Caffyns PLC
27 May 2005
Preliminary Results of Caffyns plc
For the year ended 31 March 2005
Caffyns plc, the leading motor distributor covering fourteen car franchises in
the South-East of England, announces its preliminary results for the year ended
31 March 2005.
Highlights
2005 2004
• Sales £155.7m £153.1m
• Operating profit before exceptional items £2,804,000 £3,889,000
• Profit on ordinary activities before taxation £3,303,000 £3,109,000
• Basic earnings per share 93.0p 88.1p
• Adjusted earnings per share 53.2p 95.5p
• Proposed final dividend 16.0p 15.0p
• Total dividend for the year 24.0p 22.5p
For further information:
Simon Caffyn, Chief Executive
Mark Harrison, Finance Director
01323 730201
Chairman's Statement
2005 will be remembered for the demise of MG Rover and, considering the
company's historic relationship with MG Rover, I am very pleased that we have
been able to minimise the damage this event has had on our trading result and
future prospects.
Over the years we have carefully reduced our exposure to MG Rover from 21 sites
in the mid 1990's to 8 as at April this year. Furthermore, action to minimise
our exposure to stock, coupled with discussions with other manufacturers, has
kept our consequent losses to relatively low levels and put us in a position to
regenerate business in the majority of our MG Rover dealerships with strong and
successful franchises.
It is fortunate that the VAT refund has enabled us to cope with these short term
losses and, after a period of reorganisation, we will be very well placed to
capitalise on our new franchise opportunities.
Robert Caffyn will be retiring as a director on 1 June 2005, having been a
director since 1961. Robert's contribution to the business, both in his time as
finance director and also, subsequently, as a non-executive director has been
considerable and I am very grateful to him for his advice over the years.
The profit before tax of £3.3m is up on last year's profit of £3.1m by 6% and,
given the market conditions, the underlying performance remains satisfactory.
Earnings per share increased to 93.0p from 88.1p last year.
All listed companies in the European Union will have to report their
consolidated results under IFRS for accounting periods commencing on or after 1
January 2005. This means that the new standards will first affect the Group's
reporting for the year ending 31 March 2006, commencing with the interim results
for the six months ending 30 September 2005 and details of their estimated
impact are included in note 12 to this statement. The group is well advanced in
its implementation of IFRS.
An interim dividend of 8.0p per ordinary share (2004 : 7.5p) was paid on 12
January 2005. An increased final dividend of 16p (2004 : 15p) is now being
recommended which, if approved, will be payable on 28 July 2005 to shareholders
on the register on 24 June 2005, giving a total of 24.0 p for the year (2004 :
22.5p).
B A Carte
Chairman
27 May 2005
Chief Executive's Review
Results
The profit before tax of £3.3m has been achieved during a year of major
redevelopment, assimilation into the group of three large dealerships and,
during the second half, the decline and ultimately the collapse of MG Rover.
The settlement of our claim for overpayment of VAT, including interest, from HM
Customs and Excise offsets the losses incurred from the demise of MG Rover.
Considering the disruption to our business and the substantial losses generated
from our exposure to MG Rover the final result is, in the circumstances, better
than expected and an increase on £3.1m last year.
MG Rover
At the time of MG Rover's failure just after the end of the financial year, the
Company traded from eight locations with this franchise. Turnover generated last
year from these dealerships was £28.75m with an operating loss of £305,000. This
compares with the previous year's turnover of £35.2m and profits of £888,000.
As market share and the profitability of MG Rover fell rapidly during our second
half we successfully took action to reduce our exposure to vehicle stocks but
trading losses became inevitable.
However, since the announcement that MG Rover had gone into administration we
have carefully marketed our remaining vehicle stocks and demand for these has
been strong.
Sadly, we have had to close our dealerships in Seaford and Ramsgate but we have
secured alternative franchises elsewhere. In Tunbridge Wells the branch will
continue as a Vauxhall dealership, adding Chevrolet. In Brighton we are also
changing to represent Vauxhall. Eastbourne, Uckfield and Worthing are in the
process of being refranchised and Lewes will continue as an MG Rover service
point and used car operation.
Whilst we shall experience some disruption, our action over the last few years
and our swift response to the current situation has ensured that this will be
kept to a minimum. Our move away from MG Rover and our increasing representation
of strong and successful franchises, will improve the core business of the
Company in line with our strategic plan.
Acquisitions
In June 2004 we acquired the Volkswagen dealership covering Brighton and Hove
and, after a long period of reorganisation, we are now beginning to see
encouraging results from this business.
In November we purchased the Skoda dealership in Tunbridge Wells giving us two
dealerships for this successful franchise.
Refurbishment and Relocation
The year has seen considerable refurbishment activity which, although disruptive
in the short term, is giving us sites that are more appealing to customers and
easier and more efficient to operate.
In May this year we completed on schedule our new Audi Centre greenfield
development in Eastbourne and successfully relocated the Audi business from
nearby Hailsham.
In Tunbridge Wells the extensive redevelopment work on our Vauxhall dealership
is nearing completion and we are adding the Chevrolet franchise to this
impressive facility.
