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For immediate release

3 March 2009

Just Car Clinics Group Plc

('Just Car Clinics' or 'the Company')

Preliminary Results

Another Record Year

Just Car Clinics Group plc ('Just Car Clinics'), the independent collision repair chain with 23 vehicle repair centres, today announces its preliminary results for the year ended 31 December 2008. 

Highlights:

▪	Turnover up 16% to £42.6 million (2007: £36.8 million)
▪	Like for like turnover growth of 4%
▪	Underlying* profit before taxation up 12% to £1,307,000 (2007: £1,164,000)
▪	Underlying EPS* up 12% to 6.4p (2007: 5.7p)
▪	Operating cash flow strong at £1.2 million
▪	Gearing reduced to 49% (2007: 52%)
▪	Number of trading operations increased by 3, with new sites in Swindon, Banbury and Hull making a total of  23
▪	Total dividend for 2008 up 6.7% to 1.6p per share (2007: 1.5p)

*  Underlying results in 2008 exclude the increased deferred taxation charge due to phasing out of industrial building allowances and in 2007 exclude the notional profit on disposal of fixed assets arising from the replacement of old assets for new as a result of an insurance claim for flood damage (as set out in note 2)

Commenting on the results, Barry Whittles, Chief Executive of Just Car Clinics, said:

'I am delighted by another year of progress for Just Car Clinics despite the challenges presented by a difficult economic climate.  The 2008 financial statements clearly demonstrate another successful year with improvements in revenue and profitability, underpinned by good cash flow and a strong balance sheet. I believe that we are in good position to meet the demands of the economic recession and look forward to continuing success during 2009.'

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 and HIGHLIGHTS 

It is very pleasing to report the continued progress of Just Car Clinics Group plc ('the Group') during the year. The 2008 financial statements clearly demonstrate this progress, with improved levels of revenue and profitability underpinned by the strength of the Group's balance sheet. The performance in 2008 continues a five year period of growth, in both profitability and revenue, since the acquisition of the business in 2003. 

RESULTS

Revenue for the year increased by approximately £5.8 million to £42.6 million (2007: £36.8 million) representing overall growth of 15.8%. After allowing for the impact of acquisitions during 2007 and 2008, the like for like increase was 3.5%, with volume increases accounting for approximately half of this.

Market repair volumes fell generally in 2008 through a combination of reduction in road traffic associated with high fuel prices and a decline in car residual values which has increased write off rates. Despite these adverse market conditions the Group has managed to increase like for like sales by focusing on increasing volumes from local business fleets, vehicle manufacturer approval programmes and accident management companies, to complement the existing relationships with major vehicle insurers.

The Group continues to strive for excellence in all areas of customer service and during 2008 has improved the average percentage of customers who are entirely satisfied with the repair process to 92.4% (2007: 89.6%), nonetheless further improvement in this area continues to be a key focus.  This emphasis on customer service, together with a proactive relationship with corporate clients and a genuine desire to minimise claims costs and find solutions to customer's concerns, underpin the Just Car Clinic brand and distinguish it from the majority of competitors.

Gross margins for the year reduced to 41.7% (2007: 43.0%) reflecting a combination of reduced margins at more recently acquired sites as they build up to optimal operating volumes and efficiency, variability in weekly volumes across the market and the difficulty of passing cost increases on to customers in the current economic climate.

With the more challenging economic conditions stringent cost control has become even more important. All significant cost areas have been investigated during the period and, where possible, efficiencies have been improved and costs reduced. The success of this strategy, together with benefits from economies of scale in central costs, is reflected in a reduction in the level of expenses as a percentage of sales by 1.2% in the year to 38.5% (2007: 39.7%).  

The net interest charge was £59,000 (2007: £65,000), representing an interest cover of 23 times (2007: 19 times). The Group has not benefitted significantly from reduced underlying interest rates as the majority of borrowings are at fixed rates, however, continued focus on working capital control maintained average debt at a similar level to 2007, despite increased revenues and the acquisition spend of £354,000 during the year.

