Caffyns sees half-year pre-tax profit plummet by 92 per cent to £56,000

3:54 pm, November 25, 2019

DEALERSHIP group Caffyns suffered a 92 per cent drop in its pre-tax profit for the half-year to September 30 – from £704,000 to £56,000.

In its half-year report, released via the London Stock Exchange, Caffyns – which sells new and used cars at 12 sites across Sussex and Kent – blamed the ‘disappointing’ results on a difficult political and economic climate, as well as supply problems caused by the implementation of the second stage of the Real-Driving Emissions regime affecting deliveries for the September plate change.

Revenue dipped from £106m to £99m with like-for-like new car unit deliveries down by 14.5 per cent and used car unit sales down by 2.3 per cent. Aftersales revenues, however, went up by 2.1 per cent.

Chief executive Simon Caffyn said: ‘Whilst disappointing, the results should be read against a difficult economic and political background. This was compounded by supply problems for new cars. These supply issues have however improved, and we remain cautiously optimistic about the future outlook.’

Both its Audi and VW divisions suffered financially, with the former turning in a loss, and Caffyns said its Motorstore business in Ashford, pictured, experienced ‘a very disappointing six months and was loss-making for the period’. Management changes have since been made, as have alterations to the stock profile as well as how it operates, and Caffyns added: ‘We are confident that the second six months of this financial year will see the business return to profitable trading. Longer term, the concept continues to be very well received by our customers who are particularly reassured by the Caffyns brand.’

Operational highlights included its Eastbourne Volvo business trading ‘very profitably’ and ahead of expectations, while its Vauxhall business in Ashford similarly experienced an improvement in trading performance and its Seat business continued with a strong performance, countering the Skoda businesses’ ‘weaker performance’.

Looking ahead, it said in its report: ‘Our continuing strategy is to focus on representing premium and premium-volume franchises as well as maximising opportunities for premium used cars.

‘We recognise that we operate in a rapidly changing environment and continue to carefully monitor the appropriateness of this strategy. We continue to seek opportunities to invest in the future growth of our businesses.

‘We are concentrating on larger business opportunities in stronger markets to deliver higher returns from fewer but bigger sites. We continue to seek to deliver performance improvement, in particular in our used car and aftersales operations.’

It added: ‘Despite a weak marketplace for the bi-annual registration plate change in September, we are cautiously optimistic about the future outlook. However, our full-year outcome will remain heavily dependent on the success of the next bi-annual registration plate change in March 2020 as well as on the wider challenges to the UK economy, including uncertainty surrounding the Brexit process.’

Picture: Google Street View

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