Caffyns back in the black due to operational efficiency gains

Caffyns is back in the black with underlying profit before tax at £606,000 following a loss of £566,00 last year.

Results for the year to March 31, 2025 also showed that statutory profit before tax for the dealer group also returned to positive territory at £246,000, recovering from a loss of £1.5 million in the prior year.

Revenues increased by 5% to £275.5 million.

The turnaround was underpinned by a 34% increase in underlying EBITDA, which rose to £5.6 million from £4.2 million.

The results mark a return to profitability for thr group after two consecutive years of losses.

The group credited operational efficiency gains as well as increased aftersales revenue performance up 8% to £30.7m.

A strong performance from new cars and aftersales generated an additional £3.1 million of gross profit, a 10% increase.

However, profits from used car sales declined and “inflationary pressures on the cost base remained high, which negated some of the improvement in gross profits”.

The company continues to own all but two of the freeholds of the dealership and office premises from which it operates. It said this approach provides the dual strengths of a strong asset base and minimal exposure to rent reviews.

Simon Caffyn, chief executive, said: "A strong performance from new cars and aftersales generated an improved gross profit and, despite inflationary pressures on the cost base, a significant turnaround in underlying profit before tax."

In the group’s financial statement, it said it is remaining focussed on generating further improvements in the levels of used car sales, used car finance income and service labour sales. 

It said these three areas will be key to achieving increases in profitability in the coming years.

In addition, Caffyns is working to progress utilising technology to enhance customers' experience throughout their buying journey, as well as improving aftersales retention levels.

Caffyns is reporting a healthy new car forward-order book, but said trading conditions in the early part of the current financial year have remained challenging. This is due to inflationary pressures and high interest rates continuing to impact not only the group’s cost base, but also customers' confidence levels.

The group is reporting that enquiry rates from retail customers for electric cars have increased as retail offers become more attractive and customers' confidence levels in the product increase, although much of the demand for electric cars continues to come through the fleet channel.

Caffyns said its manufacturer brand partners, which include MG, Volkswagen, Volvo, Vauxhall, Audi, Skoda, Cupra, Seat and Lotus “are well placed for the future with a pipeline of market-leading electric new car products due to come to market”.