Caffyns Regulatory News (CFYN)

23 Nov 2007 07:30

Caffyns PLC23 November 2007 INTERIM RESULTS for the half year ended 30 September 2007 2007 2006 £'000 £'000 Turnover 94,991 85,484 Operating profit before exceptional items 1,378 1,213 Underlying profit before tax 759 643 Exceptional items 2,826 186 Profit before tax 3,585 829 Earnings per share 95.1p 19.6p Underlying earnings per share 26.4p 15.0p Interim dividend per share 8.0p 8.0p CHAIRMAN'S STATEMENT Results In the six months to September 2007 turnover increased from £85.5m to £95.0m.Profit before tax and exceptional items is also ahead of last year at £759,000against £643,000. Profit before tax after exceptional items is significantly upto £3,585,000 from £829,000 last year. This substantial increase was largely theresult of a repayment for overpaid VAT. Recovery and Development We are now half way into our three year recovery programme and, considering theinflationary pressures on consumers of higher interest rates and fuel costs, itis encouraging to see a substantial increase in turnover. Significant investmenthas been made in our franchised dealerships and growth in turnover will in timebe followed by an improvement in performance. In Brighton we are refurbishing our Audi Centre to enlarge the showroom andservice bay capacity to cater for the success of Audi's expanding model range.To accommodate this expansion, the bodyshop business has been closed and we arerefurbishing the bodyshop facility in Hailsham to enable us to continue toprovide this service for all our Volkswagen and Audi customers. VAT In March 2007 we announced that we had received £3.0m from HM Revenue & Customsin respect of a claim relating to VAT overpaid on demonstrator vehicle bonuses.The amount received comprised the claim of £1.4m and interest of £1.6m. There was uncertainty relating to the retention by the Company of the moniesreceived pending the outcome of a case due to be heard in the House of Lordslater this year. Following a change of view by HMRC, confirmation was receivedin July that the monies can be retained by the Company and that their retentionwas no longer dependent upon the outcome of this case. The monies received (less professional costs incurred) amounting to £2.9m havebeen treated as exceptional income in the Company's Income Statement for thehalf-year ended 30 September 2007. Property We announced in June 2007 that we have exchanged contracts for the sale of ourvacant freehold site in Hove, Sussex, conditional upon planning, for £4.5m. Theplanning application has been submitted to the local authority and we now awaitthe outcome. In June we also exchanged contracts for the sale of our vacant freehold site inWorthing, Sussex, conditional upon demolition of the existing building andenvironmental remediation of the site which it is hoped will be completed by theend of our financial year. The consideration of £1.1m is due when theseconditions have been satisfied. Developments since the period end On 19 November, we announced the sale of our vacant freehold site in EastGrinstead, Sussex, conditional upon the granting of an acceptable planningpermission, with the consideration of £3.1m being payable two weeks after thiscondition is satisfied. The net book value of the property in the company'saccounts is £656,000. The Future Whilst it is encouraging to see good growth in our turnover, pressures onmargins caused by external economic and competitive factors continue to restrictimprovements in profits. Recent announcements on the rate of inflation, togetherwith indications that house prices have levelled off and are now possiblyfalling, will continue to influence retail demand in the short term. The underlying position of the Company is fundamentally strong, allowing us tobuild our businesses and to look forward to a further improved performance whenthe economy returns to a more stable level. Your Directors have agreed to an unchanged interim dividend of 8.0p per ordinaryshare. This will be paid on 9 January 2008 to shareholders on the register at5.00pm on 7 December 2007. Brian A CarteChairman23 November 2007 CONSOLIDATED INCOME STATEMENTfor the half year ended 30 September 2007 Note Half year to Half year to Year to 30 September 30 September 31 March 2007 2007 2006 £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Revenue 94,991 85,484 176,238 ------ ------ ------ ------ ------ ------ Operating profit Before exceptionalitems 1,378 1,213 2,515 Exceptional items 2 1,226 186 160 ------ ------ ------ ------ ------ ------ Total operatingprofit 2,604 1,399 2,675 Interest receivable 2 1,600 - - Finance costs (619) (570) (1,232) ------ ------ ------ ------ ------ ------ Profit before tax From normaltrading operations 759 643 1,283 Arising fromexceptional items 2 2,826 186 160 ------ ------ ------ ------ ------ ------ 3,585 829 1,443 ------ ------ ------ ------ ------ ------ Tax On normal tradingoperations - (211) (232) On exceptionalitems 2 (848) (54) (48) ------ ------ ------ ------ ------ ------ 3 (848) (265) (280) ------ ------ ------ ------ ------ ------ Profit for theperiod 6 2,737 564 1,163 ------ ------ ------ ------ ------ ------ Earnings per share 4 95.1p 19.6p 40.4p ------ ------ ------ ------ ------ ------ Dividend perordinary share 5 8.0p 8.0p 25.0p ------ ------ ------ ------ ------ ------ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEfor the half year ended 30 September 2007 Half year to Half year to Year to 30 September 30 September 31 March 2007 2007 2006 £'000 £'000 £'000 Profit for the period 2,737 564 1,163 Actuarialgains/(losses)recognised in definedbenefit pensionscheme 2,003 (2,690) 3,134 Deferred tax onactuarialgains/(losses) (554) 807 (940) ----------- ----------- ----------- Total recognisedincome/(expense) forthe period 4,186 (1,319) 3,357 ----------- ----------- ----------- CONSOLIDATED BALANCE SHEETat 30 September 2007 Note 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 Non-current assets Goodwill 481 481 481Intangible assets 20 43 31Property, plant and equipment 31,480 31,549 31,610Retirement benefit scheme 2,610 - 344Deferred tax asset 593 2,668 1,160 --------- --------- --------- Total non-current assets 35,184 34,741 33,626 --------- --------- --------- Current assets Inventories 25,234 23,965 23,846Trade and other receivables 7,699 8,999 9,047Cash and cash equivalents 14 62 35Non-current assets held forsale 990 1,645 990 --------- --------- --------- Total current assets 33,937 34,671 33,918 --------- --------- --------- Total assets 69,121 69,412 67,544 --------- --------- --------- Current liabilities Bank overdrafts and loans 8,358 11,309 6,797Trade and other payables 20,151 20,814 21,575Tax liabilities 696 159 230Obligations under financeleases 29 29 29Short-term provisions 125 276 3,203 --------- --------- --------- Total current liabilities 29,359 32,587 31,834 --------- --------- --------- Net current assets 4,578 2,084 2,084 --------- --------- --------- Non-current liabilities Bank loans 3,000 3,000 3,000Preference shares 1,237 1,237 1,237Retirement benefit obligation - 5,725 -Deferred tax liabilities 3,746 2,139 3,378Obligations under financeleases 37 63 50 --------- --------- --------- Total non-current liabilities 8,020 12,164 7,665 --------- --------- --------- Total liabilities 37,379 44,751 39,499 --------- --------- --------- Net assets 31,742 24,661 28,045 --------- --------- --------- EQUITY Share capital 1,439 1,439 1,439Share premium account 272 272 272Capital redemption reserve 282 282 282Non-distributable reserve 3,915 3,961 3,915Retained earnings 6 25,834 18,707 22,137 --------- --------- --------- Total equity 31,742 24,661 28,045 --------- --------- --------- CONSOLIDATED CASH FLOW STATEMENTfor the half year ended 30 September 2007 Half year ended Half year ended Year ended 30 September 30 September 31 March 2007 2007 2006 £'000 £'000 £'000 Cash flows from operatingactivities Profit before taxation 3,585 829 1,443 Adjustments for: Interest receivable (1,600) - - Finance costs 619 570 1,232 ----------- ----------- ----------- Operating profit 2,604 1,399 2,675 Adjustments for: Depreciation andamortisation 718 700 1,450 Negative goodwillreceived - (186) (186) Loss/(profit) ondisposal of property,plant and equipment 11 - (600) (Decrease)/increase inprovisions (1,478) (65) 2,862 ----------- ----------- ----------- Operating cash flowsbefore movements inworking capital 1,855 1,848 6,201 Movements in workingcapital (1,728) (2,982) (925) ----------- ----------- ----------- Cashgenerated/(absorbed)by operations 127 (1,134) 5,276 Income taxes received - 158 151 Net interest paid (619) (570) (1,225) ----------- ----------- ----------- Net cash (usedin)/from operatingactivities (492) (1,546) 4,202 ----------- ----------- ----------- Investing activities Proceeds on disposalof property, plant andequipment 26 1,476 1,351 Purchases of property,plant and equipment (614) (2,584) (3,479) Acquisition ofbusiness - (176) (176) ----------- ----------- ----------- Net cash used ininvesting activities (588) (1,284) (2,304) ----------- ----------- ----------- Financing activities Dividends paid (489) (461) (691) Repayments ofobligations underfinance leases (13) (14) (27) ----------- ----------- ----------- Net cash used infinancing activities (502) (475) (718) ----------- ----------- ----------- Net(increase)/decrease incash and cashequivalents (1,582) (3,305) 1,180 Cash and cashequivalents atbeginning of period (6,762) (7,942) (7,942) ----------- ----------- ----------- Cash and cashequivalents at end ofperiod (8,344) (11,247) (6,762) ----------- ----------- ----------- NOTES TO THE INTERIM RESULTSfor the half-year ended 30 September 2007 1. BASIS OF PREPARATION The interim financial statements for the half year to 30 September 2007 areunaudited and have been prepared under International Financial ReportingStandards (IFRS) in accordance with the accounting policies set out in theAnnual Report for 2007. The figures for the year ended 31 March 2007 have beenextracted from the statutory accounts, filed with the Registrar of Companies onwhich the auditors gave an unqualified opinion. These interim financialstatements have been reviewed by the Company's auditors. A copy of their reviewreport is set out at the end of these statements. These interim statements comply with IAS 34 'Interim Financial Reporting' andwere approved by the Directors on 23 November 2007. 