TIDMJCR
RNS Number : 3095C
Just Car Clinics Group PLC
04 March 2011
For immediate release 4 March 2011
Preliminary Results
Just Car Clinics Group plc ("Just Car Clinics"), the independent
collision repair chain with 25 vehicle repair centres, today
announces its preliminary results for the year ended 31 December
2010.
Highlights:
-- Turnover increased by 8.6% to GBP46.54 million (2009:
GBP42.86 million)
-- Gross margin of 40.2% (2009: 41.0%)
-- Profit before taxation GBP1.11 million (2009: GBP1.15
million) a decrease of GBP47,000
-- Operating costs reduced to 37.8% of sales (2009: 38.2%)
-- Earnings per share 5.4p (2009: 5.6p)
-- Total dividend up 13.5% to 1.85p per share (2009: 1.63p)
Commenting on the results, Barry Whittles, Chief Executive of
Just Car Clinics, said:
Just Car Clinics' proactive approach to client relationship
building, its relentless commitment to top quality customer
service and its flexibility to move resources to meet demand
has enabled the Group to post solid results against a difficult
market backdrop. In 2010 Just Car Clinics increased sales
and added two further accident repair sites to the Group,
further increasing our geographical footprint. Although
margins came under some pressure, partially due to the variability
of repair volumes throughout the year and the extreme weather
conditions, our continued confidence in the prospects and
financial strength of the Group mean that the total dividend
for the year has increased by 13.5% to 1.85p per share (2009:
1.63p)."
For further information, please contact:
Just Car Clinics:
Barry Whittles, Chief Executive 07850 268369
Chris Elton, Finance Director 07702 598344
Buchanan Communications:
Tim Thompson / Chris McMahon 020 7466 5000
chairman'S and chief executive's report
overview
Market conditions during 2010 were challenging, with repair
volumes adversely affected by reduced road usage and ongoing price
pressure from many corporate clients. Adverse weather can obviously
boost turnover, but severe conditions can significantly disrupt
operations. Against this background, it was no surprise that, while
sales increased slightly during 2010, margins were squeezed and as
a result Group profitability changed little from last year.
REvenue
Weather conditions usually have a significant impact in the
accident repair sector, with higher activity traditionally seen in
the winter months. This year was no exception, producing a strong
first quarter. However, the extreme conditions in the final quarter
impeded operations and hence that period was initially quiet and
then saw considerable activity at the end of the year.
More general market conditions were unfavourable; a combination
of the subdued economic climate and high petrol prices reduced
average road usage, with a consequential effect on accident
volumes. Additionally, many retail customers were reluctant to
initiate smaller repairs, seeking to avoid high insurance excess
payments. Therefore the second and third quarters were quieter than
anticipated.
As a result of these factors, the variability of repair volumes
was the biggest operational challenge of 2010. However, a flexible
approach to aligning resources with demand resulted in an overall
increase in revenue for the year of 8.6% and total turnover of
GBP46.5 million (2009: GBP42.9 million). On a like for like basis,
after adjusting for the impact of acquisitions during the last two
years, revenue increased by 1.8%.
The Group responded to the underlying market conditions by
extending the range of services offered to customers, with tyre
replacement, general vehicle maintenance and servicing now
available at all locations. In addition mobile accident repair
services are now offered at a regional level, allowing customers to
have minor repairs carried out at their home.
margins
As reported in the interim statement, the variability of repair
volumes, exacerbated by the extreme weather conditions, resulted in
sites operating outside of optimum efficiency levels during some
periods. This inefficiency, coupled with continued pressure on
prices from many corporate clients, resulted in some reduction in
margins, although there was an improvement in the second half.
Overall gross margins for the year decreased by 0.8% to 40.2%
(2009: 41.0%).
operating and finance costs
Proactive control of operating costs remains central to the
Group's profitability and all structures and costs are continually
reviewed. As a result operating costs were reduced to 37.8% of
sales this year (2009: 38.2%).
