Interim results

For immediate release					      Wednesday 29th November 2000

CLAIMS DIRECT PLC

'Excellent maiden interim results from the UK market leader'

Interim Results for the six months ended 30 September 2000

Claims Direct plc ('Claims Direct'), the UK market leader in personal injury compensation, announces its unaudited results for the six months ended 30th September 2000:

Highlights

* Underlying operating profits* up 174% to £11.8m (1999: £4.3m)
* Turnover up 336% to £42.7m (1999: £9.8m)
* Basic earnings per share of 3.9p (1999: 1.9p)
* Maiden interim dividend per share of 0.5p
* First half accepted cases run rate average of 5,065 per month (1999: 1,857)
* First half number of accepted cases rose by 172% to 30,388 (1999: 11,141), greater than last year as a whole
* Number of cases covered by insurance total 25,886 (1999: 592)

*before amortisation and exceptional employee costs
	
Tony Sullman, Chairman of Claims Direct, commenting on the interim results, said: 

'Our half-year results reflect our market leadership in the personal injury claims management industry, the success of our brand, and our marketing drive.  

'We are determined to rebuild consumer confidence by continuing to enable members of the public who have suffered injury or disability through the fault of another party to have 'Access to Justice'.

'We are operating in a long term growth market and are confident that the strong momentum we have demonstrated will continue.  The outlook for the remainder of the current financial year, although clouded by recent events, continues to be positive.'

- Ends -

An analysts' meeting will be held today at 9:30am at Founders Hall, Cloth Fair, EC1

For further information, please contact:

Claims Direct plc								
Colin Poole, Chief Executive	01952 284838
Paul Doona, Finance Director	01952 284938
Web Site	             www.claimsdirect.com

Golin/Harris Ludgate	0207 253 2252
Reg Hoare/Robin Hepburn 


Chairman's Statement


I am pleased to report Claims Direct's maiden set of interim results since becoming a quoted company, for the six months ended 30 September 2000.

Operating results

The group has recorded an excellent performance for the period.  Operating profit before exceptional employee costs and amortisation, the best measure of our underlying performance, rose 174% to £11.8m (1999: £4.3m). Basic earnings per share were 3.9p (1999: 1.9p).

Balance Sheet

At the end of the period the Group had a robust financial position, with net assets of £57.8m (1999 £2.1m) and cash at bank and in hand of £43.2m (1999: £0.6m). £48.5m was raised in the flotation as proceeds for the Company's use.  

Dividend

As a sign of your board's confidence in the progress of your company, it is proposed to pay a maiden interim dividend of 0.5p on 14 January 2001 to all shareholders on the register as at 15 December 2000.  As indicated in the Company's flotation prospectus, the Directors intend to adopt a progressive dividend policy while maintaining an appropriate level of dividend cover.

Operating review

The last six months have been an exciting period for the group, during which we achieved a successful flotation on the London Stock Exchange and acquired the vetting business of Poole and Company for a consideration of £9.75 million.  The number of cases accepted during the period was 30,388 (1999: 11,141), of which 25,886 were covered by the Claims Direct Protect insurance policy.  Furthermore, substantial progress has been made in relation to the litigation initiated by certain franchisees who declined to operate the Claims Direct Protect insurance policy.  Gross payments to potential litigants were £976,000 in the period, but taking into account the benefit of the cases returned to Claims Direct from these franchisees, the costs to the Group are not expected to be material.  

The accounts include the estimated cost of ex gratia payments which the company expected to make to claimants who had voluntarily transferred to the insurance policy from the previous percentage fee arrangement, and had not been able to recover the cost of insurance premiums from third party insurers on policies taken out before 1 April 2000.

Subsequent to the period end your company suffered damaging media comment about the issue of premium recoverability pre 1 April 2000. The Board has therefore taken the initiative by announcing that all clients who have taken out insurance policies prior to 1 April will be guaranteed that they will placed in no worse a position than they would have been under the Company's previous arrangements.

The cost of this guarantee is expected to be approximately £5 million, thus requiring a further provision of £4 million to that contained in the interim results.  This will also be treated as an exceptional cost in the second half. The Board believes that this action will arrest and reverse any slow down in business activity which may result from a reduction in consumer confidence due to media comment. 

Recent comment has also centred on the defendant insurance industry's apparent reluctance to re-imburse the premiums paid by claimants for after-event insurance effective since 1 April 2000.  We remain confident and will continue to support the Lord Chancellor's stated objective to protect the client's compensation in full via the Access to Justice legislation.  We continue to monitor the situation closely and should the need arise are prepared to refine our business model as we have done in the past. 

