The Group tests goodwill annually for impairment, or more frequently if there are indications that the goodwill might be impaired.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculationsare those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Managementestimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on pastpractices and expectations of future changes in the market.




10 Goodwill continued

The Group prepares cash flow forecasts derived from the most recent financial forecast approved by management for the next five years and extrapolates cash flows for the remaining period based on estimated growth rate. This rate does not exceed the average long-termgrowth rate for the relevant markets.

The rate used to discount the forecast cash flows for all CGUs is 7%. The growth rate assumed is 5% per annum, but with a 5% per annum decline in the last five years of each CGU’s useful economic life and 0% growth in the preceding five years. This is considered by the Directors to be less than the long-term average growth rate for the industry.

At 30 June 2008, before impairment testing, goodwill of £1,453,000 was allocated to the Previous Acquisitions segment. Due to reducedbusiness performance and refocusing of these businesses, the Group revised its cash flow forecasts for this CGU and an impairment loss of £1,453,000 was recognised in the year ended 31 March 2005.

11 Other intangible assetsCustomer Software contracts development Total

£’000 £’000 £’000

CostAt 1 July 2006 7,135 4,042 11,177Additions – 3,945 3,945

At 30 June 2007 7,135 7,987 15,122Additions – 2,320 2,320Recognised on business combinations 2,115 – 2,115

At 30 June 2008 9,250 10,307 19,557

Accumulated amortisation and impairment lossesAt 1 July 2006 (3,918) (1,000) (4,918)Amortisation charge (2,296) – (2,296)Impairment loss – (406) (406)

At 30 June 2007 (6,214) (1,406) (7,620)Amortisation charge (1,463) – (1,463)

At 30 June 2008 (7,677) (1,406) (9,083)

Carrying amountAt 30 June 2008 1,573 8,901 10,474

At 30 June 2007 921 6,581 7,502

Customer contracts acquired as part of business combinations are amortised over the expected useful life of each contract, which rangesfrom 23 to 48 months.

Software development relates to a new IT platform for the Group. It was not available for operational use in the year ended 30 June 2008and therefore was not amortised. Amortisation is expected to commence in the next financial year.

The Directors are required to test assets not available for use for impairment. In performing the impairment test for software development, the Directors have assessed the recoverable amount based on the estimated future economic benefits of implementation. The quantificationof these benefits is judgmental and a key source of estimation uncertainty.



12 Property, plant and equipmentFreehold Leasehold Vehicle hire Fixtures &property improvements fleet equipment Total

£’000 £’000 £’000 £’000 £’000

CostAt 1 July 2006 – 1,763 51,833 13,174 66,770Additions 7,216 718 131,570 6,250 145,754Disposals – – (41,152) – (41,152)

At 30 June 2007 7,216 2,481 142,251 19,424 171,372Additions 4,410 1,331 193,623 5,273 204,637 Acquisitions – – 629 793 1,422 Disposals – – (116,608) (2,732) (119,340)

At 30 June 2008 11,626 3,812 219,895 22,758 258,091

Accumulated depreciation and impairmentAt 1 July 2006 – (677) (7,702) (7,689) (16,068)Charge for the year (67) (239) (17,600) (2,744) (20,650)Disposals – – 9,455 – 9,455

At 30 June 2007 (67) (916) (15,847) (10,433) (27,263)Charge for the year (169) (271) (38,041) (4,154) (42,635)Disposals – – 23,759 2,562 26,321

At 30 June 2008 (236) (1,187) (30,129) (12,025) (43,577)

Carrying amountAt 30 June 2008 11,390 2,625 189,766 10,733 214,514

At 30 June 2007 7,149 1,565 126,404 8,991 144,109

Leased assets included above:Carrying amountAt 30 June 2008 – – 161,457 4,906 166,363

At 30 June 2007 – – 122,961 4,627 127,588

The depreciation on the vehicle hire fleet represents a critical judgement made by the Directors. The Group operates a large fleet of hirevehicles. Depreciation on these vehicles is intended to reduce the carrying value of the vehicles to their expected residual value at disposal.However, the residual value attributable is dependent on conditions present in the future and is subject to movements in the market fornearly-new vehicles. As such, this area is inherently judgmental and is a key source of estimation uncertainty.

The cost of the land element of the freehold property is not separable from the cost of freehold buildings.

13 InvestmentsThe investment in the consolidated balance sheet represents an investment in an unlisted entity.

A list of the significant investments in subsidiaries, including the name, country of incorporation, proportion of ownership interest is given in note 38 to the Parent Company’s separate financial statements.




14 Trade and other receivables2008 2007£’000 £’000

Trade receivables – claims due from insurance companies 278,719 185,494Trade receivables – amounts invoiced for services 18,483 15,697

Trade receivables – gross 297,202 201,191Expected adjustment arising on settlement of claims (28,068) (21,685)Provision for impairment of amounts invoiced for services (1,228) (1,052)

Trade receivables – net 267,906 178,454Other debtors 8,801 6,025Accrued income 12,342 1,847Prepayments 7,932 4,247VAT recoverable 492 921

297,473 191,494

Total net trade receivables comprise claims due from insurance companies of £250.7m (2007: £163.8m) and amounts invoiced for theprovision of services to customers of £17.2m (2007: £14.6m). The classification of items within trade and other receivables has beenamended in the prior year comparatives to align the presentation of receivables with the requirements of IFRS 7.

The expected adjustment arising on settlement of receivables represents a critical judgement made by the Directors. The Directors havereduced trade receivables for claims to reflect the expected future adjustment on settlement on the basis of the level of adjustments arisinghistorically. However, this area is inherently judgmental and is a key source of estimation uncertainty. The risk in this respect is spread over a large number of customers.

The Group’s debtor days for the purpose of its banking covenants at 30 June 2008 were 257 (2007: 235). This measure is based on tradereceivables, other debtors and accrued income as a proportion of the related revenue multiplied by 365 days. Under an alternative measure,which assumes that the equivalent year end receivables represent the most recent months’ revenues, debtor days were 235 (2007: 205).

Further details concerning the Group’s two categories of trade receivables are set out below.

Claims against insurance companiesRisk arises on these trade receivables due to their magnitude and the nature of the claims settlement process, which can prolong the period of collection. Charges for vehicle hire and the costs of repair of customers’ vehicles are recovered from the insurer of the at fault party to the associated accident or, in a minority of claims, from the at fault party directly where they are a self insured organisation.

In view of the tripartite relationship between the Group, its customer and the insurer and the nature of the claims process, trade receivablesdo not carry a contractual ‘due date’, nor does the expected adjustment arising on settlement of trade receivables represent an impairmentfor credit losses. Accordingly the term ‘past due’, which is used in IFRS 7, is not considered relevant to the Group’s circumstances and does not reflect the manner in which the Board considers or manages credit risk. Likewise, the Directors do not consider that a provision for credit losses arises.



14 Trade and other receivables continued

As explained in the Business Review, the Board reviews trade receivables according to the status of the claim through the Group’s in-houseand solicitor panel processes. In particular, for claims sent to solicitors, management consider whether they are ‘pre-issue’ or whetherproceedings have formally been issued. The Group’s target is that trade receivables should be transferred from the in-house to the solicitorprocess when they are aged over 120 days. An analysis of trade receivables based on these circumstances is given below.

