Just Car Clinics Share Discussion Threads

[harrogate] 10/3/2011 10:21

I think it is an interesting development. I am sure it is about cost savings and I would hope that the costs in each branch are going down because of it. I agree with yorkshiret post above in that i am not sure the JCR model of customer service, quality, training, Kitemark etc is producing a sustainable growth model. We have more than doubled sales in the last 5 years and EPS has what ...gone up by a lot less ... I think they have to get cost of this operational model down and fast. Now I see the results I am confused by the timing of the share buyback ..surely they could have waited and got them at 45p or less based on this pretty downbeat statement? The change in tone from the interim announcement in Sept to now is extremely marked and if I didn't know the managament better I would see a lowball MBO on it's way. Maybe it would be better to be private since the buyback must indicate that they have given up on their stated aim a few years back of building a strong institutional shareholdee base. If anyone wanted to have a significant holding they could have done so. To be honest the more I think about the recent news the more confused I am.

[spaceparallax] 09/3/2011 12:32

Cheers, it could be a winner if run effectively.

[rmillaree] 09/3/2011 12:25

Small news piece added to the JCR website.

[spaceparallax] 09/3/2011 10:07

Thanks Ale, an interesting article - makes you wonder why insurance costs continue to soar?

Meanwhile, I'm stunned by the sharp dip in share price - I know there are a number of differing views here but I just can't believe that people are baling out with the perfectly respectable set of results last week. I appreciate that growth may be an issue but, given our current economic times, I still reckon JCR to be a very solid investment.

I'm looking seriously to shift some money into here - at sub 50p it seems a no brainer to me.

[harrogate] 05/3/2011 13:22

Yes that is right ...less the interst on the loan to buy the shares maybe ...inless they meant that profits for 2011 are going to be about the same allowing for the interest increase

[rmillaree] 05/3/2011 10:53

For the EPS calculations the number of shares used in the calculations was about 50k lower tahn the previous year, presumably this accounts for the couple of weeks or so with the lower number of shares.

However rounding the EPS to the nearest 1/10 of a penny still comes up with the same 5.4p even if we added back the extra 50k shares.

If we take the same 791k as being profit for 2011 this should give us an EPS of 6p

[harrogate] 05/3/2011 07:07

EPS not impacted by buyback in 2010 at all.

[aleman] 04/3/2011 15:54

I wonder if JCR need winters with just odd days of snow and ice through the night without bad snow disrupting traffic for days on end through daylight hours as well

I read a report on UK road traffic recently. Traffic dipped a little in the immediate aftermath of the credit crunch, recovered quickly as petrol fell and business normalised, then fell this year as the petrol price recovered to new highs and car insurance rates rose by a record 25% in a year on the back of poor investment returns and high recession-related fraudulent claims. Traffic is now down about 5% overall on precrunch levels and showing no sign of recovery as yet. There is some evidence that people are using their cars less. Many people are not feeling the recovery, especially in some services and the public sector, and they may not be replacing second cars. From what I can gather, rising costs mean people are trying to work closer to where they live and walk more. Public transport is benefitting but the real boom is in cycling which is being helped by technology advances (lighter weight frames, better suspension and battery assistance), off-road cycle routes, and increasing traffic calming and parking restrictions.

Moreover, there seem to be a North/South divide in the way the UK recovery is being felt as London seems to have benefitted from the international effects of a global recovery which some regions have missed out on. My guess is traffic will be down less than 5% down south and down a bit more up north. This will hit JCR harder than some others. Also, There are fewer company cars up north and I think the fall in traffic may be compounded for JCR by some people struggling on with older cars save money by moving away from comprehensive insurance to TPFT.

Given the above, I think JCR do have some headwind to contend with and this is shown in the results. Although results and outlook for 2011 are disappointing, it is to be remembered that this company has always given cautious statements, underlying cashflow remains very strong (despite the temporary rise in debt)compared to market cap and share buybacks - and the prospect of more - do suggest there will be further earnings growth on the cards along with increasing dividends. Given that trading in JCR's region may be a slightly tougher than elsewhere in the UK over the next year or two, I would also think that there is always the chance of a bid from the two other large players. The shares seem inexpensive but lack the prospect of growth news to push them on. Any significant fall from here, though, could see bid interest, possibly encouraged by the insurance companies.

(One straw to clutch at is that the latest month's regional PMI statistics for the UK had Yorkshire and Humberside as vying for top region thanks to a strong manufacturing presence and an healthy argicultural output benefitting, from strong crop prices.)

[spaceparallax] 04/3/2011 12:50

Either the MMs are milking the modest selling or we have a large Sell order in place.

[yorkshiret] 04/3/2011 10:36

Morning all,

The article is below. A similar downbeat statement to the results.

I found it interesting that there were no positive statements about the progress of National ARG (who have now won 5 contracts and seem to be making good inroads), or an excellent start to the year (bodyshops have been very busy).

But then conversely there was also no mention of any drop off in repair volume from RBS (who used to do Tesco insurance but this is now with Ageas (formerly Fortis, who JCR also do work for)), or Axa, who have moved their private policyholder repair work to the SIMS network (Axa bought SIMS as they managed claims for Swiftcover, but SIMS is a whole mix of different repairers to the normal Axa network, and I don't know if JCR are on this). Maybe one to ask at the AGM as to whether this will affect 2011 results.

There are other, smaller bodyshop groups producing better profitability than JCR, including ones operating in similar regions, so it seems something is not quite right with the strategy here. Whether that's being TOO compliant; wrong mix of work; too many staff; too many courtesy cars; not maximising profitability per job; or bodyshop sites in the wrong place I don't know.

