Nationwide Accident Repair Services

Nationwide, the country’s largest dedicated car crash repair services firm, is successfully motoring ahead with its new three-year strategy for growth.

In a pre-close update, ahead of interim figures slated for release in September, Nationwide cheered with news of ‘encouraging’ trading during the six months to June. Performing in line with expectations, the AIM-quoted company continued to churn out cash and expects to soon report improved half-year net cash of £8m (2009: £7.9m).

Michael Wilmshurst, CEO, reiterated the current year is but the first of a new three-year push to support, via some £1m of annual investment, growth in the fleet and retail markets – Nationwide has been seeking ways to expand non-insurance business for some time now – as well as growth in the group's traditional motor insurance market.

As part of this drive, the company is about to launch a re-branded mobile repair services offering, set to boost growth rates in its traditional insurance market as well as the retail market. Meanwhile, Nationwide continues to add repair capacity in line with levels of demand, having acquired a bodyshop in Newcastle in May and furthermore, recently added to its roster of insurance contracts via a new multi-year deal with Groupama.

Robust of balance sheet and with nil borrowings, Nationwide is on track to meet forecasts for December 2010, pointing to growth in pre-tax profits from £5.1m to £5.3m, earnings of 8.7p and a maintained 5p dividend.

Sentiment towards Nationwide, originally recommended by Growth Company Investor at 132.5p in 2008, has been unfairly dented by the economic downturn. We believe recent weakness has been overdone and the shares, selling on a single figure p/e and offering a 6.1% yield, represent excellent long-term value.