2. EXCEPTIONAL ITEMS Half year to Half year to Year to 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 VAT refund (net of costs) ondemonstrator vehicle bonuses in theperiod 1973 to 1997 1,310 - - Reverse goodwill received onacquisition (net of costs) - 186 186 Net (loss)/profit on disposal ofproperty, plant and equipment (11) - 600 Restructuring costs arising frombranch closures (73) - (626) ---------- ---------- ---------- 1,226 186 160 Interest received on VAT refund 1,600 - - ---------- ---------- ---------- 2,826 186 160 Less: tax thereon (848) (54) (48) ---------- ---------- ---------- 1,978 132 112 ---------- ---------- ---------- 3. TAXATION Half year to Half year to Year to 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 Current UK corporation tax at 30% Charge for the period 1,033 219 85 Advance corporation tax recovered (567) (31) - Adjustments in respect of prior years - - 180 ---------- ---------- ---------- Total corporation tax 466 188 265 Deferred tax at 28% (2006 - 30%) Origination and reversal of timingdifferences 601 77 136 Adjustment due to change in rate ofcorporation tax (219) - - Adjustments in respect of prior years - - (121) ---------- ---------- ---------- 848 265 280 ---------- ---------- ---------- Taxation for the half year has been provided at the effective rate of taxationexpected to apply to the whole year on ordinary trading. The tax charge on theprofit arising from normal trading operations amounting to £219,000 has beenreduced to nil as a result of the reduction in the rate of tax applicable to thedeferred tax account. Tax on exceptional items is provided at the actual rateapplicable. 4. EARNINGS PER SHARE Half year to Half year to Year to 30 September 30 September 31 MarchBasic 2007 2006 2007 £'000 £'000 £'000 Profit before tax 3,585 829 1,443 Taxation (848) (265) (280) ---------- ---------- ---------- Earnings 2,737 564 1,163 ---------- ---------- ---------- Earnings per share 95.1p 19.6p 40.4p ---------- ---------- ---------- Half year to Half year to Year to 30 September 30 September 31 MarchUnderlying 2007 2006 2007 £'000 £'000 £'000 Profit before tax 3,585 829 1,443 Adjustments: Exceptional items (Note 2) (2,826) (186) (160) ---------- ---------- ---------- Underlying profit before tax 759 643 1,283 Taxation - (211) (232) ---------- ---------- ---------- Underlying earnings 759 432 1,051 ---------- ---------- ---------- Earnings per share 26.4p 15.0p 36.5p ---------- ---------- ---------- The number of ordinary shares in issue during each period was 2,879,298. 5. DIVIDENDS Ordinary shares of 50p each The interim dividend proposed at the rate of 8.0p per share (2006: 8.0p) ispayable on 9 January 2008 to shareholders on the register at the close ofbusiness on 7 December 2007. The shares will be marked ex-dividend on 5 December2007. Preference shares Preference dividends have been paid in October 2007. The next preferencedividends are payable in April 2008. The cost of the preference dividends hasbeen included within finance costs. 6. RETAINED EARNINGS Half year to Half year to Year to 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 At the beginning of period 22,137 20,477 20,477 Prior year adjustment - - (1,062) ---------- ---------- ---------- As restated 22,137 20,477 19,415 Net profit 2,737 564 1,163 Total recognised income and expensefor the period 1,449 (1,883) 2,194 Dividends paid (489) (461) (691) Transfer from revaluation reserve - 10 56 ---------- ---------- ---------- At end of period 25,834 18,707 22,137 ---------- ---------- ---------- INDEPENDENT REVIEW REPORT to Caffyns plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30September 2007 which comprises the consolidated income statement, consolidatedstatement of recognised income and expense, consolidated balance sheet,consolidated cash flow statement and the related notes. We have read the otherinformation contained in the half-yearly financial report and considered whetherit contains any apparent misstatements or material inconsistencies with theinformation in the condensed set of financial statements. This report is made solely to the company in accordance with guidance containedin APB Statements of Standards for Reporting Accountants "International Standardon Review Engagements (UK and Ireland) 2410". Our review work has beenundertaken so that we might state to the company those matters we are requiredto state to them in a review report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company for our review work, for this report, or for theconclusion we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, ''Interim Financial Reporting'' as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, ''Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity'' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. Grant Thornton UK LLPChartered AccountantsLondon23 November 2007 This information is provided by RNS The company news service from the London Stock Exchange