2008 2007£’000 % £’000 %

Work in progress and pending claims 61,991 100% 34,554 100%

Between 1 and 120 days oldIn-house 71,552 94% 46,067 96%At solicitors

Pre-issue 4,194 5% 2,086 4%Proceedings issued 574 1% – 0%

76,320 100% 48,153 100%

More than 120 days oldIn-house 82,005 73% 63,965 79%At solicitors

Pre-issue 20,456 18% 16,741 21%Proceedings issued 9,879 10% 396 0%

112,340 100% 81,102 100%

TotalWork in progress and pending claims 61,991 25% 34,554 22%In-house 153,557 61% 110,032 67%At solicitors


250,651 100% 163,809 100%

An analysis of trade receivables split between credit hire and credit repair is shown below:

2008 2007£’000 % £’000 %

Credit hireIn-house 163,769 86% 107,723 87%At solicitors


191,242 100% 124,445 100%

Credit repairIn-house 51,780 87% 36,864 94%At solicitors


59,409 100% 39,364 100%

TotalIn-house 215,549 86% 144,587 88%At solicitors


250,651 100% 163,809 100%




14 Trade and other receivables continued

Risk is spread primarily across the major UK based motor insurance companies in proportion to their respective share of the market. Nocredit insurance is taken out given the regulated nature of these entities. The Group does not have a significant concentration of credit risk,with exposure spread across a large number of counterparties as shown in the table below:

2008 2007£’000 % £’000 %

CounterpartyInsurer 1 21,602 9% 19,221 12%Insurer 2 16,327 6% 14,073 9%Insurer 3 13,420 5% 9,768 6%Insurer 4 12,839 5% 6,696 4%Insurer 5 6,850 3% 4,773 3%Other insurers 179,613 72% 109,278 66%

250,651 100% 163,809 100%

Amounts invoiced for servicesNo interest is charged on receivables. The Group has provided for expected irrecoverable amounts specifically based on past defaultexperience. The Group assesses the creditworthiness of each customer prior to commencing to trade with them. The largest customerrepresented 13% (2007: 13%) of the receivables at 30 June 2008. The most significant five customers represented 44% of receivables (2007: 38%). No other customer represented more than 5% of outstanding receivables.

Included in this category of the Group’s trade receivables balance are debtors with a carrying amount of £10.4m (2007: £8.3m) which arepast due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and theamounts are still considered recoverable. The Group does not hold any collateral over these balances. The cash collection period for thesebalances, which represent mainly income from solicitors for claim referrals, is standard for the industry.

Ageing of past due but not impaired receivables2008 2007£’000 £’000

30-60 days 619 76960-90 days 1,162 1,65490-120 days 301 1,048More than 120 days 8,295 4,852

Total 10,377 8,323

The movement in the allowance for doubtful debt was as follows:2008 2007£’000 £’000

At beginning of year 1,052 981Impairment losses recognised 176 71

At end of year 1,228 1,052

The carrying amount of trade and other receivables is denominated solely in sterling. The Directors consider that the carrying amountof trade and other receivables approximates to their fair value.

15 Trade and other payables2008 2007£’000 £’000

Trade payables 23,034 11,701Other taxation and social security 1,162 1,934Accruals and deferred income 45,043 38,630Other creditors 6,464 600

75,703 52,865

Trade payables represent amounts payable for goods and services. The average credit period taken for trade purchases is 27 days (2007: 21 days). The Directors consider that the carrying amount of trade payables approximates to their fair value.



16 Obligations under finance leases2008 2007£’000 £’000

Amounts payable under finance leasesWithin one year 156,215 126,237

Amount due for settlement within 12 months 156,215 126,237

Amounts payable under finance leasesIn the second to fifth years inclusive 42,582 20,606

Amount due for settlement after 12 months 42,582 20,606

It is the Group’s policy to lease certain of its fixtures and equipment and motor vehicles under finance leases. The average lease term is 1.81 years (2007: 1.60 years). For the year ended 30 June 2008, the average effective borrowing rate was 8.35% (2007: 6.89%). Interest rates arefixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

All lease obligations are denominated in sterling. The fair value of the Group’s finance lease obligations approximates to their carrying value. The Group’s obligations under finance leases are secured by the lessors’ charges over the leased assets.

17 Other borrowings and overdrafts2008 2007

Other £’000 £’000

Bank overdrafts 75,063 42,405Bank loans 96,272 38,021Loan notes 129 293

171,464 80,719

The borrowings are repayable as follows:

On demand or within one yearBank overdrafts 75,063 42,405Bank loans 35,427 4,523Loan notes 129 293


In the second yearBank loans 7,799 4,522

In the third to fifth years inclusiveBank loans 53,046 28,976


The weighted average interest rates paid were as follows:2008 2007

% %

Bank loans and overdrafts 6.87 6.09

The overdraft balance of £75.1m comprises amounts drawn down under revolving cash advance facilities of £85.0m, which expire in 2010.

At 30 June 2008, the Group’s bank loans of £96.3m comprised a term loan relating to the acquisition of Albany of £36.3m, a term loanrelating to the business combinations with CS2 and Cab Aid totalling £14.7m, amounts of £27.6m drawn down under a fleet funding facility,a term loan of £7.5m and mortgages totalling £10.2m secured on the Northwich and Chesterfield offices.

The Albany term loan was repayable at a rate of £6.3m per annum with a final bullet payment due in 2012. The fleet funding facility expireson 31 December 2009. The £7.5m term loan was repayable in full in 2012. The mortgages of £10.2m were repayable in full in 2009.

The mortgage loans were subject to interest at 1% above the Bank of England base rate. The revolving cash advance facilities and term loanswere subject to interest at 0.95% above LIBOR, rising to 2.15% above LIBOR if the ratio of Net Debt to EBITDA exceeded certain levels.

The combined banking facilities were secured by a fixed and floating charge over the assets of the Group.

The Directors consider that the fair value of the Group’s borrowings was equal to their book value.

The Group’s banking facilities were amended subsequent to the year-end as disclosed in note 31.

All obligations under finance leases are disclosed in note 16.




18 Deferred taxDeferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (2007: 28%).

The deferred tax liabilities and assets, and movements thereon, recognised by the Group are set out below:

Liability Liability Liability Asset AssetIntangible Accelerated tax Other timing Liability Asset share-based other timing Asset

assets depreciation differences total tax losses payments differences total£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 1 July 2006 (965) (1,502) (2,467) 3,588 3,145 – 6,733 Credit/(charge) to income 707 (5,634) – (4,927) (3,588) 333 – (3,255)Charge to equity – – – – – (1,424) – (1,424)

At 30 June 2007 (258) (7,136) – (7,394) – 2,054 – 2,054 Recognised on business

combinations (592) – – (592) – – 194 194 Credit/(charge) to income 410 (3,465) (19) (3,074) 296 (197) 31 130 Charge to equity – – – – – (1,180) – (1,180)

At 30 June 2008 (440) (10,601) (19) (11,060) 296 677 225 1,198

At the balance sheet date the Group has unused trading losses of £5.5m (2007: £5.2m) available for offset against future trading profits. A deferred tax asset has been recognised in respect of £1.0m (2007: Nil) of this amount. No deferred tax asset has been recognised in respect of the remaining £4.5m (2007: £5.2m) due to the unpredictability of future profit streams in the subsidiary where it arises.

19 Share capital2008 2007£’000 £’000

Authorised200,000,000 ordinary shares of 5p each 10,000 10,000

Issued and fully paid 138,961,489 (2007: 138,218,543) ordinary shares of 5p each 6,945 6,910

The movement in issued share capital during the period was as follows:Shares

000s

At start of the period 138,219Exercise of share options 742

At end of the period 138,961

All shares issued during the year were paid for in cash.

20 Share premium account£’000

At 1 July 2006 66,106Shares issued 2,558

At 30 June 2007 68,664Shares issued 1,381

At 30 June 2008 70,045

21 ESOP reserve£’000

At 1 July 2006 and 30 June 2007 –Shares in Helphire Group plc acquired by ESOP during the year (7,499)

At 30 June 2008 (7,499)

The ESOP purchased 2,479,133 shares in Helphire Group plc at an aggregate cost of £7,499,000 during the year. The shares are intendedto be utilised to satisfy awards under certain of the Group’s share-based incentive schemes.



22 Equity reserve£’000

At 1 July 2006 4,583Share-based payment charged to income 1,275Deferred tax – share-based incentive plans (1,424)Current tax – share-based incentive plans 1,772

At 30 June 2007 6,206Share-based payment charged to income 2,253Deferred tax – share-based incentive plans (1,180)Current tax – share-based incentive plans 134

At 30 June 2008 7,413

23 Retained earnings£’000

At 1 July 2006 33,345 Profit for the period 29,537 Dividends (12,622)

At 30 June 2007 50,260 Profit for the period 30,415 Dividends (16,852)

At 30 June 2008 63,823

24 Business combinationsOn 6 August 2007, the Group acquired the entire issued share capital of E-Claim Limited, Medirep Marketing Limited, QSIT Limited, Fleet Legal Limited and Lawyer.com Limited (together the ‘Companies’). Also on that date, the Group entered into long-term financialarrangements with CS2 Lawyers Limited (‘CS2LL’), which included a loan of £5.1m used by CS2LL to purchase the trade, assets and liabilities of CS2 Lawyers partnership. The Group has no shareholding in CS2LL. CS2LL provides uninsured loss recovery services. The Companies provide insurance mediation services, medico-legal reports and fleet assistance. The total cash paid in connection with this business combination was £10.9m. The Group also exchanged contracts on the purchase of freehold property occupied by CS2LL and the Companies for a consideration of £4.2m, which completed subsequently in March 2008.

