Final Results

RNS Number : 7947H

Caffyns PLC

03 June 2011

 



Caffyns plc

Preliminary results for the year ended 31 March 2011

3 June 2011

Caffyns plc, the automotive retailer covering nine car franchises in the south-east of England, announces its preliminary results for the year ended 31 March 2011.

Summary

	2011	2010
	£'000	£'000
Revenue	201,467	189,426
Adjusted EBITDA *	3,455	3,382
Adjusted operating profit *	2,311	2,152
Non-underlying items before tax	(1,167)	118
Adjusted profit before tax *	1,435	852
Profit before tax	268	970
Earnings per share	7.7p	38.6p
Adjusted earnings per share *	41.4p	35.7p
Final proposed dividend per share	7.0p	5.0p
* Adjusted for non-underlying items

Highlights

§ Revenue up 6.4% to £201.5m

§ Underlying profit before tax up by 68% to £1.44m

§ Adjusted earnings per share up by 16%

§ New car market share increased

§ Used car unit sales up by 7.1% on a like for like basis

§ Aftersales resilient with turnover increasing by 4.9% on a like for like basis

§ Ratio of net bank borrowings to equity of 40% (2010:  47%)

§ Seven non-strategic operations successfully closed

§ Proposed final dividend of 7.0p per ordinary share (2010: 5.0p) making 12.0p in total for the year (2010: 10.0p)

The Chief Executive, Simon Caffyn, commented:

"We are pleased to report a 6.4% rise in revenue to over £200m and a 68% rise in underlying profit before tax.  Our new car market share improved, used car sales rose by 7.1% and aftersales turnover was up 4.9% in a declining market and our concentration on improving operational processes in our core businesses is beginning to produce sustained profit improvement.

The major restructuring exercise has produced a more profitable core business with fewer, better businesses, improved gearing and market share.

Our strategy is to focus on premium and premium-volume franchises and we are now in a position to invest in new opportunities in these sectors.''

Enquiries:

Caffyns plc	Simon Caffyn, Chief Executive	Tel:	01323 730201
	Mark Harrison, Finance Director
The HeadLand Consultancy	Howard Lee Tom Gough	Tel:	0207 367 5225 or 5228

 

Operational Business Review 

Results

In the year to 31 March 2011 revenue has increased by 6.4% to £201.5m from £189.4m last year despite the sale or closure of seven sites during the year.  Like for like revenue is up by 8.5%.

Underlying profit before tax rose by 68% to £1.44m from £852,000 last year. The major restructuring of the Group is now largely completed incurring non-underlying costs of £1.17m during the year. These one-off costs reduced profit before tax to £268,000 from £970,000 last year.

Adjusted earnings per share increased to 41.4p (2010: 35.7p).  Basic earnings per share were 7.7p (2010: 38.6p).

Operating Review

During the year we successfully implemented our strategy of improving performance and efficiency across the core businesses. Seven underperforming operations were closed, central support services were reduced by £0.3m and productivity improved. 

The key achievements during the year to 31 March 2011 were:

-        Revenue growth of 6.4% with growth in ongoing businesses up 8.5%, despite the closure or sale of seven operations.

-        Underlying profit before tax up 68% to £1.44m from £852,000.  Core continuing businesses further improved profitability despite pressure on margins. 

-        Like for like new car unit sales down 5.5% against a fall of 16.5% in our market segment indicating an increase in market share.

-        Like for like used car unit sales up 7.1% against a flat market.

-        We have agreed plans with our strategic franchise partners to develop existing and new sites.

-        Seven non-strategic operations successfully closed allowing us to concentrate on key franchise partners.

-        In our remaining sites we continued to increase operational effectiveness through improvements to facilities, operational processes and significant investment in training and development.

In summary the major restructuring exercise has produced a more profitable core business with fewer, better businesses.

New and Used Cars

Total UK new car registrations fell 7% in the 12 month period to 31 March 2011 and were down 16.5% in the private and small business sector in which we operate.  Against this backdrop our like for like new car unit sales were down only 5.5% indicating a continuing increase in our market share.  Our premium and premium-volume franchises continue to perform well and new car margins have strengthened.

Like for like used car unit sales were up 7.1% compared to a generally flat market. However competitive pressures have reduced margins.

Aftersales

Annual new car registrations remain at levels well below pre-recession figures and we have seen a further reduction in the overall size of the zero to five year old car servicing market.

