Interim Results

Caffyns PLC 24 November 2006 INTERIM RESULTS for the half year ended 30 September 2006 Caffyns plc, the leading motor distributor covering fifteen car franchises in the south-east of England, announces its interim results for the half year ended 30 September 2006. 2006 2005 £'000 £'000 Turnover 85,484 81,503 Operating profit before exceptional items 1,213 1,188 Underlying profit before tax 643 637 Exceptional items 186 285 Profit before tax 829 922 Earnings per share 19.6p 22.3p Underlying earnings per share 15.0p 15.4p Interim dividend per share 8.0p 8.0p Commenting on the results the Chairman, Brian Carte, said: 'The physical restructuring of the properties affected by MG Rover is now complete and we can enjoy our first six month period free from the disruption of refranchising programmes. We are still some way from delivering the full potential of our new franchises but can now concentrate on doing so without distraction, which should lead to an improved trading performance for the year'. Enquiries: Simon Caffyn Chief Executive Mark Harrison Finance Director Tel: 01323 730201 CHAIRMAN'S STATEMENT RESULTS In the six months to September 2006 turnover has increased from £81.5 million to £85.5 million. Profit before tax and exceptional items are in line with last year at £643,000 against £637,000 but after exceptional items the profit before tax is £829,000 against £922,000 last year after exceptionals of £285,000. REFRANCHISING In September we opened our new Audi Centre in Worthing which marked the end of the physical restructuring of the Company following the collapse of MG Rover. Our retained former MG Rover dealerships are now refranchised and we are concentrating on rebuilding business at these sites. Although many are already contributing positively, to fully develop the potential of these dealerships can take up to three years. ACQUISITIONS In August 2006 we acquired the Volvo business for Brighton which borders onto our Volvo business in Eastbourne, giving us significant benefits derived from adjoining markets. PROPERTY Planning issues have continued to delay the sale of our properties in Hythe and Hove. As announced in October we have remarketed our site in Hove following planning refusal on a conditional sale and have received substantial new interest. The property in Hythe is sold, subject to planning, which is likely to be granted before the end of the year. DEVELOPMENTS SINCE THE PERIOD END Since the end of the half year we decided to close our bodyshop in Worthing, our wholesale parts business in Hove and our Vauxhall dealership in East Grinstead. The sites in Worthing and East Grinstead will be sold. The parts business has been transferred to our wholesale operation in Hailsham and the Vauxhall business to our dealerships in Tunbridge Wells and Brighton. This additional business will have a beneficial effect at these sites. The proceeds from the sale of the freeholds in East Grinstead and Worthing will be used to reduce borrowings. THE FUTURE The physical restructuring of the properties affected by the MG Rover collapse is now complete and we can enjoy our first six month period free from the disruption of refranchising programmes. We are still some way from delivering the full potential of our new franchises but can now concentrate on doing so without distraction, which should lead to an improved trading performance for the year. Your Directors have agreed to an unchanged interim dividend of 8.0p per ordinary share. This will be paid on 10 January 2007 to shareholders on the register at 5.00pm on 8 December 2006. Brian A Carte Chairman 24 November 2006 CONSOLIDATED INCOME STATEMENT for the half year ended 30 September 2006 Note Half year to Half year to Year to 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Revenue 85,484 81,503 160,076 ------ ------ ------ ------ ------ ------ Operating profit Before exceptional items 1,213 1,188 1,172 Exceptional items 2 186 285 972 ------ ------ ------ ------ ------ ------ Total operating profit 1,399 1,473 2,144 Finance costs (570) (551) (1,114) ------ ------ ------ ------ ------ ------ Profit before tax From normal trading operations 643 637 58 Arising from exceptional items 2 186 285 972 ------ ------ ------ ------ ------ ------ 829 922 1,030 ------ ------ ------ ------ ------ ------ Tax On normal trading operations (211) (194) 20 On exceptional items (54) (85) (294) ------ ------ ------ ------ ------ ------ 3 (265) (279) (274) ------ ------ ------ ------ ------ ------ Profit for the period 564 643 756 ------ ------ ------ ------ ------ ------ Earnings per share 4 19.6p 22.3p 26.3p ------ ------ ------ ------ ------ ------ Dividend per ordinary share 5 8.0p 8.0p 24.0p ------ ------ ------ ------ ------ ------ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the half year ended 30 September 2006 Half year to Half year to Year to 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000 ----------- ----------- ----------- Profit for the period 564 643 756 Actuarial (losses)/gains recognised in defined benefit pension scheme (2,690) (1,058) 108 Deferred tax on actuarial (losses)/gains 807 317 (31) ----------- ----------- ----------- Total recognised income and expense for the period (1,319) (98) 833 ----------- ----------- ----------- CONSOLIDATED BALANCE SHEET at 30 September 2006 Note 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 --------- --------- --------- Non-current assets Goodwill 481 481 481 Intangible assets 43 65 54 Property, plant and equipment 31,549 32,243 31,203 Deferred tax asset 2,668 2,222 1,939 --------- --------- --------- 34,741 35,011 33,677 --------- --------- --------- Current assets Inventories 23,965 22,880 22,694 Trade and other receivables 8,999 8,311 8,897 Current tax assets - - 186 Cash and cash equivalents 62 45 39 --------- --------- --------- 33,026 31,236 31,816 --------- --------- --------- Non-current assets held for sale 1,645 - - --------- --------- --------- Total assets 69,412 66,247 65,493 --------- --------- --------- Current liabilities Bank overdrafts and loans 11,309 10,582 7,981 Trade and other payables 20,814 18,814 21,057 Tax liabilities 159 85 - Obligations under finance leases 29 34 28 Short-term provisions 276 423 341 --------- --------- --------- 32,587 29,938 29,407 --------- --------- --------- Net current assets 2,084 1,298 2,409 --------- --------- --------- Non-current liabilities Bank loans 3,000 3,000 3,000 Preference shares 1,237 1,237 1,237 Retirement benefit obligation 5,725 4,381 3,190 Deferred tax liabilities 2,139 1,858 2,140 Obligations under finance leases 63 93 78 --------- --------- --------- 12,164 10,569 9,645 --------- --------- --------- Total liabilities 44,751 40,507 39,052 --------- --------- --------- Net assets 24,661 25,740 26,441 --------- --------- --------- EQUITY Share capital 1,439 1,439 1,439 Share premium account 272 272 272 Capital redemption reserve 282 282 282 Revaluation reserve 3,961 4,698 3,971 Retained earnings 6 18,707 19,049 20,477 --------- --------- --------- Total equity attributable to shareholders of Caffyns plc 24,661 25,740 26,441 --------- --------- --------- CONSOLIDATED CASH FLOW STATEMENT for the half year ended 30 September 2006 Half year ended Half year ended Year ended 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000 ----------- ----------- ----------- Cash flows from operating activies Profit from operations 1,399 1,473 2,144 Non-cash adjustments 514 280 164 ----------- ----------- ----------- Operating cash flows before movements in working capital 1,913 1,753 2,308 Movements in working capital (3,047) (2,252) 1,019 ----------- ----------- ----------- Cash (absorbed)/generated by operations (1,134) (499) 3,327 Net interest (570) (551) (1,114) Income taxes received/(paid) 158 - (50) ----------- ----------- ----------- Net cash (used in)/from operating activities (1,546) (1,050) 2,163 ----------- ----------- ----------- Investing activities Proceeds on disposal of property, plant and equipment 1,476 783 1,959 Purchases of property, plant and equipment (2,584) (1,967) (3,510) Acquisition of business (176) - - ----------- ----------- ----------- Net cash used in investing activities (1,284) (1,184) (1,551) ----------- ----------- ----------- Financing activities Dividends paid (461) (461) (691) Repayments of obligations under finance leases (14) (20) (41) ----------- ----------- ----------- Net cash used in financing activities (475) (481) (732) ----------- ----------- ----------- Net decrease in cash and cash equivalents (3,305) (2,715) (120) Cash and cash equivalents at beginning of period (7,942) (7,822) (7,822) ----------- ----------- ----------- Cash and cash equivalents at end of period (11,247) (10,537) (7,942) ----------- ----------- ----------- NOTES TO THE INTERIM RESULTS for the half-year ended 30 September 2006 1. BASIS OF PREPARATION The interim financial statements for the half year to 30 June 2006 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 2006. The figures for the year ended 31 March 2006 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 24 November 2006. The directors approved this interim statement on 24 November 2006. 