The interest charge was GBP21,000 (2009: GBP54,000),
representing an interest cover of 54 times (2009: 22 times). This
decrease reflects a reduction in the average debt level during
2010, due to control of working capital and the cash generative
nature of the operations. Albeit this trend was masked in the year
end balance sheet by short term factors referred to elsewhere.
earnings and taxation
With challenging market conditions affecting repair volumes and
continued pressure on gross margins, the Group's overall
profitability was reasonably resilient with profit before taxation
reducing by only GBP47,000 to GBP1,106,000 (2009:
GBP1,153,000).
The tax rate for the year at 28.5% (2009: 29.7%) remained at a
similar level to the previous year with no significant changes to
the taxation regime. Earnings per share decreased by 3.6% to 5.4p
(2009: 5.6p)
WORKING CAPITAL
Cash generated from operations was GBP556,000 (2009:
GBP1,897,000). This reduction when compared to last year reflected
a short term increase in trade receivables of GBP1,095,000, due to
very high volumes in the final two weeks of the year. The level of
trade receivables is dependant both on short term repair volumes
and the timing of receipts from corporate clients and therefore can
fluctuate significantly on a weekly basis. However, it is
anticipated that the increase apparent at the year end will reverse
during the first quarter of 2011.
This increase in trade receivables, together with a cash outflow
of GBP775,000 relating to a share buy back in December, resulted in
year end net borrowings rising to GBP2,902,000 (2009:
GBP1,275,000), representing a gearing level of 70% (2009: 29%).
The Group's core borrowings have been reduced substantially over
the past few years and now comprise a committed term loan facility
of GBP500,000 repayable in instalments over 1.2 years. The Group
also has debtor finance and overdraft facilities totalling GBP2.7
million to fund peaks in cash flow requirements. The average
utilisation of these facilities during 2010 was GBP0.8 million.
The Group has no off balance sheet financial liabilities,
pension or similar obligations.
dividends and share capital
In recognition of continued confidence in both the prospects and
financial strength of the Group, the Board is recommending a final
dividend of 1.15p per share, making a total dividend for 2010 of
1.85p per share (2009: 1.63p). Subject to approval at the Annual
General Meeting the dividend will be paid on 25 May 2011 to
shareholders on the register at close of business on 15 April
2011.
The Board continues to review the capital structure with a view
to maximising shareholder value and consequently on 17 December
2010 1,461,081 ordinary shares in the Company were purchased at a
total cost of GBP775,000. The Board will be seeking renewed
authority at the Annual General Meeting to make further market
purchases of shares where appropriate.
ACQUISITIONS
The Group continues its strategy of expansion by acquisition,
but only where potential opportunities meet stringent criteria in
respect of location, quality of team members, underlying culture,
potential repair volumes and acquisition cost.
Of a number of potential targets considered, two sites, in
Keighley and Northampton, were acquired during the year. These
sites, acquired for a total consideration of GBP68,000, contributed
additional sales of GBP640,000 and a combined loss before taxation
of GBP92,000, including acquisition expenses.
As reported previously, the tighter market conditions have
increased the period required for new sites to reach optimum
capacity and efficiency levels. However, the Board continues to
believe that the medium term success of the Group will be fuelled
in part by expansion of the site network and therefore additional
site acquisitions will be undertaken if suitable opportunities are
identified.
training and empLoyees
Ongoing team development and effective training remains a
central aspect of the Group's strategy and in 2010 approximately
GBP250,000 was invested in training team members, primarily at the
Group's dedicated training facility.
A continued focus on a proactive relationship with corporate
clients and a desire to minimise repair costs and find solutions to
the challenges facing our customers, are all essential to the
continued success of the Group. Excellence in customer service is
fundamental to these relationships and remains a primary focus of
the Group's training and reward structure. During 2010 there was a
continued improvement in service with 95.5% of customers entirely
satisfied with the repair process (2009: 94.6%).
The Board recognises that our employees are fundamental to the
growth and success of our business and the Group's most important
asset is undoubtedly the high quality of the employee team. The
result achieved by the Group in testing economic conditions
reflects the hard work, flexibility and commitment of the team and
the Board would like to thank everyone for their valued
contribution.
STRATEGY and prospects
The Group's strategy is threefold:
- Continue to focus on proactive and innovative relationships
with corporate clients within the accident repair market.
- Utilise the high level of customer service associated with the
Just Car Clinics brand name to expand the retail offer to other
areas of vehicle maintenance under the banner of "Car Care You Can
Trust".