On 19 November 2007, the Group acquired 100% of the issued ordinary share capital of Cab Aid Limited and NFL Cover Limited (together the ‘Cab Aid Group’). Cab Aid is engaged in the provision of replacement hire vehicles to the hire and reward sector.

Although the Group has no shareholding in CS2LL, the nature of its financial arrangements are such that, in accordance with therequirements of IAS27, ‘Consolidated and Separate Financial Statements’, CS2LL and the Companies have been consolidated into the Group from 6 August 2007. The Cab Aid Group has been consolidated from 19 November 2007.

CS2 Lawyers Limited and the CompaniesThe book value and provisional fair value of the net assets consolidated and the goodwill arising are as follows:

Carrying amount before Fair value

combination adjustments Fair value £’000 £’000 £’000

Net assets consolidated:Intangible assets – 1,323 1,323 Property, plant and equipment (including vehicles) 719 (20) 699 Deferred tax asset – 154 154 Trade and other receivables 3,746 3,331 7,077 Cash and cash equivalents 766 – 766 Trade and other payables (1,527) (100) (1,627)Tax liabilities (304) (1,416) (1,720)Deferred tax liability – (371) (371)

3,400 2,901 6,301

Consideration – cash 10,880

Goodwill arising 4,579

Net cash outflow:Cash and cash equivalents consolidated 766Cash consideration paid (10,880)

(10,114)




24 Business combinations continued

The fair value adjustments related principally to the recognition of intangible assets on combination in accordance with IFRS 3, ‘BusinessCombinations’, the restatement of the revenue recognition policy for legal fees to an accruals basis in line with the Group policy and IAS18,‘Revenue’, and the recognition of current and deferred tax liabilities in relation to these items as required by IAS12, ‘Income Taxes’. The policy adopted for legal fee revenue is to recognise such revenue at the fair value of the amount receivable for services provided in the period net of VAT and inclusive of accrued income at the period end. The intangible assets recognised relate to customer relationshipsand IT development costs and are being amortised over three to five years.

The goodwill arising is attributable to operating synergies, quality operating processes and staff and management expertise.

CS2LL and the Companies together contributed revenues of £9.8m and profit before tax of £1.9m during the period. If the businesscombination had been completed on 1 July 2007, the total Group revenue would have been £405.7m and the profit before tax would have been £43.0m.

The Cab Aid GroupThe book value and provisional fair value of the net assets acquired and the goodwill arising are as follows:

Carrying amount before Fair value

combination adjustments Fair value£’000 £’000 £’000

Net assets consolidated:Intangible assets – 792 792Property, plant and equipment (including vehicles) 722 – 722Deferred tax asset – 40 40Trade and other receivables 927 1,318 2,245Cash and cash equivalents 1,084 – 1,084Trade and other payables (872) (55) (927)Tax liabilities (32) (657) (689)Obligations under finance leases (617) – (617)Deferred tax liability – (222) (222)

1,212 1,216 2,428

Consideration – cash 4,042Deferred contingent consideration 1,200

Goodwill arising 2,814

Net cash outflow:Cash and cash equivalents consolidated 1,084Cash consideration paid (4,042)

(2,958)

The fair value adjustments related principally to the recognition of intangible assets on acquisition in accordance with IFRS 3, ‘BusinessCombinations’, the restatement of the revenue recognition for credit hire to an accruals basis to be in line with the Group’s policy andIAS18, ‘Revenue’, and the recognition of the related deferred tax liabilities in accordance with IAS12, ‘Income Taxes’. An increase inthe current tax liability was also required in order to reflect the estimated liability at acquisition and inclusive of accrued income at the period end. The intangible assets recognised relate to customer relationships and are being amortised over three years.

The terms of the acquisition of Cab Aid provided for deferred contingent consideration to become payable in the event that agreed revenues are generated from specified sources. The total amount potentially payable by the Group under this arrangement is £1.2m and at this point the Directors’ estimate of the likely amount that will be payable in November 2008 is £1.2m. This liability has been recognised in the financial statements.

The goodwill arising is attributable to future fleet synergies and post acquisition cost reductions.

Cab Aid contributed revenues of £4.3m and profit before tax of £0.8m during the period. If the business combination had been completed on 1 July 2007, the total Group revenue would have been £409.9m and the profit before tax would have been £43.6m.



25 Operating lease arrangements2008 2007£’000 £’000

Minimum lease payments under operating leases recognised in income for the period 14,110 14,245

At the balance sheet date the Group had outstanding commitments for future minimum lease payments under non-cancellable operatingleases, which fall due as follows:

2008 2007£’000 £’000

Within one year 7,385 7,840In the second to fifth years inclusive 16,978 11,596After five years 23,175 19,249

47,538 38,685

Operating lease payments represent rentals payable by the Group for certain of its motor vehicles, plant and equipment and properties.Leases are negotiated for a weighted average term of 8.1 years (2007: 12.4 years) and rentals are fixed for a weighted average of 7.6 years(2007: 10.3 years). The prior year comparative figures for operating lease commitments have been restated due to an error whereby only thecommitment to be paid in the next 12 months was previously disclosed.

26 Share-based paymentsEquity settled share option plansThe Group grants options in the form of mainstream options and options under sharesave schemes.

Mainstream optionsThe Group grants options to certain Directors and employees. Options are exercisable at a price equal to the average quoted market price of the Company’s shares on the date of grant.

The vesting period is generally three years. If the options remain unexercised after a period of seven years from the date of grant the options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest.

Details of the options outstanding during the period are as follows:2008 2007

Weighted WeightedNumber average Number average

of options exercise of options exercise 000s price (£) 000s price (£)

Outstanding at beginning of period 3,026 1.86 5,466 1.57Granted during the period – – – – Exercised during the period (663) 1.92 (2,244) 1.20Forfeited during the period (2) 2.15 (196) 1.40

Outstanding at end of period 2,361 1.85 3,026 1.86

Exercisable at the end of the period 2,233 1.77 1,743 1.60

The weighted average share price at the date of exercise for share options exercised during the period was 371.20 pence (2007: 408.47 pence). The options outstanding at 30 June 2008 had a weighted average exercise price of £1.85 (2007: £1.86) and a weighted average remaining contractual life of 2.3 years (2007: 3.2 years).

Sharesave schemesUnder sharesave schemes, employees are granted options to acquire shares in the Company with funds deducted from their salaries on a monthly basis. The options must be exercised three years following the date of grant. The options generally lapse if the employee leaves within the three year period.




26 Share-based payments continued

2008 2007Weighted Weighted

Number average Number averageof options exercise of options exercise

000s price (£) 000s price (£)

Outstanding at beginning of period 588 3.25 415 3.08Granted during the period 1,234 1.56 223 3.56Forfeited during the period (71) 3.25 (50) 3.27

Outstanding at end of period 1,751 2.06 588 3.25

Exercisable at the end of the period – – – –

The options outstanding at 30 June 2008 had a weighted average exercise price of £2.06 (2007: £3.25) and a weighted average remainingcontractual life of 2.25 years (2007: 2.1 years). In 2008, options were granted on 2 April 2008 and their aggregate fair value was estimated at £674,000. In 2007, options were granted on 18 April 2007 and their aggregate fair value was estimated at £280,000.

2008 2007

The inputs to the Blacks-Scholes model for options granted in each period were as follows:Weighted average share price £1.87 £4.30Weighted average exercise price £1.56 £3.56Expected volatility 31.0% 24.5%Expected life 3.25 years 3 yearsRisk-free rate 4.04% 5.44%Expected dividends 3.50% 2.14%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous four years, excludingperiods of exceptional volatility. The expected useful life in the model has been adjusted, based on management’s best estimate, for theeffects of non-transferability, exercise restrictions and behavioural considerations.