2. EXCEPTIONAL ITEMS Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 Net profit on disposal of property, plant and equipment - 155 858 Reverse goodwill received on acquisition (net of costs) 186 - - Credit associated with failure of MG Rover Group - 319 317 Other restructuring costs - (189) (203) ---------- ---------- ---------- Total before tax 186 285 972 Less: tax thereon (54) (85) (294) ---------- ---------- ---------- 132 200 678 ---------- ---------- ---------- 3. TAXATION Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 Current UK corporation tax at 30% Charge for the period 219 245 22 Advance corporation tax recovered (31) (31) - Over-provision in respect of prior years - (5) (26) ---------- ---------- ---------- Total corporation tax 188 209 (4) Deferred tax at 30% Origination and reversal of timing differences 77 70 278 ---------- ---------- ---------- 265 279 274 ---------- ---------- ---------- Taxation for the half year has been provided at the effective rate of taxation expected to apply to the whole year on ordinary trading. 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 2006 2005 2006 £'000 £'000 £'000 Profit before tax 829 922 1,030 Taxation (265) (279) (274) ---------- ---------- ---------- Earnings 564 643 756 ---------- ---------- ---------- Earnings per share 19.6p 22.3p 26.3p ---------- ---------- ---------- Half year to Half year to Year to 30 September 30 September 31 March Underlying 2006 2005 2006 £'000 £'000 £'000 Profit before tax 829 922 1,030 Adjustments: Exceptional items (Note 2) (186) (285) (972) ---------- ---------- ---------- Underlying profit before tax 643 637 58 Taxation (211) (194) 20 ---------- ---------- ---------- Underlying earnings 432 443 78 ---------- ---------- ---------- Earnings per share 15.0p 15.4p 2.7p ---------- ---------- ---------- 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 (2005: 8.0p) is payable on 10 January 2007 to shareholders on the register at the close of business on 8 December 2006. The shares will be marked ex-dividend on 6 December 2006. Preference shares Preference dividends have been paid in October 2006. The next preference dividends are payable in April 2007. 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 2006 2005 2006 £'000 £'000 £'000 At the beginning of period 20,477 19,469 19,469 Total recognised income and expense for the period (1,319) (98) 833 Transfer from revaluation reserve 10 139 866 Dividends paid (461) (461) (691) ---------- ---------- ---------- At end of period 18,707 19,049 20,477 ---------- ---------- ---------- INDEPENDENT REVIEW REPORT to Caffyns plc INTRODUCTION We have been instructed by the company to review the financial information for the six months ended 30 September 2006 which comprises the consolidated interim balance sheet at 30 September 2006, the consolidated profit and loss account, the consolidated cashflow statement, the statement of recognised income and expense for the six months then ended and the related notes 1 to 6. We have read the other information contained in the interim report which comprises only the chairman's statement and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Our responsibilities do not extend to any other information. This report is made solely to the company in accordance with guidance contained in APB Bulletin 1999/4 'Review of Interim Financial Information'. 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 interim report including the financial information contained therein is the responsibility of, and has been approved by, the directors. The Listing Rules of the Financial Services Authority require. They are responsible for preparing the interim report and ensuring that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. REVIEW WORK PERFORMED We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of Interim Financial Information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards of Auditing (UK & Ireland) and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. REVIEW CONCLUSION On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2006. Grant Thornton UK LLP Chartered Accountants London 24 November 2006 This information is provided by RNS The company news service from the London Stock Exchange

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