Interim Results

Caffyns PLC 23 November 2007 INTERIM RESULTS for the half year ended 30 September 2007 2007 2006 Â£'000 Â£'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 Â£85.5m to Â£95.0m. Profit before tax and exceptional items is also ahead of last year at Â£759,000 against Â£643,000. Profit before tax after exceptional items is significantly up to Â£3,585,000 from Â£829,000 last year. This substantial increase was largely the result of a repayment for overpaid VAT. Recovery and Development We are now half way into our three year recovery programme and, considering the inflationary pressures on consumers of higher interest rates and fuel costs, it is encouraging to see a substantial increase in turnover. Significant investment has been made in our franchised dealerships and growth in turnover will in time be followed by an improvement in performance. In Brighton we are refurbishing our Audi Centre to enlarge the showroom and service 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 are refurbishing the bodyshop facility in Hailsham to enable us to continue to provide this service for all our Volkswagen and Audi customers. VAT In March 2007 we announced that we had received Â£3.0m from HM Revenue & Customs in respect of a claim relating to VAT overpaid on demonstrator vehicle bonuses. The amount received comprised the claim of Â£1.4m and interest of Â£1.6m. There was uncertainty relating to the retention by the Company of the monies received pending the outcome of a case due to be heard in the House of Lords later this year. Following a change of view by HMRC, confirmation was received in July that the monies can be retained by the Company and that their retention was no longer dependent upon the outcome of this case. The monies received (less professional costs incurred) amounting to Â£2.9m have been treated as exceptional income in the Company's Income Statement for the half-year ended 30 September 2007. Property We announced in June 2007 that we have exchanged contracts for the sale of our vacant freehold site in Hove, Sussex, conditional upon planning, for Â£4.5m. The planning application has been submitted to the local authority and we now await the outcome. In June we also exchanged contracts for the sale of our vacant freehold site in Worthing, Sussex, conditional upon demolition of the existing building and environmental remediation of the site which it is hoped will be completed by the end of our financial year. The consideration of Â£1.1m is due when these conditions have been satisfied. Developments since the period end On 19 November, we announced the sale of our vacant freehold site in East Grinstead, Sussex, conditional upon the granting of an acceptable planning permission, with the consideration of Â£3.1m being payable two weeks after this condition is satisfied. The net book value of the property in the company's accounts is Â£656,000. The Future Whilst it is encouraging to see good growth in our turnover, pressures on margins caused by external economic and competitive factors continue to restrict improvements in profits. Recent announcements on the rate of inflation, together with indications that house prices have levelled off and are now possibly falling, will continue to influence retail demand in the short term. The underlying position of the Company is fundamentally strong, allowing us to build our businesses and to look forward to a further improved performance when the economy returns to a more stable level. Your Directors have agreed to an unchanged interim dividend of 8.0p per ordinary share. This will be paid on 9 January 2008 to shareholders on the register at 5.00pm on 7 December 2007. Brian A Carte Chairman 23 November 2007 CONSOLIDATED INCOME STATEMENT for 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 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 ------ ------ ------ ------ ------ ------ Revenue 94,991 85,484 176,238 ------ ------ ------ ------ ------ ------ Operating profit Before exceptional items 1,378 1,213 2,515 Exceptional items 2 1,226 186 160 ------ ------ ------ ------ ------ ------ Total operating profit 2,604 1,399 2,675 Interest receivable 2 1,600 - - Finance costs (619) (570) (1,232) ------ ------ ------ ------ ------ ------ Profit before tax From normal trading operations 759 643 1,283 Arising from exceptional items 2 2,826 186 160 ------ ------ ------ ------ ------ ------ 3,585 829 1,443 ------ ------ ------ ------ ------ ------ Tax On normal trading operations - (211) (232) On exceptional items 2 (848) (54) (48) ------ ------ ------ ------ ------ ------ 3 (848) (265) (280) ------ ------ ------ ------ ------ ------ Profit for the period 6 2,737 564 1,163 ------ ------ ------ ------ ------ ------ Earnings per share 4 95.1p 19.6p 40.4p ------ ------ ------ ------ ------ ------ Dividend per ordinary share 5 8.0p 8.0p 25.0p ------ ------ ------ ------ ------ ------ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the half year ended 30 September 2007 Half year to Half year to Year to 30 September 30 September 31 March 2007 2007 2006 Â£'000 Â£'000 Â£'000 Profit for the period 2,737 564 1,163 Actuarial gains/(losses) recognised in defined benefit pension scheme 2,003 (2,690) 3,134 Deferred tax on actuarial gains/(losses) (554) 807 (940) ----------- ----------- ----------- Total recognised income/(expense) for the period 4,186 (1,319) 3,357 ----------- ----------- ----------- CONSOLIDATED BALANCE SHEET at 30 September 2007 Note 30 September 30 September 31 March 2007 2006 2007 Â£'000 Â£'000 Â£'000 Non-current assets Goodwill 481 481 481 Intangible assets 20 43 31 Property, plant and equipment 31,480 31,549 31,610 Retirement benefit scheme 2,610 - 344 Deferred tax asset 593 2,668 1,160 --------- --------- --------- Total non-current assets 35,184 34,741 33,626 --------- --------- --------- Current assets Inventories 25,234 23,965 23,846 Trade and other receivables 7,699 8,999 9,047 Cash and cash equivalents 14 62 35 Non-current assets held for sale 