Companies: ACE   

Post-accident prestige car replacement specialist Accident Exchange is drumming up £7.7 million to fund further growth after a 590 per cent profits surge in the year to April.

Run by entrepreneur Steve Evans and chaired by former Tory industry secretary and ex-chairman of Cable & Wireless Lord Young, high-flying Accident Exchange began life as Xecutive research and moved into supplying up-market credit-hire vehicles to 'no-fault' road accident victims with the acquisition of the original Accident Exchange company last year. Steered by the vigorous Evans, the West Midlands-based group increased pre-tax profits from £1.1 million to £6.7 million in 2004-05 on turnover up from £4.1 million to £21.7 million.

During the financial year, AIM-quoted Accident Exchange increased its fleet size from 250 to 961 vehicles and agreed to provide its services to Glasgow Audi customers, BMW and franchised West Country car dealer Helston Garages. Today, the company has announced similar deals with divisions of two other leading car dealers, HR Owen and Inchcape.

To reduce gearing and help fund continued growth, Accident Exchange is seeking £7.7 million at 230p in a placing handled by broker Numis and, at the same time, some existing shareholders have placed shares worth nearly £7 million. No directors have placed shares, though the first placing dilutes Evans' stake from 51.1 per cent to 48.5 per cent.

At 251p, up 1p this morning, Accident Exchange shares have risen more than fivefold over the past year, though they are some 50p off their January peak, and now value the company at £155 million. There could be more action.