Just Car Clinics Share Discussion Threads

[narc22] 04/10/2011 12:34

Harrogate's earlier post has nailed the issues, particularly high excesses preventing punters from claiming. Can't see that changing in the immediate future.

[aleman] 04/10/2011 12:30

Watching the sells keep trickling in makes me ask, how? WHo will they offload to?

[targatarga] 04/10/2011 11:41

Aleman - they probably square their books to zero....

[aleman] 04/10/2011 11:39

Anybody know what happens to market makers' stock? Presumably, they'll have stock if the delisting goes through.

[aleman] 04/10/2011 09:33

Insurance is cyclical. After a spell of heavy claims or stockmarket losses, claims rise and premiums follow. They come back down when claims ease or the stockmarket shows gains. It could take a couple of years. The clampdown on reselling accident details could bring significant reductions quite quickly - if it is effective.



Is my memory failing me? I thought Hodgsons had already crossed 8%. THey seem to have confidence about going private. It Is getting harder to block the delisting if they are supportive.

[harrogate] 04/10/2011 08:23

Hi

I think the road miles issue is now permanant as is the reduction in claims due to high excesses. But cheaper pertol can't do any harm

[aleman] 04/10/2011 00:13

Brent crude is down to $98 now (from over $125 high?). Supply from Libya is starting to come through which should take it closer down to WTI around $76. Why the hell is there no sign of UK petrol prices dropping? With the extra small car sales and improvements in consumption, driving volumes could soon bounce back to previous levels if Brent gets to $80 where it was a year ago when petrol was 117p. (Although smaller cars could mean cheaper repairs.)

The national average for petrol is still near its peak of 135-136p even though Brent has fallen over 20% in $s from its peak.



While US consumers feel the benefit,

[harrogate] 03/10/2011 13:03

I agree though with your point but things could get worse if volumes drop further. That is the unknown and as per the announcements, believe them or not, they say that they feel they can do better with contract wins off the market. If you run the numbers on H1 2010 sales levels with the new margin % and the costs less £1.5m you get some very interesting numbers which make it worthwhile to stick with it and trust them

[aleman] 03/10/2011 12:44

Of course, you are correct, harrogate. I should think longer and reflect before I post, but the underlying operating cashflow for H1 was still nearly £500k and things would have to get bad for that to fall more so my argument still broadly applies. I like the point about shareholder employees. It makes them more likely to keep the dividend going. If they were going to cut it, wouldn't they already have done it with this announcement?

[harrogate] 03/10/2011 12:30

Increase in inventory can't impact profit as long as it is valued at cost. The margin was increased because they are trying to move from replace to repair which helps margins a lot. The unknown is volumes. If they get back to previous levels, which I think we all accept will be by gaining market share not a recovery across the market,with the margin moving forward and a £1.5m reduction in overheads they could make a great profit in 2012. But they might not if volumes stay low.

On the issue of behaviour after delisting thanks for all the comments .It comes down to trust and maybe a factor here to provide some comfort is the relatively large number of employee shareholders.

I think we have often heard from an employee poster on here ..would be very interested in thoughts at the moment from one !!

[aleman] 03/10/2011 12:21

The profit number was spoiled by a rise in inventories despite a fall in business, most probably down to expanding the complementary retail services that raised margin a bit. THe strong debt performance would have been even better if payables hadn't fallen £650k , although you would expect some fall on weaker turnover. A slightly less bad H2 weatherwise and better margins could easily see could see pretax profit at £700k and operating cashflow before working capital changes and capex of £1.2m, with higher numbers in prospect if the insurance market starts to see premium pressures and recent oil price weakness sees petrol ease back a touch. So business is thin and numbers are weak but fundamentals don't look poor for the current market cap, debt and dividend. Underlying profit still looks to be running around £1m+ per year pretax and they have stated they expect the business to remain profitable and continue to gain market share. If the shares hadn't fallen by half they would only have been on about 4 times underlying pretax profit and operating cashflow in a bad year - probably why they want to delist it. Now, they are on only about 2 times and possibly lower if the market shows only a modest improvement and probably lower when the listing costs of £100k are knocked off. I would not say that was poor fundamentals at all, although the market looks set to remain very difficult for a while. I think the key is the gaining market share. The market will recover at some point, if only weakly, and JCR looks set to have a bigger market share and higher margins when it happens. The problem is the stockmarket just doesn't want to look past the current weak market so the low share price and cost of the listing must be annoying to directors who own half the company. It's one of the problems with AIM that steady companies like this get clobbered after one poor spell of weather despite years of relatively consistent results yet miners and pharmas go stratospheric on rumours.

