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'Stronger than anticipated' September helps Caffyns to half-year profit

Caffyns has reported a 26.7% fall in underlying profit before tax as turnover rose by 1.25% to £106.5 million in its accounts for the half-year to September 30.

The AM100 PLC’s chief executive, Simon Caffyn, said that the Eastbourne-based group had “finished the period with a stronger than anticipated September performance” which had helped to buoy underlying PBT to £0.74 million for the period.

But 87.6% slump in profit before tax down to £682,000 down from £5.49 million resulted from non-recurring items including the disposal of the Lewes Land Rover site to the Harwoods Group last year.

Like-for-like new car unit sales were down by 7.4% compared to an 11.7% fall in national retail and small business market segment registrations, Caffyns revealed, with “disappointing performance generated by its four Volkswagen franchises had been “disappointing”.

The Volkswagen operations in Worthing, Brighton, Eastbourne and Haywards Heath generated new and used car sales down by 7% and 3% on 2016, but the group said that the German brand had reduced its new car sales targets accordingly, and improved its tactical bonus opportunities.

Caffyns said that its Audi operations continued to perform well with the planned relocation of its dealership in Worthing to a “significantly larger” site in Angmering in summer of 2018 ensuring that it “can better fulfil its potential”.

The group’s Volvo business in Eastbourne is in a period of transition as further site development and growth of the Swedish brand’s range is awaited while Caffyns’ Seat business in Tunbridge Wells, together with the adjacent Skoda business during the reported period “delivered healthy levels of profitability”, it said.

Used cars like-for-like unit sales were up 4.6% on the comparative period as investment in its used car business in Ashford will continue to expand.

Over a three-year period, Caffyns has now recorded 30% like-for-like growth in used car sales.

Like-for-like service revenues grew by 4.7% in the six months to the end of September, meanwhile, Caffyn’s parts business also reported sales growth, up by 1.7% on a like-for-like basis from the comparative period.

Describing the nature of the “challenging environment” experienced during the six months to September 30, Caffyns sought to highlight April’s VED changes and the Government's re-rating of commercial properties in the same month.

It said: “Although nationally this was not targeted to raise additional revenues, the increases have fallen disproportionately on the South-East region in which we operate, where property values have increased the most over the previous seven years since the last valuation exercise was undertaken.

“As a result, our annualised cost of business property rates has risen by almost £0.25 million to £1.06 million.”

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