REG - Caffyns PLC - Annual Financial Report
11/06/2025 07:00
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RNS Number : 2887M Caffyns PLC 11 June 2025
Caffyns plc
Preliminary Results for the year ended 31 March 2025
Summary
2025 2024
£'000 £'000
Revenue 275,464 262,084
Underlying EBITDA (see note below) 5,639 4,212
Underlying profit/(loss) before tax (see note below) 606 (566)
Profit/(loss) before tax 246 (1,545)
pence pence
Underlying earnings/(loss) per share 16.4 (17.3)
Earnings/(loss) per share 6.4 (44.3)
Proposed final dividend per Ordinary share 5.0 5.0
Dividend per ordinary share for the year 10.0 10.0
Note: Underlying results exclude items that have non-trading attributes due to
their size, nature or incidence or are unrelated to the primary motor trade
business of the Company and which management therefore consider should be
disclosed separately to enable a full understanding of the operating results.
Non-underlying items for the year totalled a charge of £360,000 (2024:
£979,000) and are detailed in note 5 to these condensed consolidated
financial statements. Underlying EBITDA of £5,639,000 (2024: £4,212,000)
represents operating profit before non-underlying items of £3,498,000 (2024:
£2,114,000) adding back depreciation and amortisation of £2,141,000 (2024:
£2,098,000).
Overview
· Revenue up 5% to £275.5 million (2024: £262.1 million)
· New car unit deliveries up by 2%
· Used car unit sales up by 1%
· Aftersales revenues up by 8% to £30.7 million (2024: £28.5 million)
· Underlying profit before tax of £0.6 million (2024: loss of £0.6
million), including income of £0.1 million from the sale of a personalised
numberplate
· Final dividend of 5.0 pence per Ordinary share (2024: 5.0 pence per
Ordinary share)
· Net bank borrowings at 31 March 2025 of £8.5 million (2024: £11.3
million)
· Property portfolio valuation at 31 March 2025 showed an increased
surplus to net book value of £11.2 million (2024: £10.7 million). This
surplus is not recognised in the Company's financial statements.
Commenting on the results Simon Caffyn, Chief Executive, said: "A strong
performance from new cars and aftersales generated an improved gross profit
and, despite inflationary pressures on the cost base, a significant turnaround
in underlying profit before tax."
Enquiries:
Caffyns
plc Simon Caffyn, Chief
Executive
Tel: 01323 730201
Mike Warren, Finance Director
Tel:
01323 730201
Operational and Business Review
Summary
Turnover in the financial year ended 31 March 2025 (the "year") increased by
5% to £275.5 million (2024: £262.1 million) and the Company reported a
welcome return to profitability.
A strong performance from new cars and aftersales generated an additional
£3.1 million of gross profit, a 10% increase, which was pleasing given the
competitive marketplace. However, profits from used car sales declined and
inflationary pressures on the cost base remained high, which negated some of
the improvement in gross profits. The underlying profit before tax of £0.6
million for the year, which included income of £0.1 million from the sale at
auction of a personalised numberplate, compared to an underlying loss of £0.6
million in the prior year.
Statutory profit before tax for the year was £0.2 million (2024: loss of
£1.5 million). The Company incurred certain non-underlying costs, primarily
associated with the financing and service costs of its defined-benefit pension
scheme which were partly offset by property disposal profits. Actuarial
adjustments arising on its defined-benefit pension scheme have been taken
direct to reserves. Basic earnings per share for the year were 6.4 pence
(2024: loss of 44.3 pence). Underlying earnings per share for the year were
16.4 pence (2024: loss of 17.3 pence).
The Company's defined benefit pension scheme deficit, calculated in accordance
with the requirements of IAS 19 Pensions, reduced to £4.5 million at 31 March
2025 (2024: £10.0 million). During the year the Company made cash
contributions to the scheme of £4.2 million (2024: 0.8 million).
The Company continues to own all but two of the freeholds of the dealership
and office premises from which it operates, and this provides the dual
strengths of a strong asset base and minimal exposure to rent reviews.
The board declared an interim dividend of 5.0 pence per Ordinary share (2024:
5.0 pence), which was paid in January 2025. The board remains confident in the
prospects of the Company and is declaring a final dividend for the year of 5.0
pence per Ordinary share (2024: 5.0 pence).