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 6,797 Trade and other payables 20,151 20,814 21,575 Tax liabilities 696 159 230 Obligations under finance leases 29 29 29 Short-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 3,000 Preference shares 1,237 1,237 1,237 Retirement benefit obligation - 5,725 - Deferred tax liabilities 3,746 2,139 3,378 Obligations under finance leases 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 1,439 Share premium account 272 272 272 Capital redemption reserve 282 282 282 Non-distributable reserve 3,915 3,961 3,915 Retained earnings 6 25,834 18,707 22,137 --------- --------- --------- Total equity 31,742 24,661 28,045 --------- --------- --------- CONSOLIDATED CASH FLOW STATEMENT for the half year ended 30 September 2007 Half year ended Half year ended Year ended 30 September 30 September 31 March 2007 2007 2006 Â£'000 Â£'000 Â£'000 Cash flows from operating activities 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 and amortisation 718 700 1,450 Negative goodwill received - (186) (186) Loss/(profit) on disposal of property, plant and equipment 11 - (600) (Decrease)/increase in provisions (1,478) (65) 2,862 ----------- ----------- ----------- Operating cash flows before movements in working capital 1,855 1,848 6,201 Movements in working capital (1,728) (2,982) (925) ----------- ----------- ----------- Cash generated/(absorbed) by operations 127 (1,134) 5,276 Income taxes received - 158 151 Net interest paid (619) (570) (1,225) ----------- ----------- ----------- Net cash (used in)/from operating activities (492) (1,546) 4,202 ----------- ----------- ----------- Investing activities Proceeds on disposal of property, plant and equipment 26 1,476 1,351 Purchases of property, plant and equipment (614) (2,584) (3,479) Acquisition of business - (176) (176) ----------- ----------- ----------- Net cash used in investing activities (588) (1,284) (2,304) ----------- ----------- ----------- Financing activities Dividends paid (489) (461) (691) Repayments of obligations under finance leases (13) (14) (27) ----------- ----------- ----------- Net cash used in financing activities (502) (475) (718) ----------- ----------- ----------- Net (increase)/decrease in cash and cash equivalents (1,582) (3,305) 1,180 Cash and cash equivalents at beginning of period (6,762) (7,942) (7,942) ----------- ----------- ----------- Cash and cash equivalents at end of period (8,344) (11,247) (6,762) ----------- ----------- ----------- NOTES TO THE INTERIM RESULTS for the half-year ended 30 September 2007 1. BASIS OF PREPARATION The interim financial statements for the half year to 30 September 2007 are unaudited and have been prepared under International Financial Reporting Standards (IFRS) in accordance with the accounting policies set out in the Annual Report for 2007. The figures for the year ended 31 March 2007 have been extracted from the statutory accounts, filed with the Registrar of Companies on which the auditors gave an unqualified opinion. These interim financial statements have been reviewed by the Company's auditors. A copy of their review report is set out at the end of these statements. These interim statements comply with IAS 34 'Interim Financial Reporting' and were 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 Â£'000 Â£'000 Â£'000 VAT refund (net of costs) on demonstrator vehicle bonuses in the period 1973 to 1997 1,310 - - Reverse goodwill received on acquisition (net of costs) - 186 186 Net (loss)/profit on disposal of property, plant and equipment (11) - 600 Restructuring costs arising from branch 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 Â£'000 Â£'000 Â£'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 timing differences 601 77 136 Adjustment due to change in rate of corporation 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 taxation expected to apply to the whole year on ordinary trading. The tax charge on the profit arising from normal trading operations amounting to Â£219,000 has been reduced to nil as a result of the reduction in the rate of tax applicable to the deferred tax account. Tax on exceptional items is provided at the actual rate applicable. 4. EARNINGS PER SHARE Half year to Half year to Year to 30 September 30 September 31 March Basic 2007 2006 2007 Â£'000 Â£'000 Â£'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 March Underlying 2007 2006 2007 Â£'000 Â£'000 Â£'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) is payable on 9 January 2008 to shareholders on the register at the close of business on 7 December 2007. The shares will be marked ex-dividend on 5 December 2007. Preference shares Preference dividends have been paid in October 2007. The next preference dividends are payable in April 2008. The cost of the preference dividends has been included within finance costs. 6. RETAINED EARNINGS Half year to Half year to Year to 30 September 30 September 31 March 2007 2006 2007 Â£'000 Â£'000 Â£'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 expense for 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 financial statements in the half-yearly financial report for the six months ended 30 September 2007 which comprises the consolidated income statement, consolidated statement of recognised income and expense, consolidated balance sheet, consolidated cash flow statement and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with guidance contained in APB Statements of Standards for Reporting Accountants 'International Standard on Review Engagements (UK and Ireland) 2410'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusion we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting'' as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2007 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. Grant Thornton UK LLP Chartered Accountants London 23 November 2007 This information is provided by RNS The company news service from the London Stock Exchange

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