Disposal

Caffyns PLC
30 October 2024
 

Caffyns plc ("Caffyns")

 

Sale of freehold property at Brooks Road, Lewes

 

Caffyns announces that it has entered into an agreement (the "SPA") with Lidl Great Britain Limited (the "Purchaser") for the sale of its freehold premises at Brooks Road, Lewes (the "Premises") (the "Disposal"). Consideration for the Disposal is £4.65 million (the "Consideration") to be paid in cash by the Purchaser on completion of the SPA ("Completion"). Completion is subject solely to the successful outcome of ground surveys on the Premises, to be conducted by the Purchaser. Completion of the agreement for sale is required within a four-month period.

 

Caffyns has operated its Lotus Sussex franchised dealership ("Lotus Sussex") from a showroom building at the Premises since 2021, when it regained possession of the Premises following the expiry of lease arrangements entered into with Harwoods Limited for the operation of the Jaguar Land Rover franchised dealership sold to Harwoods Limited by Caffyns in 2016. Since 2021, part of the Premises has been sublet to third party tenants on short leases.

 

As a term of the Disposal, Caffyns has been granted an occupational lease at a peppercorn rent to enable it to continue to operate Lotus Sussex from the Premises from Completion until the end of October 2025, ahead of its relocation.

 

As at 31 March 2024, the gross asset value of the Premises in Caffyns' audited accounts was £4.65 million. In the year ended 31 March 2024, the Premises generated a rental income before tax of £0.08 million. Further financial information is shown at Appendix 1 to this announcement.

 

The directors of Caffyns (the "Directors") consider the Premises to be surplus to the Company's long-term operational needs and that, in the directors' opinion, the Disposal is in the best interests of Caffyns' shareholders as a whole.

 

The Caffyns Pension Fund (the "Fund"), which, as at the date of this announcement, is in a deficit position, holds a security charge over the Premises. To maintain the financial position of the Fund post Completion, the Fund will receive £2.40 million of the Consideration and new security charges over other freehold property owned by Caffyns with a value of at least £2.25 million (the "Security"). Once the Security is in place, the remaining £2.25 million of the Consideration will be released to Caffyns and will be used to reduce its bank borrowing levels and facilitate additional working capital.

 

After allowing for costs, the Disposal is not expected to produce any meaningful profit or loss and, therefore, is not expected to impact materially upon Caffyns' net asset position. Interest savings from utilising part of the Consideration to reduce Caffyns' bank borrowings is expected to offset the loss of rental income from the Premises, with no meaningful net impact on Caffyns' future earnings.

 

Enquiries: Sarah Caffyn Director/ Company Secretary                     Telephone: 01323 730201     

                                                                                                                                      

29 October 2024

 

 

Appendix 1 - Financial information

 

A pro-forma unaudited balance sheet for Caffyns is shown below to illustrate the expected effect of the freehold property disposal. The balance sheet has been extracted from the audited financial statements for the year ended 31 March 2024.


Pre-sale

of property

at 31 March

2024

£'000

 

Freehold

property sale

£'000

Post-sale

of property

at 31 March

2024

£'000

Non-current assets

 


 

Right-of-use assets

2,343

2,343

Property, plant and equipment

38,714

38,714

Investment properties

7,216

(4,650)

2,566

Interest in lease

65

65

Goodwill

286

286

Deferred tax asset

568

568

 

49,192

(4,650)

44,542

Current assets

 


 

Inventories

42,251

42,251

Trade and other receivables

7,310

7,310

Interest in lease

160

160

Current tax recoverable

190

190

Cash and cash equivalents

438

2,250 

2,688


50,349

2,250 

52,599

Total assets

99,541

(2,400)

97,141

Current liabilities

 


 

Interest-bearing bank overdrafts and loans

1,445

1,445

Trade and other payables

45,597

45,597

Lease liabilities

501

501


47,543

47,543

Net current assets

2,806

2,250 

5,056

Non-current liabilities

 


 

Interest-bearing bank loans

10,308

10,308

Lease liabilities

2,106

2,106

Preference shares

812

812

Retirement benefit obligations

10,036

(2,400)

7,636


23,262

(2,400)

20,862

Total liabilities

70,805

(2,400)

68,405

 

 


 

Net assets

28,736

28,736

 

 


 

Capital and reserves

 


 

Share capital

1,439

1,439

Share premium account

272

272

Capital redemption reserve

707

707

Non-distributable reserve

1,724

1,724

Retained earnings

24,594

24,594

Total equity attributable to shareholders

28,736

28,736

 

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