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Profits rise for Caffyns as it weathers the Volkswagen emissions scandal

Growth in new and used car sales has boosted Caffyns’ revenues by 10.6% to £232.5m.

Underlying profit before tax rose 15.6% to £2.85m

However since its March 31 year-end the group has been required to sell its profitable Lewes Land Rover dealership to Harwoods, JLR’s preferred partner for the market area. This sale is expected to adversely impact its underlying trading results in the coming year.

Simon Caffyn, chief executive, said: "I am delighted to announce that the underlying profit before tax for last year increased by 15.6% and we now have significant financial flexibility to take advantage of opportunities to expand."

The company said the improved profits were delivered despite ongoing disruption from redevelopment work at its Eastbourne Volkswagen site which was completed in April 2016. It also said the Volkswagen Group emissions scandal has affected enquiry rates and sales, however the carmaker’s customer loyalty support programmes have helped.

Caffyn added: “Economic growth in the UK has slowed but manufacturers continue to support our market with strong finance led offers, particularly on new car personal contract plans as well as, increasingly, on used car plans. 

“We are well placed for organic growth having recently opened our refurbished Volkswagen dealership in Eastbourne and completed the upgrading of other key dealerships.

“The proceeds from the Land Rover sale further strengthens our balance sheet and provides the company with significant financial flexibility to take advantage of opportunities to expand.”

The board has decided to recommend a final dividend of 14.50p per ordinary share (2015: 13.5p).

 

Summary

 

2016

  2015

 

£'000

£'000

 

 

 

Revenue

232,492

210,314

 

 

 

Underlying* profit before tax

2,857

2,472

 

 

 

Underlying* EBITDA

5,140

4,797

 

 

 

Net non-underlying (charge)/credit before tax

(222)

8,966

 

 

 

Profit before tax

2,635

11,438

 

 

 

 

 

 

 

 

 

Underlying* earnings per share

96.4

78.1

 

 

 

Earnings per share

90.1

335.5

 

 

 

Proposed final dividend per share

14.50

13.50

 

 

 

Dividend per share for the year

21.75

20.25

 

*   Underlying results exclude items that have non-trading attributes due to their size, nature or incidence.

 

 

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