This company is certainly catching the eye of Analysts and Tipsters. I have kindly borrowed this summing up of the company from an online associate and agree with his findings. This really is an undervalued company.

Car Clinic (JCR traded on AIM) – Market Cap 1.32million

Business

Company owns 12 accident centres. Was formerly a division of the Dixon Motor Group.

Opportunity

Profit of circa 700,000 at interim stage – Is a growing business, so every confidence that this performance will be matched in second half, generating 1.4million in cash profits for the group. As others have pointed out this would essentially put company on PE of 1.

Company does have debts, which will require servicing. Currently 2.25million, though repayment has been more than fairly structured and allows significant amounts of cash to be retained by JCR. I assume these monies will be used for bolt on acquisitions and possibly early repayment of debt.

From my various conversations with an existing large shareholder, and to a certain extent recent statements from the company, the debt will be repaid at the rate of 400k per annum. From my calculations, and conversations with various sources, net profits this year should be more than 600,000. Compare this to the measly 1.32million market cap. As I indicated above, this is ludicrously cheap. ( NB This figure takes into account costs of acquisition, associated legal fees, initial banking fees and initial repayments. Remember, the repayments begin in earnest, next year.)

Going forward however, annual profits of more than 1.4million can be expected from the group. I expect the company to beat this comfortably next year and to continue growing at pace. So in effect, I believe Just Care Clinic can deliver annual net profits of more than 1million – Remember this is net profit. (i.e. after repayment of debt)

Directors Buying

And why shouldn’t they? They obviously see the great potential here. The Finance Director, Chris Elton was formerly FD at Dixon Motors, but moved over to take part in the action.

The future

I expect the company will be more focussed on bringing in further contracts with insurance companies. When Just Car Clinic was part of the Dixon Motor Group, whilst profitability was obviously important, as the business wasn’t a core component of the larger group bringing in new contracts was likely seen as a problem rather than a chance to deliver greater profits. I suspect the management team, motivated by significant shareholdings, will be keen to bring in as much ‘big’ insurance business as they can. I expect the company to make an announcement to this regard within the next few months or so. This is based on nothing other than gut, experience and feedback from various sources involved in the industry.

Take a closer Look

Equitygrowth.net wrote a brief piece on JCR in its 7th February newsletter. Shares Magazine has also provided positive coverage of late. I do agree that the figures do appear too good to be true, that is why I encourage investors to do their own research. This stock is undervalued – FACT. I am confident these shares will do well in the coming weeks as more investors recognise the potential, whilst going forward this is excellent material in my opinion. This isn’t hype, this is all fact which can be confirmed with just a little time and effort. Shares are currently 10.5p offered. I cannot emphasise enough - JCR is one to have a look at.

Please DYOR.

Big freeze & snow forecast for next week as far south as Dorset. How will this effect JCR's share price - upwards movement is on my forecast as bad weather = more road accidents!

Good point, although is this a popular enough stock for this to make a difference until JCR release any statements?

In 1st thing this morning at 25.75 having dipped in before and taking healthy profit..QUALITY management/company.
Good Luck to all holding

Problem with this share is sliding margins to 3.2% & the heavy debt until 2008 (both schedulded & other)

I'd like to see 1m pre-tax profit for it to be fair value at the current price.


Mild weather until this week also hasn't been in it's favour...see interim statement.

Not impressed at 1p options that were issued way above the share price at the time....anyone know why the Directors didn't see fit to issue them at the share price at the time, instead of making them so much skewed in the directors favour & against investors as it will dilute their eps?

Please remember board posters ThirdEye as had a warning from the board administrators and is being carefully watched.

Just Car Clinics Group PLC
16 March 2004

Perhaps some should listen with what ThirdEye has to say see today's announcement:


16 March 2004


JUST CAR CLINICS GROUP PLC

OVERSTATEMENT OF HISTORIC RESULTS

As part of the pre-audit review of its maiden annual results, Just Car Clinics
Group plc ('the Group') has identified a significant overstatement of trading
results in three of its twelve locations. The Group instructed the forensic
division of its auditors, Ernst & Young LLP, to conduct an investigation, in
conjunction with management, and their report has now been received.

The investigation 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 this 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. All amounts are subject to any
matters arising from the statutory audit by Ernst & Young LLP currently
underway.