Net bank borrowings at 31 March 2025 were £8.5 million (2024: £11.3
million), which equated to gearing of 29% (2024: 39%).
New and used car sales
The Company's total revenues increased by £13.5 million over the previous
year, of which £11.3 million arose from the sale of new and used cars.
Total UK new car registrations in the year increased by 2% to 1.99 million as
the major car manufacturers continued to lift new car production levels
although customers remained careful with their discretionary spending. Within
this total, new car registrations in the private and small business sector, in
which we principally operate, actually fell by 4%. Our own retail new car
deliveries rose by 2%, a better outcome than for the comparable motor retail
sector.
Our volume of used cars sales rose in the year by 1%. Our performance in the
year was held back by falling volumes at our Motorstore non-franchised
businesses in Ashford and Lewes. Overall unit margins in the year were stable
against their level in the prior year. Lower volumes of new car registrations
since the covid pandemic in 2020 have also reduced the number of less than
4-year-old used cars available in the market. In recognition of this scarcity,
procedures were further strengthened to broaden our sources for replenishing
inventory but the sourcing of good quality, well-priced used cars remained
challenging.
Great efforts have been made over the last twelve months to further enhance
and develop our omni-channel used car offering for our customers, which allows
customers to interact with us in the way that suits them best, from the
traditional showroom discussion through to an online experience, and any
combination in between. We continue to see our used car offering providing a
major opportunity for stronger growth. With market conditions volatile we
continue to actively monitor and control used car stock turn and yield. The
number of used cars sold in the year again exceeded the number of new cars
sold, although by a reduced multiple than in the prior year.
Aftersales
Our aftersales business performed well during the year with service revenues
rising by 8%. We continue to place great emphasis on our customer retention
programmes and in growing sales of service plans. Our parts business also
reported higher sales, also up by 8% from the previous year.
Our people
I am very grateful for the dedication of our employees and their efforts
throughout the year to provide our customers with a first-class experience.
The Company benefits from a dedicated workforce with more than a quarter of
employees having more than ten years' service. As a result of their hard work
and professionalism, the business remains in a strong position in the
competitive retail environment in which we operate, and we continue to be an
employer of choice in Kent and Sussex.
The Company has a long tradition of investing in apprenticeship programmes.
Despite the pressures on the business, we have kept our apprenticeship numbers
at a high level and continue to see the benefits flow through the business as
more apprentices complete their training. Due to our apprentice numbers, we
continued to fully utilise our apprenticeship levy payments within the
stipulated time limits. We remain firmly committed to the long-term benefits
of apprenticeships and our recruitment programme continues with the aim of
maintaining a healthy complement in the current year, which will assist the
Company to continue to grow.
Operations
Our Audi businesses produced a satisfactory financial performance in the year,
although with profits reduced from the prior year. The franchise continues to
be boosted by the strength of the brand, the excellent model range, and
exciting new products.
Our Volkswagen businesses underperformed in the year, partly as a result of
operational issues at one of our four dealerships. The manufacturer is the
market leader in the UK and, as a result of our internal actions, we expect a
markedly improved financial performance in the coming year.
Our Volvo businesses performed well in the year, with our Worthing business
returning to profitable trading. The brand enjoys an excellent model range of
cars, which continue to be positively received by customers.
The performance of our two Lotus businesses, in Ashford and Lewes, was strong
with high levels of customer demand for the Eletre and Emira new car product
in the year.
Our combined CUPRA/SEAT/Skoda businesses continued to perform satisfactorily
and were boosted in the year by the addition of the Skoda brand to our
existing Volkswagen dealership in Eastbourne and the CUPRA and SEAT brands to
our existing Volkswagen dealership in Worthing.
Our MG business in Ashford moved into its fourth year of operation. The
business was able to generate significant growth in the year, reflecting the
increasing market share of the brand, and performed well.
Our Vauxhall business in Ashford underperformed in the year. A review of
operational performance, is expected to lead to a brighter future for this
brand.
Trading at Caffyns Motorstore, our used car businesses in Ashford and Lewes,
remained subdued as the business struggled to source high-quality used cars.
However, the concept continues to be well received by our customers, who
particularly value the Caffyns brand.
