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Caffyns battles WLTP lull but sees profits rise

Profits have risen at AM100 dealer group Caffyns following growth in used cars and aftersales.

The dealer group’s turnover for the six months to September 30 dropped 1% year-on-year (£1.5m) to £105m, while pre-tax profits rose 3% (£22,000) to £704,000. Underlying profit before tax climbed 59% (£442,000) to £1.19m.

Chief executive Simon Caffyn said: “On 1 September 2018, the government introduced a new emissions-testing regime, the Worldwide Harmonised Light Vehicle Test Procedure, commonly referred to as WLTP. This led to a scarcity in new car supply in the important bi-annual registration plate change month of September and was the main reason for the fall in turnover for the six-month period.”

Audi’s adoption of new agency terms for its fleet sales from April also impacted on volume and profitability.

The group’s like-for-like new car volumes dropped 10.4%, and used car volumes rose 6.7%.

“Over a five-year period, the company has recorded a 50% growth in the number of used cars sold by its current businesses and we continue to see this area as providing opportunities for further growth,” said Caffyn.

It already operates a Motorstore used car business in Ashford, which is increasing sales and has received investment in staffing levels and processes.

In aftersales, like-for-like service revenues grew by 9%, and parts sales were also 9% ahead.

“I am very grateful for the dedication and professionalism shown by our employees. The marketplace in which we have operated in the period has been very challenging, particularly for new car sales following the introductions of WLTP, and their hard work and professional application has been instrumental in achieving strong growth in both our used car sales and aftersales businesses,” said Caffyn.

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