Listed dealer group Caffyns sees profit rocket despite lockdowns as pent-up demand released

7:29 am, November 27, 2020

Listed dealer group Caffyns’ profit has rocketed in the first six months of the year as pent-up demand and cost savings saw the group outperform last year.

Underlying profit before tax rose to £1.53m for the six months to the end of September compared to a profit of £165,000 in the same period last year.

Revenue dropped 14 per cent for the period to £85.4m, down from £99m in 2019, as the business was closed for two months for the first coronavirus lockdown.

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However, cost savings including £1.7m from furlough scheme and the business rates holiday have helped the dealer group, which has 14 car dealerships across the south east, maintain earnings.

At the end of September, 10 per cent of the company’s workforce was still on furlough, down from 80 per cent at the height of lockdown.

Simon Caffyn, chief executive, said: ‘The underlying profit before tax of £1.53m was a significant improvement on that recorded for the comparative period in 2019.

‘Pent-up customer demand and improved operational efficiencies resulted in a strong performance for the four months to September, more than outweighing the negative impact of the lockdown of the business in April and May.’

The latest update follows similar strong performance from the listed dealer groups. Yesterday, Motorpoint also reported profit was up despite the lockdown.

Caffyns has seen performance across its dealerships bounce back and trade ahead of last year.

New and used car deliveries since reopening after the first lockdown were up 41 per cent and 17 per cent respectively.

And while aftersales dropped 16 per cent for the full six month period, it was 13 per cent ahead of last year in the four months after reopening, from June to September.

The directors’ report added: ‘The months since trading recommenced in June were buoyed by pent-up demand from the lockdown period, by higher levels of demand for private transport as customers sought to reduce their reliance on public transport, and by significant operational efficiencies which resulted in a strong performance throughout the four trading months from June to September.

‘Given the dislocation to trading in the first two months of the period, it was extremely pleasing that all six of our franchise businesses reported improved profitability in comparison to the prior year.

‘Our Audi and Volkswagen businesses, in particular, performed very strongly. Our Motorstore used car operation also improved its profitability in the period.’