Groupwide projects
We remain focused on generating further improvements in the levels of used car
sales, used car finance income and service labour sales. These three areas
will be key to achieving increases in profitability in the coming years. In
addition, we continue to make very good progress utilising technology to
enhance customers' experience throughout their buying journey, as well as
improving our aftersales retention.
Zero-emission vehicle ("ZEV") targets
With effect from 1 January 2024 the Government announced that vehicle
manufacturers would be required to meet annual minimum registration targets
for ZEV cars, with the target for the 2024 calendar year set at 22% of
registrations. For the 2025 calendar year this minimum registration target
increased to 28%. Failure to achieve the set target could result in potential
financial penalties being levied on the manufacturer, although manufacturers
were provided with potential relief against penalties by being able to carry
forward shortfalls into future years. Registrations of ZEV cars in the first
calendar quarter of 2025 amounted to 21% of the market, some way below the
stipulated minimum of 28%. We believe that the manufacturers that we represent
are well placed to meet the challenges of the transition to zero-emission
vehicles.
Climate-related emissions
The board is acutely aware of the impact that the Company's operations have on
the environment, its responsibility to minimise these wherever possible, and
to supporting the Government's efforts to transition towards net-zero carbon
emissions. To assist with this process an Environmental, Sustainability and
Efficiency Committee, headed by a senior operational manager who reports
directly to the Chief Executive, operated during the year, with the remit of
scrutinising and reducing the Company's energy usage. The Committee was able
to achieve year-on-year savings in electricity, gas and fuel usage of some 4%
in the 2024 calendar year. The Company purchases all its electricity from
sources that are certified as generating 100% renewable electricity and
investments were made in the year to improve the efficiency of lighting and
heating equipment. Further energy savings are expected in future periods.
Property
We operate primarily from freehold sites, which provides additional stability
to our business model. As in previous years, our freehold premises were valued
at the balance sheet date by chartered surveyors CBRE Limited, based on an
existing use valuation. The excess of the valuation over net book value of our
freehold properties at 31 March 2025 was £11.2 million (2024: £10.7
million). No impairment charges were deemed necessary in the year (2024: £0.6
million). In accordance with our accounting policies, this surplus of £11.2
million has not been incorporated into our accounts.
During the year, we incurred capital expenditure of £1.1 million (2024: £2.6
million). The Company added additional franchises to two existing sites at a
cost of £0.6 million alongside replacement spend on existing assets and
further installations of electric charging points.
In December, the Board completed the sale process of our freehold premises in
Lewes for a cash consideration of £4.7 million, before costs of disposal.
Under the terms of the sale, the Company has been granted a nil-cost lease to
keep its Lotus Sussex and Motorstore Performance businesses operating from the
site until October 2025.
The Company operates two of its franchised businesses from leased premises as
well as having two leased vehicle storage compounds, which are shown on the
balance sheet as right of use assets. During the year, the lease for one of
those premises was extended for a further five years. As a result, the
carrying value of the associated right of use asset was increased by £0.2
million, equal and opposite to an increase in its lease liability.
Bank facilities and borrowings
The Company's banking facilities with HSBC comprise a term loan, originally of
£7.5 million, repayable by instalments over a twenty-year period to 2038 and
a revolving credit facility of £6.0 million, both of which will next come up
for their periodic review in April 2026. HSBC also provides an overdraft
facility of £3.5 million, reviewed annually. The Company continues to enjoy a
supportive relationship with HSBC.
In addition to its facilities with HSBC, the Company also has a revolving
credit facility of £4.0 million provided by Volkswagen Bank, reviewed
annually with the next periodic review due in October 2025.
The term loan and revolving credit facilities provided by HSBC include certain
covenant tests covering interest, borrowing and security levels. In the light
of the underlying trading losses incurred in the prior year, HSBC implemented
a new covenant test solely for the year under review, which required the
Company to achieve certain quarterly EBITDA hurdles, all of which were
achieved. The covenant test relating to security levels, which continued
unchanged in the year, was also passed at each quarter-end during the year.
The previous covenant tests relating to interest and borrowing levels will
then be reapplied with effect from 30 June 2025. The interest covenant will be
tested quarterly on a rolling twelve-month basis and will require the Company
to exceed stipulated EBITDA hurdles, based on the level of interest incurred
on its bank borrowings. The borrowing covenant will also be tested quarterly
and will require secured bank borrowings to be maintained below stipulated
multiples of EBITDA. Any failure of a covenant test could result, at the
option of HSBC, in the borrowing becoming repayable on demand.