The Claims Direct Protect policy still, however, remains central to our business.  It is a means of protecting our clients from paying legal costs, or even the cost of the insurance premium itself, if they lose their case.  It ensures that we can continue to provide access to justice for all, no matter their means, on a 'no win, no fee' basis. 

As we had predicted competition has increased with the emergence of new entrants into the market.  We believe that this acts as a spur to growth as well as to our own aim of maintaining our market leadership. We operate a network of claims managers providing nationwide coverage in support of more than 300 firms of solicitors.  This unique and expensive infrastructure has taken years to build - and encompasses considerable experience backed by full training and accreditation through the law industry's leading training organisation, Central Law Training.

Our direct response TV advertising has been and will remain our principal marketing tool as evidenced by the fact that Claims Direct is the UK's leader by reference to rate card spend.  Advertising expenditure in the first half totalled approximately £7m. We intend to refresh the campaign in the second half and to use advertising to support our position as UK market leader.

As the increase in administrative costs show, staff numbers have increased to cope with the demands of a growing business.  In particular, we have invested in well-proven senior managers at operational board level.  

During the last 12 months we have developed a retail presence of some 20 shop-units.  We will closely monitor progress before making a decision about further expansion next year, but we are encouraged by the results to date.

New developments

We are in the process of finalising arrangements for the launch of Accident Assist, a unique form of work in progress funding for solicitors which we are arranging through a leading UK bank.  The importance of this initiative lies not only in freeing up solicitor capacity, but also in providing an additional route to market, as it encourages solicitors, both panel and non-panel, to refer claims to the Company.

While we build our share of the UK market, we are also looking to develop the 'Claims Direct' brand overseas and have appointed an International Business Development Director to explore master licensing agreements in Europe, the USA and Australasia.  Overseas development is an area of the business which I intend to concentrate upon in the second half of the year.

We are also developing an advanced computerised claims management system.  This will not only ensure rapid co-ordination between claims managers, central office and solicitors, but will also enable insurance companies to proceed more rapidly to settlement.  The system is due to be in place by the middle of next year.

Outlook

Our half-year results reflect our market leadership in the personal injury claims management industry, the success of our brand, and our marketing drive.  

We are determined to re-build consumer confidence by continuing to enable members of the public who have suffered injury or disability through the fault of another party to have 'Access to Justice'.

We are operating in a long term growth market and are confident that the strong momentum we have demonstrated will continue.  The outlook for the remainder of the current financial year, although clouded by recent events, continues to be positive.  


Tony Sullman
Chairman
29 November 2000




Consolidated profit and loss accounts


	Unaudited 	Unaudited 	Audited
	6 months to 	6 months to 	12 months to
	30 Sept 2000 	30 Sept 1999 	31 Mar 2000
	Note 	£'000 	£'000 	£'000
	
Turnover - continuing operations 		42,710 	9,796 	39,964
Cost of sales 		 
- before exceptional costs		(24,249)	(2,369)	(22,215)
- exceptional costs	1	(1,913)	--	--
                                                                                                                (26, 162)             (2,369)           (22,215) 	

Gross profit 		16,548 	7,427 	17,749

Administrative expenses
- before amortisation of goodwill
  and exceptional costs 		 (4,705) 	(3,142) 	(6,027)
- amortisation of goodwill 		(612)	 (68) 	(968)
- exceptional employee costs  	1	(1,611) 	-- 	(350)
	(6,928) 	(3,210)	 (7,345)

Operating profit-continuing operations		 9,620 	4,217 	10,404
Net interest receivable/(payable) 		689	 (82)	 (297)

Profit on ordinary activities
before taxation 		10,309 	4,135 	10,107
Tax on profit on ordinary activities	 2 	(3,435) 	(1,171) 	(3,457)

Profit on ordinary activities after taxation 		6,874 	2,964 	6,650
Dividends 		(963)	 (216)	 (2,858)

Profit for the period 		5,911 	2,748 	3,792

Earnings per ordinary share
- before exceptional employee costs,
  amortisation of goodwill and interest 	3 	4.7p	1.9p	5.1p
- basic 	3 	3.9p	1.9p	4.2p
- diluted 	3	 3.8p	1.9p	4.2p
Dividend per ordinary share(		0.5p 	                    2.3p  	               47.8p

There were no recognised gains and losses in the period other than those arising in the profit and loss account.



