- Car dealer’s profits jump as pandemic impact wanes
- Earnings boosted by buoyant used car market
- CEO is cautious over consumer confidence
Shares in Caffyns (CFYN) motored 9.6% higher to 602.5p after the family-owned car dealership revved in with a 142% profit surge for the year to March 2022 and resumed paying a final dividend.
However, chief executive Simon Caffyn warned he was ‘mindful’ of supply chain disruptions and cautioned that the storied car seller’s outlook ‘will depend on consumer confidence’ amid a well-documented cost of living squeeze.
FULL YEAR PAYOUT RESUMED
One of the country’s longest running dealerships, founded over 150 years ago, Caffyns’ sales accelerated 36% to £223.9 million last year amid buoyant used car market conditions, driving underlying pre-tax profits up 142% to £4.6 million.
And having restarted the payment of dividends during the year with an interim payout of 7.5p following a pandemic-induced pause, the Eastbourne-based car retailer declared a final dividend of 15p.
Caffyns started the last financial year with its showrooms temporarily shuttered and able to operate only on a click-and-collect basis.
But by mid-April 2021 the retailer had fully reopened and for the remainder of the financial year operated as usual, albeit with social distancing precautions still in place, and the impact of the pandemic on the business waned as the year progressed.
USED CAR BOOST
During the year, Caffyns’ like-for-like used cars sales motored 24% ahead as a shortage of new cars created a strong used car market and enhanced margins.
Like-for-like new car deliveries rose by 7% despite disruption to production caused by the global semiconductor shortage, and latterly the additional supply chain pain triggered by the Ukraine conflict.
Simon Caffyn said: ‘Despite limited new car supply, operating profits improved due to very buoyant trading in used cars and our strong focus on improving operational effectiveness.
‘The outlook will depend on consumer confidence, but we carry forward a strong new car order book and have substantially strengthened our balance sheet.’
Caffyn cautioned: ‘We have started the new financial year with a sense of optimism, although we are mindful of disruptions to manufacturers’ supply chains and dependent upon consumer confidence.
‘The balance sheet is appropriately funded and our freehold property portfolio is a source of stability. We remain confident in the prospects of the company and are ready to exploit future business opportunities.’