In Tonbridge we have replaced the MG Rover franchise with Vauxhall and this
business now operates as a satellite of Tunbridge Wells.
Property
In Hove we have exchanged contracts for the sale of the site for a consideration
of £3.15m conditional upon planning consent being granted.
Our premises in Hythe have been marketed and we anticipate their sale in the
current financial year.
In Burgess Hill we have exchanged contracts for the sale of part of the site on
an unconditional basis.
As mentioned earlier, we have taken the decision to close our MG Rover
dealerships in Seaford and Ramsgate. These sites will be marketed for sale and
the proceeds will be used to continue the development of our key franchise
businesses.
The company has had its portfolio of freehold and long leasehold premises valued
as at 31 March 2005, but excluding four sites which were for sale as at that
date. The valuation was carried out by CB Richard Ellis, chartered surveyors, on
the basis of existing use value. The excess of the valuation over net book value
as at 31 March 2005 was £4.325 million.
VAT
In September, HM Customs and Excise agreed our initial claim in respect of VAT
overpaid on demonstrator vehicles in the period 1973 to 1996. The total amount
agreed, including interest, was £3.4m and this money has been used to reduce
borrowings and offset the losses generated from the collapse of MG Rover.
In common with other motor retailers, an additional claim has been made to
Customs but we still await agreement on this, pending resolution of a point of
law governing the reclaim of input VAT.
Financial Services Authority
The Financial Services Authority has issued regulations effecting the sale and
administration of insurance based products from January 2005. We took the
necessary steps to comply with these new regulations and our application has
received approval.
People and Training
As mentioned in the Chairman's Statement, Robert Caffyn will be retiring as a
director in June. We have benefited not only from his management of the finance
of the company whilst Financial Director, but also from his wisdom and sound
advice over the last five years as a non-executive director.
As announced at the half year, Ian Watt retired from the Board in November 2004,
having made an outstanding contribution in his role as Deputy Chairman. I am
very grateful to both Robert and Ian for their support over the years.
The year has brought many challenges and I am delighted that we have been able
to respond to these so positively. As always, I am very grateful to all our
employees for their hard work, dedication and loyalty which has ensured that we
end a difficult year in the best possible condition.
We now have substantial market areas for Vauxhall, Volkswagen and Audi. In order
to optimise the opportunity with these franchises, we have recently appointed
franchise managers to oversee and co-ordinate the activities in the respective
dealerships.
The Future
Whilst we have successfully managed the immediate effects of the MG Rover
collapse we now have to manage the process of change to the new franchises. The
estimated losses arising as a result of the collapse have largely been provided
for in the accounts. Having suffered from the uncertain future of an ailing
franchise, we will replace it with new franchises, leaving us in a far stronger
position.
The May General Election is now behind us and the economists appear equivocal on
the prospects for the economy. Fears of a declining property market and a slow
down in retail activity are not welcome news and, after a slow period in January
and February, March was stronger but the outlook remains challenging.
S G M Caffyn
Chief Executive
27 May 2005
Caffyns plc
Preliminary Announcement
Consolidated Profit and Loss Account for the year ended 31 March 2005
Note VAT MG 2005 2004
refund Rover £'000 £'000
(note 2) (note 2)
£'000 £'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
Turnover
Continuing 149,756 - - 149,756 153,104
operations
Acquisitions 5,928 - - 5,928 -
--------------------------------------------------------------------------------
155,684 - - 155,684 153,104
Cost of sales (130,509) 1,489 (2,012) (131,032) (129,309)
--------------------------------------------------------------------------------
Gross profit 25,175 1,489 (2,012) 24,652 23,795
Other operating
charges (22,361) - (113) (22,474) (19,906)
--------------------------------------------------------------------------------
Operating profit
Continuing 2,962 1,489 (2,125) 2,326 3,889
operations
Acquisitions (148) - - (148) -
--------------------------------------------------------------------------------
Total operating
profit 2,814 1,489 (2,125) 2,178 3,889
Exceptional items 2 226 - - 226 (209)
--------------------------------------------------------------------------------
Profit on ordinary
activities before
interest 3,040 1,489 (2,125) 2,404 3,680
Interest
(payable)/ (1,015) 1,914 - 899 (571)
receivable
--------------------------------------------------------------------------------
Profit on ordinary
activities before
taxation 2,025 3,403 (2,125) 3,303 3,109
Taxation 3 (284) (642) 401 (525) (471)
--------------------------------------------------------------------------------
Profit on ordinary
activities after
taxation 1,741 2,761 (1,724) 2,778 2,638
Dividends (equity
and 4 (793) - - (793) (750)
non-equity)
--------------------------------------------------------------------------------
Retained profit 948 2,761 (1,724) 1,985 1,888
--------------------------------------------------------------------------------
Basic earnings per
ordinary share 5 93.0p 88.1p
Adjusted earnings
per 5 53.2p 95.5p
ordinary share
Note of historical
cost profits and
losses
Reported profit on
ordinary
activities 3,303 3,109
before taxation
The difference
between the
historical cost
depreciation and
depreciated based
on 46 45
revalued amounts
Realisation of
property
revaluation 109 -
surplus
--------------------------------------------------------------------------------
Historical cost
profit on ordinary
activities before
taxation 3,458 3,154
--------------------------------------------------------------------------------
Historical cost
profit for the
year
retained after
taxation and 2,140 1,933
dividends
--------------------------------------------------------------------------------
There were no recognised gains or losses other that the profit for the financial
year.
