TIDMJCR
RNS Number : 2448P
Just Car Clinics Group PLC
30 September 2011
30 September 2011
Interim Results
Just Car Clinics Group plc ("Just Car Clinics" or "the Group"),
the UK's second largest independent collision repair chain carrying
out nearly 50,000 collision repairs per annum to cars, commercial
vehicles and motorcycles, today announces its interim results for
the six months ended 30 June 2011.
Highlights:
-- Turnover of GBP21.50 million (2010: GBP25.25 million)
-- Gross margin increased by 1.5% to 41.2% (2010: 39.7%)
-- Underlying profit before taxation GBP0.2 million (2010:
GBP0.6 million)
-- Operating costs reduced by GBP0.76 million to GBP8.65
million (2010: GBP9.41 million)
-- Operating cash flow increased by GBP0.71 million to GBP1.35
million (2010: GBP0.64 million)
-- Interim dividend unchanged at 0.7p per share (2010: 0.7p)
For further information, please contact:
Just Car Clinics:
Barry Whittles, Chief Executive 07850 268369
Chris Elton, Finance Director 07702 598344
Buchanan Communications:
Tim Thompson 020 7466 5000
Chairman's Statement for the six months ended 30 June 2011
Introduction
Underlying market conditions in 2011 have been challenging and
this, together with exceptionally dry weather in the spring period,
resulted in decreases in both turnover and profit in the first six
months of the year.
In response, actions were taken to expand the retail offering,
maximise profitability and reduce costs. This had some impact in
the period and accordingly gross margins improved by 1.5% to 41.2%
and operating costs fell by 8.1%. Operating cash flow was strong
for the period at GBP1.4 million and net debt reduced by GBP949,000
to GBP1,953,000.
Trading highlights
6 months to 6 months to
30.06.11 30.06.10
Revenue (GBP'000) 21,500 25,252
Gross margin 41.2% 39.7%
Underlying* profit before taxation
(GBP'000) 195 608
Underlying* earnings per share 1.1p 3.0p
Basic earnings per share 0.9p 3.0p
Operating cash flow (GBP'000) 1,353 644
Interim dividend per share 0.7p 0.7p
* underlying results exclude exceptional costs
Results
Revenue for the six months ended 30 June 2011 was GBP21.5
million, a reduction of 14.9% when compared to the first half of
2010 and a 1.0% increase on the second half of the year.
In our last report, we highlighted that the subdued economic
climate and high petrol prices had reduced road usage and high
insurance excess payments were causing customers to delay smaller
repairs. These factors have continued to affect repair volumes in
the current period. The additional challenge of exceptionally dry
spring weather and the additional public holiday further affected
the trading performance in the second quarter. In response to the
challenging market conditions, the following actions have been
taken:
-- Expansion of the range of services offered to customers to
include tyre replacement, vehicle maintenance and servicing and
continuing development of mobile repairs and glass replacement.
This retail strategy has included the refocus of the Just Car
Clinic brand from "collision repair" to "car care you can trust",
supported by the launch of a new website and the commencement of a
project to refit the customer interaction areas of our sites to
give an improved retail environment.
-- Investment in new repair technology and training to give
greater emphasis on the higher margin repair of damaged components
rather than replacement. This has reduced the percentage of
vehicles written off because of accidents and improved gross
margins. In the first six months margins improved by 1.5% to 41.2%
(2010: 39.7%).
-- A stringent review of all costs within the business and the
realignment of Group's management structures to reflect current
repair volumes. Most of the reduction in employment costs was
achieved by a recruitment freeze and redeployment of current team
members. However, some redundancies were inevitable and the
associated costs of GBP38,000 were treated as exceptional in the
current period. Annualised cost savings amount to GBP1.5
million.
-- In response to corporate client and customer feedback, we
have established a central claims operation offering an enhanced,
efficient and flexible service and have also introduced a "fast
track" repair process that reduces vehicle repair times and
improves customer service. The recent award of a new three-year
contract with Allianz Insurance covering all sites illustrates the
success of this strategy.
These actions were taken quickly and mitigated to some extent
the reduced repair volumes. The Group recorded an underlying profit
before taxation of GBP195,000 (2010: GBP608,000) and earnings per
share of 0.9p (2010: 3.0p).
Working capital and loan facilities
Cash flow from operating activities improved to GBP1.4 million
(2010: GBP0.6 million) and net debt at GBP2.0 million was a GBP0.9
million improvement on the beginning of the year.
In order to minimise finance costs the Group repaid the
remaining balance of its term loan shortly after the end of June
and the Group's new bank facilities comprise a GBP2.5 million
debtor finance facility and a GBP0.2 million overdraft.
Dividends
Notwithstanding the tough trading conditions, the level of
interim dividend has been maintained at 0.7p reflecting the Board's
confidence in the Group's long-term prospects.
