Caffyns Share Discussion Threads

[cjohn] 16/9/2021 09:49

I'm amazed to see these finally back to the price I first paid in 2015, when I thought they looked really stonking value.

Since then I've been buying all the way down, always with the feeling of throwing good money after bad.

Yet at this price, they are still only trading at a PTBV of 0.33, if you take into account the off-balance sheet property revaluation surplus.

I do think they'd have been taken out long ago, if the family didn't have de facto control through the preference shares.

Am I wrong in thinking that redeeming the preference shares is in the family's own interest, as it would be a catalyst to outing value? They could surely negotiate a take over where they remained as highly placed executives in a bigger company, if that's what they wanted. Maybe, it's the emotional engagement of running their own company that motivates them.

[arthur_lame_stocks] 16/9/2021 09:31

I hope so. I believe the semiconductor shortage is still impacting new car sales but hopefully the second hand market is doing well.

[clemo69] 16/9/2021 09:13

Me thinks results are going to be fairly good!!!

[strathroyal] 15/9/2021 16:35

Totally agree, I would have liked a few more of these as the motor traders recover (VTU shares done well recently) but the spread is unbelievable so have decided to sell when I'm in profit.

[1tx] 02/9/2021 16:45

Thanks for info!

[strathroyal] 01/9/2021 15:06

Up for sale with SHW

[1tx] 01/9/2021 14:23

I note that Harwoods have now transfered their Land Rover business to a new site in Brighton to consolidate with their Jaguar franchise and closed the Lewes site.The Lewes site is now vacant & has I assume reverted to Caffyns.What will we do with it & what is its value/what interest will the property/ site have?

[value hound] 20/8/2021 10:13

Agreed; given the voting rights of the Prefs shares, it's really all about the yield - barring some knockout blow (which would be nice!)

[arthur_lame_stocks] 20/8/2021 10:10

I just hope they return to paying a dividend. I hold these for the income and the security of the balance sheet.

[eezymunny] 20/8/2021 09:59

Insanely good results coming out of car dealers. Strange things going on in the car market. It seems almost possible CFYN could do an H1 number that makes the share price shift pretty rapidly. £3m pbt in H1 anyone?

[3800] 04/8/2021 12:28

At some point I feel the shares will be rerated but it may be a decade or two after I have died. good results from Marshalls today look at their share price graph.

[cjohn] 04/6/2021 20:07

The results were surprisingly strong with Basic EPS of 52.4p per share, putting the shares on a PE of 8, in spite of sales down from £198m to £165m.

Bank debt was down from £16.2m to £10.3m, with strong free cash flow. PFCF of around 1.6!!

Based on the balance sheet, tangible book value was £27.6m, so the shares are on a PTBV of 0.42. However, this doesn't include the off-balance sheet revaluation surplus from their freehold properties of some £12.3m. So a total TBV of about £40m, putting the shares on a PTBV of about 0.29.


These are really cheap and a bid would be expected, if the Caffyns' family didn't have de facto control over voting through preference shares.

[this_is_me] 02/6/2021 07:51

Our freehold premises in Lewes remain leased until 9 June 2021, to the purchaser of our former Land Rover business, which was sold in April 2016. The board continues to evaluate future opportunities for the site.

[cjohn] 17/2/2021 15:41

Good spot, Strathroyal and thanks for passing on the information.

[strathroyal] 26/1/2021 16:34

I see that the Land Rover site at Lewes which has been Under Offer on the CBRE site for what seems like months has finally been removed from their website so hopefully the sale has now completed.

[cjohn] 02/12/2020 11:47

Hi itx, of course, you're right that interest rates could go down even further.

However, at some point in the next few years, the chances are much better than not that interest rates will be significantly higher than the current ultra-low rates. A 1% rise in the discount rate - not unlikely - would eliminate the deficit.

The size of the pension fund and associated liabilities would definitely be an off-putting complication to any takeover, irrespective of whether the fund's in deficit or surplus.

I've tried to find a previous discussion on here - a few years back - about the voting rights of the preference shares in such a situation. From what I remember, they do get to vote on some sorts of takeover, others not.

I wonder if there is any chance of a change in use of the Land Rover site. I took a look on google maps and the site is not far from a residential zone. Perhaps someone who knows the town might comment.

[strathroyal] 30/11/2020 12:49

Very interesting at the moment, I was offered 305p to sell last week, 410p two minutes ago!

[clemo69] 30/11/2020 12:38

MMs still don't have a lot of stock... I'm very surprised given the big rise already

[clemo69] 30/11/2020 12:31

Boom there you go jaf111

[1tx] 30/11/2020 12:11

The reason I mentioned the pension fund is not just the deficit which is not vast in terms of Caffyns assets;but rather the size of the fund @ presently £90m which is huge.Very low interest rates have magnified potential liabilities of defined benefit pension funds because they are measured against the yield on "blue chip" bonds even though pension funds have a balanced range of investments and in reality these earn a higher return.The funding presently being put into the plan,about £500k plus costs, is probably enough to fund it but whilst the headline shortfall remains I think a return of capital will be limited to reasonable dividends based on profits.The interesting event next year is the future of the Lewes Land Rover site which is rented to Harwoods
and is due for lease renewal next year.Will they renew or not.If not will it be sold or if they do renew will it be retained for investment or sold on to another investor.It is a valuable site.Finally with regard to the pref shares although on paper these could block a takeover,under Stock Exchange listing rules a buyout of ordinary shares cannot be blocked by pref share votes.....Truthfully I don't see a takeover as very likely however.

[cjohn] 30/11/2020 10:35

coolen28 Nov '20 - 18:04 - 597 of 600

To what extent, if any, might the Pension Fund deficit alter were the family to transfer to the Fund their 2 million 6% Preference Shares ?






According to the balance sheet the preference shares are worth £812k. So the simple answer is it wouldn't make much difference. (Maybe, they'd be transferred at a premium to book value, in view of the attached voting rights and healthy coupon of between 6 and 11%.)

In any case the family are never going to do that, because the preference shares complicate - may make almost impossible - any takeover approach, and they want to retain control.

Likewise, the family, like us, can see that the deficit will shrink significantly, if and when interest rates rise a little. Each 0.1% rise is the discount rate reduces the deficit by £1.4 million. It's worth pointing out that at the FY balance sheet date, the pension fund had £81 million in assets. (That value has increased since then.) So the current deficit is not enormous in percentage terms.


(It's ironic that giving up the preference shares might well be a catalyst to a much higher share price, which would benefit the family like other shareholders.)

[clemo69] 30/11/2020 09:40

Nice director buy at 3.90