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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Caffyns Plc | LSE:CFYN | London | Ordinary Share | GB0001615219 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 20.00 | 3.96% | 525.00 | 500.00 | 550.00 | 525.00 | 525.00 | 525.00 | 0.00 | 08:00:06 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Motor Veh Dealers (new,used) | 251.43M | 2.52M | 0.8766 | 5.99 | 15.12M |
From Apr 2019 to Apr 2024
TIDMCFYN
RNS Number : 1148Q
Caffyns PLC
25 November 2016
HALF YEAR REPORT
for the half year ended 30 September 2016
Summary
Hot Features
Premium
6 months 6 months
to to
30 September 30 September
2016 2015
GBP'000 GBP'000
Revenue 105,188 95,481
Underlying EBITDA 2,068 2,120
Underlying profit
before tax 1,012 989
Profit for the period
before tax (including
discontinued businesses) 5,492 1,711
Pence Pence
Underlying* earnings
per share 30.2 29.9
Basic earnings per
share (including
discontinued businesses) 164.3 51.4
Interim dividend
per ordinary share 7.50 7.25
Note: Underlying results exclude items that have non-trading attributes due to their size, nature or incidence. Following a business disposal that occurred in April 2016, the 2016 results have been presented between continuing and discontinued operations. In order for comparative information to be presented consistently, the 2015results have been restated.
Highlights
-- Underlying profit before tax up 2.3% to GBP1.01 million (2015: GBP0.99 million) -- Profit before tax generated on business disposal of GBP4.68 million -- Profit before tax up 221% to GBP5.49 million (2015: GBP1.71 million) -- Like-for-like new car unit sales up by 2.2% -- Like-for-like used car unit sales up by 11.8% -- Basic earnings per share up 220% to 164.3 pence (2015: 51.4 pence) -- Adjusted earnings per share up 1.0% to 30.2 pence (2015: 29.9 pence) -- Net bank borrowings significantly reduced to GBP5.39 million (2015: GBP9.80 million) -- Increased interim dividend declared of 7.50 pence (2015: 7.25 pence)
Simon Caffyn, Chief Executive, commented:
"Following a solid trading performance in the first six months, the Group finished the period with cash reserves and low gearing and is now ideally placed to exploit future business opportunities. These funds will enable us to invest further in Caffyns Cars, our in-house brand of used cars, with the recent acquisition of 2.1 acres of land in Ashford and also in a new site to expand our Audi business in Worthing."
Enquiries:
Simon Caffyn, Chief
Caffyns plc Executive Tel: 01323 730201
Mike Warren, Finance
Director
Headland Francesca Tuckett Tel: 020 3805 4822
INTERIM MANAGEMENT REPORT
Summary
I am pleased to report that the Group grew its underlying profit before tax by 2.3% to GBP1.01 million in the six months to 30 September 2016 (2015: GBP0.99 million). In a challenging marketplace our businesses have continued to trade well.
Revenue from continuing operations increased by 10% to GBP105.19 million compared to GBP95.48 million in the comparative period. The Group reported like-for-like sales growth across all departments: new car unit sales, used car unit sales, service and parts.
Underlying earnings per share were 30.2 pence (2015: 29.9 pence), an increase of 1.0%.
At the beginning of this financial year, shareholders approved the sale of our Land Rover business in Lewes. We were very pleased to secure excellent terms, generating a profit on disposal, net of costs and before tax, of GBP4.68 million. The total cash consideration for the sale was GBP7.51 million.
Profit before tax for the period, which included the one-off gain on the disposal of the Land Rover business, more than trebled to GBP5.49 million (2015: GBP1.71 million) with basic earnings per share of 164.3 pence (2015: 51.4 pence).
The Group finished the period with cash reserves and low gearing and is now ideally placed to exploit future business opportunities. These funds will enable us to invest further in Caffyns Cars, our in-house brand of used cars, with the recent acquisition of 2.1 acres of land in Ashford and also in a new site to expand our Audi business in Worthing. The Board continues to evaluate further investment opportunities.