During the year, cash absorbed by operating activities was £0.3 million
(2024: cash generated of £0.1 million), predominantly due to the increased
contribution in the year to the Company's defined-benefit pension scheme.
Changes in net working capital generated cash of £1.2 million (2024: £0.5
million), with inventories and payables both increasing as levels of new cars
held on consignment from manufacturers continued to return to more normal
levels. Other significant cash movements in the year included disposal
proceeds from the sale of freehold properties of £4.7 million (2024: £Nil),
capital expenditure of £1.1 million (2024: £2.6 million), net receipts of
bank term loans of £0.6 million (2024: repayments of £0.9 million) and
dividends paid to shareholders of £0.3 million (2024: £0.5 million). Cash
balances held at 31 March 2025 were £3.8 million, an increase of £3.3
million from the previous year-end.
Bank borrowings, net of cash balances, at 31 March 2025 were £8.5 million
(2024: £11.3 million) and as a proportion of shareholders' funds at 31 March
2025 were 29% (2024: 39%). This reduction in gearing level reflected cash
received from the property sale in the year combined with a lower requirement
for capital expenditure in the year and a positive movement in the deficit of
the Company's defined-benefit pension scheme. In addition to the year-end cash
balances held, available but undrawn banking facilities with HSBC and
Volkswagen Bank at 31 March 2025 were £6.5 million (2024: £7.5 million).
Taxation
The year produced a tax charge against profits of £0.1 million (2024: credit
of £0.3 million). The effective tax rate for the year, at 28%, was higher
than the standard rate of corporation tax in force for the year of 25% due to
the effect of items disallowable for corporation tax.
The Company has outstanding trading losses of £0.7 million (2024: £1.3
million) available for relief against profits in future accounting periods as
well as a corporate interest restriction carried forward of £1.1 million
(2024: £Nil). There are no capital losses awaiting relief. Capital gains
which remain unrealised, where potentially taxable gains arising from the sale
of properties and goodwill have been rolled over into replacement assets,
amounted to £3.9 million (2024: £5.9 million) which could equate to a future
potential tax liability of £1.0 million (2024: £1.5 million). The Company
was unable to utilise any of its Advanced Corporation Tax in the year, leaving
an unchanged amount carried forward to future trading periods of £0.3 million
(2024: £0.3 million).
Pension scheme
The Company's defined benefit scheme was closed to future accrual in 2010. The
board has little control over the key assumptions in the valuation
calculations as required by accounting standards and movements in yields of
gilts and bonds can have a significant impact on the net funding position of
the scheme. At 31 March 2025, the deficit of the scheme was £4.5 million
(2024: £10.0 million). The deficit, net of deferred tax, was £3.4 million
(2024: £7.5 million). During the year the Company made cash contributions to
the scheme of £4.2 million (2024: £0.8 million).
The Scheme operates with a fiduciary manager and the board, together with the
independent pension fund trustees, continues to review options to reduce the
cost of operation and its deficit. Actions that could further reduce the risk
profile of the assets and more closely match the nature of the Scheme's assets
to its liabilities continue to be considered.
The pension cost under IAS 19 is charged as a non-underlying cost and amounted
to £0.4 million in the year (2024: £0.4 million).
The latest triennial valuation was at 31 March 2023 and was formally submitted
to the Pensions Regulator in June 2024. A recovery plan to address the Scheme
deficit identified from this triennial valuation was agreed with the trustees
under which the annual recovery plan payment was set at a base level of £0.8
million for the year ended 31 March 2025, along with an additional
contribution of £1.0 million which was paid in the year. The recurring annual
recovery plan payment for each subsequent year thereafter will increase by
2.25%, with additional contributions of £0.5 million in each of the years
ending 31 March 2026 and 2027 and an additional contribution of £125,000 in
the year ended 31 March 2028. Contributions in future years beyond 2028 would
then continue at the base level until superseded by any future new recovery
plan to be agreed between the Company and the trustees. In accordance with the
recovery plan, the Company made deficit reduction contributions into the
Scheme during the year of £1.8 million (2024: £0.8 million).