( The dividend per ordinary share declared in the six month period to 30 September 1999 and the year to 31 March 2000 are not comparable with that declared in the six month period.  These being dividends paid in the run up to flotation to a significantly smaller shareholder base.


Consolidated balance sheets

		Unaudited 	Unaudited 	Audited
		at 	at 	at
		30 Sept 2000 	30 Sept 1999 	31 Mar 2000
	Note 	£'000 	£'000 	£'000

Fixed assets
Intangible assets	4 	12,610 	572 	3,472
Tangible assets 		1,180 	189 	466
Investments 	5	 623 	--	--

Total fixed assets 		14,413	 761 	3,938

Current assets
Debtors 		30,311 	10,691 	19,103
Investments 	6 	10,535 	--	--
Cash at bank and in hand 		43,210 	611 	5,059


Total current assets 		84,056 	11,302 	24,162

Creditors: amounts falling due within one year 		(33,784)	 (8,620) 	(17,450)

Net current assets 		50,272 	2,682	 6,712

Total assets less current liabilities 		64,685	 3,443 	10,650

Creditors: amounts falling
due after more than one year 		-- 	(13)	--

Provisions for liabilities & charges 		(6,868) 	(1,375) 	(7,296)

Net assets		 57,817 	2,055 	3,354

Capital & reserves
Called up share capital 		1,926 	94	 94
Share premium account 		48,222 	--	--
Merger reserve 		333 	644 	401
Profit & loss account 		7,336 	1,317 	2,859

Equity shareholders' funds 		57,817	 2,055 	3,354

The interim financial statements were approved by the Board of Directors on 29 November 2000.


Consolidated cash flow statements

	Unaudited 	Unaudited	Audited
	6 months to 	6 months to	12 months to
	30 Sept 2000 	30 Sept 1999	31 March 2000
	£'000 	£'000		£'000

Net cash inflow/(outflow) from operating activities	6,160	(1,294)	4,813

Returns on investments and servicing of finance
Interest received 	764	--	44
Interest paid	 (341) 	(82)	(341)

Net cash inflow/(outflow) from returns on
investments and servicing of finance 	423 	(82)	(297)

Taxation 	(2,074) 	--	(76)
Capital expenditure and financial investment -
Purchase of tangible fixed assets 	(903)	 (59)	(426)
Purchase of fixed asset investments	(623)	--	--

Acquisitions
Poole & Company vetting operation 	(9,750)	--	--
Deferred consideration in relation to 
acquisition in previous period	(1,000)	--	--

Equity dividends paid to shareholders 	(590) 	(33)	(1,605)

Net cash (outflow)/inflow before use
of liquid resources and financing 	(8,357) 	(1,468)	2,409

Management of liquid resources
Increase in short-term restricted deposits with banks	 (4,003) 	--	(4,259)
Current asset investments	(10,535)	--	--	
Financing
Issue of ordinary shares (net of costs)	48,552
(Decrease)/increase in bank loans 	(5) 	4	(8)
Capital element of finance lease payments	(3)	(3)	(9)
Increase in invoice discounting facility	8,572 	2,629	3,144

Net cash inflow from financing 	57,117 	2,630	3,127

Increase in cash in the period	34,222 	1,162	1,277

Reconciliation to net cash/(debt)
Net cash/(debt) at 1 April 	1,131	 (1,278)	(1,278)
Increase in net cash 	34,222	 1,162	1,277
Movement in liquid resources	14,538 	(9)	4,259
Movement in financing	(8,565)	 (2,630)	(3,127)

Net cash/(debt) at period end	41,326	 (2,755)	1,131




Supplementary statements to the consolidated cash flow statement

Reconciliation of operating profit to operating cash flow


	Unaudited	Unaudited	Audited
	6 months to 	6 months to 	12 months to
	30 Sept 2000	30 Sept 1999	31 March 2000
	£'000 	£'000	£'000

Operating profit	9,620 	4,217	10,404
Depreciation charge 	189 	23	89
Loss on sale of fixed assets	--	--	15
UITF 17 charge	--	--	255
Amortisation of goodwill 	612 	68	968
Increase in debtors 	(10,942) 	(6,437)	(15,197)
Increase in creditors 	6,109 	1,376	6,756
Increase/(decrease) in provisions 	572 	(541)	1,523

Net cash inflow/(outflow) from operating activities 	6,160	 (1,294)	4,813


Reconciliation of movement in net debt
	At 1 April 		At 30 Sept
	2000 	Cash flow 	2000
	£'000 	£'000 	£'000