Despite this it is encouraging that we continue to increase our aftersales turnover with like for like sales up 4.9% as a result of our continued focus on customer retention.

Restructuring

During the year we closed or sold seven underperforming businesses, enabling us to focus attention on our core premium and premium-volume franchises. Since October 2008 we have reduced our representation from 15 manufacturers to nine and the number of businesses has reduced from 28 to 19.

In Uckfield we sold a small Citroën business to another local operator but retained the freehold on a maximum four year lease.  The aftersales operation in Hailsham has closed along with the bodyshop business.  We closed our Eastbourne Nissan and Chevrolet businesses which operated from a building constructed in the 1960s which was no longer fit for purpose.  We own the freeholds of both the Hailsham and Eastbourne sites and these are being marketed for sale.

Our Tunbridge Wells bodyshop has been closed which will allow us to expand the used car and service elements of the Vauxhall dealership on this site.

We have closed our small retail Ford dealership in Haslemere and consolidated operations into the larger site in Alton.  The freehold in Haslemere was sold in February for £475,000.

In April 2011 we also announced the unconditional sale of our premises in Sevenoaks.  The franchise agreements with Peugeot and Citroën expired at the end of May 2011 and a strong offer for the freehold fitted well with our overall strategy.  Funds of £1.75m were received on 31 May 2011.

In addition to these closures and sales we have further reduced central costs and branch administration costs on an annualised basis by over £300,000 p.a. 

These actions have resulted in significant non-underlying costs of £1.17m largely comprising redundancy and closure costs. These one-off costs are greater than anticipated at the time of the Interim Management Statement announced in February 2011 because further cost saving measures were taken prior to 31 March including additional redundancy charges. However, the overall cash flow has been positive following stock reduction and freehold sales. The funds generated by these actions will be invested in growing our remaining dealerships and in acquiring strategically aligned businesses as and when the appropriate opportunities arise.

Developments and Investments

In Lewes we have relocated our Land Rover aftersales business into a state-of-the-art facility and have started the building of a new showroom to give us greater new car space and a significantly enlarged used car display.

Our Volkswagen businesses will be expanded to meet the new Volkswagen corporate standards allowing us to grow our businesses in line with or ahead of Volkswagen's aspirations for enhanced market share by 2013.

Both Audi and Skoda are performing well and we have an opportunity to grow market share with their next generation of cars. 

Finance and Working Capital

Net bank borrowings reduced in the year by £1.4m to £8.1m representing 40% of shareholders' funds (2010: 47%).

The Group has available bank facilities comprising revolving credit facilities of £8m and overdraft facilities of £10m. A revolving credit facility of £3m as at 31 March 2011 was due for repayment in December 2011 and is thus shown as a current liability in the balance sheet. However, since the year end, the repayment date has been extended to May 2012 to coincide with the repayment date of the other revolving credit facility of £5m. Discussions have commenced with the company's bankers to renew both facilities beyond May 2012.

Vehicle stock levels at the year end were higher than normal largely due to higher used car stocks following the registration plate change in March. While the number of units increased by 5.0% over the previous year end, the average value per unit increased by 16.8% reflecting the move towards the premium and premium-volume sector. Since the year end, stock levels have reduced to more normal levels.

Property

Our property portfolio is an important aspect of our business and we operate primarily from freehold properties as well as some leasehold.

In addition to the property sale at Haslemere already mentioned, we also sold our vacant freehold site in East Grinstead for £1.0m receiving the proceeds in March 2011.

We now have four vacant freehold sites for potential sale, namely those in Upperton Road, Eastbourne, Hailsham, Goring-by-Sea and Preston Road, Brighton. As indicated, the first two sites closed in March 2011 and are currently being marketed. Our site in Goring-by-Sea has recently received a planning approval for change of use and we expect a lease to be granted to the applicant shortly after which we shall offer the freehold of this site for sale. We announced in April that Brighton and Hove City Council rejected an application for change of use at our site in Preston Road, Brighton and our options are currently being reviewed . On 31 May 2011 we announced that we had exchanged contracts for the sale of our freehold property in Alton, Hampshire for £1.807m conditional upon a satisfactory planning application for change of use. If the planning application is successful, completion will take place in November 2012. The site trades as a Ford franchise and it is intended that the business will be transferred to alternative premises.