Caffyns plc
Preliminary Announcement
Consolidated Balance Sheet at 31 March 2005
Note 2005 2004
£'000 £'000
--------------------------------------------------------------------------------
Fixed assets
Intangible assets 451 161
Tangible assets 31,540 29,229
--------------------------------------------------------------------------------
31,991 29,390
--------------------------------------------------------------------------------
Current assets
Stocks 24,441 22,011
Debtors 9,269 9,860
Bank balances and cash 46 62
--------------------------------------------------------------------------------
33,756 31,933
Creditors
Amounts falling due within one year (30,227) (28,501)
--------------------------------------------------------------------------------
Net current assets 3,529 3,432
--------------------------------------------------------------------------------
Total assets less current liabilities 35,520 32,822
Creditors
Amounts falling due after more than one year (3,106) (3,013)
Provisions for liabilities and charges (1,023) (403)
--------------------------------------------------------------------------------
31,391 29,406
--------------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,676 2,676
Share premium account 272 272
Capital redemption reserve 282 282
Revaluation reserve 4,345 4,500
Profit and loss account 23,816 21,676
--------------------------------------------------------------------------------
31,391 29,406
--------------------------------------------------------------------------------
Equity shareholders' funds 30,154 28,169
Non-equity shareholders' funds 1,237 1,237
--------------------------------------------------------------------------------
Total shareholders' funds 6 31,391 29,406
--------------------------------------------------------------------------------
Caffyns plc
Preliminary Announcement
Consolidated Cash Flow for the year ended 31 March 2005
Note 2005 2004
£'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
Net cash inflow from operating 7 4,848 1,029
activities
Returns on investment and servicing
of finance
Interest paid (1,015) (571)
Interest receivable 1,914 -
Preference dividends paid (102) (102)
--------------------------------------------------------------------------------
797 (673)
Taxation
UK Corporation tax paid (net) (644) (400)
Capital expenditure
Purchase of tangible fixed assets (3,496) (3,814)
Sale of property in current assets - 951
Sale of tangible fixed assets 801 167
--------------------------------------------------------------------------------
Net cash outflow from capital (2,695) (2,696)
expenditure
Acquisitions and disposals
Payments in respect of acquisitions (826) (4,348)
Disposals (229) (231)
--------------------------------------------------------------------------------
(1,055) (4,579)
Equity dividends paid (662) (619)
--------------------------------------------------------------------------------
Cash inflow/(outflow) before 589 (7,938)
financing
Financing
Capital element of finance leases (29) (37)
Issue of shares - 1
--------------------------------------------------------------------------------
Net cash outflow from financing (29) (36)
--------------------------------------------------------------------------------
Increase/(decrease) in cash 8 560 (7,974)
--------------------------------------------------------------------------------
Caffyns plc
Notes to the Preliminary Announcement for the year ended 31 March 2005
1. Basis of Preparation
This preliminary statement, which does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985, has
been extracted from the statutory financial statements of the company
for the year ended 31 March 2005 on which the auditors issued an
unqualified audit opinion on 27 May 2005. These financial statements
have not yet been delivered to the Registrar of Companies.
The principal accounting policies have remained unchanged from the
previous year.
2. Exceptional items
2005 2004
£'000 £'000
Net profit on disposal of tangible fixed assets 455 22
Closure and disposal costs (229) (231)
-------- -------
226 (209)
-------- -------
MG Rover
Following the appointment of administrators to MG Rover Group Limited on 8 April
2005, an exceptional charge has been made to cost of sales of £2,012,000
representing provisions against the realisation of stocks of MG Rover cars owned
by the company at 31 March 2005 (£1,412,000), and a provision against potential
warranty claims from customers who purchased MG Rover cars which were registered
after 1 April 2002 (£600,000). A further provision of £113,000 in other
operating costs comprises bad debts and an impairment review of MG Rover related
fixtures and fittings.
VAT
The VAT refund of £1,489,000 represented a claim in respect of VAT overpaid on
demonstrator vehicles in the period 1973 to 1996. There was also £1,914,000
interest received following receipt of the VAT refund.