Other equity-settled share plansThe Group also makes awards to Directors, senior managers and staff under the Equity Partnership Plan 2002 (‘EPP’) and the PerformanceShare Plan 2006 (‘PSP’). Under the EPP, matching shares are awarded subject to co-investment by the participant. Under the PSP, nil cost options are awarded. Awards made under both plans vest after a three year performance period, subject to satisfaction of performanceconditions and continued employment with the Group. Half of each award under both plans is subject to an Earnings Per Share (‘EPS’)condition whereby an absolute adjusted EPS target for the financial year three years after that in which the award is made must be met forthe award to vest fully. The other half of each award is subject to a Total Shareholder Return (‘TSR’) condition, which measures Helphire’sTSR against that of the FTS250 (excluding investment trusts) over the three years commencing with that in which the award is made.

Details of the aggregate awards made during 2008 and 2007, all of which were outstanding at the year end, are as follows:

2008 2007Matching shares/ Matching shares/

nil cost options nil cost options000s 000s

Equity Partnership Plan 840 1,393Performance Share Plan 2,104 194

2,944 1,587

The matching shares outstanding under the EPP had a weighted average remaining contractual life of 1.8 years (2007: 2.48 years). The outstanding nil cost options under the PSP had a remaining contractual life of 2.5 years (2007: 2.79 years).

For the 50% of EPP and PSP awards subject to the EPS condition, the fair value of the awards per share at the date of grant was themarket price of the Company’s shares at the date of the award. This weighted average fair value per share was £3.98 (2007: £3.82) for the EPP awards granted during the year and £2.43 (2007: £4.36) for the PSP awards.

For the 50% of EPP and PSP awards subject to the TSR performance condition, this market-based condition was factored into thecalculation of the fair value of the awards using the Stochastic Model which applies the performance condition to a large number of possibleshare price movements and uses the average result to produce an estimated value for an option.



26 Share-based payments continued

The key assumptions input into the Stochastic Model were as follows:2008 2007

EPP PSP EPP PSP

Weighted average share price £3.98 £2.43 £3.82 £4.36Expected volatility 25.00% 29.40% 24.60% 24.80%Expected life 3 years 3 years 3 years 3 yearsRisk-free rate 4.04% N/A 5.10% N/AExpected dividends Nil Nil Nil Nil

There is no expected dividend yield because participants receive the value of dividends accruing over the vesting period. The risk-free rate of interest does not apply to the PSP awards because no payment is required from participants.

The Group recognised total expenses of £2.3m and £1.3m related to equity-settled share-based payment transactions in 2008 and 2007 respectively.

27 Related party transactionsTransactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are notdisclosed in this note. Transactions between the Company and its subsidiaries are disclosed in the Company’s separate financial statements.

Remuneration of the Directors, who are the key management personnel of the Group, is provided in the audited section of the Directors’Remuneration Report on pages 26 to 33.

28 Financial instrumentsCapital risk managementThe Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includesfinance lease obligations, the borrowings disclosed in note 17, cash and cash equivalents, and equity attributable to equity holders of theparent, comprising issued share capital, reserves and and retained earnings as disclosed in notes 19 to 23.

The gearing ratio, defined as net debt divided by total capital, was as follows:2008 2007£’000 £’000

Net debt 362,341 222,667Total shareholders’ equity 140,727 132,040

Total capital 503,068 354,707

Gearing ratio 72.0% 62.8%

Net debt is defined as borrowings and overdrafts less cash and cash equivalents.

Categories of financial instrumentsCarrying value

2008 2007£’000 £’000

Financial assetsHeld to maturity investments 300 300At amortised cost:

Loans and receivables* 267,906 180,477Cash and cash equivalents 7,920 4,895

Assets held at fair value through profit or loss 67 –

Financial liabilitiesAt amortised cost:

Trade payables 23,034 11,701Obligations under finance leases 198,797 146,843Other borrowings and overdrafts 171,464 80,719

* See comments in note 14




28 Financial instruments continued

Financial risk management objectivesThe Group monitors and manages its financial risks, which include interest rate risk, credit risk and liquidity risk. Interest rate swaps are used to manage interest rate risk. The use of financial derivatives is governed by the Group’s policies, approved by the Board of Directors,which provide written rules on the use of financial derivatives. The Group does not enter into or trade financial instruments, includingderivative financial instruments, for speculative purposes. The Group does not have any significant foreign currency risk exposure.

Interest rate risk managementThe Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite.

Interest rate sensitivity analysisThe sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative financialinstruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the balance sheet date was outstanding for the whole year. A 0.75% increase or decrease represents management’s assessment of thereasonably possible change in interest rates.

If interest rates had been 0.75% higher/lower and all other variables were held constant, the Group’s profit for the year ended 30 June 2008would have decreased/increased by £1.0m (2007: £0.8m). This is mainly attributable to the Group’s exposure on variable rate borrowings.

Interest rate swap contractsUnder interest rate swaps the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of of changing interest rates on the cash flowexposures on issued variable rate debt held. The fair value of swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.

The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the reporting date:

Average Notional contract fixed principal Fair

interest rate amount valueOutstanding ‘receive floating pay fixed’ contracts % £’000 £’000

Less than one year 5.52 55,000 203Two to five years 5.68 128,752 (136)

183,752 67

No comparatives are presented as the swaps were taken out in the current year.

Credit risk managementThe Group is exposed to credit risk in connection with the possible default by insurance companies. Following an assessment of thecounterparties, the Directors have concluded that there is no requirement for an impairment provision for credit loss against trade receivablesarising from claims against insurance companies.

The provision for expected adjustments arising on settlement of claims does not represent an impairment provision under IFRS 7. Nevertheless, for normal commercial reasons the Group ensures that vehicles are only placed on hire and repairs to vehicles are only carried out after thevalidation process has provided assurance that the liability for the accident rests with another party. As trade receivables for credit hire and credit repair carry no contractual ‘due date’, the term ‘past due’ used in IFRS 7 is not considered to be relevant to the Group’s trade receivables or the way in which the Group manages credit risk. Trade receivables relating to amounts invoiced to customers for services provided are subjectto credit risk in that a counterparty may default on its obligation to the Group. Customers represent primarily legal firms and the Group’s policyis to deal only with an approved panel of such firms. The carrying value of these financial assets, net of impairment provisions, represent theGroup’s maximum exposure to credit risk. Credit risk for cash placed on deposit is controlled by the use of approved financial institutions.

Liquidity risk managementLiquidity risk arises primarily from the nature of the claims settlement process, which can prolong the period of collection of trade receivables.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk managementframework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Groupmanages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continually monitoring forecastand actual cash flows.




Fair value of financial instrumentsThe fair value of financial assets and liabilities held at amortised cost is considered by the Directors not to be materially different from theircarrying amounts at the balance sheet date.

Maturity of financial assetsAs explained in note 14, trade receivables for claims from insurers do not carry a contractual due date. Accordingly, the following tableanalyses the Group's estimated maturity in the case of claims from insurers and remaining contractual maturity for all other financial assets,based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed are the undiscounted cash flows including estimated future interest yet to be incurred.

In less than In one to After five 2008 In less than In one to After five 2007one year two years years Total one year two years years Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Held to maturity investments – – 300 300 – – 300 300

At amortised cost:Loans and receivables* 267,906 – – 267,906 178,454 2,023 – 180,477 Cash and cash equivalents 7,920 – – 7,920 4,895 – – 4,895

Assets held at fair value through profit or loss 67 – – 67 – – – –

275,893 – 300 276,193 183,349 2,023 300 185,672

* See comments in note 14

Maturity of financial liabilitiesThe following tables analyse the Group's remaining contractual maturity of its financial liabilities based on the remaining period at the balancesheet date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows including estimated futureinterest yet to be incurred.

