Caffyns Profit Slumps
Shares in Caffyns reversed 17% to 345p today after the Eastbourne-based motor retailer reported a collapse in first half profits.
Founded over 150 years ago, Caffyns has successfully traded through many an economic cycle, but hasn’t been able to swerve the short term supply challenges and Brexit-related uncertainties that continue to hurt the automotive retail sector.
PROFITS SKID LOWER
For the first half of the year to 30 September, Caffyns posted a slump in underlying pre-tax profit from £1.19m to £170,000 as like-for-like new car sales fell 14.5%.
Used car sales fell 2.3% due to a weak performance from Caffyns’ Motorstore business, although aftersales revenue continued to grow and a maintained 7.5p dividend demonstrates confidence the company can weather the storm.
Chief Executive Officer Simon Caffyn commented: ‘Whilst disappointing, the results should be read against a difficult economic and political background. This was compounded by supply problems for new cars. These supply issues have however improved, and we remain cautiously optimistic about the future outlook.’
Nervous times in the trade with some dealers reporting profit growth and others struggling. Invariably it seems that poor performance is leading to changes in management (usually accompanied by changes lower down the order), leading to the conclusion that it’s people that make the difference – something I think we all know, but always worth remembering.