Re: Acquisitions - My gut feel is that JCR would be an excellent fit for DWS Bodyworks (another NARG member) to acquire as they look to grow into a national chain in their own right, so might well be worth sitting tight - good luck!

Anyway, here's the publication:

Just Car Clinics - Barry Whittles speaks to ABP Club about this mornings results

Following this morning's results issued by Just Car Clinics, Chief Executive Barry Whittles spoke exclusively with ABP Club about the realities of challenges that JCC and the industry faces.

"We have to face up to the fact that times are tough," said Barry. "The current economic climate coupled with a reducing claims frequency, reduced hours sold per repair, volatility of capacity and cash flow, presents many challenges. We remain positive in meeting the challenges and believe that as a business we have to diversify or die. As a company, we now provide mobile repair; it has its place but I feel in a limited way, we are commencing other branded solutions such as Just Tyre, Just Service and Just MOT to name a few and backing this up with a customer Just Car Promise – the simple message is for the customer to choose 'Car Care You Can Trust' – and they really like it!"

"For our core business of accident repair, we are very focused on customer satisfaction achieving a rating of over 95% as a group. Our central claims unit assists this by enabling faster cycle time management and a triage service to provide our express repair service for sub 10 hour repairs; this has benefited our customers and our business as a whole."

Concluding Barry stated that the results tell their own story; a £46 million business providing a £1.2 million profit from 25 sites demonstrates just how tough market conditions are, but we remain extremely positive and will continue to develop our business accordingly.

[spaceparallax] 04/3/2011 10:30

Don't forget that they managed an almost LfL EPS, having shelled out on the buyback. If trading continued as is, then the profit would be substantially higher with the same number of shares, which should yield an increased EPS - this of course barring an exceptional expenditure on new branches.

[harrogate] 04/3/2011 10:21

SP...You may be right and I value your sensible approach to things ...I juts don't see how they are going to grow EPS post 2011 though unless they do a big deal that takes out a lot of back office and other staff and is a step change and I doubt they are planning that.

[spaceparallax] 04/3/2011 10:17

I see the results as very solid and have nothing but praise for the continued excellent management. Interestingly, it does appear that many of us, me included, have been misreading the effects of the cold spells. Considering the subsyantial share buyback, the EPS is good and the divi solid. Given the uncertainties of current and immediate economic outlook, I see nothing to be disappointed with in these results - is as good as having your money in a savings account, but with decent interest via the divi and good potential for growth. If the share price drifts, I'll be surprised and disappointed but will be likely to grab more.

[harrogate] 04/3/2011 10:12

Yorkshiret can get the story off ABP I think if he is around ..would be interesting as you say. The conditions may make acquisitions cheaper and more plentiful as an upside.

[microscope] 04/3/2011 10:10

Hi Harrogate while I agree with your take on the results overall, I'm not quite as sceptical as you. Re username yes, think I mentioned it before. I just see steady paying off debt ahead and steady results. Might stagnate a bit for a year or so, but they still look well run and a snip imho for a bigger player at some stage. Infact slightly less good results often attracts a bigger fish who think they can get a company on the cheap.
If you asked me my persional opinion I'd say strong hold for a couple of years.

Perhaps shammytime was reading someone else's results? From the early price move up looks like imho someone who hadn't read carefully enough may have got suckered in at a premium - hope it wasn't you shammy. ;)

[rmillaree] 04/3/2011 10:07

Would be interesting to here what Barry has said to ABP - does anyone have access to this article?



In some respects if JCR wants to buy back the remaining RRF shares then it would be sensible to be pretty downbeat about prospects if they want to get them at a reasonable price so perhaps it's all a cunnning plan.

[harrogate] 04/3/2011 09:14

When you say I am not reading the results right I have no idea what you can mean. The results are disappointing and the only thing that is saving them is the dividend increase and the fact that we have 11% increase in EPS in 2011 due to the share buyback. When the company produces flat profits, says the maerket is tough and profuts will not be up in 2011 how can you describe them as fantastic.
The debt increase looks temporary and I hope they push on and buy the other 8% of the shares available from RRF when they can.
Microscope..are you egoi? I agree on timescales - I have held for over 7 years so am a patient man but difficult to make a case to buy at the price today I think.

[microscope] 04/3/2011 08:57

No company can produce increased profits every single year, although JCR has had a fine track record of doing so hitherto. These results are symptomatic of the times; solid but unspectacular, and on this occasion slightly lower, but imho the company is still doing perfectly adequately.

It depends on your investment timeframe I guess. I'd expect to see a small disappointement in the share price, and having recently tested above the top of the fairly longstanding 45-55p range (about 15 months), I'd not be atall surprised to now see it test the bottom end of that range in the near future.

Brokers unlikely to be upgrading and that may hit sentiment too..

[rmillaree] 04/3/2011 08:13

Perhaps i was a little harsh shammy - I guess the dividend increase is nice, i was just expecting a little bit better than what we got. I also wasn't expecting the debt to jump quite as much as it did although the level should reverse itself back down quite quickly.

[shammytime] 04/3/2011 08:02

You're not reading the results correctly. Look at the market reaction. They are fantastic results. We'll see 65p here today.

[rmillaree] 04/3/2011 07:38

Very disappointing results - Infact i couldn't find anything in the announcement to cheer me up at all.

[harrogate] 04/3/2011 07:14

Not sure which set you are reading !! They look disappoinitng to me and below expectations ... Could be a difficult day here unfortunately

[shammytime] 04/3/2011 07:12

Very very solid set of results.

Increased dividend too :) Should see this surpass 60p level today