Caffyns PLC on Friday said half-year profit all but disappeared, as costs outpaced revenue growth, and it gave a mixed outlook.
The Eastbourne, Sussex-based car dealership chain said pretax profit plummeted to just £44,000 in the six months to September 30, from £1.6 million a year prior, even as revenue grew by 13% to £134.3 million from £119.0 million.
Cost of sales increased 15% to £118.3 million from £102.8 million, and net finance costs doubled to £1.5 million from £696,000.
In response, the company cut its interim dividend by 33% to 5.0 pence from 7.5p.
Caffyns shares were down 14% to 471.00 pence midday Friday in London.
Looking ahead, Caffyns said it is confident in its prospects despite a wobbly UK economy.
Giving a mixed outlook, Chief Executive Simon Caffyn said: ‘Our forward-order bank for new cars is strong with improved levels of supply and we are targeting an improved used car performance in the second half. However, the high level of economic and political uncertainty, both in the UK and abroad, is a concern. Given these uncertainties, the board remains cautious for the second half of the financial year. Our balance sheet is appropriately funded, and our freehold property portfolio is a source of great stability.’
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