10:09 am, May 27, 2020
Dealer group Caffyns has postponed publishing its full-year results to July but says it should still make a profit.
The results were due about now – last year they were announced on June 3 and the year before on May 31 – but in a trading update issued via the London Stock Exchange today (May 27), it said the results for the year ending March 31, 2020 would be announced on July 17, with the annual meeting to be held on September 24.
The group, which has 13 sites across Sussex and Kent, also told investors that it had enough liquidity to get through the lockdown and make the most of what lay ahead.
It said the last trading days of its financial year were badly affected after the temporary closure of all car showrooms and most aftersales operations on March 24, following the government order in reaction to the coronavirus pandemic.
‘With our showrooms closed, only online and telephone sales operations were able to continue, alongside three aftersales operations which provided essential support for key workers.
‘As would be expected, this had a significant adverse impact on the financial performance for March 2020, a key month for the company due to the bi-annual registration plate change on the first of that month.’
But it stated that trading up to the beginning of March had been broadly in line with board expectations and, as such, it still expected to report an underlying profit for the year to March 31, 2020, subject to audit review after trading has restarted.
In the update, it said it furloughed some four-fifths of its employees in April, with some of them returning this month and more expected next month once the showrooms reopen.
An annual salary ceiling of £37,500 was also put in place in April for all active employees, including the executive directors and chairman, to save costs. In addition, the non-executive directors agreed to ‘a significant reduction’ in their fees.
Most non-furloughed employees were put on 80 per cent of their contractual salary from May 1, with the exception of the full-time executive directors who went to half their contractual salary from the same date.
Employees’ response to the crisis was praised as ‘outstanding’, with the update adding that ‘the board would like to particularly thank those that have remained active throughout the lockdown period to ensure that we have been able to restart the business quickly and effectively.
‘We are very focused on the health and safety of our employees and customers and the reopening of showrooms will be undertaken in a responsible and socially distanced way.’
Last November, Caffyns reported a 92 per cent drop in its pre-tax profit for the half-year to September 30 – from £704,000 to £56,000, as reported by Car Dealer.
In today’s update, it said it had ‘a very strong balance sheet’ with an unaudited book value of £47m as of March 31. There won’t be a final dividend, though.
Unaudited net bank borrowings at March 31 were £16m, with available but undrawn facilities at an extra £10m-plus.
Its manufacturer partners were continuing to be very supportive, it said, with the offer of extended new vehicle funding and lower funding costs.
‘As a consequence, the board is confident that the company has sufficient liquidity to effectively manage its exit from the lockdown restrictions and to capitalise on the trading opportunities which are expected to arise as markets return to more normal levels of activity,’ it said.
More: Caffyns CEO gifted £70,000 worth of shares by his mum
More: Caffyns sees half-year pre-tax profit plummet by 92 per cent to £56,000
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