3. Taxation
Analysis of charge for year:
2005 2004
£'000 £'000
Current tax:
UK Corporation tax at 30% 645 820
Advance corporation tax recovered (239) (367)
Adjustment relating to prior years' corporation tax (24) (53)
-------- -------
382 400
Deferred taxation
Origination and reversal of timing differences 143 71
-------- -------
Tax on profit on ordinary activities 525 471
-------- -------
4. Dividends
2005 2004
£'000 £'000
Non equity
Preference:
6.5% Cumulative First Preference 25 25
10% Cumulative Preference 65 65
6.0% Cumulative Second Preference 12 12
--------- -------
102 102
--------- -------
Equity
Ordinary:
Interim dividend paid of 8.0p (2004 - 7.5p) 230 216
Final dividend proposed of 16.0p (2004 - 15.0p) 461 432
--------- -------
691 648
--------- -------
793 750
--------- -------
5. Earnings per ordinary 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 year.
Reconciliations of earnings and weighted average number of shares used
in the calculations are set out below:
Adjusted Basic
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Profit before tax 3,303 3,109 3,303 3,109
Adjustments:
Goodwill amortisation 120 34 - -
Exceptional items - Property (226) 209 - -
profit and closure costs
- VAT (3,403) -
- MG Rover 2,125 - - -
------- ------- ------- -------
Adjusted profit before tax 1,919 3,352 3,303 3,109
Taxation (284) (501) (525) (471)
Preference dividends (102) (102) (102) (102)
------- ------- ------- -------
Earnings 1,533 2,749 2,676 2,536
------- ------- ------- -------
Adjusted earnings per share 53.2p 95.5p
------- -------
Basic earnings per share 93.0p 88.1p
------- -------
2005 2004
Number Number
Weighted average number of
fully paid ordinary shares
in
issue during the year 2,879,298 2,879,298
6. Reconciliation of movements in shareholders funds
2005 2004
£'000 £'000 £'000 £'000
Profit for the financial year 2,778 2,638
Dividends (793) (750)
------- -------
1,985 1,888
Equity shares issued in year - 1
------- -------
Net increase in shareholders' funds 1,985 1,889
Brought forward at beginning of year 29,406 27,517
------- -------
Carried forward at end of year 31,391 29,406
------- -------
Shareholders' Funds are attributable as
follows:
Equity interests 30,154 28,169
Non-equity interests
6.5% Cumulative First Preference shares of 389 389
£1 each
10% Cumulative Preference shares of £1 648 648
each
6% Cumulative Second Preference shares of 200 200
10p each
------- -------
1,237 1,237
------- -------
31,391 29,406
------- -------
7. Reconciliation of operating profit to net cash inflow from operating
activities
2005 2004
£'000 £'000
Operating profit 2,178 3,889
Depreciation charge 1,167 995
Amortisation of goodwill 120 34
Increase in stocks (2,175) (1,119)
Decrease/(increase) in debtors 742 (1,937)
Increase/(decrease) in creditors 2,339 (663)
Increase/(decrease) in provisions for liabilities and 477 (170)
charges
------- -------
Net cash inflow from operating activities 4,848 1,029
------- -------
8. Reconciliation of net cash flow to movement in net
debt
2005 2004
£'000 £'000
Increase/(decrease) in cash in the year 560 (7,974)
Net cash (inflow)/outflow from capital elements of (147) 37
finance leases
------- -------
Movement in net debt in the year 413 (7,937)
Net debt at beginning of year (11,382) (3,445)
------- -------
Net debt at end of year (10,969) (11,382)
------- -------
9. Analysis of net debt
At Cashflow Acquisitions Other non- At
31 March cash 1 April
2005 changes 2004
£'000 £'000 £'000 £'000 £'000
Bank overdrafts 7,822 (560) - - 8,382
(net)
------- ------- ------- ------- -------
Debt falling due
after
more than 1 3,000 - - - 3,000
year
Finance leases 147 (29) 55 121 -
------- ------- ------- ------- -------
3,147 (29) 55 121 3,000
------- ------- ------- ------- -------
Total 10,969 (589) 55 121 11,382
------- ------- ------- ------- -------
10. Annual Report
Copies of the Annual Report will be despatched to shareholders by 1 July
2005.
11. Financial Calendar
Final dividend to be paid on 28 July 2005 to shareholders on the register
as at 24 June 2005. (Ex Dividend date - 22 June 2005).
Annual General Meeting at the Hydro Hotel, Eastbourne on Thursday 28 July
2005 at 11.30am.
12. International Financial Reporting Standards ("IFRS")
The results for the year ended 31 March 2005 set out in this statement are
presented under UK GAAP (UK Generally Accepted Accounting Practice). As a
result the changeover to IFRS, there will be changes to the format of the
primary financial statements (profit and loss account, balance sheet and
cash flow statement) and there will also be additional disclosures.
However, the main impact on the results comes from differences in the IFRS
accounting treatment and for certain items compared to UK GAAP. Those
matters having the most significant impact on the group are in respect of
pensions, deferred tax and dividends payable. The table below summarises
the estimated effect of the change to IFRS on the results for the year
ended 31 March 2005.
