Companies: JCR   

Just Car Clinics, the collision repair chain offering investors a decidedly defensive bet due to the inevitability of accidents occurring on roads, has motored in with another set of record interim results to June.

The company, which has expanded over the past two years from 13 to 23 car repair centres, delivered near-17% growth in both sales and pre-tax profits to £21.2m and £647,000 respectively, with acquisitions boosting the top line and like-for-like turnover growth an encouraging 3.8%. Following yet another period of strong cash flow, chief executive Barry Whittles was able to propose a 6% interim dividend increase to 0.53p.

Whittles attributed the record figures to improvements in both volumes and profit and said that although spiralling petrol prices had caused volatile recent trading, by reducing the number of cars on the road, he still expects full-year forecasts to be met.

Furthermore, he explained that a marginal decrease in gross margins to 42.3% (2007: 42.9%) reflected recent acquisitive activity, since margins at more recently acquired sites are lower than at mature repair centres – tougher trading conditions have also extended the time it takes to bring acquired sites up to speed in terms of the returns they make.

For the year, Just Car Clinics, which reduced net debt during the period from £1.6m at year-end to £1.2m, is forecast to lift pre-tax profits from £1.2m to £1.3m and earnings to 6.2p (2007: 5.5p), with a 1.7p dividend looking likely. Trading on only eight times forward earnings, we think investors who bought on our advice – the shares were recommended by Growth Company Investor at 75p in 2007 – should sit tight. Just Car Clinics remains a strongly cash-generative, profitable and defensive company.

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Just Car Clinics Group	AIM	£6.13m	42.00p	2.00p
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