Shares in Helphire have plunged 60% after its second profit warning in less than a year, as its market turned down and it identified an accounting problem.
The company, which supplies vehicles to motorists involved in accidents while their own cars are replaced, said its profits for the year would be significantly below expectations. Total claims in the UK fell by 8% in 2010 and Helphire believed this trend had continued into the first quarter.

It said: “The effects of record high petrol prices and the general economic climate have continued to contribute towards lower road miles being driven, resulting in lower accident rates. This in turn has led to a shorter than normal hire duration as body shop capacity outstrips demand and vehicles are repaired quicker.”

The effects of record high petrol prices and the general economic climate have continued to contribute towards lower road miles being driven, resulting in lower accident rates. This in turn has led to a shorter than normal hire duration as body shop capacity outstrips demand and vehicles are repaired quicker.

It has also discovered it may have overstated its debtors by around £25m, which represents 15% of group receivables. It has called in KPMG to investigate what happened and exactly how big the problem is. It has also told its bankers, but said the problem does not affect the settlement of claims or its cash position.