Last checked at 30 Jul 2009 11:30
CAFFYNS PLC
30 July 2009
AGM INTERIM MANAGEMENT STATEMENT
Caffyns plc, the leading motor distributor covering 12 car franchises in the south east of England, is issuing the following Interim Management Statement at its Annual General Meeting today at 11.30am.
"I am pleased to announce that we have made a profit, ahead of our plan, in the first quarter of the current financial year which continues the improvement that resulted in a profit in the last quarter of the previous financial year. The strategy we adopted last year to deal with an unprecedented decline in our market has turned last year's losses into profits in two successive quarters.
Our new car sales in the quarter to June were down 3% against a reported fall of 13.7% in the private and business market. Improved effectiveness of our marketing to both new and existing customers, allied to enhanced design of our internet site and also good use of the Government's scrappage scheme, have resulted in this improvement in our market share. In July, our new car sales are over 40% up on last year. We have new car orders in hand for delivery in the new registration month of September which are double the level at this time last year.
We continue to make good progress selling used cars and unit sales are up 17% on a like for like basis in the quarter to June and gross profit margins are significantly improved. Used car prices have remained strong partly due to a shortage of supply and we have also significantly strengthened the effectiveness of our supply chain management.
Management of working capital has resulted in lower levels of new and used car stocks and we have achieved a stock turn rate for used cars which is significantly better than the national average.
The cost reduction programme which was a crucial element of our overall strategy has continued and costs in the quarter to June are £0.7m lower than in the previous year and we are on track to deliver an annual saving in excess of £2.5m.
The outlook remains challenging but we will continue to focus on our 7 point strategy as follows:
Improve sales performance, concentrating on lower priced and fuel efficient vehicles with increased focus on used vehicles
Enhance margins through marketing innovation and improved use of internet
Reduce costs through closure of underperforming branches and reduction in staff numbers
Reduce stocks and increase stock turnover
Reduce future capital expenditure
Allocate franchises to facilities to maximise profits
Negotiate with manufacturers to set lower sales and bonus targets
The Board has noted the announcement made yesterday by London Trust Limited commenting on the Company's performance, capital structure and strategy. The Board strongly rejects these comments and continues to seek to deliver value for all shareholders during these difficult times.
We are encouraged by the progress we have made in executing our strategy and the Company is now in a strong position to benefit even further as the economy recovers from the current recession."
Enquiries:
Caffyns plc Simon Caffyn, Chief Executive Tel: 01323 730201
Mark Harrison, Finance Director
The HeadLand Consultancy Howard Lee Tel: 0207 367 5225