Cash at bank and in hand 	800 	34,148 	34,948

Overdrafts 	(74) 	74 	--

	726 	34,222 	34,948

Debt due within one year 	(3,848) 	(8,568) 	(12,416)
Finance leases 	(6) 	3 	(3)

	(3,854) 	(8,565) 	(12,419)

Liquid Resources
- restricted cash balances	4,259	4,003	8,262
- current asset investments	-	10,535	10,535

	4,259	14,538	18,797

	1,131	 40,195 	41,326




Supplementary statement
	Unaudited 	Unaudited	Audited
	6 months to	6 months to	12 months to
	30 Sept 2000 	30 Sept 1999	31 Mar 2000
	 £'000 	£'000	£'000

Reconciliation of movements in shareholders' funds
Profit attributable to shareholders 	6,874 	2,964	6,650
Dividends 	(963) 	(216)	(2,858)
UITF 17 charge	--	--	255

	5,911 	2,748	4,047
New share capital (net of costs) 	48,552	--	--

Net addition to shareholders' funds 	54,463 	2,748	4,047
Opening shareholders' funds 	3,354 	(693)	(693)

Closing shareholders' funds 	57,817 	2,055	3,354




Notes to the accounts

1.  Exceptional costs

	Unaudited	Unaudited	Audited
	6 months to	6 months to	12 months to
	30 Sept 2000	30 Sept 1999	31 Mar 2000
	£'000	£'000	£'000


(a)  Included in cost of sales
	- ex-gratia payments and provision	937	-	-
	- gross payments to potential litigants	976	-	-

		1,913	-	-

(b)  Included in administrative expenses
	- flotation bonuses	481	-	-
	- national insurance paid on share options exercised	654	-	-
	- national insurance provided on share options not exercised	476	-	-
- UITF 17 charge	-	-	350
		1,611	-	350
		3,524	-	350


2.	Taxation
	The taxation charge for the six months to 30 September 2000 has been calculated by applying the estimated tax rate for the current financial year ending 31 March 2001.

3.	Earnings per ordinary share
	Earnings per ordinary share before amortisation of goodwill, interest and exceptional employee costs is calculated by adjusting the profit attributable to ordinary shareholders by the after tax effect of those items (£1,257,000) and then dividing the adjusted earnings by the weighted average number of ordinary shares (174,103,729).  

	Basic and diluted earnings per ordinary share, the latter of which allows for the impact of the exercise of outstanding share options, are calculated by dividing the profit attributable to ordinary shareholders of £6,874,000 (1999: £2,964,000) by the weighted average number of ordinary shares.

	In the case of basic earnings per share, the weighted average number of ordinary shares, excluding the shares held by the long-term share incentive scheme which are owned by the company, totals 174,103,729 (1999: 159,706,993); and for diluted earnings per share, totals 181,576,271 (1999: 160,043,146).

4.	Intangible fixed assets
	Intangible fixed assets comprise goodwill arising on consolidation and on acquisitions. During the period goodwill of £9,750,000 arose on the acquisition of the vetting business of Poole & Co.  This and other goodwill arising has been capitalised and is being amortised over its estimated useful economic life, being five years for past acquisitions.

5.	Fixed assets investments
	Fixed assets investments comprise investment in own shares held within an Employee Trust and relate to the long-term incentive scheme for executive directors. The costs of shares acquired are amortised over the performance period to which they relate.

6.	Current assets investments
	Current assets investments comprise loans to claimants and were made to facilitate the movement from the company's previous to present funder.

7.	Contingent liabilities
	As disclosed in the annual report for the year ended 31 March 2000, the group had become aware of the intentions of a number of current and former franchises to initiate proceedings against the group.  As commented upon in the Chairman's statement, substantial progress has been made towards settling these disputes.

	The Directors, accordingly, remain confident that the resolution of outstanding disputes, will not have a significant impact on the group's financial position.


8.	 Other information
	(a) The figures for the year to 31 March 2000 have been extracted from the full group accounts for that period on which an unqualified report was made by the group's auditors and which have been delivered to the Registrar of Companies.

	(b) The interim financial statements for the six months ended 30 September 2000, whilst not constituting statutory accounts within the meaning of section 240 of the Companies Act 1985,  are prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the group accounts for the year ended 31 March 2000.

	(c) A copy of this  interim statement will be sent to all shareholders on 6 December 2000 and copies will be available at the company's registered office, Grosvenor House, Central Park, Telford, TF2 9TU from that date