During the year, the Company sold a freehold property in Lewes, which was
charged to the Scheme, for a cash consideration of £4.7 million. In return
for releasing its security charge over the property, the Scheme received a
cash contribution of £2.4 million, in December 2024.
Dividend
The board declared an interim dividend of 5.0 pence per Ordinary share (2024:
5.0 pence), which was paid in January 2025. The board remains confident in the
prospects of the Company and is declaring a final dividend for the year of 5.0
pence per Ordinary share (2024: 5.0 pence). This will be paid on 8 August 2025
to shareholders on the register at close of business on 11 July 2025 if
approved by shareholders at the Company's Annual General Meeting on 7 August
2025. The Ordinary shares will be marked ex-dividend on 10 July 2025.
Strategy
Our continuing strategy is to focus on growing our loyal customer base through
representing premium and premium-volume franchises, maximising opportunities
for premium used cars and delivering an excellent after sales service. We
recognise that we operate in a rapidly changing environment and continue to
carefully monitor the appropriateness of this strategy. We continue to seek
opportunities to invest in the future growth of our business.
We are concentrating on business opportunities in stronger sectors to deliver
higher returns from fewer but bigger sites. We continue to seek to deliver
performance improvement, in particular in our used car and aftersales
operations, and to enhance both the purchasing and aftersales experience for
our customers.
Annual General Meeting
The Annual General Meeting will be held on 7 August 2025 and will be an open
meeting, to which shareholders will be invited to attend in person.
Outlook
The Company has a healthy new car forward-order book but trading conditions in
the early part of the current financial year have remained challenging, with
inflationary pressures and high interest rates continuing to impact on our
cost base, and on our customers' confidence levels.
Enquiry rates from retail customers for electric cars have increased as retail
offers become more attractive and customers confidence levels in the product
increase although much of the demand for electric cars continues to come
through the fleet channel. However, our manufacturers are well placed for the
future with a pipeline of market-leading electric new car products due to come
to market.
Our Company enjoys an exceptional workforce who represent excellent brands. We
also continue to enjoy supportive relationships with our banking partners,
HSBC and Volkswagen Bank, with undrawn facilities at 31 March 2025 of £6.5
million. 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 benefit from future business opportunities.
S G M Caffyn
Chief Executive
10 June 2025
Group Income Statement
for the year ended 31 March 2025
2025 2024
Note £'000 £'000
Revenue 275,464 262,084
Cost of sales (240,774) (230,389)
Gross profit 34,690 31,695
Operating expenses
Distribution costs (21,572) (19,913)
Administration expenses (10,101) (10,605)
Operating profit before other income 3,017 1,177
Other income 530 356
Operating profit 3,547 1,533
Operating profit before non-underlying items 3,498 2,114
Non-underlying items within operating profit 5 49 (581)
Operating profit 3,547 1,533
Finance expense 6 (2,892) (2,680)
Finance expense on pension scheme (409) (398)
Net finance expense (3,301) (3,078)
Profit/(loss) before taxation 246 (1,545)
(Loss)/profit before tax and non-underlying items 606 (566)
Non-underlying items within operating profit 5 49 (581)
Non-underlying items within finance expense on pension scheme 5 (409) (398)
Profit/(loss) before taxation 246 (1,545)
Taxation 7 (70) 341
Profit/(loss) for the year 176 (1,204)
Earnings/(loss) per share
Basic 8 6.4p (44.3)p
Diluted 8 6.4p (44.3)p
Underlying earnings/(loss) per share
Basic 8 16.4p (17.3)p
Diluted 8 16.4p (17.3)p
See accompanying notes to these condensed financial statements.
