Final Results

Caffyns PLC
31 May 2001


Preliminary Announcement
For the year ended 31 March 2001


Chairman's Review

Results from ongoing trading operations can be considered satisfactory in a
difficult trading climate. However, our net operating profit has been affected
this year by two adverse sets of events. Firstly, we suffered losses (£800,000)
as a result of flooding at our two branches in Lewes together with our branch in
Uckfield; losses which we were advised by our auditors at the time of
publication of our half yearly figures should be treated as extraordinary, but
now have to be shown as an exceptional charge. Secondly, we are making full
provision at the year end for losses likely to arise in the future from
guaranteed repurchase values given on cars sold on contract hire.
However, against that we have a surplus on sale of properties. All in all,
therefore, I feel that the management and staff have performed well and are to
be congratulated.

The year saw the retirement of Mr. Robert and Mr. Anthony Caffyn. Both have
served the company loyally over many years, Robert in charge of our financial
affairs and Anthony the after sales operations. Both have been instrumental in
introducing new ideas and practices into our business that has allowed us to
remain in the forefront of the retail motor trade. I thank them for their
immense contributions and wish them happiness in retirement. Robert is
remaining on the board whilst Anthony has been appointed a consultant to the
company.

As with last year I feel that it is sensible for the chief executive to
present a more detailed report of the year's activities. As for the future
there remains much uncertainty, particularly the outcome of the Block
Exemption debate and the subsequent reactions of the car manufacturers with
whom we deal. We have already seen Mercedes reveal their radical ideas for the
future. They may of course be right but history suggests otherwise.

Finally, an interim dividend of 5.5p per ordinary share was paid on the 16
January. A final dividend of 9.5p, the same as last year, is now being
recommended which, if approved, will be payable on 25 July 2001 to
shareholders on the register on 6 July 2001.



A M CAFFYN
Chairman

31 May 2001



Chief Executive's Review

Results

The year ending 31 March 2001 has been an exceptionally difficult one for the
motor industry and, consequently, I am very pleased to report an improved
profit of £2.515m on our continuing operations.

Unfortunately we have been adversely affected by the Competition Commission's
Report and its affect on residual prices together with unprecedented levels of
flooding affecting three of our sites. These extraordinary events, outside of
our control, have reduced our profit before tax to £1.09m.

Competition Commission

Following the publication of the Competition Commission's review of the Motor
Industry, new car enquiry levels remained low as customers continued to delay
buying decisions as Manufacturers began to reduce prices. Confidence in the
market did not return until January 2001 when prices had stabilised at about
10-12% below peak levels.

We are delighted to see this overall reduction in new car prices but in the
short term this has had a detrimental effect on residual values of used cars.
It is well known that this has produced large write-downs (losses) in contract
hire fleets and ours, Caffyns Motor Contracts (CMC), is no exception. We have
decided to close CMC to new business, as although the division has produced
healthy profits in the past, the fleet size is insufficient to compete with
the large operations who are becoming dominant.


Preliminary Announcement
For the year ended 31 March 2001



Chief Executive's Review (continued)

We continue to maintain existing customer contracts but this year's profits
include a charge for anticipated losses on disposal of the vehicles at end of
contract.

Block Exemption

I am encouraged that discussions with both Manufacturers and the Department of
Trade and Industry are progressing in a very positive manner. No decisions
have yet been made on future regulation after Block Exemption expires in
September 2002, but it seems that these may be to our overall benefit.

Floods

In October 2000 we were greatly damaged by unprecedented levels of flooding in
Lewes and Uckfield. It is to the credit of our staff in these sites that we
re-opened for business so quickly and consequently mitigated some of the
losses.

Franchises and Premises

In September we opened our new Vauxhall dealership in Ashford on the Orbital
Park site near the International Railway Station. This is also the location of
our Skoda dealership and both are enjoying success in the growing Ashford
economy.

We have had a very successful year with Volkswagen in Worthing following our
major redevelopment of the site and have agreed with them to merge our Lewes
operation with our dealership in Haywards Heath.