Delisting
For some time your Board has been of the view that the
AIM-quoted status of the Group has served little purpose, other
than to provide an occasional market for shareholders wishing to
deal. There are considerable costs and other disadvantages
associated with being quoted which, in the opinion of the Board,
are out of proportion to the size of the Group. Accordingly, the
Board has decided to convene a General Meeting, at which a
resolution will be proposed to cancel the admission of the
Company's shares to trading on AIM.
In order to continue to provide shareholders, or persons wishing
to trade in the Group's shares, with the ongoing ability to trade
in the Group's shares, arrangements have been made with Brewin
Dolphin to provide a matched bargain share dealing facility.
Further details of the proposed delisting have also been
announced today and will be sent to shareholders with the interim
statement.
Strategy and prospects
For the past twelve months, tougher trading conditions have been
seen throughout the industry. During this time, the number of
independent competitors ceasing to trade has accelerated. The Group
remains the second largest independent operator in the UK, and
continues to secure additional contracts with leading insurers.
Market share therefore continues to grow organically.
Expansion by acquisition also continues with the purchase of
facilities in Keighley and Northampton during 2010, bringing the
total number of locations to 25. Additional acquisition
opportunities are under review, and the related criteria have been
tightened in favour of the Group.
In response to the current economic conditions, the Group's
strategy will also include further expanding the breadth of the
retail offering.
While tough trading conditions persist, the Board believes that
Just Car Clinics, with a strong balance sheet and an experienced
management team, is in a good position to continue to grow market
share and continue to trade profitably. As and when volumes
recover, the Group should see substantial benefit.
David Hickey Chairman
30 September 2011
Group income statement
6 months 6 months 12 months
to to to
30.06.2011 30.06.2010 31.12.2010
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
------------------------------------ ------------ ------------ ------------
Revenue 21,500 25,252 46,540
Cost of sales (12,650) (15,221) (27,811)
------------------------------------ ------------ ------------ ------------
Gross profit 8,850 10,031 18,729
Operating expenses (8,649) (9,408) (17,602)
Total operating profit - before
exceptional items 201 623 1,127
Exceptional restructuring costs
(note 2) (38) - -
------------------------------------ ------------ ------------ ------------
Total operating profit 163 623 1,127
Finance costs (6) (15) (21)
------------------------------------ ------------ ------------ ------------
Profit before taxation 157 608 1,106
Taxation (note 3) (43) (176) (315)
------------------------------------ ------------ ------------ ------------
Profit for the period -
attributable to equity holders of
parent 114 432 791
==================================== ============ ============ ============
Earnings per share (note 4)
------------------------------------ ------------ ------------ ------------
Basic earnings per share 0.9p 3.0p 5.4p
------------------------------------ ------------ ------------ ------------
Diluted earnings per share 0.9p 2.9p 5.4p
------------------------------------ ------------ ------------ ------------
Underlying earnings per share 1.1p 3.0p 5.4p
------------------------------------ ------------ ------------ ------------
Group statement of comprehensive income
Profit for the period 114 432 791
Gain on interest rate hedge 11 15 31
Income tax on interest rate hedge (3) (4) (9)
------------------------------------------- ---- ---- ----
Other comprehensive income for the period 8 11 22
------------------------------------------- ---- ---- ----
Total comprehensive income - attributable
to equity holders of parent 122 443 813
=========================================== ==== ==== ====
The results derive entirely from the continuing operations of
the Group.
Group balance sheet
At At At
30.06.2011 30.06.2010 31.12.2010
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
---------------------------------- ------------ ------------ ------------
ASSETS
Non current assets
Property, plant and equipment 2,284 2,376 2,454
Intangible assets 2,096 2,078 2,097
4,380 4,454 4,551
---------------------------------- ------------ ------------ ------------
Current assets
Inventories 570 659 896
Trade and other receivables 5,818 6,658 6,992
Cash and cash equivalents 4 5 4
---------------------------------- ------------ ------------ ------------
6,392 7,322 7,892
---------------------------------- ------------ ------------ ------------
TOTAL ASSETS 10,772 11,776 12,443
LIABILITIES
Current liabilities
Trade and other payables (4,331) (5,282) (4,979)
Financial liabilities (1,957) (1,052) (2,806)
Derivative financial instruments (8) (35) (19)
Corporation tax liability (98) (226) (139)
(6,394) (6,595) (7,943)
---------------------------------- ------------ ------------ ------------
Non-current liabilities
Financial liabilities - (300) (100)
Deferred tax liability (269) (247) (266)
---------------------------------- ------------ ------------ ------------
(269) (547) (366)
---------------------------------- ------------ ------------ ------------
TOTAL LIABILITIES (6,663) (7,142) (8,309)
TOTAL NET ASSETS 4,109 4,634 4,134
================================== ============ ============ ============
CAPITAL AND RESERVES
Issued equity share capital 131 146 131
Share premium account 345 345 345
Capital redemption reserve 15 - 15
Retained earnings 3,624 4,168 3,657
Hedge reserve (6) (25) (14)
