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Caffyns property sale and new cars help increase half year profits

Caffyns has reported a first-half year profit before tax increase to £512,000 in comparison to £241,000 over the same period in 2011.

This came despite a drop in turnover from £86.7 million down to £82.5m over the first six months of the year as the group disposed of four “non-core” operations. Turnover on a like-for-like basis, excluding the disposal, increased by 1.7%.

The increase in profits was helped by an 18.9% rise in new car sales. Used car unit sales were down 5.9% on last year on a like for like basis, due largely to the reduction at Caffyns’ Brighton Volkswagen dealership which suffered disruption during a showroom upgrade.

Aftersales revenue fell by 2.7%on a like for like basis as compared to 2011 levels.

Profit for the period from continuing operations increased to £427,000 from £178,000 prior year. Profit before tax and non-underlying items rose to £439,000 from £268,000 prior year.

Simon Caffyn, chief executive, said: “Our improved profitability in the first half year has continued into the early part of our second half year.

“However, the trading for the full year will, as always, depend on our performance in the crucial month of March."

The refurbishment work at Caffyns’ Brighton Volkswagen dealership is now complete with an enlarged car showroom and aftersales facility. The group’s loss-making Ford and Volvo business in Brighton was sold in July this year releasing working capital, comprising principally stocks, of £459,000. It also closed its Ford dealership in Alton in September recording a non-underlying loss in the first half of the year of £194,000.

Caffyns has started trading as a Seat authorised repairer in Tunbridge Wells alongside its Skoda dealership and Seat sales are expected to follow.

Capital expenditure in the six months was £565,000 (2011: £1.3m), of which £277,000 was incurred on the Brighton Volkswagen showroom upgrade.

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