Companies: DSL    HHR   

It might be the season of good cheer, but many companies use the cover of the Christmas and New Year holidays to deliver profits warnings, dull results and weak trading statements. Leslie Copeland reports

Helphire Group, one of the UK's leading accident management specialists, chose to deliver its eagerly awaited interim figures to the market AFTER dealing had ended on 28 December. The results where somewhat startling, containing as they did a pre-tax loss of £48 million (profit last time of £2.0 million) on sales increased to £31.4 million (£29.1 million).

The hefty losses relate to the group's backlog of claims against insurance companies. Helphire's business is the hiring out of cars on credit to those involved in non-fault accidents. The group then recovers the cost of the car hire - and any other claims - from the insurance company of the person who caused the accident.

The business has proved to be a lucrative niche - Helphire made £6.0 million pre-tax last year. However, it all changed this year when the group was forced to reduce its hire charges in line with the Association of British Insurance guidelines.

The present interim losses are composed of a write-off provision of £35.2 million which will 'facilitate' the settlement of its considerable backlog of outstanding claims. There was also a £8.6 million hit related to debt collection costs.

Even before these exceptional items the group made an operational loss of £3.4 million, against a profit last time of £3.0 million. The shares are now trading at 71p, very close to their all-time low.

Another group inducing seasonal pain was Aim-listed Deep-Sea Leisure. This beleaguered venture chose the holiday period to release a very disappointing set of results for the interim period to August. The aquarium operator, beset by cash flow problems and falling visitor numbers, saw turnover dip to £3.16 million (£3.45 million ) and operating profits plunge from £1.34 million to £933,000. Chairman Alastair Ritchie said the performance during the period was severely restricted by 'serious cash flow' problems, namely the group's inability to meet debt repayments to Allied Irish Bank and Bank of Ireland, its former bankers. Cost overruns at the Deep-Sea's Blue Planet site prompted a degree of over-gearing and when visitor numbers failed to live up to expectations, the group was unable to generate enough cash to meet its interest repayments. To keep the wolves at bay, the group paid both banks £9.7 million (from a mixed debt package of £9.7 million advanced by Bank of Scotland) while a further £2 million of debt was written off. The affair prompted the resignation of founder and chief executive Phil Crane, who has still yet to be replaced. In order to stay afloat, the company is currently in the throes of a £3.5 million fundraising. £2 million of this will be used to repay a bridging loan to Bank of Scotland. Deep-Sea's shares are now trading at 31.5p, close to their year low.

Surrey-based Karpad was another sneaking out poor results while the market slept. The Ofex-traded venture, which provides computerised management systems for the catering industry, issued interim results showing profits falling to £97,000 (£117,000) on turnover up to £490,000 (£399,000). The group admitted that the market for its products remained 'stagnant' and that trading remained 'difficult'.

The other main protagonist in the holiday warnings pantomime was Wealth Management Software. Its trading statement on December 29 contained many bullish points. Director Paul Newton revealed that the company had made additional investment in staff and had also secured an order of £1.5 million for the provision of services to M&G Ltd. There was also news of the launch of new products and the securing of development funding from Mellon Bank for a pensions product.

However, the beef in the statement related to a major contract for its pensions product which 'would have underpinned the result for 2000'. Contract negotiations with a major financial institution have been suspended, meaning that results for the year are expected to be 'materially below market expectations'. The shares remain stuck at 110p - close to their all time low.