Caffyns Warns It Will "Take Time" To Bounce Back From Lockdown

Fri, 17th Jul 2020 09:09

(Alliance News) - Car dealer Caffyns PLC on Friday shrugged a revenue decline to post a swing to profit, but said that it took a hit from the Covid-19 pandemic and the implementation of new emissions-testing rules.

In the year ended March 31, revenue shrunk 5.4% to GBP197.9 million from GBP209.2 million. Caffyns swung to a pretax profit of GBP103,000 from a GBP428,000 loss, however.

Administration expenses were chopped by 18% to GBP8.0 million from GBP9.8 million, numbers showed.

Chief Executive Simon Caffyn said: "The year under review was defined by two key events: the Covid-19 pandemic in March 2020 and the further implementation of the emissions-testing regime, Real Driving Emissions, in September 2019.

"The response from our employees to the Covid-19 crisis has been outstanding. Due to their efforts we experienced a strong trading performance in June as the businesses began to fully re-open."

Car dealers were initially forced to close under lockdown rules in the UK. Showrooms in England reopened in June.

Caffyns explained that the new emissions testing rules led to "some scarcity of supply" of new cars and it particularly hit its trading in September, dubbed the "second most important trading month of the year".

The company decided against a final dividend, due to Covid-19, after a 15.00 pence payout a year ago. It means its total dividend is down 67% to 7.50p from 22.50p.

"In the light of the ongoing impact of the Covid-19 pandemic, we are very cautious about the future outlook. We incurred substantial losses in April and May whilst the business was in an effective lockdown state although we were pleased with the levels of trading achieved in June as we reopened our showrooms. However, we still expect ongoing trading to take time to revert to previous levels," Caffyns added.

Caffyns shares were untraded in London on Friday morning, last seen at 242.00p each.

By Eric Cunha; ericcunha@alliancenews.com

Caffyns