Operating review
New and used cars
New car unit sales were up by 2.2% on a like-for-like basis in the half year period, which compared very favourably to the 3.9% fall in registrations in the UK retail and small business market segment in which we principally operate. For used cars, like-for-like unit sales were up 11.8% on the comparative period as our investment in this area of the business continues to yield strong returns. During the period we upgraded our website and this has significantly enhanced our customers' online searching abilities, leading to an easier, more enjoyable car-buying experience. Over a three-year period, the Group has now recorded 35% like-for-like growth in the number of used cars sold and we continue to see this part of the business as providing a major opportunity for future growth.
Aftersales
The growth in the new car market over the last four years has led to an increase in the number of one to three-year old cars in circulation. Strong sales of both new and used cars has meant our three-year car parc has also grown considerably. It is encouraging to see service revenue has risen by 9.4% on a like-for-like basis as we continue to realise improvements to our customer retention processes. Our parts business also reported strong sales growth, up by 6.6% on a like-for-like basis from the comparative period.
Operations
The redevelopment of our Volkswagen dealership in Eastbourne was completed in May and now comprises a twelve-car showroom with extended used car display areas as well as a state of the art new workshop. The completion of this project will now enable the site to grow in the second half of the current year. More widely for the brand, the manufacturer has commenced the roll-out of the remedial work for cars affected by the defeat-device issue and this is being carried out at authorised Volkswagen dealerships. Although this has been a carefully managed programme, the nature of the work passing through our service departments has been low margin and has involved certain added costs, such as extra courtesy cars. In the short-term it has therefore had a negative impact on service profitability. In addition, we have seen some impact on our Volkswagen sales which have fallen from last year's level, broadly similar to the manufacturer's national registrations' performance. We remain confident that the strength of the brand and the excellent model range will lead to improvements in the trading performance of our Volkswagen division.
Our Audi businesses have seen strong year-on-year growth and we have now secured planning approval to relocate our dealership in Worthing to a new, and significantly larger, site to ensure this business can better fulfil its potential.
Our Volvo business in Eastbourne has traded very strongly, assisted by new model launches. Both the new XC90 and, more recently, the S90 and V90 have been particularly well received by customers. We are planning to invest in an expansion of our showroom facility in order to better accommodate these extra models and expect the business to continue to grow.
In Tunbridge Wells, our SEAT business has gained considerable extra traction, having almost quadrupled its new car sales from the comparative prior year period, and together with the adjacent Skoda business, the site has delivered significant improvements in profitability.
Property
Capital expenditure in the half year was GBP1.43 million of which GBP0.83 million was incurred on the purchase of freehold land at Worthing in order to facilitate the relocation of Audi Worthing.
In April, we completed on the sale of our Land Rover business in Lewes. Under the terms of the sale, the purchaser has been granted a lease to operate from the premises for a two to three-year period after which it will revert back to the Group. The Board has commenced the process of evaluating future opportunities for the site.
In October, after the end of the six-month period under review, the purchase was completed of the remaining two parcels of freehold land at Worthing which will complete the site for the relocation of Audi Worthing. We anticipate construction will commence early next year. Also in October, we acquired some 2.1 acres of additional land adjacent to Caffyns Cars, our used car centre in Ashford. This investment will almost double the footprint of our existing operations at Ashford and will enable us to further grow the exciting used car concept as well as our Vauxhall and Skoda operations at the site. Caffyns Cars has been very well received by our customers who particularly value the Caffyns brand. The business has traded profitably since its inception in October 2014 and we are now in a position for significant expansion of this operation.
Strategy
The significant proceeds from the sale of our Land Rover business in Lewes, coupled with the Group's low gearing, has provided us with flexibility to expand upon our recent successes, particularly in the used car arena, and to evaluate and invest in future growth. In addition to investing in freehold land, in Ashford and Worthing, we are assessing a number of further opportunities.
Pensions
The unprecedented falls in gilt and bond yields in the period has had a significant adverse impact on the net funding position of the Group's defined-benefit pension, in line with most similar schemes. Despite a strong performance from the scheme's investments, the deficit at the period end had widened to GBP11.58 million net of tax (GBP13.95 million gross of tax). This compared with a deficit of GBP4.09 million net of tax at 31 March 2016 (GBP4.98 million gross of tax).
The scheme's recovery plan, which was agreed with the trustees following the actuarial valuation in March 2014, resulted in a total cash payment of GBP0.15 million being made in the first six months of this financial year. Under the terms of the recovery plan, it has been agreed that this payment will increase in future financial years by 2.25% per annum.
