Good morning! I'm encouraged by today's AGM trading statement from Helphire (LON:HHR). This is a turnaround situation, where a company providing credit hire cars (for no-fault accidents) had been a complete disaster for investors, but transformed itself with a remarkable refinancing earlier this year, which eliminated ALL its debt. This turnaround first caught my eye here on 20 Jun, when the shares were 3.4p, and they have since re-rated decently to about 5.4p.

Their trading statement today sounds pretty good to me. The key sentence says;

 

"The Group's new financial year has begun well. Trading profits for the first four months of the year are ahead of the corresponding period last year. Early indications are that this trend has continued during November and the Board is confident about the Group's prospects for the financial year as a whole."

 

It goes on to say that debtor days is consistent with earlier this year, at 128 days (but improved from 153 days at 31 Oct 2012). Debtors is the bane of this sector, and is what killed Accident Exchange, and is a key area of uncertainty at Quindell Portfolio (LON:QPP) (I haven't mentioned that one for a while!).

So be sure to look at all Debtors, not just trade debtors, when scrutinising the accounts in this sector, as a certain amount of window-dressing goes on, with key figures sometimes only quoting part of debtors.

The Balance Sheet turnaround at Helphire is quite astonishing - they report net cash of £4.3m at 31 Oct 2013, which compares with net debt of £101m a year before! That's not a one-off either, they have cleared all their debt through an equity raising, a debt write-off, and transforming the collection of debtors. The company is now focussed on paying dividends, and they say this on that subject;

 

"In the absence of unforeseen circumstances, the Board intends to announce a second interim dividend for the current year as part of its announcement of results for the six months ending 31 December 2013. The Board expects the second interim dividend to be 0.171 pence per ordinary share (approximately £ 2.7 million in aggregate). The Group's dividend policy is unchanged since the refinancing and remains to distribute as much of the Group's…

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