In less than In one to In two to 2008 In less than In one to In two to 2007one year two years five years Total one year two years five years Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At amortised cost:– Trade payables 23,034 – – 23,034 11,701 – – 11,701– Other borrowings and overdrafts 110,619 7,799 53,046 171,464 47,221 4,522 28,976 80,719– Obligations under finance leases 156,215 39,452 3,130 198,797 126,237 17,748 2,858 146,843

289,868 47,251 56,176 393,295 185,159 22,270 31,834 239,263

In addition to the above, at 30 June 2008 the Group had available £17.5m of undrawn committed working capital facility, £37.4m of fleetfinancing facility, and £15.3m of acquisition facility. In conjunction with the Placing and Open offer which took place after the year end, the bank facilities were revised as detailed further in note 31. Finance lease facilities are with a wide variety of funders and in general do not represent committed facilities, but rather are provided on a rolling basis.

Externally imposed capital requirementsThe Group is not subject to any externally imposed capital requirements.

29 Contingent assets and liabilitiesSubsequent to the acquisition of Albany in October 2004 and Swift in September 2005, certain liabilities have arisen in the acquiredbusinesses relating to matters arising prior to acquisition by Helphire Group plc. These liabilities were not foreseen at the date of acquisition.The Directors have estimated the likely impact of these matters and recognised associated liabilities in the consolidated balance sheet.

£1.6m of the liabilities were identified within one year of the relevant acquisition and therefore were treated as adjustments to the fair valuesof the acquired liabilities. £0.6m arose after one year of the relevant acquisition and therefore was treated as an expense in 2006. Whilst thenature of the items concerned is such that it is not possible at the current time to precisely determine the amount of the liability, the Directorsconsider that suitably reliable estimations can be made and have recorded liabilities on this basis.




29 Contingent assets and liabilities continued

The Directors have issued proceedings against the Albany vendors and the case is expected to come to trial in the second quarter of 2009.The total value of these claims is £1.6m. The Directors also anticipate making a warranty claim against the former owners of Swift in respectof the above liabilities. However, such claims are at a stage where it is not possible to assess their success, or otherwise, with sufficientcertainty. As such, warranty claims are considered contingent and no asset has been recorded in the accounts.

A significant number of the Group’s customers have claims against the Motor Insurers Bureau (the ‘MIB’), a company which exists, with thesupport of all motor insurers, to compensate non-fault victims of accidents caused by uninsured or untraced motorists. The MIB is disputingliability for these claims for a variety of reasons. In response, these are being pursued, via test cases, one of which has now been referred to the European Court of Justice, albeit this is subject to a Court of Appeal ruling which is expected shortly; final judgement is not expectedwithin the next two years. The gross value of the claims outstanding at 30 June 2008 was £5.5m. Although the Directors are taking steps to maximise the recovery of these claims, a substantial provision has been made in the Group accounts, which the Directors consider is appropriate in the context of the uncertain nature of the legal proceedings and timetable.

30 Analysis and reconciliation of net debt1 July Non cash 30 June 2007 Cash flow changes 2008

£’000 £’000 £’000 £’000

Net cash and cash equivalents (37,510) (29,633) – (67,143)

Debt due within one year (4,816) (30,740) – (35,556)Debt due after more than one year (33,498) (23,137) (4,210) (60,845)Finance leases (146,843) 126,134 (178,088) (198,797)

(185,157) 72,257 (182,298) (295,198)

Net debt (222,667) 42,624 (182,298) (362,341)

Net cash and cash equivalents comprise cash and cash equivalents less bank overdrafts.2008 2007£’000 £’000

Decrease in cash and cash equivalents in the year (29,633) (23,087)Cash outflow from increase in borrowings and lease financing 72,257 46,692

Change in net debt resulting from cash flows 42,624 23,605 New finance leases (178,088) (137,394)New mortgage loan (4,210) (6,198)

Movement in net debt in the year (139,674) (119,987)Net debt at start of the year (222,667) (102,680)

Net debt at end of the year (362,341) (222,667)

31 Post balance sheet eventsOn 9 July 2008, the Board of Helphire Group plc announced a conditional Placing and Open Offer of 40,871,027 new ordinary shares of 5 pence each in the share capital of the Company to raise approximately £45m (approximately £42.7m net of expenses). The placing andopen offer was approved at a General Meeting of the Company on 8 September 2008 and the new ordinary shares were admitted to trading on 9 September 2008.

In conjunction with the placing and open offer, the bank facilities were revised, principally by removing £35m of the undrawn fleet financingfacility and £10m of the undrawn acquisition facility. As a result, the Group’s facilities now comprise £85m for working capital, £30m for fleetfinancing and £60m of term loans for acquisitions, together with the £7.5m term loan and £10.2m mortgage. A revised set of covenants and undertakings was agreed as part of this refinancing, together with an increase in the applicable interest rates to reflect market conditions.

The interest rate applicable to the revolving cash advance facilities and the term loans was increased to 1.70% to 2.15% above LIBOR,dependent on the ratio of Net Debt to EBITDA not exceeding certain levels.



2008 2007Continuing operations Note £’000 £’000

Operating incomeManagement charges 40,966 32,297Other income 2,022 45Dividends from subsidiaries 8,000 12,350

50,988 44,692

Operating expensesShare-based payment charge (1,708) (910)Administrative expenses (23,521) (21,967)

(25,229) (22,877)

Operating profit 33 25,759 21,815

Finance costs 35 (8,258) (4,456)

Profit before tax 17,501 17,359Tax 36 (3,596) (1,975)

Profit for the period 13,905 15,384

Company statement of changes in equity for the year ended 30 June 2008

Share Share premium Own shares Equity Retained capital account reserve reserve earnings

Note 43 Note 43 Note 46 Note 45 Note 44 Total £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 July 2006 6,799 66,086 – 3,997 909 77,791

Profit for the year – – – – 15,384 15,384 Issue of new ordinary shares 111 2,558 – – – 2,669 Share-based incentive plans – – – 1,275 – 1,275 Deferred tax – share-based incentive plans – – – (1,123) – (1,123)Current tax – share-based incentive plans – – – 1,651 – 1,651 Dividend paid – – – – (12,622) (12,622)

Balance at 30 June 2007 6,910 68,644 – 5,800 3,671 85,025 –

Profit for the year – – – – 13,905 13,905 Issue of new ordinary shares 35 1,381 – – – 1,416 Share-based incentive plans – – – 2,253 – 2,253 Helphire Group plc shares acquired by ESOP – – (7,499) – – (7,499) Deferred tax – share-based incentive plans – – – (1,069) – (1,069)Dividend paid – – – – (16,852) (16,852)

Balance at 30 June 2008 6,945 70,025 (7,499) 6,984 724 77,179

Company income statementfor the year ended 30 June 2008



2008 2007Note £’000 £’000

Non-current assetsProperty, plant and equipment 37 9,052 7,966Investments in subsidiaries 38 79,884 68,303Other investments 38 300 300Deferred tax asset 42 550 1,719Trade and other receivables – 316

89,786 78,604

Current assetsTrade and other receivables 39 140,033 99,628Other financial assets 67 –Cash and cash equivalents 736 436

140,836 100,064

Total assets 230,622 178,668

Current liabilitiesTrade and other payables 40 (13,945) (14,351)Current tax liabilities (174) (562)Borrowings and overdrafts 41 (78,307) (45,229)

(92,426) (60,142)

Net current assets 48,410 39,922

Non-current liabilitiesBorrowings and overdrafts 41 (60,835) (33,498)Deferred tax liabilities 42 (182) (3)

(61,017) (33,501)

Total liabilities (153,443) (93,643)

Net assets 77,179 85,025

EquityShare capital 43 6,945 6,910 Share premium account 43 70,025 68,644Own shares reserve 46 (7,499) –Retained earnings 44 724 3,671 Equity reserve 45 6,984 5,800

Total equity 77,179 85,025

The financial statements were approved by the Board of Directors and authorised for issue on 23 September 2008. They were signed on itsbehalf by:


Company balance sheet as at 30 June 2008



2008 2007£’000 £’000 £’000 £’000

Cash flows from operating activitiesOperating profit 25,759 21,815 Depreciation charge 223 112 Increase in debtors (42,113) (21,419)(Decrease)/increase in creditors (351) 4,494 Share-based payment charge 1,528 910