Underlying profit before taxation increased by 12.3% to £1,307,000 (2007: £1,164,000), despite the challenges of a difficult market for much of the period.

The tax rate increased to 34.2% (2007: 29.3%) reflecting a non-recurring increase in deferred tax resulting from the phased abolition of capital allowances on industrial buildings. There is no significant resulting impact on the amounts of tax that will be paid and it is anticipated that the underlying rate will reduce to approximately 30% from 2009 onwards. 

Underlying earnings per share, calculated excluding the impact of the increased tax rate in 2008 and the notional profit on flood affected fixed assets in 2007, increased by 12.3% to 6.4p (2007: 5.7p). Unadjusted earnings per share increased by approximately 2% to 5.9p (2007: 5.8p).

dividends

In recognition of the improved trading performance and financial strength of the Group the Board is pleased to recommend a 7% increase in the final dividend to 1.07p per share (2007: 1.00p). With the interim dividend of 0.53p per share paid during October 2008, this makes a total dividend for 2008 of 1.60p per share (2007: 1.50p). Subject to approval at the Annual General Meeting the final dividend will be paid on 22 May 2009 to shareholders on the register at the close of business on 24 April 2009.

ACQUISITIONS

During 2008 the Group continued its strategy of expansion and three new branches were acquired in Swindon, Banbury and Hull at a total cost of £354,000.  

These three sites contributed additional sales of £2.2 million and made a small combined loss during 2008 of approximately £0.1 million. The variability of the market during 2008 has extended slightly the period required for new sites to reach optimum capacity and efficiency levels. The estimated turnaround period is assessed, in conjunction with the quality of the employee team and facilities and the anticipated future repair volumes, in determining an acceptable acquisition price.

The Group continues to seek suitable acquisition opportunities which meet established criteria and which are available at an acceptable price and it is anticipated that expansion by acquisition will continue during 2009 and beyond.

WORKING CAPITAL

Cash generated from operations remained very strong at £1,244,000 (2007: £1,099,000) despite increases in trade receivables, due primarily to acquisition of new sites and associated revenue increases particularly in the final quarter of 2008.  

The Group balance sheet remained strong with net assets of £3,726,000 (2007: £3,131,000) at the year end and net borrowings of £1,824,000 (2007: £1,640,000). The overall gearing level reduced to 49% (2007: 52%).  

The Group's core borrowings are provided by a committed term loan facility of £1.3 million repayable in instalments over 3.2 years. The Group also has a £2.5 million debtor finance facility and a £0.2 million overdraft facility to fund peaks in cash flow and future acquisitions. The Group has no off balance sheet financial liabilities, pension or similar obligations.

empLoyees and training

The Group's most important asset is undoubtedly the high quality Just Car Clinic employee team. The continued progress of the Group reflects the hard work and commitment of this team and the Board would like to thank everyone for their contribution.

The importance of team development and effective training remains a central aspect of the Group's strategy. Training, carried out at the Group's dedicated facility, has focused on customer service and management development, in addition to technical training reflecting the increased complexity in the manufacture of vehicles and developments in repair methods.

The Group aims to establish a successful 'team culture' based on a high level of internal communication, recruiting quality individuals and, where possible, by promoting from within. The percentage of employees leaving the Group during 2008, excluding the impact of recently acquired sites, reduced to 17.8% (2007: 18.6%), still significantly below industry averages.

STRATEGY and prospects

The strategy of the Group continues to be one of expansion both organically from existing locations and by acquisition.