The Company has undertaken a valuation of its portfolio of freehold premises as at 31 March 2011. The valuation was carried out by CB Richard Ellis Limited, chartered surveyors, on the basis of existing use value. The excess of the valuation over net book value as at 31 March 2011, excluding the four sites which were either for sale or available for letting as at that date, was £6.3m. In accordance with the Company's accounting policies, this surplus has not been incorporated into the accounts.

In May 2011, the Company signed a contract to build a new showroom in Lewes, Sussex at our Land Rover dealership at a cost of £1.9m. Work on the building has started and it is expected to open by the end of 2011.

Pension Scheme

The pension scheme deficit decreased to £5.5m at 31 March 2011 from £6.4m at 31 March 2010 mainly due to the improvement in asset values in the year. The Recovery Plan agreed with the trustees following the actuarial valuation at 31 March 2008 required cash payments of £120,000 per annum in the two years to 31 March 2011 and a further £1.44m payable over a maximum period of eight years. Payments in respect of the Recovery Plan to the Scheme in the year to 31 March 2012 are expected to amount to £180,000.

We closed our defined benefit scheme to future accrual with effect from 1 April 2010.  Continued provision of pension benefits will be available to existing employees through the alternative defined contribution scheme which has been available to new members of staff joining the Company since April 2006

People

I am very grateful to all our employees for their positive approach during a time of change.  It is always difficult to close down dealerships and we regret the loss of jobs. However, we start the current year with a stronger franchise portfolio.

I am particularly pleased that our apprentice program has been so successful with two of our technician apprentices winning awards for excellent performance on their manufacturer programmes.

Two of our senior Land Rover technicians also achieved great success in the Jaguar Land Rover Technician of the Year awards with Andy Young declared Land Rover Technician of the Year for the third year running.

Our commitment to customer satisfaction is clearly demonstrated by our scores in manufacturer surveys and reflects the enthusiasm and commitment shown by employees across the Company.

Dividend

The Board has decided to recommend a final dividend of 7.0p per Ordinary Share (2010: 5.0p).  If approved at the Annual General Meeting this will be paid on 28 July 2011 to shareholders on the register at close of business on 24 June 2011.  Together with the interim dividend of 5.0p per share paid during the year (2010: 5.0p), the total dividend for the year will be 12.0p per Ordinary Share (2010: 10p).

Strategy

Our strategy is to focus on representing premium and premium-volume franchises which have proven to be more resilient and deliver stronger sales, profits and returns, despite the general economic difficulties.

Our concentration on improving our operational processes is now beginning to produce sustained benefits to profitability.  The closure of loss-making and sub-scale businesses has freed up capital and management time to concentrate on performance improvements at sites with robust future profit potential and to return to sustainable levels of profitability achieved historically.

We will do this by using the proceeds from the sale of properties and closed businesses to invest in larger business opportunities in strong markets with the potential to develop higher rates of return on sales.

Outlook

We enter the year having completed a substantial restructuring of our business. We have a strong balance sheet and an excellent franchise portfolio with investment plans scheduled and underway. Our costs are lower and our structure more robust yet flexible.  We continue to improve our market share in tough market conditions and enter the current year with strong new car order books. 

The effects of public spending cuts are difficult to predict but we believe that we are well placed to take advantage of any upturn. We expect to show further growth this year but future economic conditions remain uncertain and our approach will inevitably have to be cautious.

Simon Caffyn

Chief Executive

3 June 2011

Consolidated Income Statement

for the year ended 31 March 2011

	Note	Before  non-underlying	Non-underlying (note 5)	2011	Before non-underlying	Non-underlying (note 5)	2010
		£'000	£'000	£'000	£'000	£'000	£'000
Revenue		199,829	1,638	201,467	189,426	-	189,426
Cost of sales		(171,736)	(1,750)	(173,486)	(161,831)	-	(161,831)
Gross profit		28,093	(112)	27,981	27,595	-	27,595
Operating expenses
Distribution costs		(17,732)	(745)	(18,477)	(15,382)	(71)	(15,453)
Administration expenses		(8,050)	(467)	(8,517)	(10,061)	189	(9,872)
Operating profit before other income		2,311	(1,324)	987	2,152	118	2,270
Other income - net gains on disposal of tangible fixed assets		-	157	157	-	-	-
Operating profit		2,311	(1,167)	1,144	2,152	118	2,270
Finance expense	6	(1,168)	-	(1,168)	(873)	-	(873)
Finance income/(expense) on pension scheme	7	292	-	292	(427)	-	(427)
Net finance costs		(876)	-	(876)	(1,300)	-	(1,300)
Profit before taxation		1,435	(1,167)	268	852	118	970
Income tax (expense)/credit	8	(267)	217	(50)	171	(34)	137
Profit for the year from continuing operations		1,168	(950)	218	1,023	84	1,107
Earnings per share continuing operations
Basic	9			7.7p			38.6p
Diluted	9			7.4p			38.6p

