7:58 am, November 25, 2022
Profit for listed dealer group Caffyns has fallen in the first half of the year to £1.6m compared to £2.3m in the same period in 2021.
Despite revenues increasing for the group by seven per cent to £118m (2021: £110m), profit was hit by new car supply issues.
The profit figure for the same period in 2021 was also boosted by business rates relief and furlough cash.
Boss Simon Caffyn said: ‘I am pleased to report a strong underlying profit before tax of £1.6m for the half-year ended 30 September 2022.
‘While this is less than the £2.4m recorded for the comparative period in 2021, the prior period was positively impacted by the post-Covid reopening of showrooms in April 2021 and from the holiday from business rates for retail premises.
‘It is a strong result considering the ongoing disruption to new car supply and current economic challenges. We have a substantial new car order book and used car sales continue to perform well.’
Used car trading in the period was ‘robust’, said Caffyns, but it warned that new car supply from the manufacturers it represents ‘remained muted’.
Caffyns has 18 dealerships across Sussex and Kent including franchises for Volkswagen, Audi, Seat, Skoda, Vauxhall, Volvo, MG, Lotus and LEVC.
The group opened a Lotus franchise in June and now covers both Kent and Sussex for the brand.
The new site’s performance is already ‘encouraging’ and Caffyns says it is looking forward to making deliveries of the new Emira and the Eletre.
Aftersales revenue rose five per cent in the period on last year, but the group admitted staffing continued to be ‘challenging’.
‘New car supply for the majority of the manufacturers we represent remained muted due to the continuing effects of the global shortage in semiconductors and battery components restraining manufacturers’ production levels,’ added Caffyn.
‘We expect this shortage to begin to dissipate during the 2023 calendar year.’
Caffyns said it is maintaining its interim dividend at 7.5 pence per ordinary share ‘reflecting the board’s confidence in the prospects for the company’. This will be paid in January.
New car deliveries for the firm rose six per cent during the period, against a five per cent drop in the market according to the SMMT.
Used car sales volumes fell 12 per cent, but ‘demand remained buoyant’ as many customers turned to used cars as their choice of new was restricted.
However, Caffyns said the ‘supply of appropriately-priced used cars remained challenging’.
Of the brands it represents, Audi was performing particularly well. Its used car Motorstore arm was only trading ‘satisfactorily’, though, reported the group.
Looking ahead, Caffyn said: ‘Customer demand for used cars remains buoyant and our forward-order bank for new cars is at an elevated level, which is especially encouraging for 2023 when it is hoped that new car availability will improve.
‘However, in the short-term new cars are expected to remain in short supply and the high level of economic uncertainty, including the price and availability of energy over the winter months, is a concern.
‘Given these uncertainties, the board remains cautious for the second half of the financial year.
‘We continue to enhance our online presence, as well as improving our productivity and increasing the resilience of the business.
‘We remain confident in the longer-term prospects for the company and are ready to explore future business opportunities as they arise.’