Profit before Profit after Net
tax tax assets
£ million £ million £ million
Profit/net assets under UK GAAP 3.3 2.8 31.4
Pensions - incorporation of deficit
onto balance sheet
and elimination of SSAP 24 prepayment (0.4) (0.3) (3.2)
Deferred tax - provide for
revaluations
and rollover relief - (0.1) (1.0)
Taxation - loss of benefit of ACT
previously written off
under UK GAAP, utilised in the year - (0.5) -
Dividends - dividends accounted for
in year in
which declared or proposed - - 0.5
Preference shares - reclassify as a
liability - - (1.2)
--------- -------- --------
Profit/net assets under IFRS 2.9 1.9 26.5
--------- -------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
27 May 2005
Preliminary Results of Caffyns plc
For the year ended 31 March 2005
Caffyns plc, the leading motor distributor covering fourteen car franchises in
the South-East of England, announces its preliminary results for the year ended
31 March 2005.
Highlights
2005 2004
• Sales £155.7m £153.1m
• Operating profit before exceptional items £2,804,000 £3,889,000
• Profit on ordinary activities before taxation £3,303,000 £3,109,000
• Basic earnings per share 93.0p 88.1p
• Adjusted earnings per share 53.2p 95.5p
• Proposed final dividend 16.0p 15.0p
• Total dividend for the year 24.0p 22.5p
For further information:
Simon Caffyn, Chief Executive
Mark Harrison, Finance Director
01323 730201
Chairman's Statement
2005 will be remembered for the demise of MG Rover and, considering the
company's historic relationship with MG Rover, I am very pleased that we have
been able to minimise the damage this event has had on our trading result and
future prospects.
Over the years we have carefully reduced our exposure to MG Rover from 21 sites
in the mid 1990's to 8 as at April this year. Furthermore, action to minimise
our exposure to stock, coupled with discussions with other manufacturers, has
kept our consequent losses to relatively low levels and put us in a position to
regenerate business in the majority of our MG Rover dealerships with strong and
successful franchises.
It is fortunate that the VAT refund has enabled us to cope with these short term
losses and, after a period of reorganisation, we will be very well placed to
capitalise on our new franchise opportunities.
Robert Caffyn will be retiring as a director on 1 June 2005, having been a
director since 1961. Robert's contribution to the business, both in his time as
finance director and also, subsequently, as a non-executive director has been
considerable and I am very grateful to him for his advice over the years.
The profit before tax of £3.3m is up on last year's profit of £3.1m by 6% and,
given the market conditions, the underlying performance remains satisfactory.
Earnings per share increased to 93.0p from 88.1p last year.
All listed companies in the European Union will have to report their
consolidated results under IFRS for accounting periods commencing on or after 1
January 2005. This means that the new standards will first affect the Group's
reporting for the year ending 31 March 2006, commencing with the interim results
for the six months ending 30 September 2005 and details of their estimated
impact are included in note 12 to this statement. The group is well advanced in
its implementation of IFRS.
An interim dividend of 8.0p per ordinary share (2004 : 7.5p) was paid on 12
January 2005. An increased final dividend of 16p (2004 : 15p) is now being
recommended which, if approved, will be payable on 28 July 2005 to shareholders
on the register on 24 June 2005, giving a total of 24.0 p for the year (2004 :
22.5p).
B A Carte
Chairman
27 May 2005
Chief Executive's Review
Results
The profit before tax of £3.3m has been achieved during a year of major
redevelopment, assimilation into the group of three large dealerships and,
during the second half, the decline and ultimately the collapse of MG Rover.
The settlement of our claim for overpayment of VAT, including interest, from HM
Customs and Excise offsets the losses incurred from the demise of MG Rover.
Considering the disruption to our business and the substantial losses generated
from our exposure to MG Rover the final result is, in the circumstances, better
than expected and an increase on £3.1m last year.
MG Rover
At the time of MG Rover's failure just after the end of the financial year, the
Company traded from eight locations with this franchise. Turnover generated last
year from these dealerships was £28.75m with an operating loss of £305,000. This
compares with the previous year's turnover of £35.2m and profits of £888,000.
As market share and the profitability of MG Rover fell rapidly during our second
half we successfully took action to reduce our exposure to vehicle stocks but
trading losses became inevitable.
However, since the announcement that MG Rover had gone into administration we
have carefully marketed our remaining vehicle stocks and demand for these has
been strong.
Sadly, we have had to close our dealerships in Seaford and Ramsgate but we have
secured alternative franchises elsewhere. In Tunbridge Wells the branch will
continue as a Vauxhall dealership, adding Chevrolet. In Brighton we are also
changing to represent Vauxhall. Eastbourne, Uckfield and Worthing are in the
process of being refranchised and Lewes will continue as an MG Rover service
point and used car operation.
Whilst we shall experience some disruption, our action over the last few years
and our swift response to the current situation has ensured that this will be
kept to a minimum. Our move away from MG Rover and our increasing representation
of strong and successful franchises, will improve the core business of the
Company in line with our strategic plan.
Acquisitions
In June 2004 we acquired the Volkswagen dealership covering Brighton and Hove
and, after a long period of reorganisation, we are now beginning to see
encouraging results from this business.
In November we purchased the Skoda dealership in Tunbridge Wells giving us two
dealerships for this successful franchise.
Refurbishment and Relocation
The year has seen considerable refurbishment activity which, although disruptive
in the short term, is giving us sites that are more appealing to customers and
easier and more efficient to operate.
In May this year we completed on schedule our new Audi Centre greenfield
development in Eastbourne and successfully relocated the Audi business from
nearby Hailsham.
In Tunbridge Wells the extensive redevelopment work on our Vauxhall dealership
is nearing completion and we are adding the Chevrolet franchise to this
impressive facility.