Cash (used in)/generated from operations (14,954) 5,912

Bank and loan interest paid (8,325) (4,456)Taxation paid (2,693) –

Net cash flow from operating activities (25,972) 1,456

Cash flows from investing activitiesPurchases of property, plant and equipment (1,307) (1,058)Acquisitions (9,836) –

Net cash flow from investing activities (11,143) (1,058)

Cash flows from financing activitiesNet proceeds from issue of ordinary share capital 1,417 2,444 Net proceeds from issue of new loans 37,729 16,444 Own shares acquired (7,499) –Repayment of borrowings (7,347) (25,599)Dividends paid to shareholders (16,852) (16,701)

Net cash flow from financing activities 7,448 (23,412)

Net decrease in cash and cash equivalents (29,667) (23,014)

Cash and cash equivalents at beginning of period (39,977) (16,963)

Cash and cash equivalents at end of period (69,644) (39,977)

Cash and cash equivalents consists ofCash at bank and in hand 436 –Cash held in restricted deposit 300 436Bank overdraft (70,380) (40,413)

(69,644) (39,977)

Company cash flow statementfor the year ended 30 June 2008



32 Significant accounting policiesThe separate financial statements of the Company are presented as required by the Companies Act 1985. As permitted by that Act, the separate financial statements have been presented in accordance with International Financial Reporting Standards.

The financial statements have been prepared on a historical cost basis. The principal accounting policies adopted are the same as those set out in note 1 to the consolidated financial statements except as noted below.

Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.

33 Operating profitThe auditors’ remuneration for audit services to the Company was £87,000 (2007: £83,000).

34 Staff costsThe average number of employees (including Executive Directors) was:

2008 2007Number Number

Office administration 93 58Management 63 32

156 90

Their aggregate remuneration comprised:2008 2007£’000 £’000

Wages and salaries 8,338 9,363Social security costs 1,300 1,694Other pension costs 445 344Share-based payment charges 1,708 910

11,791 12,311

35 Finance costs2008 2007£’000 £’000

Interest on bank overdrafts and loans 8,315 2,277Interest on loan notes 10 2,179Change in fair value of other financial assets (67) –

8,258 4,456

Notes to the Company financial statements



36 Tax2008 2007£’000 £’000

Current taxUK corporation tax on profits for the period 3,517 2,210 Adjustments in respect of prior periods (200) –

Total current tax 3,317 2,210

Deferred taxOrigination and reversal of timing differences 279 (235)

3,596 1,975

2008 2007£’000 £’000

Reconciliation of tax chargeProfit before tax 17,501 17,359

Tax at the weighted average UK corporation tax rate of 29.5% (2007: 30%) 5,163 5,208Non taxable income (1,325) (3,705)Deductible costs not in income statement (242) – Non-deductible costs – 472

Tax expense for the period 3,596 1,975

The weighted average rate of UK corporation tax applying to the Company for the year ending 30 June 2009 will be reduced from 29.5% to28% due to legislative changes.

In addition to the deferred tax charge of £100,000 (2007: credit of £231,000) recognised in profit or loss in respect of share-based payments,there was a further charge of £1,069,000 (2007: £1,123,000) recognised in the equity reserve.

37 Property, plant and equipmentFreehold Leaseholdproperty improvements Total

£’000 £’000 £’000

CostAt 1 July 2006 – 850 850 Additions 7,216 40 7,256

At 30 June 2007 7,216 890 8,106 Additions – 1,309 1,309

At 30 June 2008 7,216 2,199 9,415

Accumulated depreciation and impairmentAt 1 July 2006 – (28) (28)Charge for the period (68) (44) (112)

At 30 June 2007 (68) (72) (140)Charge for the period (148) (75) (223)

At 30 June 2008 (216) (147) (363)

Carrying amountAt 30 June 2008 7,000 2,052 9,052

At 30 June 2007 7,149 817 7,966

The cost of the land element of freehold property is not separable from the freehold buildings.

Notes to the Company financial statementscontinued



38 SubsidiariesDetails of the Company and Group’s subsidiaries at 30 June 2008 are as follows:

Shares held by Subsidiary undertaking Company or Group Principal activity Ownership interest % Voting power %

Helphire (UK) Limited Company Non-fault accident management 100% 100%Helphire Finance Limited Company Financing vehicle repairs 100% 100%Angel Assistance Limited Company Sale of legal expenses insurance 100% 100%HHFS Limited Company Fleet management 100% 100%Helphire Legal Services Limited Company Provision of claims handling service 100% 100%Countrywide Assistance Limited Company Non-trading 100% 100%1st Automotive Limited Company Non-trading 100% 100%Rescue Car Rentals Limited Group Non-trading 100% 100%Helphire EBT (Trustees) Limited Group Corporate trustee 100% 100%e Register Limited Company Jewellery data services 100% 100%Total Accident Management Limited Company Accident management services 100% 100%City and County Hire Limited Group Non-trading 100% 100%Car and Commercial Assessors Limited Group Non-trading 100% 100%Specialist Witness Limited Group Non-trading 100% 100%Theftsure Limited Group Non-trading 100% 100%Helphire (Pinesgate) Limited Company Property services 100% 100%Helphire (Pinesgate Reversion) Limited Company Non-trading 100% 100%Albany RTA Limited Company Holding company 100% 100%Albany Group Holdings Limited Group Holding company 100% 100%Marketstir Limited Group Non-trading 100% 100%Albany Assistance Limited Group Uninsured loss recovery 100% 100%Albany Vehicle Rentals Limited Group Vehicle rental 100% 100%Albany Medical Rentals Limited Group Non-trading 100% 100%Swift Rent-A-Car Limited Company Vehicle rental 100% 100%Swift Prestige Hire Limited Group Non-trading 100% 100%Swift Finance (GB) Limited Group Financing vehicle repairs 100% 100%Cab Aid Limited Group Vehicle rental 100% 100%NFL Cover Limited Group Vehicle rental 100% 100%Lawyer.com Limited Group Legal support services 100% 100%QSIT Limited Group IT services 100% 100%E-Claim Limited Group Sale of legal expenses insurance 100% 100%Fleet Legal Limited Group Accident management services 100% 100%Medirep Marketing Limited Group Provision of medico-legal reports 100% 100%Helphire Spain SL Company Non-fault accident management 100% 100%CS2 Lawyers Limited N/A Uninsured loss recovery services 0% 0%Fishers Solicitors Limited N/A Uninsured loss recovery services 0% 0%

The Company and all subsidiaries are incorporated in England and Wales and operate in the United Kingdom, with the exception of HelphireSpain SL, which is incorporated and operates in Spain.

Whilst Helphire owns no shares in CS2 Lawyers Limited or Fishers Solicitors Limited, the Directors consider these entities to be subsidiariesagainst the requirements of IAS27 because of their contractual arrangements with the Group.

The movement in investments in subsidiaries during the year was as follows:

£’000

CostAt 1 July 2006 73,200Additions 365

At 30 June 2007 73,565Additions 11,581

At 30 June 2008 85,146

ImpairmentAt 1 July 2006 and 30 June 2007 5,262

Charge for the year –

At 30 June 2008 5,262

Net book valueAt 30 June 2008 79,884

At 30 June 2007 68,303



38 Subsidiaries continued

The additions during the year related principally to the acquisitions of QSIT Limited, Lawyer.com Limited, Medirep Marketing Limited, E-ClaimLimited and Fleet Legal Limited on 6 August 2007, together with the acquisitions of Cab Aid Limited and NFL Cover Limited on 19 November2007. Full details of these acquisitions are disclosed in note 24. The remaining increase in investments arose from the accounting for share-based payment charges in respect of subsidiary undertakings.

39 Trade and other receivables2008 2007£’000 £’000

CurrentAmounts owed by subsidiary undertakings 135,634 91,540Other debtors 2,038 5,328Prepayments 2,189 2,083VAT recoverable 172 677

140,033 99,628

Non-currentAmounts owed by subsidiary undertakings – 316

– 316

40 Trade and other payables2008 2007£’000 £’000

Trade payables 3,316 1,945Other taxation and social security 358 1,205Accruals and deferred income 5,658 5,817Amounts owed to subsidiary undertakings 4,613 5,384

13,945 14,351

Trade payables represent amounts payable for goods and services. The average credit period taken for trade purchases is 60 days(2007: 26 days).

