Caffyns' profits creep up as emissions tests damage sales

Half-year profits at Caffyns crept up despite revenue inching lower as new car sales were hampered by supply disruption.

For the six month period ended 30 September the new and used vehicle retailer’s profit before tax increased to £0.7m, a 3% increase over the same period the previous year, while revenue dropped by 1% to £105m.

Used car sales rose by 6.7% and aftersales saw a 9% rise but a 10% drop in new car sales following supply issues.

The London-listed outfit blamed disruption to supply of new vehicles on a new emissions-testing regime, known as the worldwide harmonised light vehicle test procedure, which was introduced by the government in September.

Non-underlying costs also damaged profits, rising to £0.5m from £0.1m a year before due to property impairments and pension scheme costs.

Simon Caffyn, chief executive of Caffyns, said: "Despite a weak marketplace for the bi-annual registration plate change in September, the current industry consensus for the 2018 calendar year is for no more than a single-digit fall in the UK new car market, so we are cautiously optimistic about the outlook."

Cash and cash equivalents at 30 September stood at £2.3m, up from £0.3m at the same point last year, while the company opted to hold steady with its interim dividend remaining at 7.5p per share.

"Our full year outcome will remain dependent on the success of the next bi-annual registration plate change in March 2019 as well as on the wider challenges to the UK economy from uncertainty surrounding the finalisation of the Brexit process," said Caffyn.

Caffyns’ shares were unchanged at 405.00p at 1141 GMT.