- Grow the branch network by acquisition where stringent
criteria are met.
Trading since the year end has been in line with expectations.
It is likely however that economic conditions will continue to be
challenging during the current year and whilst the Board believes
that Just Car Clinics, with a strong balance sheet and experienced
management team, is in a good position to meet these challenges, it
does not anticipate a significant improvement in profitability in
the current year.
David Hickey Barry Whittles
Chairman Chief Executive
4 March 2011
GROUP INCOME STATEMENT
for the year ended 31 December 2010
2010 2009
GBP'000 GBP'000
REVENUE 46,540 42,858
Cost of sales (27,811) (25,275)
---------- ----------
GROSS PROFIT 18,729 17,583
Selling and distribution costs (10,455) (9,797)
Administrative expenses (7,147) (6,579)
---------- ----------
OPERATING PROFIT 1,127 1,207
Finance costs (21) (54)
---------- ----------
PROFIT BEFORE TAXATION 1,106 1,153
Income tax expense (315) (342)
---------- ----------
PROFIT FOR THE YEAR 791 811
---------- ----------
Attributable to equity holders of parent company 791 811
---------- ----------
earnings per share (note 2)
Basic earnings per share 5.4p 5.6p
Diluted earnings per share 5.4p 5.5p
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2010
2010 2009
GBP'000 GBP'000
PROFIT FOR THE YEAR 791 811
---------- ----------
Gain on interest rate hedge 31 42
Income tax relating to interest rate hedge (9) (12)
---------- ----------
other comprehensive income for the year 22 30
---------- ----------
total comprehensive income for the year 813 841
---------- ----------
Attributable to equity holders of parent company 813 841
---------- ----------
The results for the year derive entirely from the continuing
operations of the Group.
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2010
Equity Share Capital
share premium redemption Hedge Retained Total
capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2009 146 344 - (66) 3,302 3,726
Gain on
interest rate
hedge - - - 42 - 42
Income tax on
interest rate
hedge - - - (12) - (12)
--- --- --- --- --- ---
Other
comprehensive
income - - - 30 - 30
Profit for the
year - - - - 811 811
--- --- --- --- --- ---
Total
comprehensive
income - - - 30 811 841
Exercise of
share
options - 1 - - - 1
Share based
payments - - - - 9 9
Income tax on
share based
payments - - - - (1) (1)
Equity
dividends
paid - - - - (228) (228)
--- --- --- --- --- ---
At 31 December
2009 146 345 - (36) 3,893 4,348
Gain on
interest rate
hedge - - - 31 - 31
Income tax on
interest rate
hedge - - - (9) - (9)
--- --- --- --- --- ---
Other
comprehensive
income - - - 22 - 22
Profit for the
year - - - - 791 791
--- --- --- --- --- ---
Total
comprehensive
income - - - 22 791 813
Purchase of
own shares (15) - 15 - (775) (775)
Share based
payments - - - - 2 2
Income tax on
share based
payments - - - - 3 3
Equity
dividends
paid - - - - (257) (257)
--- --- --- --- --- ---
At 31 December
2010 131 345 15 (14) 3,657 4,134
--- --- --- --- --- ---
GROUP balance sheet
at 31 December 2010
2010 2009
GBP'000 GBP'000
ASSETS
Non current assets
Property, plant and equipment 2,454 2,305
Intangible assets 2,097 2,081
---- ----
4,551 4,386
---- ----
Current assets
Inventories 896 686
Trade and other receivables 6,992 5,897
Cash and cash equivalents 4 4
---- ----
7,892 6,587
---- ----
TOTAL ASSETS 12,443 10,973
---- ----
LIABILITIES
Current liabilities
Trade and other payables 4,979 4,875
Financial liabilities 2,806 779
Derivative financial instruments 19 50
Income tax payable 139 178
---- ----
7,943 5,882
---- ----
Non current liabilities
Financial liabilities 100 500
Deferred tax liability 266 243
---- ----
366 743
---- ----
TOTAL LIABILITIES 8,309 6,625
---- ----
TOTAL NET ASSETS 4,134 4,348
---- ----
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF PARENT
Issued equity share capital 131 146
Share premium account 345 345
Capital redemption reserve 15 -
Hedge reserve (14) (36)
Retained earnings 3,657 3,893
---- ----
TOTAL EQUITY 4,134 4,348
---- ----
GROUP CASH FLOW STATEMENT
for the year ended 31 December 2010
2010 2009
GBP'000 GBP'000
Operating activities
Profit after taxation for the year 791 811
