Accidentcare Group PLC, the leading supplier of vehicle accident assistance, announces its Preliminary Results for the Year ended 31 December 2000.

Ø      Pre exceptional loss of £159,000 (1999: profit £16,000 restated)

Ø     £300,000 Gross Profit deferred to 2001 through adopting accounting policy      change to reflect best practice

Ø     £600,000 fund raising - fully subscribed

Ø      Management restructuring exercise completed

Ø      Continued growth expected

19th April 2001

For more information visit www.accidentcare.com

Approval and Risk Warnings

The value of the Ordinary Shares in the Company may fluctuate and the investor may not get back the whole of his investment.

OFEX is not a recognised or designated investment exchange. There is no recognised market for ordinary shares in the Company and it may be difficult for the investor to sell the investment or to obtain reliable information about its value or the extent of the risks to which it is exposed.

This announcement is not intended to contain any offer or invitation to acquire or deal in the shares of the Company. Teather & Greenwood Limited has approved this announcement for section 57 of the Financial Services Act 1986. Teather & Greenwood is regulated by The Securities and Futures Authority.

During the year 2000, Accidentcare Group PLC established itself at the forefront of a rapidly growing market, specialising in providing assistance services to the motoring public. The group obtained an OFEX facility in September 1999 and it had been planning to migrate to a listing on AIM during early 2001.  These plans have been placed on hold until such time as stock market conditions become more favourable. 

The Company is pleased to announce a proposed subscription agreement for 2,000,000 new shares in the Company at 30p per share by certain existing shareholders, in order to fund the Group’s continued expansion.  An EGM has been called for 14th May 2001 to seek shareholder approval of the proposed subscription.

The year 2000 has also witnessed a major restructuring of the Group, involving the appointment in December 2000 of Sachel Singh as Chief Executive, Nick Stone as Finance Director and a new Board of Directors.  Roy Kent stepped down as Managing Director to become non-Executive Chairman and two new non-Executive Directors, Bernard Solomons and Robin Warrender, were also welcomed on to the Board.  Regrettably, Panten Corbett resigned as non-Executive Director to pursue other business interests.

The Group also now benefits from having an Executive Committee, which is responsible for the various areas of sales activities, being Intermediary Marketing, Insurer and Affinity Marketing, as well as Group Operations.  These senior executives have direct responsibility for the enhanced marketing strategy, which is designed to underpin the growth targets for the immediate future.  The infrastructure is now in place to build upon the progress made so far.  This will not only help to make Accidentcare a household name in its unique marketplace, but also maintain the level of service which has been the cornerstone of the Company’s success hitherto.

In January 2001, KPMG Audit Plc were appointed as the Group’s auditors to fill the vacancy left by the resignation of Jeffreys Henry, the previous incumbent.  The Board has revised the Group’s income recognition accounting policy to reflect the best practice following a detailed review of companies with similar income streams.  The Directors, following advice from their advisers, have decided to change the way in which membership fees are recognised to be consistent with the majority of other businesses with similar income streams.  The historic policy was to recognise in full the estimated gross profit on each membership during the month of the sale.  The new policy will be to spread the gross profit over the life of the membership.  All the figures contained within this announcement have been re-stated under the new accounting policy.

Results

The results for the year show turnover up to £2.6m from £2.1m in 1999, a 25% increase, and loss on ordinary activities before exceptional items of £159,000 (1999: profit of £16,000).  This loss reflects both the deferral of profit as a result of the new accounting policy and the investment in the new management and sales structure during the last quarter of the year.  As a result of the change in accounting, more than £300,000 of gross profit has been deferred into 2001.  The impact of the new income recognition policy will continue to affect profitability in 2001 as the membership base grows.

Operations

Since we floated on OFEX in September 1999, we have invested heavily in our operational systems, for example by installing e-mail and zetafax facilities for instantaneous communication with both our broker partners and members.  However, these are only facilitators and should not be viewed as an alternative to the ‘personal touch’.  Our philosophy of total customer service remains at the forefront of everything we do.

Our membership base has steadily grown during the year.  Since the year end we have benefited from the collaboration agreements signed last year and the rate of membership has increased in line with market expectations.

In 2000 we have forged marketing alliances with a number of leading insurance companies and service providers, including Policy Master, Global Telematics and Europ Assistance.  These relationships allow Accidentcare to market its products via their network which will not only increase the membership but further extend the marketing database.

Outlook

We have every confidence regarding our future prospects – the marketplace is expanding and we are in a position to benefit from this.  We intend to continue to forge strategic affinity partnerships to expand our membership base and to further develop customer driven membership schemes.  The focus will continue to be on establishing a number of new distribution channels for our products and services; the benefits of this policy can already be seen in the increased level of turnover.

I believe that the market for accident claims handling continues to expand as insurers seek long term relationships with strategic partners to help them accommodate the peaks and troughs of demand and to improve the level of service.   Accidentcare remains at the forefront in this changing arena.

We are committed to developing solutions that customers demand.  The next few years will offer opportunities for significant growth and will therefore be the most important in the Group’s history and I believe that we have a solid foundation on which to build for the future.

Consolidated profit and loss account

 The results above relate to continuing activities,

 The Group had no recognised gains or losses other than those reported above.

Consolidated Balance Sheet

Consolidated cash flow statements

Notes to the Accountants