Caffyns PLC on Friday reported an interim rise in revenue but suffered a drop in profit. It also maintained its interim dividend.

The Eastbourne, Sussex-based car dealership said revenue rose by 7.2% to £119 million for the six months that ended on September 30 from £111 million a year ago, primarily due to ‘strong used car prices’.

Pretax profit, however, fell 30% to £1.6 million from £2.3 million, as operating profit declined by 23% to £2.3 million from £3.0 million. Net finance expense increased to £661,000 from £570,000 a year ago.

Caffyns said: ‘Nationally, the Society of Motor Manufacturers and Traders reported a 5% reduction in new car registrations in the retail and small business market segment in which we primarily operate. We were, therefore, pleased that the majority of our brands performed ahead of the UK market.’

Underlying pretax profit declined by 33% to £1.6 million from £2.4 million. Though the company noted that the decrease was positively impacted by the ‘post-covid reopening of showrooms in April 2021 and from the holiday from business rates for retail premisses’.

Chief Executive Simon Caffyn said: ‘The underlying pretax profit of £1.6 million is a strong result considering the ongoing disruption to new car supply and current economic challenges. We have a substantial new car order book and used car sales continue to perform well.’

Caffyns declared an interim dividend of 7.5 pence per share, unchanged from a year prior.

Looking ahead, Caffyns said that customer demand for used cars ‘remains buoyant and its forward-order bank for new cars is at an elevated level’. The company said it is ‘encouraging for 2023’ when it hopes that new car availability will improve.

However, it said it remains ‘cautious’ for the second half of the year, as short-term new cars are expected to remain in short supply, coupled with the high level of economic uncertainty.

Shares were flat at 519.50 pence each on Friday morning in London.

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