Car dealer group Caffyns reports 30% slump in profits

Caffyns, the AM car dealer group based in East Sussex, has blamed a 30% decline in profits on to inflation and higher business rates in its latest financial year.

According to its preliminary results for the year ended March 31, 2023, underlying profit before tax fell from £4.3 million in the previous fiscal year to £3.1 million.

The company stated that profitability was affected by rising costs in areas such as business rates and overhead expenses in an inflationary environment. Despite the decrease in profits, chief executive Simon Caffyn remained optimistic, highlighting that the £3.1 million profit was still significantly higher than pre-pandemic levels.

On a positive note, Caffyns reported a 12% increase in revenue, amounting to £251.4 million, with £25 million coming from new and used car sales. New car deliveries experienced a substantial 34% surge, while used car sales declined by 4%.

The company mentioned that it was expanding its sources for replenishing used car inventory due to a shortage of vehicles less than three years old.

Aftersales revenues also saw a nine percent increase, reaching £27 million.

Caffyns excluded the impact of its MG and Lotus dealerships in Ashford, Kent, and its Lotus showroom in Lewes, East Sussex, which all opened during the year, from its like-for-like comparisons.

The company expressed optimism about its Lotus business opportunity but noted underperformance in its Vauxhall business in Ashford. Furthermore, Caffyns highlighted subdued business at its Motorstore used car showroom in Ashford due to challenges in sourcing stock.

Another used car centre called 'Performance Motorstore' has been opened alongside the Lotus showroom in Lewes.

Looking ahead, Caffyns provided a cautious outlook for the future, citing cost increases and potential disruptions as some manufacturers transition to agency sales. Despite the challenges, the company remains determined to navigate the evolving market conditions and sustain its growth.