People
I am very grateful for the dedication and patience shown by our employees. In particular, our front line staff who have continued to work tirelessly to address potential customer concerns regarding the Volkswagen emissions issue. Across the Group the hard work and professional application of our employees has been rewarded with strong growth in both our sales and aftersales businesses.
As previously announced, Mark Harrison, our Finance Director, retired during the period and I would like to thank him for his outstanding contribution since his appointment to the Board in April 2001 and to wish him well for the future. In his place, we were pleased to appoint Mike Warren as Finance Director at the Annual General Meeting and to welcome him to the Board. Mike brings a wealth of experience to the position, having been Finance Director at H.R. Owen Plc between 2007 and 2015.
Dividend
The Board has declared an interim dividend of 7.50 pence per ordinary share, an increase of 3.4% from last year. This will be paid on 6 January 2017 to shareholders on the register at close of business on 16 December 2016. The shares will be marked ex-dividend on 15 December 2016.
Current trading and outlook
The six months to 30 September 2016 have seen us deliver new car sales ahead of the market in addition to impressive growth in used car sales and aftersales. Low interest rates and attractive marketing offers have continued to underpin the motor retail sector with the majority of cars now sold under contracts rather than by outright purchase. In addition, the bi-annual registration plate change in September produced a stronger than anticipated trading performance. However, the Board remains cautious for the second half of the year given market consensus for a smaller new car market in 2017, coupled with the wider challenge to the UK economy from the weakness in sterling and the uncertainty surrounding the Brexit process. Following a solid trading performance in the first six months, with low gearing and cash reserves, the Group is now well placed to exploit future business opportunities.
Simon G M Caffyn
Chief Executive
24 November 2016
Condensed Consolidated Statement of Financial Performance
for the half year ended 30 September 2016
Restated
Unaudited Unaudited and Unaudited
Note Half year Half year Year ended
to 30 to 30 31 March
September September 2016
2016 2015 Total
Total Total
GBP'000 GBP'000 GBP'000
Continuing operations:
Revenue 105,188 95,481 186,401
Cost of sales (93,099) (84,231) (162,401)
-------------------------------------- ------- ------------ ------------ ---------------
Gross profit 12,089 11,250 24,000
Operating expenses (10,918) (9,742) (21,846)
-------------------------------------- ------- ------------ ------------ ---------------
Operating profit before
other income 1,171 1,508 2,154
Other income 246 287 341
-------------------------------------- ------- ------------ ------------ ---------------
Operating profit 1,417 1,795 2,495
Operating profit before
non-underlying items 1,479 1,544 2,544
Non-underlying items within
operating profit 3 (62) 251 (49)
-------------------------------------- ------- ------------ ------------ ---------------
Operating profit 1,417 1,795 2,495
Finance expense 4 (467) (555) (1,079)
Non-underlying net finance
expense on pension scheme 3 (81) (87) (173)
-------------------------------------- ------- ------------ ------------ ---------------
Net finance expense (548) (642) (1,252)
-------------------------------------- ------- ------------ ------------ ---------------
Profit before taxation 869 1,153 1,243
Profit before tax and non-underlying
items 1,012 989 1,465
Non-underlying items within
operating profit 3 (62) 251 (49)
Non-underlying net finance
expense on pension scheme 3 (81) (87) (173)
-------------------------------------- ------- ------------ ------------ ---------------
Profit before taxation 869 1,153 1,243
Income tax expense 5 (148) (198) (70)
-------------------------------------- ------- ------------ ------------ ---------------
Profit for the period from
continuing operations 721 955 1,173
-------------------------------------- ------- ------------ ------------ ---------------
Discontinued operations:
Profit on disposal of discontinued
operations 9 3,888 - -
(Loss)/profit attributed
to discontinued operations 9 (51) 463 1,314
-------------------------------------- ------- ------------ ------------ ---------------
Profit for the period from
discontinued operations 3,837 463 1,314
-------------------------------------- ------- ------------ ------------ ---------------
Profit for the period 4,558 1,418 2,487
-------------------------------------- ------- ------------ ------------ ---------------
Earnings per share
Basic 6 164.3p 51.4p 90.1p
Diluted 6 164.2p 50.7p 88.7p
Non GAAP measure
Underlying basic earnings