---------------------------------- ------------ ------------ ------------
TOTAL EQUITY 4,109 4,634 4,134
================================== ============ ============ ============
Group Statement of Cash Flows
6 months to 6 months to 12 months to
30.06.2011 30.06.2010 31.12.2010
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
----------------------------------- ------------ ------------ -------------
Operating activities
Profit after taxation for the
period 114 432 791
Adjustments to arrive at operating
cash flow:
Income tax expense 43 176 315
Finance costs 6 15 21
Depreciation and amortisation 321 325 596
(Loss) / gain on sale of property,
plant and equipment - (2) (3)
Expense arising from share based
payments - 1 2
Changes in inventories 326 35 (193)
Changes in trade and other
receivables 1,174 (761) (1,095)
Changes in trade and other
payables (631) 423 122
----------------------------------- ------------ ------------ -------------
Cash generated from operations 1,353 644 556
Income tax paid (84) (128) (337)
Net cash flow from operating
activities 1,269 516 219
----------------------------------- ------------ ------------ -------------
Investing activities
Sale of property, plant and
equipment 8 6 8
Payments to acquire property,
plant and equipment (155) (372) (682)
Payments to acquire computer
software (4) - (19)
Payments to acquire businesses - (33) (68)
Net cash flow from investing
activities (151) (399) (761)
----------------------------------- ------------ ------------ -------------
Financing activities
Interest paid (22) (31) (53)
Purchase of own shares - - (775)
Repayments of borrowings (200) (200) (400)
Dividend paid to equity holders of
Parent Company (147) (158) (257)
----------------------------------- ------------ ------------ -------------
Net cash flow from financing
activities (369) (389) (1,485)
----------------------------------- ------------ ------------ -------------
Change in cash and cash
equivalents 749 (272) (2,027)
Cash and cash equivalents at
beginning of period (2,402) (375) (375)
----------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period (1,653) (647) (2,402)
=================================== ============ ============ =============
Reconciliation to net debt (comprising borrowings less cash
and cash equivalents)
Net debt at beginning of period (2,902) (1,275) (1,275)
Change in cash and cash equivalents 749 (272) (2,027)
Changes in bank loans during period 200 200 400
Net debt at end of period (1,953) (1,347) (2,902)
===================================== ========= ======== ===========
Group Statement of Changes in Equity
Issued Capital
share redemption Hedge Retained Total
capital Share premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
--------------- ---------- --------------- ----------- ---------- ---------- ----------
At 1 January
2010 146 345 - (36) 3,893 4,348
Total
comprehensive
income - - - 11 432 443
Share based
payments - - - - 1 1
Equity
dividends
paid - - - - (158) (158)
At 30 June
2010 146 345 - (25) 4,168 4,634
=============== ========== =============== =========== ========== ========== ==========
At 1 January
2011 131 345 15 (14) 3,657 4,134
Total
comprehensive
income - - - 8 114 122
Equity
dividends
paid - - - - (147) (147)
--------------- ---------- --------------- ----------- ---------- ---------- ----------
At 30 June
2011 131 345 15 (6) 3,624 4,109
=============== ========== =============== =========== ========== ========== ==========
Notes to the interim report
1. Basis of preparation. The interim report has been prepared on
the basis of International Financial Reporting Standards ("IFRS")
in accordance with accounting policies set out in the Annual Report
for the year ended 31 December 2010.
The financial information set out in this interim report does
not constitute statutory accounts within the meaning of Section 435
of the Companies Act 2006. The interim report was approved by the
Board of Directors on 29 September 2011 and is unaudited.
The financial information for the year ended 31 December 2010 is
extracted from the statutory accounts for that period. A copy of
the full accounts for that period, on which the auditors have
issued an unqualified report and did not contain a statement under
section 498(2) or (3) Companies Act 2006, has been delivered to the
Registrar of Companies.
2. Exceptional costs. Exceptional costs relate to the
non-reoccurring redundancy and other costs arising from the
restructuring of the business in response to the underlying
economic conditions and lower repair volumes.
3. Taxation. The taxation charge for the six months ended 30
June 2011 has been estimated based on the anticipated effective
rate of 27.5% for the year ending 31 December 2011.
4. Earnings per share ("EPS"). EPS have been calculated on the
result after taxation and on the weighted average number of shares
in issue being 13,149,735 (30 June 2010: 14,610,816; 31 December
2010: 14,554,621). Underlying EPS has been calculated on the result
after taxation before excluding the post taxation affect of
exceptional costs of GBP28,000.
In calculating diluted EPS, the weighted average number of
shares has been adjusted for the diluting effect of share options
giving a diluted number of shares of 13,221,722 (30 June 2010:
14,668,484; 31 December 2010: 14,632,602).
5. Dividend. An interim dividend of 0.7p per share (2010: 0.7p)
will be paid on 11 November 2011 to shareholders on the register on
14 October 2011. The shares will be marked ex dividend on 12
October 2011.
6. Interim report. Copies of this interim report will be posted
to shareholders on 7 October 2011 and will be available from the
registered office of the Company at Rawcliffe Road, Goole, East
Yorkshire DN14 6XL.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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