At this stage in the investigation it appears that the overstatement has arisen
as a consequence of deception by one of the Group's four accountants, who has
since been dismissed for gross misconduct. In the Board's view, whilst the
misconduct was deliberate, there is no evidence at this stage that it was
motivated by personal financial gain. The deceit took the form of numerous
artificial journal entries inserted into monthly accounts for three of the
Group's locations, for at least the past two years. The deceit was identified by
the Group's Finance Director, as part of his pre-audit review. The degree of
complexity used by the dismissed employee has made the investigation difficult.
The investigation is continuing and the possibility of theft for personal gain
has not yet been fully ruled out. However, the amounts concerned are not now
expected to change significantly from those indicated.

IMPLICATIONS AND ACTION TAKEN

As a result of the restatement of the financial results following the
investigation breaches of certain banking covenants with the Group's principal
lending bank have arisen. The bank has confirmed its willingness to re-set the
relevant covenants and revised documentation will be completed in due course.

A full and detailed examination of the current and historic results for the
Group's other nine locations has been undertaken by management. No other issues
have been identified. Accordingly the Board is satisfied that this matter
relates solely to the three locations reported on by the former employee.

Finally, the Board has instructed its legal advisers to advise whether the
discovery of the overstatement of the opening balance sheet could give rise to a
claim against the vendors of the business under the terms of the acquisition
agreement dated December 2002.

CURRENT TRADING

During 2004 the Group has been profitable and continues to be cash positive.
Management accounts show pre-tax profit for the first two months of the current
year to be at forecast levels, and early indications for March, traditionally a
major trading month, suggest that it will also be in line with managements'
expectations.

PRELIMINARY ANNOUNCEMENT

The Group's maiden preliminary announcement of results is expected to be made in
April 2004, and the report and accounts for the 15 months ended 31 December
2003, are expected to be released before the end of May 2004

Commenting Barry Whittles, Chief Executive said:

'The Group is addressing the underlying trading problems masked by the false
bookkeeping. We continue to be cash positive and current trading is
satisfactory. The Board will provide a further trading update in the Preliminary
Announcement.'

With the heavy borrowings & breaches with the bank, these are a strong sell in my opinion, their debt repayment schedule has been seriously put back.

Guess some will think they are cheap, who don't check balance sheets & debt, I suggest you take a good look.

It does make you wonder, what is the point in checking the company balance sheet if you are thinking about buying a share?

Check the borrowings Scottie.....they would have told you that JCR is 'walking on a tightrope' as far as debt & repayments are concerned....it's so heavily geared.....I warned many times that this share lets say was being looked at through rose tinted specs with it's p/e of 1 ....see goldfinger/Oliverleftwingtit/Slaters post above.....if it's cheap, there is often a reason why.

Any reply to that gf?

Third Eye - yes, you have been sceptical on the basis of published debt. However, it is the unpublished stuff that is the problem today. As investors in SUF also found out, if the accounts themselves are in fact baloney, then all you can do is pray.

Fortunately, I made my profits last September and sold on the results which contained cautious comment. Looks like I escaped!

Bones

Well done Bones

But I made the point, you can't slip up with such debt, there is no cushion for comfort, if the balance sheet wasn't so ropey, the company would have been able to take it in it's stride.

Nice try thirdeye, but unless you have a crystal ball and can predict the future , especially the future of a CORRUPT ACCOUNTANT I suggest you stick to upsetting posters on whatever site you go on other than here. Lets face it you have just been barred from posting on UQ.com after the management found you to be say less holy than holy and then lets not forget Ians warning only a few weeks back, on your last life I see...............


IanT(MoneyAM) - 02 Feb'04 - 09:10 - 107 of 110


Thirdeye,

With regard to your posting, as you have have been warned previously - please only 'attack' companies and not individuals. Please treat this as a final warning.

Regards

Ian ENDS.

Perhaphs if you put a little more effort into posting on Money Am and not just spoiling tactics people would take far more notice of you and your comments.

There are of course always two sides of a coin to a debate like this but thirdeye does himself no justice by failing to neglect that this was the work of one fraudster, and yes one fraudsster who should have been found out, but in real life its not that easy as any financial Director will advise you.