[spaceparallax] 03/10/2011 11:57

Can't understand why you say the fundamentals are poor

[narc22] 02/10/2011 14:54

Very interesting comments but one thing to consider. The fundamentals of JCR's are shot to bits and won't be getting any better in the short/medium term imho

[envirovision] 02/10/2011 13:28

Directors would be crazy not to use the consolidation route in order to eject unwanted smaller investors at minimum cost who may have just a few percent of the holding or less. Unless there is a constitution in place prior to de-listing setting out the rights, as a small shareholder you don't stand a chance of realising any value.

[targatarga] 02/10/2011 13:03

Directors who initially have good intentions often get greedy.... Inspectron consolidated several times and tolent reluctantly pass on info. Just look at the reflec bb. Not many happy bunnies on the delisted boards.... imho

[davydoo] 02/10/2011 11:33

Can i just ask out of curiousity, particularly if you have been through this before. What if you have your holding in a SIPP? how do you receive future dividends and any eventual sale proceeds?

[microscope] 02/10/2011 11:05

Seems people are happy to capitulate easily. I respect your decisions of course and especially acknowledge Harrogate your fantastic support of them over the years.

However my view remains very strongly that this is not in shareholders interests, or ultimately the company's, and is therefore fundamentally wrong and shoud be strongly opposed.

Easyjet, lol, does it really cost 28 quid to carry a bag on a plane? I think their margins must be just fine!

[rmillaree] 02/10/2011 10:34

Hello harrogate

Thanks for all of your efforts in relation to this matter

I don't really have much to say on the matter as in some respects the financials of the business speak for themselves times are tough and tough decisions need to be made to ensure the company prospers in the future.I take some comfort from the fact that i hold shares in touchstone and they have shown good transparency and improved financials since de-listing.Obviously short term shareholders have been very poorly rewarded by this announcement however i can't think of any way of avoiding this type of situation.

I don't see anything strange about the history of share transactions - RRF are closing down their fund and in some respects were forced sellers - on the basis that JCR can make ongoing £1 million pa profits the price paid to buy back these shares was pretty cheap - i suspect the directors had to increase their shareholdings to ensure the de-listing vote would succeed- anyone who didn't like the fact that directors were getting a larger proportion of the shares had the option to sell.

With reference to the dividend - i don't particularly like dividends being paid when a company has material debts and the presence of the dividend increases this debt.For JCR this is probably even worse than for some others companies as
the dividend if included as an expense makes the company loss making.Hopefully the presence of the dividend shows that the directors are suitably confident that the company will return back to normal profitability levels in H2 (500k+ for the 6 month period).

With regard to the results - not good but they remain profitable and have stated there are some specific reasons for the low profit levels this period.Unfortunately from an investing point of view the lack of transparency about future earnings and low margins mean that they have some hard work to do to get back to were we would want them to be.Note for self in future - never invest in companies with wafer thin low margins (hmmmmm why do i own shares in easyjet?)

[harrogate] 02/10/2011 09:32

Hi.

There are lots of questions here and I can only give my view. I have spoken to the directors and I now believe I have enough comfort on this going forward to make me a holder after the delisting. It would be wrong to say I am happy but I do know that actually I couldn't have sold my shares anyway. I will hold and take the yield. Of course even more than before it is about trust but I am sure when we are not quoted that the information flow will be easier for them. It has shown me though how dangerous a large holding in a very small cap is when trading gets difficult. There is no real exit. I have been a shareholder in unquoted companies before and made money so fingers crossed. My email address is still on here somewhere so feel free to email me. I intend to go to the meeting and I may well vote against on principle.

[davydoo] 01/10/2011 12:45

They haven't agreed to that, they've agreed to a longer term plan, their value is still there, it's just there's now an expensive premium to pay and get out if personally your plans are shorter term.

[targatarga] 01/10/2011 12:19

Strange that 75% of investors would agree to have their investment decimated by approx 40%... imho

[davidosh] 01/10/2011 11:52

Just to be clear...I have no shares whatsoever in JCR. I was merely posting to try and help other investors and provide a meeting of minds with ShareSoc there to help if they could and if shareholders here felt the need.

I agree that the huge buyback at 51p now looks rather bizarre. I wonder if Rapid Realisations Fund with their very large holding were causing a problem so they got them out of the way with the buyback. Just a thought !

[dd776] 01/10/2011 04:26

if they are short of cash why pay a dividend ?

[supreme mo] 30/9/2011 23:57

Hi Davidosh,

I hope all is well. Are you a holder here?

Harrogate, well done for banging the drum on here and hope it works out for when (of if) the company de-lists.

Interesting that:

1) Company bought shares back at nearly 4 x the price they are at today and

2) Directors bought boat load at 24p

Wouldn't the smart thing have been to announce the de-listing and pick up the shares at rock bottom prices when everyone else wants to sell (as doesn't want to hold shares in a private company)?

Perhaps some would say it was a smart move buying to protect their positions and to make it nailed on the de-listing would go through...

Either way, it makes me wonder what the Canadian investors make of all this...

GL all