In Tonbridge we have replaced the MG Rover franchise with Vauxhall and this
business now operates as a satellite of Tunbridge Wells.
Property
In Hove we have exchanged contracts for the sale of the site for a consideration
of £3.15m conditional upon planning consent being granted.
Our premises in Hythe have been marketed and we anticipate their sale in the
current financial year.
In Burgess Hill we have exchanged contracts for the sale of part of the site on
an unconditional basis.
As mentioned earlier, we have taken the decision to close our MG Rover
dealerships in Seaford and Ramsgate. These sites will be marketed for sale and
the proceeds will be used to continue the development of our key franchise
businesses.
The company has had its portfolio of freehold and long leasehold premises valued
as at 31 March 2005, but excluding four sites which were for sale as at that
date. The valuation was carried out by CB Richard Ellis, chartered surveyors, on
the basis of existing use value. The excess of the valuation over net book value
as at 31 March 2005 was £4.325 million.
VAT
In September, HM Customs and Excise agreed our initial claim in respect of VAT
overpaid on demonstrator vehicles in the period 1973 to 1996. The total amount
agreed, including interest, was £3.4m and this money has been used to reduce
borrowings and offset the losses generated from the collapse of MG Rover.
In common with other motor retailers, an additional claim has been made to
Customs but we still await agreement on this, pending resolution of a point of
law governing the reclaim of input VAT.
Financial Services Authority
The Financial Services Authority has issued regulations effecting the sale and
administration of insurance based products from January 2005. We took the
necessary steps to comply with these new regulations and our application has
received approval.
People and Training
As mentioned in the Chairman's Statement, Robert Caffyn will be retiring as a
director in June. We have benefited not only from his management of the finance
of the company whilst Financial Director, but also from his wisdom and sound
advice over the last five years as a non-executive director.
As announced at the half year, Ian Watt retired from the Board in November 2004,
having made an outstanding contribution in his role as Deputy Chairman. I am
very grateful to both Robert and Ian for their support over the years.
The year has brought many challenges and I am delighted that we have been able
to respond to these so positively. As always, I am very grateful to all our
employees for their hard work, dedication and loyalty which has ensured that we
end a difficult year in the best possible condition.
We now have substantial market areas for Vauxhall, Volkswagen and Audi. In order
to optimise the opportunity with these franchises, we have recently appointed
franchise managers to oversee and co-ordinate the activities in the respective
dealerships.
The Future
Whilst we have successfully managed the immediate effects of the MG Rover
collapse we now have to manage the process of change to the new franchises. The
estimated losses arising as a result of the collapse have largely been provided
for in the accounts. Having suffered from the uncertain future of an ailing
franchise, we will replace it with new franchises, leaving us in a far stronger
position.
The May General Election is now behind us and the economists appear equivocal on
the prospects for the economy. Fears of a declining property market and a slow
down in retail activity are not welcome news and, after a slow period in January
and February, March was stronger but the outlook remains challenging.
S G M Caffyn
Chief Executive
27 May 2005
Caffyns plc
Preliminary Announcement
Consolidated Profit and Loss Account for the year ended 31 March 2005
Note VAT MG 2005 2004
refund Rover £'000 £'000
(note 2) (note 2)
£'000 £'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
Turnover
Continuing 149,756 - - 149,756 153,104
operations
Acquisitions 5,928 - - 5,928 -
--------------------------------------------------------------------------------
155,684 - - 155,684 153,104
Cost of sales (130,509) 1,489 (2,012) (131,032) (129,309)
--------------------------------------------------------------------------------
Gross profit 25,175 1,489 (2,012) 24,652 23,795
Other operating
charges (22,361) - (113) (22,474) (19,906)
--------------------------------------------------------------------------------
Operating profit
Continuing 2,962 1,489 (2,125) 2,326 3,889
operations
Acquisitions (148) - - (148) -
--------------------------------------------------------------------------------
Total operating
profit 2,814 1,489 (2,125) 2,178 3,889
Exceptional items 2 226 - - 226 (209)
--------------------------------------------------------------------------------
Profit on ordinary
activities before
interest 3,040 1,489 (2,125) 2,404 3,680
Interest
(payable)/ (1,015) 1,914 - 899 (571)
receivable
--------------------------------------------------------------------------------
Profit on ordinary
activities before
taxation 2,025 3,403 (2,125) 3,303 3,109
Taxation 3 (284) (642) 401 (525) (471)
--------------------------------------------------------------------------------
Profit on ordinary
activities after
taxation 1,741 2,761 (1,724) 2,778 2,638
Dividends (equity
and 4 (793) - - (793) (750)
non-equity)
--------------------------------------------------------------------------------
Retained profit 948 2,761 (1,724) 1,985 1,888
--------------------------------------------------------------------------------
Basic earnings per
ordinary share 5 93.0p 88.1p
Adjusted earnings
per 5 53.2p 95.5p
ordinary share
Note of historical
cost profits and
losses
Reported profit on
ordinary
activities 3,303 3,109
before taxation
The difference
between the
historical cost
depreciation and
depreciated based
on 46 45
revalued amounts
Realisation of
property
revaluation 109 -
surplus
--------------------------------------------------------------------------------
Historical cost
profit on ordinary
activities before
taxation 3,458 3,154
--------------------------------------------------------------------------------
Historical cost
profit for the
year
retained after
taxation and 2,140 1,933
dividends
--------------------------------------------------------------------------------
There were no recognised gains or losses other that the profit for the financial
year.