In Sevenoaks our new Peugeot showroom is nearing completion and we will then
have an excellent facility in a prime location.

In Brighton we have redeveloped our after sales facilities at our Audi
dealership and at the same time managed to produce an outstanding result.

In Eastbourne we have had three major projects. The first was to refurbish our
Rover dealership, which along with some of our other Rover sites produced a
very good result for the year.

Jaguar have expanded their model range with the introduction of the X-Type
and, recognising the increased opportunity, we have extended our showroom
facilities in our Meads Road site. I believe that the X-Type will be a great
success for Jaguar.

Thirdly we acquired the Volvo franchise for Eastbourne and now represent three
of Fords Premier Automotive Group's marques for this territory, namely Jaguar,
Land Rover, and Volvo. Already Volvo has made a significant contribution to
the group.

During the year we sold premises in Canterbury, Crowborough, and Heathfield at
a premium to book value. Customers of Crowborough and Heathfield have been
able to use our facilities in nearby Uckfield and Tunbridge Wells. We have
also sold our remaining stand-alone petrol forecourts and now only offer
petrol sales on three dealership sites.

As I mentioned above, our MG Rover businesses continue to do well and the
Phoenix consortium are to be congratulated on their performance. MG Rover have
proved resilient and made themselves far more attractive to a joint venture
partner than had been expected.

Mercedes have surprised the industry by issuing their entire dealer network
one year's notice of termination. Their intention is to appoint only a small
core of dealers. The dealer body is taking legal action and we await the
outcome of the trial in July 2001.





Preliminary Announcement
For the year ended 31 March 2001

Chief Executive's Review (continued)


Pensions

Following the abolition of ACT relief on pension fund investments, there has
been much talk about the increasing cost of providing pensions, in particular
company final salary schemes. We have reviewed our own scheme and, on the
advice of our actuaries, we have made some modifications to contribution and
benefit rates. We are satisfied that we have taken sufficient action at the
present time.

Technology

We have extended our successful relationship with our software suppliers and
continue to enjoy the benefits of a group-wide dealer management system.

Our website caffyns.co.uk continues to provide us with strong enquiries on
sales as well as other services such as warranty and insurance. We are
extending our use of this medium to provide intranet company communications.

People

After more than 40 years service with the company, Anthony Caffyn retired as
joint managing director in February this year. Under Anthony's guidance, the
after sales operations of the company have flourished. In particular, his
innovative Flexi fixed price servicing and repair programme for cars outside
manufacturers warranty period has been consistently successful in retaining
customers in our service departments.

Anthony will remain close to the company as a consultant and we wish him a
long and happy retirement.

I would like also to thank our non-executive directors and professional
advisors for their advice and support during a challenging year.

The Future

I began by reporting our strong underlying performance in our continuing
operations. This is again a testament to the hard work, commitment, and
loyalty of our staff and I am grateful to them for their efforts, particularly
those involved in the recovery of the flood affected branches.

Our ongoing management development training continues to pay dividends and
together with our strategy of concentrating our resources with our more
successful franchises, I am very confident that we will take full advantage of
the more beneficial trading conditions.


S G M CAFFYN
Chief Executive

31 May 2001




Preliminary Announcement 
For the year ended 31 March 2001 
Consolidated Profit and Loss Account 
                                                                              
                     Continuing Acquisition Discontinued
                Note operations               operations     Total       Total
                           2001        2001         2001      2001        2000
                          £'000       £'000        £'000     £'000       £'000

  Turnover             139,062         938        3,401    143,401    147,305 

  Cost of             (119,946)       (775)      (3,589)  (124,310)  (126,586)
  sales                                                                       
  Exceptional      2     (800)           -        (785)    (1,585)          - 
  items                                                                       
  Total cost          (120,746)      (775)      (4,374)   (125,895)  (126,586)
  of sales                                                                    

