Nationwide Accident Repair hits expectations

Nationwide Accident Repair Services confirmed today that current trading is in line with management's expectations and the cash position of the Group remains strong.

Nationwide reported that its mobile repair and glass businesses continue to make an increasing contribution to Group performance and it has an encouraging pipeline of new fleet and insurance opportunities.

Following completion of a re-tendering process by Aviva, Nationwide will see a significant reduction in the volume of vehicle accident repair work undertaken for Aviva in the second half, as the volumes were awarded on terms that are commercially unattractive to the Group.

From 2 July 2012, Nationwide will no longer undertake work in certain geographical regions for Aviva resulting in a revenue shortfall of approximately £10 million for the current financial year ending 31 December 2012. Aviva does, however, continue to be an important and valued customer supporting approximately £5 million per annum of Group revenue. In particular, our integrated offer utilising our call centre, fixed site and mobile repair capability has been retained to service their growing online offer 'Quote Me Happy', reflecting the benefits of this unique model.

Capacity across the branch network will be unaffected by this decision and there are no plans to close sites. The impact of the reduced volume is largely mitigated by the scalability of the Group's operating costs and flexible working practices.

With the continuing, and expected, downward trend in motor insurance claims frequency, the group said it remains focused on securing new business in the retail and fleet markets, as well as in the insurance-funded market, and on ensuring that the cost base is aligned with demand.

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