41 Borrowings and overdrafts2008 2007£’000 £’000


139,142 78,727

The borrowings are repayable as follows:On demand or within one year



In the second yearBank loans – 4,522

In the third to fifth years inclusiveBank loans 60,835 28,976


Further details relating to borrowings and overdrafts and the applicable interest rates are given in note 17 to the consolidated financialstatements. The Directors consider that the fair values of the Group’s borrowings was equal to their book value.




42 Deferred taxDeferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (2007: 28%).

The deferred tax liabilities and assets, and movements thereon, recognised by the Company are set out below:

Liability Asset Accelerated tax Liability Liability Share-based

depreciation Other Total payments £’000 £’000 £’000 £’000

At 1 July 2006 (7) – (7) 2,611 Credit to income 4 – 4 231 Charge to equity – – – (1,123)

At 30 June 2007 (3) – (3) 1,719 Charge to income (160) (19) (179) (100)Charge to equity – – – (1,069)

At 30 June 2008 (163) (19) (182) 550

43 Share capital and share premium accountThe movements on these items are disclosed in notes 19 and 20 to the consolidated financial statements.

44 Retained earnings

£’000

At 1 July 2006 909Profit for the year 15,384Dividends (12,622)

At 30 June 2007 3,671Profit for the year 13,905Dividends (16,852)

At 30 June 2008 724

45 Equity reserve£’000

At 1 July 2006 3,997Share-based payment charge 1,275Deferred tax – share-based incentive plans (1,123)Current tax – share-based incentive plans 1,651

At 30 June 2007 5,800Share-based payment charge 2,253Deferred tax asset on share options (1,069)

At 30 June 2008 6,984

46 Own shares reserve£’000

At 1 July 2006 and 30 June 2007 –Shares in Helphire Group plc acquired by ESOP (7,499)

At 30 June 2008 (7,499)



47 Financial instrumentsThe Company follows the same accounting policies and manages its capital and risks in the same way as the Group. Please refer to Note 28for further details. The gearing ratio, defined as net debt divided by total capital, was as follows:

2008 2007£’000 £’000

Net debt 138,406 78,291Total shareholders’ equity 81,103 85,025

Total capital 219,509 163,316

Gearing ratio 63.1% 47.9%

Net debt is defined as borrowings and overdrafts less cash and cash equivalents.

Categories of financial instruments2008 2007£’000 £’000

Financial assetsHeld to maturity investments 300 300 At amortised cost:

Amounts owed by subsidiary undertakings 135,634 91,856 Cash and cash equivalents 736 436

Assets held at fair value through profit or loss 67 –

Financial liabilitiesAt amortised cost:

Trade payables 3,316 1,945 Other borrowings and overdrafts 139,142 78,727

Financial risk management objectivesThe Company monitors and manages its financial risks, which include interest rate risk, credit risk and liquidity risk. Interest rate swaps areused to manage interest rate risk. The use of financial derivatives is governed by the Company’s policies, approved by the Board of Directors,which provide written rules on the use of financial derivatives. The Company does not enter into or trade financial instruments, includingderivative financial instruments, for speculative purposes.

Interest rate risk managementThe Company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by theCompany by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts.Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite.

Interest rate sensitivity analysisThe sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative financialinstruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstandingat the balance sheet date was outstanding for the whole year. A 0.75% increase or decrease represents management’s assessment of thereasonably possible change in interest rates.

If interest rates had been 0.75% higher/lower and all other variables were held constant, the Company’s profit for the year ended 30 June 2008would have decreased/increased by £0.4m (2007: £0.6m). This is mainly attributable to the Company’s exposure on variable rate borrowings.

Interest rate swap contractsUnder interest rate swaps, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated onagreed notional principal amounts. Such contracts enable the Company to mitigate the risk of of changing interest rates on the cash flowexposures on issued variable rate debt held. The fair value of swaps at the reporting date is determined by discounting the future cash flowsusing the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.





The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the reportingdate. No comparatives are provided as the interest rate swaps were only taken out in the current year.

Contract Notional interest principal Fair

rate amount valueOutstanding ‘receive variable pay fixed’ contracts % £’000 £’000

Less than one year 5.52 55,000 203Two to five years 5.68 128,752 (136)

5.63 183,752 67

Credit risk managementCredit risk for cash placed on deposit is controlled by the use of approved financial institutions.

Liquidity risk managementUltimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk managementframework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Groupmanages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continually monitoring forecastand actual cash flows.

Maturity of financial assetsThe following table details the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up basedon the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where theCompany anticipates that the cash flow will occur in a different period.

In less than In one to After five 2008 In less than In one to After five 2007one year two years years Total one year two years years Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Held to maturity investments – – 300 300 – – 300 300

At amortised cost:Amounts owed by subsidiary undertakings 135,634 – – 135,634 91,540 316 – 91,856

Cash and cash equivalents 736 – – 736 436 – – 436Assets held at fair value through profit or loss 67 – – 67 – – – –

136,437 – 300 136,737 91,976 316 300 92,592

Maturity of financial liabilitiesThe following table details the Company’s expected maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be earned on those liabilities except where theCompany anticipates that the cash flow will occur in a different period.

In less than In one to In two to 2008 In less than In one to In two to 2007one year two years five years Total one year two years five years Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Trade and other payables 3,316 – – 3,316 1,945 – – 1,945 Other borrowings and overdrafts 78,307 – 60,835 139,142 45,229 4,522 28,976 78,727

81,623 – 60,835 142,458 47,174 4,522 28,976 80,672

In addition to the above, at 30 June 2008 the Company had available £17.5m of undrawn committed working capital facility and £15.3m of acquisition facility. In conjunction with the Placing and Open Offer which took place after the year end, the bank facilities were revised, as detailed further in note 31.

Fair value of financial instrumentsThe fair value of financial assets and liabilities held at amortised cost is considered by the Directors not to be materially different from theircarrying amounts at the balance sheet date.


Notice of Annual General Meeting


Notice is hereby given that the Annual General Meeting of the Company will be held at the Illustrious Suite, Hampton Stand, Bath Rugby,Recreation Ground, Bath on Thursday 13 November 2008 at 11 am for the consideration of the following resolutions, which will be proposedas to resolutions 1 to 7 inclusive as ordinary resolutions and as to resolution 8 a special resolution:

1. To receive and adopt the financial statements for the financial year ended 30 June 2008 and receive the Directors’ and auditors’ reports.

2. To declare a final dividend of 5.8 pence per ordinary share.

3. To re-elect Mark Jackson as a Director.

4. To elect Mark Adams as a Director.

5. To elect Dr Reiner Hagemann as a Director.

6. To re-appoint Deloitte & Touche LLP as auditors to the Company until the conclusion of the next general meeting of the Company at which accounts are laid and to authorise the Directors to fix their remuneration.

7. To approve the Directors’ Remuneration Report for the financial year ended 30 June 2008.

8. That the amendments to the Articles of Association of the Company in the form produced to the Annual General Meeting and, for thepurpose of identification, initialled by the Chairman and dated 23 September 2008 be approved.


Nick TilleyCompany Secretary23 September 2008

Notes:(i) At the date of the Notice, the issued share capital of the Company was 179,832,516 ordinary shares of 5 pence each and the total number of voting shares

was 179,832,516.

(ii) Any member entitled to attend and vote at the meeting convened by the above Notice may appoint one or more proxies to attend and, on a poll, to vote instead of him. A proxy need not be a member of the Company. A form of proxy is enclosed for your use if desired. Completion of a form of proxy does not preclude a member from attending and voting at the meeting in person.

(iii) If you appoint a proxy to vote on your behalf at this Annual General Meeting, your voting rights will revert to you at the conclusion of the Annual General Meeting or any adjournment of the Annual General Meeting.

(iv) Copies of all the Directors’ service agreements or memoranda of the terms thereof and the Company’s amended Articles of Association and a copy of the existingArticles of Association marked to show the changes being proposed, will be available for inspection at the Company’s registered office during normal business hours on any week day (Saturdays, Sundays and public holidays excluded) and will be available for inspection at the place of the Annual General Meeting for at least 15 minutes prior to and during the meeting.