per share 6 30.2p 29.9p 48.8p
Underlying diluted earnings
per share 6 30.2p 29.4p 48.0p
Condensed Consolidated Statement of Comprehensive Income
for the half year ended 30 September 2016
Unaudited Unaudited Audited
Half year to Half year Year to
30 to 30 31
September 2016 September March
2015 2016
GBP'000 GBP'000 GBP'000
Profit for the period 4,558 1,418 2,487
--------------------------------------- --------------- ----------- ---------
Items that will never
be reclassified to profit
and loss:
Remeasurement of net pension
scheme obligation (9,055) (661) 296
Deferred tax on remeasurement
of pension scheme obligation 1,539 132 (59)
--------------------------------------- --------------- ----------- ---------
Other comprehensive (expense)/income,
net of tax (7,516) (529) 237
--------------------------------------- --------------- ----------- ---------
Total comprehensive (expense)/income
for the period (2,958) 889 2,724
--------------------------------------- --------------- ----------- ---------
Condensed Consolidated Statement of Financial Position
at 30 September 2016
Unaudited Unaudited Audited
30 September 30 September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and
equipment 32,974 37,275 38,218
Investment property 7,032 - 1,167
Goodwill 286 286 286
Deferred tax asset 41 - -
----------------------------- -------------- -------------- ----------
Total non-current
assets 40,333 37,561 39,671
------------------------------ -------------- -------------- ----------
Current assets
Inventories 27,425 33,840 32,925
Trade and other receivables 8,048 8,399 8,449
Cash and cash equivalents 6,231 1,824 219
------------------------------ -------------- -------------- ----------
Total current assets 41,704 44,063 41,593
------------------------------ -------------- -------------- ----------
Total assets 82,037 81,624 81,264
Current liabilities
Bank overdraft 500 - -
Interest-bearing
loans and borrowings 500 500 500
Trade and other payables 31,931 36,602 36,368
Tax liabilities 469 515 416
------------------------------ -------------- -------------- ----------
Total current liabilities 33,400 37,617 37,284
------------------------------ -------------- -------------- ----------
Net current assets 8,304 6,446 4,309
Non-current liabilities
Interest-bearing
loans and borrowings 10,625 11,125 10,875
Preference shares 812 1,237 812
Deferred tax liability - 613 617
Pension scheme obligation 13,953 5,997 4,980
------------------------------ -------------- -------------- ----------
Total non-current
liabilities 25,390 18,972 17,284
------------------------------ -------------- -------------- ----------
Total liabilities 58,790 56,589 54,568
------------------------------ -------------- -------------- ----------
Net assets 23,247 25,035 26,696
------------------------------ -------------- -------------- ----------
Shareholders' equity
Ordinary share capital 1,439 1,439 1,439
Share premium 272 272 272
Capital redemption
reserve 707 282 707
Non-distributable
reserve 1,724 1,724 1,724
Other reserve - 106 132
Retained earnings 19,105 21,212 22,422
------------------------------ -------------- -------------- ----------
Total equity 23,247 25,035 26,696
------------------------------ -------------- -------------- ----------
Consolidated Statement of Changes in Equity
for the half year ended 30 September 2016
Capital
Share Share redemption Non-distributable Other Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2016 1,439 272 707 1,724 132 22,422 26,696
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
income
Profit for the period - - - - - 4,558 4,558
Other comprehensive
expense - - - - - (7,516) (7,516)
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
expense for
the period - - - - - (2,958) (2,958)
Transactions with
owners:
Dividends - - - - - (401) (401)
Purchase of own shares
for treasury - - - - - (383) (383)
Sale of own shares - - - - - 272 272
Share-based payment - - - - 21 - 21
Transfer - SAYE
scheme
(2013) - - - - (153) 153 -
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
At 30 September 2016
(unaudited) 1,439 272 707 1,724 - 19,105 23,247
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
for the half year ended 30 September 2015
Capital
Share Share redemption Non-distributable Other Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2015 1,439 272 282 1,724 81 20,696 24,494
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
income
Profit for the period - - - - - 1,418 1,418
Other comprehensive
expense - - - - - (529) (529)
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
income for
the period - - - - - 889 889
Transactions with
owners:
Dividends - - - - - (373) (373)
Share-based payment - - - - 25 - 25
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
At 30 September 2015
(unaudited) 1,439 272 282 1,724 106 21,212 25,035
