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Sales drop at accident repair group

A fall in repair volumes due to economic conditions and the exceptionally dry spring is being blamed for a drop in half-year revenue at accident repair group Just Car Clinics.

Turnover for the six months to July 1 fell 14.9% year-on-year to £21.5m.

Its interim statement, published this morning, said economic factors such as fewer motorists have continued to affect repair volumes in the current period, and additional challenge of exceptionally dry spring weather and the additional public holiday further affected the trading performance in the second quarter.

In response to the challenging market conditions, JCC said it has expanded its range of services to include tyre replacement, vehicle maintenance and servicing plus continuing development of mobile repairs and glass replacement.

This retail strategy has included the refocus of the Just Car Clinic brand from "collision repair" to "car care you can trust", supported by the launch of a new website and the commencement of a project to refit the customer interaction areas of its sites to give an improved retail environment.

It has also invested in repair technology to emphasise more profitable repair of damaged parts than replacement, and improved margins by 1.5% as a result, plus generated £1.5m annualised cost savings through a recruitment freeze, redeployment and some redundancies.

In response to corporate client and customer feedback, we have established a central claims operation offering an enhanced, efficient and flexible service and have also introduced a "fast track" repair process that reduces vehicle repair times and improves customer service. The recent award of a new three-year contract with Allianz Insurance covering all sites illustrates the success of this strategy.

The Group recorded an underlying profit before taxation of £195,000 (2010: £608,000) and earnings per share of 0.9p (2010: 3.0p).

Chairman David Hickey said: "For the past twelve months, tougher trading conditions have been seen throughout the industry. During this time, the number of independent competitors ceasing to trade has accelerated.

"The group remains the second largest independent operator in the UK, and continues to secure additional contracts with leading insurers. Market share therefore continues to grow organically.

"Expansion by acquisition also continues with the purchase of facilities in Keighley and Northampton during 2010, bringing the total number of locations to 25.

"Additional acquisition opportunities are under review, and the related criteria have been tightened in favour of the group.

"In response to the current economic conditions, the group's strategy will also include further expanding the breadth of the retail offering.

"While tough trading conditions persist, the board believes that Just Car Clinics, with a strong balance sheet and an experienced management team, is in a good position to continue to grow market share and continue to trade profitably.

"As and when volumes recover, the group should see substantial benefit."

 

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