11:21 am, June 3, 2013
DEALER group Caffyns has increased profit before tax from £1.45m to £1.52m as reported in its preliminary results for the year ended March 31, 2013.
The Caffyns group – which represents Audi, Land Rover, Seat, Skoda, Vauxhall, Volvo and Volkswagen – closed three underperforming businesses and sold another four in the period, which resulted in underlying trading profits before tax over the period increasing from £564,000 to £1.22m.
Caffyns has completed expansion work on its Volkswagen site in Brighton and work on a new VW site in Worthing is expected to be completed in early 2014. The VW site in Haywards Heath has also been expanded and the Seat franchise has been added to its Tunbridge Wells dealership alongside its Skoda business. The loss-making Ford and Volvo businesses in Brighton were sold in July 2012 and the other Ford dealership in Alton closed later that year.
Caffyns chief executive, Simon Caffyn said: ‘We are pleased to have improved our underlying trading profits after a period of restructuring.
‘We continue to invest the proceeds from the sale of properties and close operations into larger business opportunities in stronger markets to deliver higher returns on capital. Fewer, bigger sites will enable us to deliver performance improvement.’
New car sales increased over the period by 18.5 per cent and underlying revenue also increased by 10.6 per cent. Caffyns said new car margins remain firm, with new car gross profits ahead of expectations. Due to a reduction in new car registrations impacting on the 0-five year old servicing market, the business saw a 2.4 per cent reduction in service revenues. However, used car unit sales were up by 12 per cent in the second half of last year, on a like-for- like basis.
Caffyns also acquired a freehold property next to its Land Rover dealership in Lewes earlier this year to expand its aftersales activities. To further these improvements, redevelopment has also started on a redundant bodyshop building in Ashford with an aim to create more workshop and showroom space for the Skoda franchise.
Caffyn added: ‘We have seen signs of an improvement in consumer confidence with the new car market up 8.9 per cent in the UK in the four months to April 2013.
‘However, the market in Europe remains weak and this could affect the levels of manufacturer support available to the UK market. We remain strategically well placed with resilient premium franchises to take advantage of any improvement in economic conditions.’
