Caffyns Regulatory News (CFYN)

15 Apr 2005 15:42

Caffyns PLC15 April 2005 Caffyns plc ("the Company") Statement - MG Rover Following the appointment of administrators to MG Rover Group Limited ("MGRover"), the Board considers that an exceptional charge will need to be made inthe Company's financial statements for the year ended 31 March 2005. The Company trades from eight locations with this franchise. Turnover generatedfrom MG Rover dealerships of the Company in the six months ended 30 September2004 was £15.8m and operating profit was £355,000. At 31 March 2005, the Companyhad stocks of MG Rover new and used vehicles amounting to approximately £3.6m(including £1.5m consignment stock) representing 16% of the Company's totalvehicle stock. The branch in Tunbridge Wells will continue to operate under the Vauxhallfranchise which is already in place at these premises. The MG Rover branches inEastbourne, Brighton and Worthing are in the process of being re-franchised. Thebranches in Lewes and Uckfield will continue to trade as used car andafter-sales operations. The alternatives available to the Company with regard to the dealerships inSeaford and Ramsgate are currently being considered. The Company was owed £54,000 by MG Rover at 31 March 2005. In addition, furtherexceptional charges may be required against the value of the Company's vehiclestocks noted above, as well as warranty obligations which may no longer befunded by MG Rover. The full costs of the provisions necessary are likely tohave become clear by the time the preliminary announcement of the Company'sresults for the year ended 31 March 2005 is made on 27 May 2005. Simon Caffyn, Chief Executive of Caffyns said: "Since the mid 1990's, in line with MG Rover's declining market share, we havetaken action to reduce our exposure from 21 MG Rover dealerships to eight.Similarly, we have in recent months taken steps to reduce our exposure to MGRover vehicle stocks. We have priced our stock attractively and demand for thesevehicles is strong. Whilst there will be some disruption, our actions over the last few years andour swift response to the current situation has ensured that this is kept to aminimum. Our move away from MG Rover and our increasing representation of strongand successful franchises, will improve the core structure of the Company inline with our strategic plan." For further information: Simon Caffyn, Chief Executive, Caffyns plcMark Harrison, Finance Director, Caffyns plc01323 730201 This information is provided by RNS The company news service from the London Stock Exchange