Listed dealer group Caffyns has seen profits fall to just £300,000 as revenue drops and new and used car sales fall.
In its annual results issued to the Stock Market this morning, the dealer group – which has 13 sites across Sussex and Kent – said it incurred substantial losses for April and May this year and doesn’t expect trading to recover any time soon.
Profit fell from £1.4m for the previous year to £300k for the year ended March 31.
The results – the publication of which were delayed three months – only take into account just a few days of lockdown.
The group says revenue was down 5.34 per cent to £197.9m for the year with new car sales falling 11 per cent and used car sales down 1.4 per cent.
Caffyns represents VW Group brands as well as Volvo and Vauxhall.
Chief executive Simon Caffyn said: ‘In the light of the ongoing impact of the Covid-19 pandemic, we are very cautious about the future outlook.
‘We incurred substantial losses in April and May whilst the business was in an effective lockdown state although we were pleased with the levels of trading achieved in June as we reopened our showrooms.
‘However, we still expect ongoing trading to take time to revert to previous levels.
‘Our manufacturer partners have been, and continue to be, very supportive, offering extended new vehicle funding and reduced funding costs.
‘Therefore, the board is confident that the company has sufficient liquidity to allow it to effectively navigate the post-lockdown period and to capitalise on the trading opportunities which are expected to arise as markets return to more normal levels of activity.’
The group paid an interim dividend of 7.5 pence but has decided not to declare a final dividend too.
Caffyn said: ‘The company has a strong balance sheet and the board remains confident in its future prospects.
‘However, in the light of the Covid-19 pandemic, the government support of which the company has taken advantage, and in order to conserve cash resources, the board has decided not to declare a final dividend in relation to the year.’
The group said non executive director Nick Hollingworth retired from the board in July 2019, having served 11 years. Stephen Bellamy has been appointed in his place.
In 2019, the group turned over £209.2m and made a profit of £1.45m, but its half-year pre-tax profit for this year sank by 92 per cent to £56,000.
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