------------------------ ---------- ---------- ------------ ------------------ --------- ----------- ----------
Consolidated Statement of Changes in Equity
for the year ended 31 March 2016
Capital
Share Share redemption Non-distributable Other Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2015 1,439 272 282 1,724 81 20,696 24,494
---------------------- ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
income
Profit for the year - - - - - 2,487 2,487
Other comprehensive
income - - - - - 237 237
---------------------- ---------- ---------- ------------ ------------------ --------- ----------- ----------
Total comprehensive
income for the year - - - - - 2,724 2,724
Transactions with
owners:
Dividends - - - - - (573) (573)
Preference shares
bought back - - 425 - - (425) -
Share-based payment - - - - 51 - 51
--------------------- ---------- ---------- ------------ ------------------ --------- ----------- ----------
At 31 March 2016
(audited) 1,439 272 707 1,724 132 22,422 26,696
---------------------- ---------- ---------- ------------ ------------------ --------- ----------- ----------
Condensed Consolidated Cash Flow Statement
for the half year ended 30 September 2016
Restated
Unaudited Unaudited and
Half year Half year Unaudited
to to Year to
30 September 30 September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation from
continuing operations 869 1,153 1,243
Adjustments for:
Preference share redemption
premium and costs - - 292
Net finance expense and service
cost 570 691 1,350
Depreciation and amortisation 589 576 1,148
Contribution to pension scheme
obligation (182) (163) (324)
Gain on disposal of property,
plant and equipment - (272) (317)
Share-based payments 21 25 51
(Loss)/profit generated from
discontinued operations before
tax (61) 558 1,392
Decrease/(increase) in inventories 3,579 (1,944) (1,029)
Decrease/(increase) in trade
and other receivables 401 (235) (1,235)
(Decrease)/increase in payables (4,321) 671 241
--------------------------------------- --------------- --------------- -----------
Cash generated from operations 1,465 1,060 2,812
Income taxes - (183) (325)
Interest paid (470) (583) (1,135)
--------------------------------------- --------------- --------------- -----------
Net cash generated from operating
activities 995 294 1,352
--------------------------------------- --------------- --------------- -----------
Investing activities
Proceeds on disposal of property,
plant and equipment (net of
sale costs) - 1,304 2,736
Proceeds generated on sale of 6,707 - -
Land Rover business, net of
costs
Purchases of property, plant
and equipment (1,428) (897) (3,825)
--------------------------------------- --------------- --------------- -----------
Net cash generated from/(used
in) investing activities 5,279 407 (1,089)
--------------------------------------- --------------- --------------- -----------
Financing activities
Secured loans repaid (250) (250) (500)
Purchase of own preference shares - - (717)
Purchase of own shares for treasury (383) - -
Issue of shares - SAYE scheme 272 - -
Dividends paid to shareholders (401) (373) (573)
--------------------------------------- --------------- --------------- -----------
Net cash used in financing activities (762) (623) (1,790)
--------------------------------------- --------------- --------------- -----------
Net increase/(decrease) in cash
and cash equivalents 5,512 78 (1,527)
Cash and cash equivalents at
beginning of period 219 1,746 1,746
--------------------------------------- --------------- --------------- -----------
Cash and cash equivalents at
end of period 5,731 1,824 219
--------------------------------------- --------------- --------------- -----------
Cash and cash equivalents 6,231 1,824 219
Bank overdraft (500) - -
------------------------------- ------ ------ ----
Net cash and cash equivalents 5,731 1,824 219
------------------------------- ------ ------ ----
Notes to the Set of Financial Information
for the half year ended 30 September 2016
1. GENERAL INFORMATION
Caffyns plc is a company domiciled in the United Kingdom. The address of the registered office is Meads Road, Eastbourne, East Sussex, BN20 7DR.
These condensed consolidated interim financial statements for the half year to 30 September 2016 and similarly for the half year to 30 September 2015 are unaudited. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2016.
The figures for the year ended 31 March 2016 have been extracted from the statutory accounts, filed with the Registrar of Companies on which the auditor gave an unqualified opinion and did not contain statements under section 498(2) or (3) of the Companies Act 2006. There has been a restatement of certain items from these audited statutory accounts in order to disclose comparative information for the amounts relating to discontinued operations.