The UK economy as a whole is clearly being affected by an economic recession characterised by restrictions in available credit. Most sectors will be adversely affected by these underlying conditions and this, to some extent, may include motor vehicle repair. However, the majority of accident repairs are not discretionary and it is unlikely that repair volumes will be affected as significantly as most other areas of expenditure. Whilst challenges will undoubtedly be faced by the Group in 2009, the Board believe that Just Car Clinics is in a strong position to meet these demands and that the Group will continue to progress during the current year.  In the meantime, the Board is pleased to confirm that trading during 2009 has been in line with expectations. 

David Hickey                                    Barry Whittles

Chairman                                            Chief Executive

3 March 2009

 

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2008

	2008	2007
	£'000	£'000
REVENUE	42,617	36,802
Cost of sales	(24,854)	(20,978)
	----------	----------
GROSS PROFIT	17,763	15,824
Selling and distribution costs	(9,659)	(8,341)
Administrative expenses	(6,743)	(6,254)
Net gain on disposal of property, plant and equipment	5	27
	----------	----------
OPERATING PROFIT	1,366	1,256
Finance revenue	20	44
Finance costs	(79)	(109)
	----------	----------
PROFIT BEFORE TAXATION	1,307	1,191
Income tax expense	(447)	(349)
	----------	----------
PROFIT FOR THE YEAR - attributable to equity holders of parent	860	842
	----------	----------
earnings per share ( note 2)
Basic earnings  per share	5.9p	5.8p
Underlying earnings per share	6.4p	5.7p
Diluted earnings per share	5.9p	5.7p

  The results for the year derive entirely from the continuing operations of the Group.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2008

	Equity share capital	Share premium account	Other reserves	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000
At 31 December 2006	145	2,451	(89)	(158)	2,349
Exercise of share options	1	9	-	-	10
Transfer of merger reserve	-	-	89	(89)	-
Share based payments	-	-	-	17	17
Reduction in share premium account	-	(2,118)	-	2,118	-
Income tax - share based payments	-	-	-	17	17
Loss on interest rate hedge	-	-	(32)	-	(32)
Profit for the year	-	-	-	842	842
Equity dividend paid	-	-	-	(72)	(72)
	---	---	---	---	---
At 31 December 2007	146	342	(32)	2,675	3,131
Exercise of share options	-	2	-	-	2
Share based payments	-	-	-	8	8
Income tax - share based payments	-	-	-	(18)	(18)
Loss on interest rate hedge	-	-	(60)	-	(60)
Income tax on interest rate hedge	-	-	26	-	26
Profit for the year	-	-	-	860	860
Equity dividends paid	-	-	-	(223)	(223)
	---	---	---	---	---
At 31 December 2008	146	344	(66)	3,302	3,726
	---	---	---	---	---

  

consolidated balance sheet

at 31 December 2008

	2008	2007
	£'000	£'000
ASSETS
Non current assets
Property, plant and equipment	2,367	2,275
Intangible assets	2,060	1,906
	----	----
	4,427	4,181
	----	----
Current assets
Inventories	544	639
Trade and other receivables	6,645	4,926
Cash and cash equivalents	3	60
	----	----
	7,192	5,625
	----	----
TOTAL ASSETS	11,619	9,806
	----	----
LIABILITIES
Current liabilities
Trade and other payables	(5,406)	(4,521)
Financial liabilities	(927)	(400)
Derivative financial instruments	(92)	(32)
Income tax payable	(361)	(292)
	----	----
	(6,786)	(5,245)
	----	----
Non current liabilities
Financial liabilities	(900)	(1,300)
Deferred tax liability	(207)	(130)
	----	----
	(1,107)	(1,430)
	----	----
TOTAL LIABILITIES	(7,893)	(6,675)
	----	----
TOTAL NET ASSETS	3,726	3,131
	----	----
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF PARENT
Issued equity share capital	146	146
Share premium account	344	342
Other reserves	(66)	(32)
Retained earnings	3,302	2,675
	----	----
TOTAL EQUITY	3,726	3,131
	----	----

 