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2011

	2011 £'000		2010 £'000
Profit for the year	218		1,107
Other comprehensive income:
Defined benefit plan actuarial gain/(loss) recognised	465		(2,599)
Deferred tax on actuarial gain/(loss)	(121)		728
Total other comprehensive income, net of taxation	344		(1,871)
Total comprehensive income for the year	562		(764)

Consolidated Balance Sheet

at 31 March 2011

	2011 £'000		2010 £'000
Non-current assets
Property, plant and equipment	27,733		31,683
Investment property	536		-
Goodwill	286		286
Deferred tax asset	-		96
	28,555		32,065
Current assets
Inventories	26,269		22,032
Trade and other receivables	6,002		8,105
Cash and cash equivalents	54		407
Non current assets classified as held for sale	2,704		564
	35,029		31,108
Total assets	63,584		63,173
Current liabilities
Interest bearing loans and borrowings	3,128		1,888
Trade and other payables	28,180		25,195
Current tax payable	213		220
	31,521		27,303
Net current assets	3,508		3,805
Non-current liabilities
Interest bearing loans and borrowings	5,000		8,000
Preference shares	1,237		1,237
Deferred tax liabilities	75		-
Retirement benefit obligations	5,481		6,358
	11,793		15,595
Total liabilities	43,314		42,898
Net assets	20,270		20,275
Capital and reserves
Share capital	1,439		1,439
Share premium account	272		272
Capital redemption reserve	282		282
Non-distributable reserve	2,419		2,901
Other reserve	72		72
Retained earnings	15,786		15,309
Total equity attributable to shareholders of Caffyns plc	20,270		20,275

 

Consolidated Statement of Changes in Equity

for the year ended 31 March 2011

		Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Non-distributable reserve £'000	Other reserve £'000	Retained earnings £'000	Total £'000
	At 1 April 2010	1,439	272	282	2,901	72	15,309	20,275
	Total comprehensive income
	Profit for the period	-	-	-	-	-	218	218
	Other comprehensive income	-	-	-	-	-	344	344
	Realised surpluses on disposal of land and buildings	-	-	-	(482)	-	482	-
	Total comprehensive income for the year				(482)		1,044	562
	Transactions with owners:
	Dividends	-	-	-	-	-	(283)	(283)
	Purchase of own shares	-	-	-	-	-	(284)	(284)
	At 31 March 2011	1,439	272	282	2,419	72	15,786	20,270

for the year ended 31 March 2010

		Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Non-distributable reserve £'000	Other reserve £'000	Retained earnings £'000	Total £'000
	At 1 April 2009	1,439	272	282	2,901	-	16,410	21,304
	Total comprehensive income
	Profit for the period	-	-	-	-	-	1,107	1,107
	Other comprehensive income	-	-	-	-	-	(1,871)	(1,871)
	Total comprehensive income for the year	-	-	-	-	-	(764)	(764)
	Transactions with owners:
	Dividends	-	-	-	-	-	(200)	(200)
	Purchase of own shares	-	-	-	-	-	(137)	(137)
	Share based payment	-	-	-	-	72	-	72
	At 31 March 2010	1,439	272	282	2,901	72	15,309	20,275

 

 

Consolidated Cash Flow Statement

for the year ended 31 March 2011

 

	Note		2011 £'000		2010 £'000
Net cash from operating activities	11		1,405		144
Investing activities
Proceeds on disposal of property, plant and equipment			1,668		-
Purchases of property, plant and equipment			(1,099)		(392)
Net cash used in investing activities			569		(392)
Financing activities
Secured loans drawn down			-		8,000
Purchase of own shares			(284)		(137)
Dividends paid			(283)		(200)
Repayments of obligations under finance leases			(5)		(15)
Net cash (outflow)/inflow from financing activities			(572)		7,648
Net  increase  in cash and cash equivalents			1,402		7,400
Cash and cash equivalents at beginning of year			(1,476)		(8,876)
Cash and cash equivalents at end of year			(74)		(1,476)
	31 March		31 March		31 March
	2011		2010		2009
	£'000		£'000		£'000
Cash and cash equivalents	54		407		32
Overdrafts	(128)		(1,883)		(8,908)
Net cash and cash equivalents	(74)		(1,476)		(8,876)

  

Notes

 

for the year ended 31 March 2011

1.             GENERAL INFORMATION

Caffyns plc is a company domiciled in the United Kingdom. The address of the registered office is Saffrons Rooms, Meads Road, Eastbourne BN20 7DR. The registered number of the Company is 105664.

