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Caffyns' restructuring gets set for economic recovery

AM100 car dealer group Caffyns achieved a five-fold jump in pre-tax profit thanks to one-off boosts from the sale of properties, but the underlying motor retail operation saw profits almost halve.

Its results for the 12 months to the end of March show just under £1.5 million pre-tax profit, up from £261,000 the previous year, although underlying operating profit slumped year on year from £1.4m to £779,000.

Revenue had also declined – from £201m to £170m – as the group continued major restructuring to improve performance and efficiency and focus on its premium and near-premium franchises.

The restructuring saw single Peugeot and Jaguar businesses close, three more dealerships consolidated into other sites during the period, plus a £600,000 reduction in the central cost base, on top of the closure of seven businesses in the prior year.

Net debt at the end of March had increased to £8.7m from £8.1m, with gearing up to 43% from 40%.

In March the group renewed banking facilities with HSBC, increasing its three year revolving credit facility to £7.5m from £5m, plus a £3.5m overdraft facility.

It also secured a £7m overdraft facility from Volkswagen Bank, replacing a previous one with RBS.

Chief executive Simon Caffyn said the group had achieved a relatively strong new car sales performance – down 1.3% against a 7.2% national private and small business market decline.

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