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