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Caffyns posts a loss

Caffyns has reported a loss from continuing operations of £3.97 million, compared to a profit of £2.13 million.

Loss before tax was £4.42 million, in comparison with a profit of £2.58million a year earlier.

New and used

Caffyns’ full year new car sales were down 21% with average unit prices down 4%. Used car volumes were up 6% for the year, although prices were lower by 9%.

As a result revenue for the year was £158.7m, 13% down from last year's £182m and operating profit on the continuing business fell by £1.8m to a loss of £1.4m in spite of action to reduce costs, which fell by £1.9m.

The chairman's comment

Brian Birkenhead, Caffyns chairman, said: "The actions we took during the year to arrest the decline in profits and to return the company to a sustainable level of profit have begun to show results. It is encouraging that we traded profitably in our final quarter to March 2009.

“Our new car sales volume has declined by less than the market, costs have been cut with reductions in manpower and operational processes are undergoing major improvement.

"This means that we are stronger, leaner and better able to cope with the difficult economic conditions now affecting the UK market and we are well placed to take advantage of the upturn when it arrives."

Dealer closures

Caffyns closed three branches (Tonbridge, Brighton and Halisham) have been closed over the year period with customers transferred to nearby dealerships.

Additional reductions in staff numbers have been made at all Caffyns sites.

Overall employee numbers have fallen from 778 to 646. Cost reduction measures taken so far have reduced the total cost base of the company by over £2.5m per year.

Redundancy costs of £455,000 incurred at our ongoing sites have been treated as a non-recurring expense. The costs of closing the three branches during the year were £754,000. We continue to monitor costs closely, identifying operating efficiencies wherever possible.

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