  Gross                  18,316         163        (973)    17,506      20,719
  profit/(loss)                                                               
                                                                              
  Other                (16,240)       (138)        (375)   (16,753)   (17,877) 
  operating                                                                   
  charges                                                                     

  Operating               2,076          25      (1,348)       753       2,842
  profit                                                                      

  Exceptional      2     1,039           -        (100)        939          5 
  items                                                                       

  Profit on               3,115          25      (1,448)     1,692       2,847
  ordinary                                                                    
  activities before                                                             
  interest                                                                    

  Interest               (600)           -            -      (600)      (696) 
  payable                                                                     

  Profit on               2,515          25      (1,448)     1,092       2,151
  ordinary                                                                    
  activities                                                                  
  before taxation                                                               
    
  Taxation         3                                            36       (345) 

  Profit on                                                  1,128       1,806
  ordinary                                                                    
  activities                                                                  
  after                                                                       
  taxation                                                                    

  Dividends        4                                         (611)       (601) 
  (equity and                                                                 
  non-equity)                                                                 

  Retained                                                     517       1,205
  profit                                                                      
                                                                              
  Earnings per     5                                                          
  ordinary                                                                    
  share                                                                       
  Basic                                                      30.6p       51.3p
  Adjusted                                                   52.1p       51.3p
  Diluted                                                    30.6p       50.7p

  Note of                                                                     
  Historical                                                                  
  Cost Profits                                                                
  and Losses                                                                  

  Reported                                                   1,092       2,151
  profit on                                                                   
  ordinary                                                                    
  activities                                                                  
  before                                                                      
  taxation                                                                    

  Realisation                                                1,111        163 
  of property                                                                 
  revaluation                                                                 
  surpluses                                                                   

  Historical                                                 2,203      2,314 
  cost profit                                                                 
  on ordinary                                                                 
  activities                                                                  
  before                                                                      
  taxation                                                                    

  Historical                                                                  
  cost profit                                                                 
  for the year                                                                
  retained                                                                    
  after                                                                       
  taxation,                                                                   
  and dividends                                              1,628      1,368 


There were no recognised gains or losses other than the profit for the
financial year.




Preliminary Announcement
For the year ended 31 March 2001
Consolidated Balance Sheet at 31 March 2001

                                                   Note      2001        2000
                                                            £'000       £'000
   Fixed Assets                                                              
   Intangible assets                                           24          -
   Tangible assets                                         25,022     24,077
   Investments                                                 -           -  
                                                           25,046     24,077 
   Current Assets                                                            
   Stocks                                                  22,096     21,647
   Debtors                                                  6,262      5,895 
                                                           28,358     27,542 
   Creditors                                                                 
   Amounts falling due within one year                    (23,179)   (22,353)
   Net Current Assets                                       5,179      5,189 

   Total Assets Less Current Liabilities                   30,225     29,266

   Creditors                                                                 
   Amounts falling due after more than one year           (4,427)     (4,937)

   Provisions for liabilities and charges                   (960)       (150) 
                                                           24,838     24,179 

   Capital and Reserves                                                      
   Called up share capital                                  2,935      2,899
   Share premium account                                      164         58
   Revaluation reserve                                      4,308      5,419
   Profit and loss account                                 17,431     15,803 
                                                           24,838     24,179 
   Equity shareholders' funds                              23,601     22,942
   Non-equity shareholders' funds                           1,237      1,237 
   Total shareholders' funds                      6        24,838     24,179 



The financial statements were approved by the Board of Directors on 31 May
2001



Preliminary Announcement
For the year ended 31st March 2001
Consolidated Cash Flow Statement for the year ended 31 March 2001

                              Note                  2001                  2000
                                        £'000      £'000      £'000      £'000
  Net cash inflow from                                                        
  operating                                                                   
  activities                      7                1,975                 6,966

  Returns on investment                                                       
  and servicing of finance                                                      
  Interest paid                         (600)                 (696)           
  Preference dividends paid             (102)                 (98)            
                                                   (702)                 (794)

