Shares digital

Mark Jackson, chief executive of vehicle insurance specialist Helphire (HHR) became the sixth director to buy stock in the wake of half year figures. The results were largely disappointing, highlighting continued turnover growth but a significant erosion in margins. Helphire provides cars for victims of non-fault accidents, enjoying some 33% of the market. During the first half it signed contracts with eight new insurers, but these contracts were won by accepting lower margins.

The group’s business model has changed dramatically over the past two years – moving from owning only 20% of its fleet to owning 80%. The resulting balance sheet strain has encouraged the group to try and settle claims more speedily.

There is a relatively consistent level of accidents in the UK, some five million. The market Helphire currently serves accounts for some 600,000 of these but could grow to around 900,000 eventually. Lehman Brothers, the group’s joint broker believes that the number of cases it helps could grow by 100,000 to 245,000 by June 2009.

Following the interims the broker did, however, revise its forecast for this year and 2008-09 . Earnings are now forecast to be 21.8p this year and 27.08p next year placing the shares at 184p on a PE of 8.4, falling to 6.8. The broker has revised its target price to 271p, a 47% premium to the current price.

Shares says: The willingness of most of the board to buy shares suggests that the future should be encouraging.