Caffyns plc
Preliminary Announcement
Consolidated Balance Sheet at 31 March 2005
Note 2005 2004
£'000 £'000
--------------------------------------------------------------------------------
Fixed assets
Intangible assets 451 161
Tangible assets 31,540 29,229
--------------------------------------------------------------------------------
31,991 29,390
--------------------------------------------------------------------------------
Current assets
Stocks 24,441 22,011
Debtors 9,269 9,860
Bank balances and cash 46 62
--------------------------------------------------------------------------------
33,756 31,933
Creditors
Amounts falling due within one year (30,227) (28,501)
--------------------------------------------------------------------------------
Net current assets 3,529 3,432
--------------------------------------------------------------------------------
Total assets less current liabilities 35,520 32,822
Creditors
Amounts falling due after more than one year (3,106) (3,013)
Provisions for liabilities and charges (1,023) (403)
--------------------------------------------------------------------------------
31,391 29,406
--------------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,676 2,676
Share premium account 272 272
Capital redemption reserve 282 282
Revaluation reserve 4,345 4,500
Profit and loss account 23,816 21,676
--------------------------------------------------------------------------------
31,391 29,406
--------------------------------------------------------------------------------
Equity shareholders' funds 30,154 28,169
Non-equity shareholders' funds 1,237 1,237
--------------------------------------------------------------------------------
Total shareholders' funds 6 31,391 29,406
--------------------------------------------------------------------------------
Caffyns plc
Preliminary Announcement
Consolidated Cash Flow for the year ended 31 March 2005
Note 2005 2004
£'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
Net cash inflow from operating 7 4,848 1,029
activities
Returns on investment and servicing
of finance
Interest paid (1,015) (571)
Interest receivable 1,914 -
Preference dividends paid (102) (102)
--------------------------------------------------------------------------------
797 (673)
Taxation
UK Corporation tax paid (net) (644) (400)
Capital expenditure
Purchase of tangible fixed assets (3,496) (3,814)
Sale of property in current assets - 951
Sale of tangible fixed assets 801 167
--------------------------------------------------------------------------------
Net cash outflow from capital (2,695) (2,696)
expenditure
Acquisitions and disposals
Payments in respect of acquisitions (826) (4,348)
Disposals (229) (231)
--------------------------------------------------------------------------------
(1,055) (4,579)
Equity dividends paid (662) (619)
--------------------------------------------------------------------------------
Cash inflow/(outflow) before 589 (7,938)
financing
Financing
Capital element of finance leases (29) (37)
Issue of shares - 1
--------------------------------------------------------------------------------
Net cash outflow from financing (29) (36)
--------------------------------------------------------------------------------
Increase/(decrease) in cash 8 560 (7,974)
--------------------------------------------------------------------------------
Caffyns plc
Notes to the Preliminary Announcement for the year ended 31 March 2005
1. Basis of Preparation
This preliminary statement, which does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985, has
been extracted from the statutory financial statements of the company
for the year ended 31 March 2005 on which the auditors issued an
unqualified audit opinion on 27 May 2005. These financial statements
have not yet been delivered to the Registrar of Companies.
The principal accounting policies have remained unchanged from the
previous year.
2. Exceptional items
2005 2004
£'000 £'000
Net profit on disposal of tangible fixed assets 455 22
Closure and disposal costs (229) (231)
-------- -------
226 (209)
-------- -------
MG Rover
Following the appointment of administrators to MG Rover Group Limited on 8 April
2005, an exceptional charge has been made to cost of sales of £2,012,000
representing provisions against the realisation of stocks of MG Rover cars owned
by the company at 31 March 2005 (£1,412,000), and a provision against potential
warranty claims from customers who purchased MG Rover cars which were registered
after 1 April 2002 (£600,000). A further provision of £113,000 in other
operating costs comprises bad debts and an impairment review of MG Rover related
fixtures and fittings.
VAT
The VAT refund of £1,489,000 represented a claim in respect of VAT overpaid on
demonstrator vehicles in the period 1973 to 1996. There was also £1,914,000
interest received following receipt of the VAT refund.