(v) The Register of Directors’ interests is kept by the Company and will be open for inspection at the meeting.

(vi) To be valid, the instrument appointing a proxy, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of such power or authority) must be deposited with Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hoursbefore the time fixed for the meeting or the adjourned meeting.

(vii) Pursuant to Regulation 34 of the Uncertificated Securities Regulations 1995, the Company specifies that only those shareholders registered in the Register ofMembers of the Company 48 hours before the time for which the meeting is called, shall be entitled to attend and vote at the Annual General Meeting in respect of the number of shares registered in their name at that time. Changes to entries on the Register of Members after 48 hours before the time for which the meetingis called shall be disregarded in determining the rights of any person to attend or vote at the meeting.

(viii) In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that (i) if a corporate shareholder hasappointed the Chairman of the meeting as its corporate representative to vote on a poll, in accordance with the directions of all other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representatives in accordance with those directions; and (ii) if more than one corporate representative for the same corporateshareholder attends the meeting but the corporate shareholder has not appointed the Chairman of the meeting as its corporate representative, a designatedcorporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate representatives willgive voting directions to that designated corporate representative.

(ix) Corporate representatives are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives, see www.icsa.org.uk for further details of this procedure. The guidance includes a sample form of appointment letter if the Chairman is beingappointed as described above.



Set out below is an explanation of the Resolutions to be proposed at the Annual General Meeting:

Resolution 1Resolution 1 will be proposed as an ordinary resolution to receive and adopt the financial statements for the financial year ended 30 June2008 and receive the Directors’ and Auditors’ reports. A copy of the Company’s financial statements and the Directors’ and auditors’ reportsare enclosed within this Annual Report.

Resolution 2 Resolution 2 will be proposed as an ordinary resolution to permit the payment of a dividend to shareholders of 5.8 pence per ordinary share.

Resolutions 3, 4 and 5Resolutions 3, 4 and, 5 will respectively be proposed as ordinary resolutions to re-elect, as a Director, Mark Jackson who is retiring by rotationand to elect Mark Adams and Dr Reiner Hagemann as Directors following their appointment during 2008, and whose biographical details areset out on pages 18 to 19 of this Annual Report.

Resolution 6Resolution 6 will be proposed as an ordinary resolution to re-appoint Deloitte & Touche LLP as auditors to the Company, until the conclusionof the next general meeting of the Company, at which accounts are laid and to authorise the Directors to fix their remuneration.

Resolution 7Resolution 7 will, as required by the Directors’ Remuneration Report Regulations 2002, be proposed as an ordinary resolution to approve the Directors’ Remuneration Report for the Financial Year ended 30 June 2008. The Directors’ Remuneration Report can be found on pages 26 to 33 of this Annual Report.

Resolution 8 (Special Resolution)Resolution 8 seeks approval for the adoption of new Articles of Association of the Company. The Company’s current Articles of Associationwere last amended on 15 November 2007. Since then there have been some developments in the law and market practice which affect theCompany’s Articles of Association including, recently, the implementation of certain parts of the Companies Act 2006. The Company togetherwith its advisors has therefore carried out a detailed review of its Articles of Association and considers that this is an appropriate time toupdate them to reflect the current law and practice.

Because of the number of these changes, they have not been itemised separately in Resolution 8 but have instead been incorporated into a revised draft of the Articles of Association, which it is proposed should replace the existing Articles of Association.

Action to be takenEnclosed is a form of proxy relating to the Resolutions to be proposed at the Annual General Meeting. You are requested to complete, sign and return the form of proxy in accordance with the directions on it as soon as possible, but in any event so as to arrive at the offices of the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 11am on 11 November 2008, being 48 hours before the time appointed for the Annual General Meeting. Completion of the form of proxy will notprevent you from attending and voting at the Annual General Meeting if you so wish.

RecommendationYour Board unanimously believes that the proposals referred to above in this explanation are in the best interests of shareholders as a wholeand, accordingly, recommends that you vote in favour of the Resolutions to be proposed at the Annual General Meeting, as the Directorsintend to do in respect of their own beneficial holdings.

Rodney Baker-BatesChairman



Company enquiriesGeneral shareholder enquiries about theCompany and requests for copies of theGroup’s literature, Annual Report or InterimStatement should be directed to theCompany Secretary at the Company’s headoffice at:

PinesgateLower Bristol RoadBathBA2 3DP

InternetVisit the Company’s website atwww.helphire.co.uk for:

• Current share price• Latest news• Additional information about

the Company• Latest Annual and Interim Reports

Shareholding enquiriesQueries about personal shareholdings (e.g. lost certificates, dividend payments or change of personal details) should bedirected to the Company’s registrars,Capita IRG plc, whose details are set out in the Advisor’s section.

Registered OfficeHelphire Group plcWhite Hart House High Street Limpsfield Surrey RH8 0DT

Company number 03120010

Financial calendar2008

November Interim Management Statement13 November Annual General Meeting31 October Record date for final dividend5 December Payment of final dividend

2009

February/March Interim ResultsMarch/April Record date for interim dividendApril/May Payment of interim dividendMay Interim Management Statement

Shareholder information, financial calendar and advisors

AdvisorsAuditorsDeloitte & Touche LLP3 RivergateTemple QuayBristolBS1 6GD

SolicitorsSlaughter and MayOne Bunhill RowLondonEC1Y 8YY

Taylor Wessing Carmelite50 Victoria EmbankmentBlackfriarsLondonEC4Y 0DX

Stockbrokers and Financial AdvisorsCenkos Securities Limited6.7.8 Tokenhouse YardLondonEC2R 7AS

RegistrarsCapita IRG plcThe Registry34 Beckenham RoadBeckhamKentBR3 4TU

BankersBank of Scotland4th FloorNew Uberior House11 Earl Grey StreetEdinburghEH3 9BN

Royal Bank of Scotland4th FloorCastlegate HouseTower HillBristol BS2 0JA

Allied Irish Bank plc2 Callaghan SquareCardiffCF10 5AZ

HSBC45 Milsom StreetBathBA1 1OU

PR AdvisorsCollege HillThe RegistryRoyal Mint CourtLondonEC3N 4QN


This report has been printed in the UK by www.applecolour.co.uk. Our printersare accredited with the ISO14001 Environmental Management System andhold full Forest Stewardship Council (FSC) chain of custody. All inks used arevegetable-based. The paper used in this report is produced from FSC certifiedfibre and the publication is bio-degradable and recyclable.

If you have finished reading this report and no longer wish to retain it, please pass it on to other interested readers or return it to Helphire Group plcor recycle it. Thank you.

Designed and produced by The College +44 (0)20 7457 2030www.thecollege.uk.com

Who we are

Founded in 1992, Helphire is the UK’s marketleader in the provision of accident assistance to not-at-fault drivers involved in road accidents.In partnership with the insurance and motorindustries, we provide accident managementsolutions to motorists, ensuring that they remainmobile until their own vehicles are repaired,or until they are put in a position to obtain a replacement.

Contents

Introduction

01 Business and financial highlights02 At a glance 04 Chairman’s statement

Business review

06 How we are driving ourbusiness forward

11 Our performance 15 Corporate social responsibility (CSR)

Governance

18 Board of Directors 20 Directors’ report23 Corporate governance26 Directors’ remuneration report34 Statement of Directors’ responsibilities

Our results

35 Independent auditors’ report36 Consolidated income statement37 Consolidated statement

of changes in equity38 Consolidated balance sheet39 Consolidated cash flow statement40 Notes to the consolidated

financial statements64 Company income statement64 Company statement of changes

in equity65 Company balance sheet66 Company cash flow statement67 Notes to the Company

financial statements74 Notice of Annual General Meeting76 Shareholder information,

financial calender and advisors

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Helphire Group plcPinesgateLower Bristol RoadBath BA2 3DP Tel: 01225 321000www.helphire.co.uk

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lc Annual report and accounts 2008

Helphire Group plcAnnual report and accounts 2008

Maximising our potential

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maximising our potential - redde · close relationships with solicitors who provide personal injury...

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