LONDON (ShareCast) - Accident Exchange posted lower pre-tax profits and announced a dividend cut despite higher revenues, after the vehicle replacement group was hit by a legal challenge related to terms and conditions of hire.

Pre-tax profits in the year to 30 April fell to £12.1m from £13.6m the previous year, even as revenue jumped to £165.1m from £116.9m. The company proposed a final dividend of 1.5p, which would result in a total dividend for the year of 2.5p, from 3p the previous year.

Accident Exchange, said the legal challenge, which it successfully won against in October, took up management time, affected referrer confidence and had cash flow and refinancing consequences. It said victory in the legal battle helped cement its reputation.

The company said it was improving efficiencies in its fleet of vehicles, lifting utilisation of its fleet to 70% from 60.8% in the first half. In line with increased efficiencies, the number of vehicles in the fleet has fallen to 4,850 from 4,999.

“In spite of the uncertain global economic outlook, we are looking to the future with renewed confidence,” non-executive chairman David Galloway said.

“The demand for the services we offer continues to grow and we see further opportunities working more closely with existing referrers, vehicle manufacturers and other referral sources and from new product initiatives that are being marketed for the first time.”

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