These consolidated financial statements were approved by the Directors on 3 June 2011.

2.             ACCOUNTING POLICIES

The financial information has been prepared under International Financial Reporting Standards (IFRSs) issued by the IASB and as adopted by the European Commission (EC). This financial information has been prepared on the same basis as in 2010.             

       
Whilst the financial information included in this announcement has been computed in accordance with IFRSs, this announcement does not itself contain sufficient information to comply with IFRSs.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2011 or 2010, but is derived from those accounts. Statutory accounts for the year ended 31 March 2010 have been delivered to the Registrar of Companies and those for the year to 31 March 2011 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under section 498(2) or (3) Companies Act 2006 or equivalent preceding legislation.

A copy of the annual report for the year ended 31 March 2011 will be available at www.caffynsplc.co.ukand will be posted to shareholders by 4 July 2011.

3.             GOING CONCERN

The financial statements have been prepared on a going concern basis which the directors consider appropriate for the reasons set out below.

The Group meets its day to day working capital requirements through short-term stocking loans and bank overdraft and medium-term revolving credit facilities. While the revolving credit facilities are due for renewal in less than twelve months from the date of these financial statements, the directors have no reason to believe that the facilities will not be renewed at a level appropriate to the Group's requirements. The overdraft and revolving credit facilities include certain covenant tests. The failure of a covenant test would render these facilities repayable on demand at the option of the lenders.

The directors have undertaken a detailed review of trading and cash flow forecasts for a period in excess of one year from the date of this Annual Report which projects that the facility limits are not exceeded over the duration of the forecasts. These forecasts have made assumptions in respect of future trading conditions, particularly volumes and margins of new and used car sales, aftersales and operational improvements. The forecasts take into account these factors to an extent which the directors consider to be reasonable, based on the information that is available to them at the time of approval of this financial information. These forecasts indicate that the Group will be able to operate within the financing facilities that are available to it and meet the covenant tests with sufficient margin for reasonable adverse movements in expected trading conditions.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For those reasons, they continue to adopt the going concern basis in preparing the annual financial statements.

4.             CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

Except as described below, in preparing the condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 March 2010. 

5.             NON-UNDERLYING ITEMS

	Non-underlying items			2011 £'000		2010 £'000
	Within operating expenses:
	Impairment of property, plant and equipment: reversal			-		359
		Net profit/(loss) on disposal of property, plant and equipment		156		(41)
	Losses incurred on closed businesses			(1,171)		(51)
		Redundancy costs		(152)		(149)
	Total non-underlying items before taxation			(1,167)		118
	Income tax expense - Tax credit/(charge) on non-underlying items			217		(34)
	Total after tax			(950)		84

The following amounts have been presented as non-underlying items in these financial statements:

Property, plant and equipment have been reviewed for possible impairment in the light of economic conditions, in particular the changes in commercial property prices. As a result of this review no impairment has been made (2010 - credit £359,000).

Losses incurred in the closure of businesses amounted to £1,171,000 (2010 - £51,000). These costs include wind down expenses, recognised from the date of the announcement to close, and branch specific redundancy costs which amounted to £699,000.

The Group undertook a programme of redundancies in its core business consequent to the current economic situation, resulting in non-underlying payments of £152,000 (2010 - £149,000).

6.             FINANCE EXPENSE

		2011 £'000		2010 £'000
	Interest payable on bank borrowings	469		402
	Vehicle stocking plan interest	407		223
	Interest payable on finance leases	-		2
	Financing costs amortised	190		144
	Preference dividends	102		102
	Finance expense	1,168		873

7.             FINANCE INCOME/(EXPENSE) ON PENSION SCHEME

		2011 £'000		2010 £'000
	Defined benefit pension scheme net finance income/(expense)	292		(427)

