The Group instructed the forensic division of its auditors, Ernst & Young LLP, to conduct an investigation, which confirms that in 2003 the EBITDA and pre-tax profit of the Just Car Clinics business, which was acquired by the Group in January 2003, have been overstated by approximately £370,000. This reduces the Groups' estimated pro-forma pre-tax profit for the year to 31 December 2003 to approximately break-even, before taking account of the costs of the investigation. The investigation has also confirmed that net assets of the business were overstated by approximately £400,000 at 31 December 2002 and indicates that the pre-acquisition results for the year then ended were also overstated.
The Group's first published accounts will be for the 15-month period from September 2002. As previously reported, the accounts will incorporate a loss of £124,000 recorded for the first three months relating to internet-based retailing, the former activity of the group.