Companies: ACE   

Steve Evans’ Accident Exchange, the post-accident prestige car replacement outfit backed by Growth Company Investor at 285p, continues to motor ahead with stellar organic growth rates and a surging share price.

First half figures to the end of October were emphatic, with sales climbing 170% to £20.7m, pre-tax profits powering ahead by more than 160% to £5.6m – the adjusted figure was £6m – earnings rocketing up 157% to 5.9p a share, and the half-time payout doubled to 1p.

Evans, founder and chief executive, was delighted with the group’s growth, all delivered organically, and said the company had won significant new accounts that had yet to fully impact the top-line. During the half, the fleet grew from a year-end 960 to 1,704, and contracts were added with Inchcape’s Mercedes, Lexus, Jaguar and Ferrari divisions, as well as the Jaguar and BMW franchises of HR Owen and Hartwell. The company, which now has a total of 195 dealers contracted to its accident management service, also said the second half would generate significantly higher volumes and hire starts figures for November were well ahead of October.

For the full year to April, analysts at Numis predict adjusted pre-tax profits of £17 million and earnings of 18.4p, placing the 389p shares on a forward multiple of 21 times. At first glance that looks somewhat pricey, but given that earnings growth of 122 per cent is forecast for 2006, the shares must rank as a buy. Furthermore, Numis has upgraded its target price from 400p to 475p in the wake of the superb figures.

Evans plans to grow this into a FTSE 250 company. If you bought on our advice, keep buying.