3. Taxation
Analysis of charge for year:
2005 2004
£'000 £'000
Current tax:
UK Corporation tax at 30% 645 820
Advance corporation tax recovered (239) (367)
Adjustment relating to prior years' corporation tax (24) (53)
-------- -------
382 400
Deferred taxation
Origination and reversal of timing differences 143 71
-------- -------
Tax on profit on ordinary activities 525 471
-------- -------
4. Dividends
2005 2004
£'000 £'000
Non equity
Preference:
6.5% Cumulative First Preference 25 25
10% Cumulative Preference 65 65
6.0% Cumulative Second Preference 12 12
--------- -------
102 102
--------- -------
Equity
Ordinary:
Interim dividend paid of 8.0p (2004 - 7.5p) 230 216
Final dividend proposed of 16.0p (2004 - 15.0p) 461 432
--------- -------
691 648
--------- -------
793 750
--------- -------
5. Earnings per ordinary 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 year.
Reconciliations of earnings and weighted average number of shares used
in the calculations are set out below:
Adjusted Basic
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Profit before tax 3,303 3,109 3,303 3,109
Adjustments:
Goodwill amortisation 120 34 - -
Exceptional items - Property (226) 209 - -
profit and closure costs
- VAT (3,403) -
- MG Rover 2,125 - - -
------- ------- ------- -------
Adjusted profit before tax 1,919 3,352 3,303 3,109
Taxation (284) (501) (525) (471)
Preference dividends (102) (102) (102) (102)
------- ------- ------- -------
Earnings 1,533 2,749 2,676 2,536
------- ------- ------- -------
Adjusted earnings per share 53.2p 95.5p
------- -------
Basic earnings per share 93.0p 88.1p
------- -------
2005 2004
Number Number
Weighted average number of
fully paid ordinary shares
in
issue during the year 2,879,298 2,879,298
6. Reconciliation of movements in shareholders funds
2005 2004
£'000 £'000 £'000 £'000
Profit for the financial year 2,778 2,638
Dividends (793) (750)
------- -------
1,985 1,888
Equity shares issued in year - 1
------- -------
Net increase in shareholders' funds 1,985 1,889
Brought forward at beginning of year 29,406 27,517
------- -------
Carried forward at end of year 31,391 29,406
------- -------
Shareholders' Funds are attributable as
follows:
Equity interests 30,154 28,169
Non-equity interests
6.5% Cumulative First Preference shares of 389 389
£1 each
10% Cumulative Preference shares of £1 648 648
each
6% Cumulative Second Preference shares of 200 200
10p each
------- -------
1,237 1,237
------- -------
31,391 29,406
------- -------
7. Reconciliation of operating profit to net cash inflow from operating
activities
2005 2004
£'000 £'000
Operating profit 2,178 3,889
Depreciation charge 1,167 995
Amortisation of goodwill 120 34
Increase in stocks (2,175) (1,119)
Decrease/(increase) in debtors 742 (1,937)
Increase/(decrease) in creditors 2,339 (663)
Increase/(decrease) in provisions for liabilities and 477 (170)
charges
------- -------
Net cash inflow from operating activities 4,848 1,029
------- -------
8. Reconciliation of net cash flow to movement in net
debt
2005 2004
£'000 £'000
Increase/(decrease) in cash in the year 560 (7,974)
Net cash (inflow)/outflow from capital elements of (147) 37
finance leases
------- -------
Movement in net debt in the year 413 (7,937)
Net debt at beginning of year (11,382) (3,445)
------- -------
Net debt at end of year (10,969) (11,382)
------- -------
9. Analysis of net debt
At Cashflow Acquisitions Other non- At
31 March cash 1 April
2005 changes 2004
£'000 £'000 £'000 £'000 £'000
Bank overdrafts 7,822 (560) - - 8,382
(net)
------- ------- ------- ------- -------
Debt falling due
after
more than 1 3,000 - - - 3,000
year
Finance leases 147 (29) 55 121 -
------- ------- ------- ------- -------
3,147 (29) 55 121 3,000
------- ------- ------- ------- -------
Total 10,969 (589) 55 121 11,382
------- ------- ------- ------- -------
10. Annual Report
Copies of the Annual Report will be despatched to shareholders by 1 July
2005.
11. Financial Calendar
Final dividend to be paid on 28 July 2005 to shareholders on the register
as at 24 June 2005. (Ex Dividend date - 22 June 2005).
Annual General Meeting at the Hydro Hotel, Eastbourne on Thursday 28 July
2005 at 11.30am.
12. International Financial Reporting Standards ("IFRS")
The results for the year ended 31 March 2005 set out in this statement are
presented under UK GAAP (UK Generally Accepted Accounting Practice). As a
result the changeover to IFRS, there will be changes to the format of the
primary financial statements (profit and loss account, balance sheet and
cash flow statement) and there will also be additional disclosures.
However, the main impact on the results comes from differences in the IFRS
accounting treatment and for certain items compared to UK GAAP. Those
matters having the most significant impact on the group are in respect of
pensions, deferred tax and dividends payable. The table below summarises
the estimated effect of the change to IFRS on the results for the year
ended 31 March 2005.
Profit before Profit after Net
tax tax assets
£ million £ million £ million
Profit/net assets under UK GAAP 3.3 2.8 31.4
Pensions - incorporation of deficit
onto balance sheet
and elimination of SSAP 24 prepayment (0.4) (0.3) (3.2)
Deferred tax - provide for
revaluations
and rollover relief - (0.1) (1.0)
Taxation - loss of benefit of ACT
previously written off
under UK GAAP, utilised in the year - (0.5) -
Dividends - dividends accounted for
in year in
which declared or proposed - - 0.5
Preference shares - reclassify as a
liability - - (1.2)
--------- -------- --------
Profit/net assets under IFRS 2.9 1.9 26.5
--------- -------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