Seems a shame that every post thirdeye puts on this board is a negative one and is aimed at my person as a grudge attack. This is not Advfn and this sort of thing is best kept away from here. Its horses for courses thirdeye as Bullshare as said before. If you want a slanging match I will be quite happy to see you on advfn, otherwise why try and stir up trouble here as you have done not just on advfn but two other sites.

cheers GF.

ps, posters please try and keep this kind of thing away from money am. This is an excelent site and we surely dont want it going down hill. Yes nothing wrong with free speech , but then always keep in mind the posters true motifs.

Well I taken note of that Goldfinger, but I want to talk about JCR, you seem to want to divert attention.


I repeat high gearing upto 2008, gives no cushion for any hiccups, that was my foresight.....had they had sensible gearing, this affair wouldn't matter so much, but now there is a chance they could go bust.

Good call ThirdEye. It was your confirmation of the debt position that kept me out of this one. Phew!

Cheers.

Btw isn't your debt misleading ( you claim to be an accountant in your profile)in your opening post goldfinger?

Thanks Guitarist

I see my negative posts have been of use.

A measured reaction is required here. Third Eye's rather frantic reaction looks overly panicky to me.
Here are my thoughts:

This clearly was a pre-JCR/Bikenet problem.

However it IS disappointing, and there can be no denial of that, and it was not picked up during the changeover - someone should be answerable for that. The banks have clearly recognised that it is not the current management's fault, hence the seemingly amicable rearrangement of borrowings. That is comforting.

As i have always said one of the big strengths is the cashflow and that is why today's fall, while in part I accept, justified, is overdone and i reckon for the time being fair value is closer to 20p (market cap under 3 million - we must not forget at some stage when repayments are complete the company will have assets of 10 million or so), though sentiment quite naturally sees that it has plunged further short term.

And yes, as i have always said, if any company I hold has a 'major change' of circumstances - and they do not come much more major than this - I am always prepared to act and I have unwound part of my position today (despite all the rubbish talked about liquidity there were no problems, even on a bad day, unlike i have experienced on ofex for example at times). The rest is staying firmly put though.

However if the numbers as i fully expect have no other nasties, the investigation appears to be complete, the events are now historic (in the past) - crucial - and current trading, says the company, is fine, i anticipate after that I will buy back some of what I sold after results, but i want to be fully reassured first. I can see no reason why anything more should be uncovered, this has been properly and very fully investigated now and it is clear today's statement attempts to get all the sh*t out in a "oner" - probably the best way to handle things. Actually guitarist looks like Third Eye's post has cost you, up 40% from yesterday's low, hardly a dead cat! i first bought this at 9.75p.

Importantly, the company says it expects no 'material' other problems to be found, (if there was anything likely to be very minimal - zero and i mean ZERO, chance of this business failing) so although as with any loss it didn't show real performance, this impacted only 3 centres of 12 (now 14) further minimizing its real impact. Strong cashflow has clearly impressed the banks too. Remember the REAL value is somewhat hidden too here - ironically! When repayments are complete, they will have a nav of 10 million (current market cap 3 million). That is why long termers will be happy to ride this out and reap the rewards. Shown itself to be a tough little business nugget the way it has been able to take this on chin and come back fighting already.

However i would be surprised in this instance if more bargain hunters do not materialise before results and the chances are they will have made the right move. I am impressed by management's swift and full reaction to investigate.

My final comment is that it is disappointing of course, and the sort of thing that no amount of bulletin board discussion can reasonably foresee, otherwise every business in the world would suffer the same sort of speculation.

A

hawick, thankfully I had sold @ 28p as I felt at the time because of a previous weak trading statement there wouldn't be much upside if any at all untill just prior to next results and AFD was more tempting. Agree with your comments though and have it on my watch list as on next accounts the share price should begin to recover.

On the plus side for JCR, having read all the posts on other B&Bs including an excert from today's FT today, which finishes with

"But bold investors can occasionally make a killing on occasions like this. As a division of Dixons Motors, the company had turnover of 22m in 2002. The directors say the company was profitable in the first two months of the current year. But the market value at yesterday's close, was only 2m"

plus today's bounce, for now, I'm holding.

It would be great too to refrain from personal attacks and vendettas Third Eye -it appears to me that you only appear when you gleefully have ammunition to fire at GF - not interested in that - in fact, it's as a direct result of his input that I've made some pretty healthy profits - and it's not as if ANYONE (unless you had a crystal ball?) could predict a crooked accountant tarnishing the prospects of JCR...