Adjustments to arrive at operating cash flow:
Income tax expense 315 342
Finance costs 21 54
Depreciation and amortisation 596 570
Gain on sale of property, plant and equipment (3) (7)
Expense arising from share based payments 2 9
Change in inventories (193) (119)
Changes in trade and other receivables (1,095) 748
Changes in trade and other payables 122 (511)
---- ----
Cash generated from operations 556 1,897
Income tax paid (337) (502)
---- ----
Net cash flow from operating activities 219 1,395
---- ----
Investing activities
Sale of property, plant and equipment 8 15
Payments to acquire property, plant and equipment (682) (447)
Payments to acquire computer software (19) (8)
Payments to acquire businesses (68) (90)
---- ----
Net cash flow from investing activities (761) (530)
---- ----
Financing activities
Interest paid (53) (89)
Proceeds from shares issued on exercise of
options - 1
Purchase of own shares (775) -
Repayments of borrowings (400) (400)
Dividends paid to equity holders of Parent
Company (257) (228)
---- ----
Net cash flow from financing activities (1,485) (716)
---- ----
Change in cash and cash equivalents (2,027) 149
Cash and cash equivalents at beginning of
year (375) (524)
---- ----
Cash and cash equivalents at end of year (2,402) (375)
---- ----
Reconciliation to net debt
Net debt at beginning of year (1,275) (1,824)
Change in cash and cash equivalents (2,027) 149
Repayments of borrowings during year 400 400
---- ----
Net debt at end of year (2,902) (1,275)
---- ----
NOTES TO THE PRELIMINARY STATEMENT
1. Basis of preparation of the accounts
The results comprise those of Just Car Clinics Group plc and its
subsidiary for the year ended 31 December 2010. This preliminary
announcement has been prepared on the basis of accounting policies
as set out in the statutory accounts for 2009 and International
Financial Reporting Standards and interpretations issued by the
International Accounting Standards Board as adopted by the European
Union ("IFRS") and does not constitute the Company's statutory
accounts within the meaning of Section 435 of the Companies Act
2006. During 2010 the Group has adopted amendments to "IFRS 3R -
Business Combinations" and "IAS 27 - Consolidated and separate
financial statements" which have required acquisition related costs
to be expensed rather than included in the calculation of goodwill
and required changes to disclosure and presentation. Other changes
to IFRS, effective in 2010, have resulted in no material changes to
the Group's financial statements.
Statutory accounts for the years ended 31 December 2010 and 31
December 2009 have been reported on by the auditors who issued an
unqualified opinion in respect of both periods and the auditors'
reports did not contain statements under 498(2) or 498(3) of the
Companies Act 2006.
Statutory accounts for the year ended 31 December 2009 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2010, which were approved by the Board
on 4 March 2011, will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
2. earnings per share
The calculation of earnings per share is based on the profit for
the year attributable to equity holders of the Parent Company of
GBP791,000 (2009: GBP811,000) and on 14,554,621 ordinary shares
(2009: 14,603,069), being the weighted average number of shares in
issue during the year.
The calculation of diluted earnings per share is based on profit
for the year attributable to equity holders of the Parent Company
of GBP791,000 (2009: GBP811,000) and on 14,632,062 ordinary shares
(2009: 14,681,104) after taking account of the potentially dilutive
effect of outstanding share options.
3. DIVIDENDS
The directors recommend the payment of a final dividend of 1.15p
per share, which, subject to approval at the Annual General
Meeting, will be paid on 25 May 2011 to shareholders on the
register at the close of business on 15 April 2011. With the
interim dividend of 0.70p per share paid during the year, this
makes a total dividend for 2010 of 1.85p per share (2009:
1.63p).
4. ANNUAL Report
The Report and Accounts will be posted to shareholders on or
about 4 April 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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