These statements have been reviewed by the Company's auditor and a copy of their review report is set out at the end of these statements.
These consolidated interim financial statements were approved by the directors on 24 November 2016.
2. ACCOUNTING POLICIES
The annual financial statements of Caffyns plc are prepared in accordance with IFRSs as adopted by the European Union. The set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union. This interim financial report has been prepared under the historical cost convention as modified by the fair value accounting of defined benefit schemes and share-based payment transactions. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, this set of financial statements has been prepared in accordance with the accounting policies set out in the Annual Report for the year ended 31 March 2016.
Segmental reporting
Based upon the management information reported to the Group's chief operating decision maker, the Chief Executive, in the opinion of the directors, the Group only has one reportable segment. There are no major customers amounting to 10% or more of the Group's revenue. All revenue and non-current assets derive from, or are based in, the United Kingdom.
Basis of preparation: Going concern
The condensed financial statements have been prepared on a going concern basis which the directors consider appropriate for the reasons set out below:
The Group meets its day to day working capital requirements through short-term stocking loans and bank overdraft and medium-term revolving-credit facilities. The overdraft and revolving-credit facilities include certain covenant tests. The failure of a covenant test would render these facilities repayable on demand at the option of the lenders.
The directors have undertaken a detailed review of trading and cash flow forecasts for a period in excess of one year from the date of this Half Year Report which projects that the facility limits are not exceeded over the duration of the forecasts. These forecasts have made assumptions in respect of future trading conditions, particularly volumes and margins of new and used car sales, aftersales and operational improvements together with the timing of capital expenditure. The forecasts take into account these factors to an extent which the directors consider to be reasonable, based on the information that is available to them at the time of approval of this financial information. These forecasts indicate that the Group will be able to operate within the financing facilities that are available to it and meet the covenant tests with sufficient margin for reasonable adverse movements in expected trading conditions.
The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For those reasons, they continue to adopt the going concern basis in preparing this Half Year Report.
Discontinued operations
A discontinued operation represents an individually significant component of the Group that is either held for sale or has been disposed of. The Statement of Financial Performance discloses the results of a discontinued operation separately with comparative information being restated where applicable. The assets and liabilities are presented separately on the Statement of Financial Position, although comparative information is not restated.
3. NON-UNDERLYING ITEMS
Half year Half year Year to
to to 31 March
30 September 30 September 2016
2016 2015
GBP'000 GBP'000 GBP'000
Other income:
Net profit on disposal
of property, plant and
equipment - 272 317
------------------------------ -------------- -------------- ----------
Within operating expenses:
Preference share premium
paid on redemption - - (156)
Preference share redemption
costs - - (136)
Service cost on pension
scheme (19) (21) (42)
Redundancy costs (43) - (32)
----------------------------- -------------- -------------- ----------
(62) (21) (366)
------------------------------ -------------- -------------- ----------
Non-underlying items
within operating profit (62) 251 (49)
------------------------------ -------------- -------------- ----------
Net finance expense on
pension scheme (81) (87) (173)
------------------------------ -------------- -------------- ----------
Total non-underlying
items within profit before
taxation (143) 164 (222)
------------------------------ -------------- -------------- ----------
The following amounts have been presented as non-underlying items in these financial statements:
There were branch specific redundancy costs of GBP43,000 (2015: GBPnil).
In the prior period, the Group sold most of its freehold property in Upperton Road, Eastbourne for GBP1,581,000 generating gains on disposal of GBP281,000. In January 2016, a portion of land in Goring Road, Worthing was sold for GBP360,000 generating net gains of GBP71,000 respectively. Other losses on disposal totalled GBP35,000 with GBP9,000 of these generated in the period to 30 September 2015.
In February 2016, the Company purchased 218,268 First Preference shares for 108 pence each and 206,664 New Preference shares for 167 pence each pursuant to a redemption option offered to shareholders. Given the nature of the transaction, the associated legal and professional costs of this purchase have been treated as non-underlying together with the premium paid on redemption.