8.             TAXATION

			2011 £'000		2010 £'000
	Current tax
		UK corporation tax	-		(8)
	Deferred tax
		Origination and reversal of temporary differences	(67)		(165)
		Adjustments recognised in the period due to change in rate of corporation tax	79		-
		Adjustments recognised in the period for deferred tax of prior periods	(62)		310
			(50)		145
		Total tax (charged)/credited in the Income Statement	(50)		137
		The tax (charge)/credit arises as follows:
		On normal trading	(267)		171
		Non-underlying (see note 5)	217		(34)
			(50)		137
	The (charge)/credit for the year can be reconciled to the profit per the Income Statement as follows:		2011 £'000		2010 £'000
	Profit before tax		268		970
	Tax at the UK corporation tax rate of 21% (2010 - 28%)		(56)		(272)
	Tax effect of expenses that are not deductible in determining taxable profit		(27)		(45)
	Marginal rate relief		-		10
	Change in rate of corporation tax from 28% to 26%		79		-
	Accounting depreciation for which no tax relief is due		(69)		(57)
	Difference between accounts profits and taxable profits on capital asset disposals		33		-
	Long term incentive plan		-		18
	Movement in rolled over and held over gains		52		72
	Asset impairment credit		-		101
	Adjustments to tax charge in respect of prior years		(62)		310
	Tax (charge)/credit for the year		(50)		137

9.             EARNINGS PER 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.  Treasury shares and shares held in employee share trusts 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:
				Adjusted					Basic
				2011 £'000		2010 £'000			2011 £'000			2010 £'000
	Profit before tax			268		970			268			970
	Adjustments:
	Non-underlying items (note 5)			1,167		(118)			-			-
	Adjusted profit before tax			1,435		852			268			970
	Taxation			(267)		171			(50)			137
	Earnings			1,168		1,023			218			1,107
	Earnings per share			41.4p		35.7p			7.7p			38.6p
	Diluted earnings per share		39.9p			35.7p			7.4p			38.6p
	The number of fully paid ordinary shares in issue at the year end was 2,788,835 (2010 - 2,849,716). The weighted average shares in issue for the purposes of the earnings per share calculation were 2,822,686 (2010 - 2,866,751). The shares awarded under the long term Incentive Plan are not dilutive under the terms of IAS 33, but the shares granted under the Company's SAYE scheme are dilutive. The weighted average number of dilutive shares under option at fair value was 107,532 giving a total diluted weighted average number of shares of 2,930,218.

10.           DIVIDENDS

The directors propose a final dividend in respect of the year ended 31 March 2011 of 7.0p per share which will absorb £195,000 of shareholders' funds (2010 - 5.0p per share absorbing £142,000).  The proposed final dividend is subject to approval by shareholders at the forthcoming Annual General Meeting and has not been included as a liability in these financial statements. The ex-dividend date is 22 June 2011.

11.           NOTES TO THE CASH FLOW STATEMENT

		2011 £'000		2010 £'000
	Profit before taxation	268		970
	Adjustment for net finance expense	876		1,300
		1,144		2,270
	Adjustments for:
	Depreciation of property, plant and equipment	1,144		1,230
	Impairment of property, plant and equipment	-		(359)
	Change in retirement benefit obligations	(120)		(383)
	(Gain)/loss on disposal of property, plant and equipment	(156)		14
	Share based payments	-		65
	Operating cash flows before movements in working capital	2,012		2,837
	Increase in inventories	(4,237)		(2,937)
	Decrease/(increase) in receivables	1,773		(2,179)
	Increase in payables	3,032		3,296
	Cash generated by operations	2,580		1,017
	Income taxes	(7)		-
	Interest paid	(1,168)		(873)
	Net cash derived from operating activities	1,405		144

12.           POST BALANCE SHEET EVENTS

Contracts were exchanged for the sale of the company's freehold site in Sevenoaks, Kent for £1.75 million on 6 April 2011. This ceased trading by 31 May 2011. The consideration was paid in cash on 31 May 2011. The Company has agreed since 31 March 2011 the extension of the repayment date for its £3m revolving credit facility from January 2012 to May 2012. On 26 May 2011, the company signed a contract with a firm of building contractors in the sum of £1.8m in respect of the redevelopment of the Land Rover dealership in Lewes, Sussex. On 31 May 2011 the Company announced that contracts were exchanged for the sale of the Company's freehold site in Alton, Hampshire, conditional upon the purchaser obtaining a satisfactory planning permission for change of use. If successful, the consideration of £1.807m would be payable in cash on 27 November 2012.

 

END

 

 

FR LLFERRSIFIIL