4 March 2011 – final results

The car repairchain reported an 8.6% increase in revenue in 2010 as this rose to £46.5m (2009: £42.9m), whilst pre-tax profit fell slightly to £1.11m (2009: £1.15m).  Earnings per share fell to 5.4p (2009: 5.6p) but the dividend was raised to 1.85p (2009: 1.63p).  These results suffered from the very poor weather conditions, because whilst poor weather increases the number of accidents on the roads, there comes a point where it is so bad that drivers don’t venture out but stay at home!  The group’s insurance company customers also put pressure on prices, resulting in lower margins, whilst many retail customers didn’t bother with minor repairs as they did not want to lose no-claims bonuses. 

Two new sites were acquired during the year and the expansion programme will continue when suitable opportunities can be found.  As growth will mainly come through acquisition, it is hard to see what the catalyst will be for the shares to move up much in the short term.  As such, we suggest the shares are a HOLD.