4. FINANCE EXPENSE
Half year Half year Year to
to to 31 March
30 September 30 September 2016
2016 2015 GBP'000
GBP'000 GBP'000
Interest payable on bank
borrowings 119 162 292
Vehicle stocking plan
interest 269 288 596
Financing costs amortised 43 54 104
Preference dividends 36 51 87
--------------------------- -------------- -------------- ----------
Total finance costs 467 555 1,079
--------------------------- -------------- -------------- ----------
5. TAXATION
Half year Half year Year to
to to 31 March
30 September 30 September 2016
2016 2015 GBP'000
GBP'000 GBP'000
Current UK corporation
tax
Charge for the period (53) (252) (415)
Adjustment in respect
of prior years - - 121
------------------------------------ -------------- -------------- ----------
Total current tax charge (53) (252) (294)
------------------------------------ -------------- -------------- ----------
Deferred tax
Origination and reversal
of timing differences (979) (90) (87)
Adjustments recognised
in the period due to
change in rate of corporation
tax - - 184
Adjustments recognised
in the period for deferred
tax of prior periods 98 49 49
------------------------------------ -------------- -------------- ----------
Total deferred tax (charge)/credit (881) (41) 146
------------------------------------ -------------- -------------- ----------
Total tax charged in
the Statement of Financial
Performance (934) (293) (148)
------------------------------------ -------------- -------------- ----------
The tax (charge)/credit
arises as follows:
On normal trading (173) (165) (119)
Non-underlying items 25 (33) 49
------------------------------------ -------------- -------------- ----------
Continuing operations (148) (198) (70)
Discontinued operations (786) (95) (78)
------------------------------------ -------------- -------------- ----------
Total tax charge (934) (293) (148)
------------------------------------ -------------- -------------- ----------
Taxation of trading items for the half year has been provided at the effective rate of taxation of 17.1% (2015: 17.1%) expected to apply to the full year on ordinary trading. Tax on disposal gain from discontinued operations items is provided at the substantially enacted rate of 17%.
6. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Treasury shares are treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post-tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.
Reconciliations of the earnings and the weighted average number of shares used in the calculations are set out below.
Half year Half year Year to
to to
30 September 30 September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'000
Basic
Profit for the period 4,558 1,418 2,487
---------------------------- ------------- ------------- ---------
Basic earnings per share 164.3p 51.4p 90.1p
---------------------------- ------------- ------------- ---------
Diluted earnings per share 164.2p 50.7p 88.7p
---------------------------- ------------- ------------- ---------
Adjusted
Profit before tax 869 1,153 1,243
Adjustment: Non-underlying
items (note 3) 143 (164) 222
---------------------------- ------------- ------------- ---------
Underlying profit for the
period 1,012 989 1,465
Taxation on normal trading
(note 5) (173) (165) (119)
---------------------------- ------------- ------------- ---------
Underlying earnings 839 824 1,346
---------------------------- ------------- ------------- ---------
Underlying earnings per
share 30.2p 29.9p 48.8p
---------------------------- ------------- ------------- ---------
Diluted earnings per share 30.2p 29.4p 48.0p
---------------------------- ------------- ------------- ---------
The number of fully paid ordinary shares in issue at the period end was 2,879,298 (2015: 2,879,298). Excluding the shares held for treasury, the weighted average shares in issue for the purposes of the earnings per share calculation were 2,773,616 (2015: 2,759,678). The shares granted under the Company's SAYE scheme are dilutive. The number of dilutive shares under option at fair value was 2,011 (2015: 39,133) giving a total diluted weighted average number of shares of 2,775,627 (2015: 2,798,811).
The Directors consider that underlying earnings per share figures provide a better measure of comparative performance.
7. DIVIDS
Ordinary shares of 50p each
The interim dividend proposed at the rate of 7.50 pence per share (2015: 7.25 pence) is payable on 6 January 2017 to shareholders on the register at the close of business on 16 December 2016. The shares will be marked ex-dividend on 15 December 2016.
Preference shares
Preference dividends were paid in October 2016. The next preference dividends are payable in April 2017. The cost of the preference dividends has been included within finance costs.
8. PENSIONS
The pension scheme deficit reflects a defined benefit obligation that has been updated to reflect its valuation as at 30 September 2016. This has been calculated by a qualified actuary using a consistent valuation method to that which was adopted in the audited financial statements for the year ended 31 March 2016 and in the period to 30 September 2015, and which complies with the accounting requirements of IAS 19 (revised).