  Taxation                                                                    
  UK Corporation tax paid                          (353)                 (302)

  Capital expenditure                                                         
  Purchase of tangible                (3,524)               (1,582)           
  fixed assets                                                                
  Closure costs                         (260)                  (82)           
  Sale of tangible fixed                4,024                  267            
  assets                                                                      
                                                     240               (1,397)

  Acquisitions                                   (1,590)                    -

  Equity dividends paid                            (502)                 (483) 

  Cash (outflow)/inflow                            (932)                3,990
  before financing                                                            

  Financing                                                                   
  Capital element of                    (118)                 (104)           
  finance leases                                                              
  Issue of shares                         142                     7           
  Loan repayments                       (500)               (3,498)           
  Loan advance                          1,000                   -             
  Net cash                                           524               (3,595) 
  inflow/(outflow) from                                                       
  financing                                                                   

  (Decrease)/increase in        8,9                (408)                  395 
  cash                                                                        
 
 

Notes to the Preliminary Announcement for the year ended 31 March 2001

1      Basis of preparation


This preliminary statement which does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985, has been extracted from the
statutory financial statements of the company for the year ended 31 March 2001
on which the auditors issued an unqualified audit opinion on 31 May 2001.
These financial statements have not yet been delivered to the Registrar of
Companies.



The financial statements have been prepared using accounting policies which
are consistent with previous years.



2.     Exceptional items
                                                               2001     2000
                                                              £'000    £'000

       Exceptional items - flood losses                         800        - 
                         - Caffyns Motor Contracts              785        - 
                                                              1,585        - 
 


The exceptional item for flood losses relates to the losses arising on the flood
damage at three of the company's branches.



The provision of £785,000 on the cessation of  Caffyns Motor Contracts ('CMC')
relates to the difference between the forecast residual values of vehicles and
the residual amounts that the company has guaranteed to pay for the vehicles. It
is anticipated that the provision will be utilised over a period of not more
than 3 years from 31 March 2001.


      Arising in respect of branch closures:                 2001      2000
                                                            £'000     £'000

      Net profits on disposal of tangible fixed assets     1,199        87
      Closure costs                                         (260)      (82) 
                                                             939         5 


The closure costs and profit on disposals related to the surplus on and related
costs incurred as a result of disposing of five branches in the year and the
estimated costs of closure of CMC. The effect on the taxation credit for the
current year of the exceptional items recognised below operating profit is
disclosed in note 3.


3.    Taxation

The Group's UK corporation tax charge has been reduced by £ 78,000 (2000 -
£25,000) as a result of the exceptional costs (note 2). There is no corporation
tax charge arising on the exceptional profit due to the availability of
roll-over relief and indexation.



Notes to the Preliminary Announcement for the year ended 31 March 2001



4.     Dividends
                                                           2001      2000
                                                          £'000     £'000
       Non equity                                                        
       Preference                                                        
       6.5% Cumulative First Preference                     25         25
       6.0% Cumulative Second Preference                    12         12
       10% Cumulative Preference                            65         65 
                                                           102        102 
       Equity                                                            
       Ordinary                                                          
       Interim dividend paid of 5.5p (2000 - 5.5p)         186        183
       Final dividend proposed of 9.5p (2000 - 9.5p)       323        316 
                                                           509        499 
       Total                                               611        601 


5.     Earnings per ordinary share

The calculation of the basic earnings per share is based on  the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year. Shares held in employee share schemes are
treated as cancelled for the purposes of this calculation.

The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends and/or interest, on the assumed conversion of all dilutive options and
other dilutive potential ordinary shares.

Reconciliations of earnings and weighted average number of shares used in the
calculations are set out below.