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2008

	2008	2007
	£'000	£'000
Operating activities
Profit after taxation for the year	860	842
Adjustments to arrive at operating cash flow:
Income tax	447	349
Net finance costs	59	65
Depreciation and amortisation	513	483
Gain on sale of property, plant and equipment	(5)	(27)
Expense arising from share based payments	8	17
Changes in inventories	160	(5)
Changes in trade and other receivables	(1,719)	(934)
Changes in trade and other payables	921	309
	----	----
Cash generated from operations	1,244	1,099
Income tax paid	(293)	(8)
	----	----
Net cash flow from operating activities	951	1,091
	----	----
Investing activities
Sale of property, plant and equipment	6	63
Payments to acquire property, plant and equipment	(463)	(518)
Payments to acquire computer software	(8)	(4)
Payments to acquire businesses	(354)	(525)
	----	----
Net cash flow from investing activities	(819)	(984)
	----	----
Financing activities
Interest paid	(115)	(109)
Interest received	20	44
Proceeds from shares issued on exercise of options	2	10
Repayments of borrowings	(400)	(2,301)
Receipts from new borrowings	-	2,000
Dividends paid to equity holders of Parent Company	(223)	(72)
	----	----
Net cash flow from financing activities	(716)	(428)
	----	----
Change  in cash and cash equivalents	(584)	(321)
Cash and cash equivalents at beginning of year	60	381
	----	----
Cash and cash equivalents at end of year	(524)	60
	----	----
Reconciliation to net debt
Net debt at beginning of year	(1,640)	(1,604)
Change in cash and cash equivalents	(584)	(321)
Repayments of borrowings during year	400	2,301
Amortisation of finance issue costs	-	(16)
New borrowings during the year	-	(2,000)
	----	----
Net debt at end of year	(1,824)	(1,640)
	----	----

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 2008.  This preliminary announcement has been prepared on the basis of International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board as adopted by the European Union and does not constitute the Company's statutory accounts within the meaning of Section 240 of the Companies Act 1985.  There have been no material changes to the accounting policies set out in the accounts for the year ended 31 December 2007.

Statutory accounts for 2007 have been delivered to the Registrar of Companies, whereas those for 2008 will be delivered following the Company's Annual General Meeting on 20 May 2009. The auditors have reported on these accounts; their reports were unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.

The financial statements for the year ended 31 December 2008 were approved by the Board on 3 March 2009.

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 £860,000 (2007: £842,000) and on 14,574,085 ordinary shares (2007: 14,515,392), being the weighted average number of shares in issue during the year.  

In order to reflect the underlying trading performance of the Group an underlying earnings per share figure has also been presented which excludes income and costs of one off non-trading items. The calculation of the underlying earnings per share is based on the same number of shares as outlined above with the following adjustments to the profit figures. In 2008 the profit has been increased by £68,000 reflecting an estimate of the additional deferred tax charge arising from the phasing out of capital allowances on industrial buildings. In 2007 the profit was reduced by £19,000 reflecting the post taxation affect of a profit on disposal of fixed assets arising from the replacement of old assets with new under the terms of an insurance claim.

The calculation of diluted earnings per share is based on profit for the year attributable to equity holders of the Parent Company of £860,000 (2007: £842,000) and on 14,674,559 ordinary shares (2007: 14,694,329) after taking account of the potentially dilutive effect of outstanding share options.

3.    DIVIDENDS

The directors recommend the payment of a final dividend of 1.07p per share (2007: 1.00p), which, subject to approval at the Annual General Meeting, will be paid on 22 May 2009 to shareholders on the register at the close of business on 24 April 2009.  With the interim dividend of 0.53p per share paid during October 2008, this makes a total dividend for 2008 of 1.60p per share (2007: 1.50p).  

4.    ANNUAL Report

The Report and Accounts will be posted to shareholders on or about 6 April 2009 and will be available from the registered office of the Company at Rawcliffe Road, Goole, East Yorkshire DN14 6XL.

ENDFR EAXDAEADNEFE