The net liability for defined benefit obligations has increased from GBP4,980,000 at 31 March 2016 to GBP13,953,000 at 30 September 2016. The increase of GBP8,973,000 comprises the net charge to the Statement of Financial Performance of GBP100,000 and a net remeasurement loss charged to the Statement of Comprehensive Income of GBP9,055,000 less contributions of GBP182,000. Although assets have increased, the liabilities have increased by a greater amount as a result of a decrease in the discount rate from 3.35% at 31 March 2016 to 2.20% at 30 September 2016.
9. DISCONTINUED OPERATIONS
In April, the Group sold the business and assets (excluding the freehold property) of its Land Rover business to Harwoods Limited ("Harwoods"). Cash consideration of GBP7.5 million comprised GBP5.5 million for goodwill together with GBP0.2 million for property, plant and equipment and GBP1.9 million for inventories less GBP0.1 million in respect of liabilities transferred. The total consideration was received at completion on 29 April 2016.
Ownership of the freehold property in Lewes from which Harwoods will continue to operate the Land Rover business remains with the Group, and is being leased to Harwoods for a period of up to three years from 29 April 2016 subject to a two-year tenant-only break clause.
As a result of this transaction, the operating activities attributed to that business have been disclosed as a discontinued operation.
Half year Half year Year to
to to 31 March
30 September 30 September 2016
2016 2015 GBP'000
GBP'000 GBP'000
Revenue 5,828 22,196 46,089
Cost of sales (5,516) (19,942) (41,169)
------------------------------- -------------- -------------- ----------
Gross profit 312 2,254 4,920
Operating expenses (370) (1,668) (3,473)
------------------------------- -------------- -------------- ----------
Operating (loss)/profit (58) 586 1,447
------------------------------- -------------- -------------- ----------
Finance expense (3) (28) (55)
------------------------------- -------------- -------------- ----------
(Loss)/profit before taxation (61) 558 1,392
Income tax credit/(expense) 10 (95) (78)
------------------------------- -------------- -------------- ----------
(Loss)/profit attributed
to discontinued operations (51) 463 1,314
Profit on sale of business 3,888
net of deferred tax - -
------------------------------- -------------- -------------- ----------
Profit for the period from
discontinued operations 3,837 463 1,314
------------------------------- -------------- -------------- ----------
The results of the business shown above represent its trading from the start of the financial year until disposal on 29 April 2016.
Half year to
30 September
2016
GBP'000
Proceeds generated on sale
of business 7,512
Sale of property, plant and
equipment (218)
Transfer of inventories (1,921)
Transfer of liabilities 116
----------------------------------- --------------
5,489
Associated transaction costs:
Professional fees (470)
Adjustments arising on completion (230)
Provision for onerous costs (105)
----------------------------------- --------------
Net transaction costs (805)
----------------------------------- --------------
Net gain on sale of business 4,684
----------------------------------- --------------
Deferred tax expense (796)
----------------------------------- --------------
Profit on sale of business
net of deferred tax 3,888
----------------------------------- --------------
10. RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Board believes these risks and uncertainties to be consistent with those disclosed in our latest Annual Report, including general economic factors, their impact on the Group's defined benefit pension scheme, liquidity and financing, the Group's dependency on its manufacturers' and their stability, used car prices and regulatory compliance. Following the UK's decision to leave the EU, a degree of uncertainty in the UK economy has been created and we believe that the main risks to arise from this relate to consumer confidence and the potential impact that Sterling/Euro exchange rates may have on vehicle prices.
11. RESPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
a) the Half Year Report has been prepared in accordance with IAS34 'Interim Financial Reporting';
b) the Half Year Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules (indication of important events during the first six months and their impact on the set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year); and
c) the Half Year Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules (disclosure of related parties' transactions and changes therein).
By order of the Board
S G M Caffyn
Chief Executive
M Warren
Finance Director
24 November 2016
INDEPENT REVIEW REPORT
to Caffyns plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report of Caffyns plc for the six months ended 30 September 2016 which comprises the Condensed Consolidated Statement of Financial Performance, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Condensed Consolidated Cash Flow Statement and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Grant Thornton UK LLP
Auditor
Gatwick
24 November 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMMZMVDGGVZM
(END) Dow Jones Newswires
November 25, 2016 02:00 ET (07:00 GMT)
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