                                          2001                            2000
                             Number   Earnings               Number   Earnings
                                of                               of           
                Earnings    shares   per share    Earnings   shares  per share
                   £'000      '000                   £'000     '000           

  Profit on         1,026                           1,704                     
  ordinary                                                                    
  activities                                                                  
  after                                                                       
  taxation                                                                    
  and preference                                                                
  dividends                                                                   

  Weighted                                                                    
  average                                                                     
  number of                                                                   
  shares                      3,350                          3,322            

  Basic                                  30.6p                          51.3p 
  earnings                                                                    
  per share                                                                   

  Profit on                                                                   
  ordinary                                                                    
  activities                                                                  
  after                                                                       
  taxation                                                                    
  and preference                                                                
  dividends         1,026                            1,704                     

  Add :               800                                -                    
  Exceptional                                                                 
  item (see                                                                   
  note 2)                                                                     

  Less: Tax          (80)                                -                     
  relief                                                                      
                    1,746                            1,704                     
  Weighted                                                                    
  average                                                                     
  number of                                                                   
  shares                      3,350                           3,322           

  Adjusted                               52.1p                          51.3p 
  earnings                                                                    
  per share                                                                   

  Number of                      51                             133           
  shares                                                                      
  under                                                                       
  option                                                                      

  Number of                                                                   
  shares                                                                      
  that would                                                                  
  have                                                                        
  been                         (48)                            (95)            
  issued at                                                                   
  average                                                                     
  market                                                                      
  value                                                                       

  Diluted          1,026     3,353       30.6p       1,704    3,360     50.7p 
  earnings                                                                    
  per share                                                                   
 


Notes to the Preliminary Announcement for the year ended 31 March 2001



6.  Reconciliation of  movements in shareholders' funds

                                                     2001               2000
                                          £'000     £'000    £'000     £'000

    Profit for the financial year                   1,128              1,806
    Dividends                                        (611)              (601) 
                                                      517              1,205
    Equity shares issued in year                      142                  7 
    Net increase in shareholders funds                659              1,212
    Brought forward at 1 April                     24,179             22,967 
    Carried forward at 31 March                    24,838             24,179 
                                                                 
    Shareholders' Funds are attributable 
    as follows: 
    Equity interests                               23,601             22,942
    Non-equity interests                                                        
    6.5% Cumulative First Preference shares   389               389          
    of £1 each                                                                  
    10% Cumulative Preference shares of £1    648               648          
    each                                                                        
    6% Cumulative Second Preference shares    200               200           
    of 10p each                                                                 
  
                                                    1,237              1,237 
                                                   24,838             24,179 


7.   Reconciliation of operating profit to net cash inflow
     from operating activities:


                                                             2001      2000
                                                            £'000     £'000
      Operating profit                                        753     2,842
      Depreciation charge                                     921       894
      Amortisation of goodwill                                  1         -
      Loss on sale of tangible fixed assets                     -        19
      Decrease in stocks                                        9       894
      (Increase)/decrease in debtors                        (275)     2,535
      Decrease in creditors                                 (169)     (218)
      Increase in provisions for liabilities and charges      735         - 
      Net cash inflow from operating activities             1,975     6,966 



8.    Reconciliation of net cash flow to movement in net debt

                                                              2001        2000
                                                             £'000       £'000

  (Decrease)/increase in cash in the year                    (408)         395
  Movement in loans                                          (500)       3,498
  Cash outflow from capital repayments of finance leases       118         104 
  Movement in net debt in the year                           (790)       3,997
  Net debt at 1 April                                      (5,735)      (9,732) 
  Net debt at 31 March                                     (6,525)      (5,735) 
 


Notes to the Preliminary Announcement for the year ended 31 March 2001


9.   Analysis of net debt

                                                At                          At
                                     31 March 2001    Cashflow    1 April 2000
                                             £'000       £'000           £'000

  Overdrafts                                 3,219         408           2,811 

  Debt falling due within 1 year             1,000        (500)          1,500
  Debt falling due after more                2,000       1,000           1,000
  than 1 year                                                                 
  Finance leases                               306        (118)            424 
                                             3,306          382          2,924 

  Total                                      6,525          790          5,735