Group Statement of Comprehensive Income
for the year ended 31 March 2025
2025 2024
Note £'000 £'000
Profit/(loss) for the year 176 (1,204)
Items that will never be reclassified to profit and loss:
Remeasurement of net defined benefit liability 1,707 (1,652)
Deferred tax on remeasurement 17 (427) 413
Total other comprehensive income/(expense), net of taxation 1,280 (1,239)
Total comprehensive income/(expense) for the year 1,456 (2,443)
See accompanying notes to these condensed financial statements
Group Statement of Financial Position
at 31 March 2025
2025 2024
Note £'000 £'000
Non-current assets
Right-of-use assets 10 2,200 2,343
Property, plant and equipment 11 38,080 38,714
Investment properties 12 2,513 7,216
Interest in lease 13 - 65
Goodwill 14 286 286
Deferred tax asset 17 224 568
43,303 49,192
Current assets
Inventories 15 44,425 42,251
Trade and other receivables 10,113 7,310
Interest in lease 13 65 160
Current tax recoverable 39 190
Cash and cash equivalents 3,762 438
58,404 50,349
Total assets 101,707 99,541
Current liabilities
Interest-bearing bank overdrafts and loans 1,445 1,445
Trade and other payables 16 51,781 45,597
Lease liabilities 642 501
53,868 47,543
Net current assets 4,536 2,806
Non-current liabilities
Interest-bearing bank loans 10,863 10,308
Lease liabilities 1,720 2,106
Preference shares 812 812
Retirement benefit obligations 4,523 10,036
17,918 23,262
Total liabilities 71,786 70,805
Net assets 29,921 28,736
Capital and reserves
Share capital 1,439 1,439
Share premium account 272 272
Capital redemption reserve 707 707
Non-distributable reserve 1,531 1,724
Retained earnings 25,972 24,594
Total equity attributable to shareholders 29,921 28,736
Group Statement of Changes in Equity
for the year ended 31 March 2025
Capital Non-
Share Share redemption distributable Retained
capital premium reserve reserve Earnings Total
Note £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2024 1,439 272 707 1,724 24,594 28,736
Total comprehensive
Income
Profit for the year - - - - 176 176
Other comprehensive - - - - 1,280 1,280
income
Total comprehensive - - - - 1,456 1,456
income for the year
Transactions with
owners:
Dividends 11 - - - - (273) (273)
Issue of shares - SAYE 27 - - - - 2 2
Transfer arising from
disposal of Held for
Sale Asset (193) 193 -
At 31 March 2025 1,439 272 707 1,531 25,972 29,921
for the year ended 31 March 2024
Capital Non-
Share Share redemption distributable Retained
capital premium reserve reserve Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2023 1,439 272 707 1,724 27,520 31,662
Total comprehensive
expense
Profit for the year - - - - (1,204) (1,204)
Other comprehensive - - - - (1,239) (1,239)
expense
Total comprehensive - - - - (2,443) (2,443)
expense
Transactions with
owners:
Dividends - - - - (539) (539)
Issue of shares - SAYE - - - - 220 220
Purchase of own - - - - (195) (195)
shares
Share-based payment - - - - 31 31
At 31 March 2024 1,439 272 707 1,724 24,594 28,736
Group Cash Flow Statement
for the year ended 31 March 2025
2025 2024
Note £'000 £'000
Net cash (outflow)/inflow from operating activities 18 (303) 119
Investing activities
Proceeds on disposal of investment property 4,620 -
Proceeds on disposal of property, plant and equipment 93 57
Purchases of property, plant and equipment (1,063) (2,575)
Receipt from investment in lease 185 185
Net cash inflow/(outflow) from investing activities 3,835 (2,333)
Financing activities
Revolving-credit facility utilised 6,500 1,000
Revolving-credit facility repaid (6,500) (1,000)
Secured loan received 1,000 -
Secured loans repaid (375) (875)
Unsecured loan received - 350
Unsecured loan repaid (70) (35)
Issue of shares - SAYE scheme 2 220
Purchase of own shares for treasury - (195)
Dividends paid (273) (539)
Repayment of lease liabilities (492) (500)
Net cash outflow from financing activities (208) (1,574)
Net increase/(decrease) in cash and cash equivalents 3,324 (3,788)
Cash and cash equivalents at beginning of year 438 4,226
Cash and cash equivalents at end of year 3,762 438
Notes
for the year ended 31 March 2025
1. GENERAL INFORMATION
Caffyns plc is a company domiciled in the United Kingdom. The address of the
registered office is Saffrons Rooms, Meads Road, Eastbourne BN20 7DR. The
registered number of the Company is 105664.
This financial information has been extracted from the consolidated financial
statements which were approved by the directors on 10 June 2025.
2. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with UK adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006 and in accordance with International Financial Reporting
Standards ("IFRS") as adopted in the United Kingdom.
Whilst the financial information included in this announcement has been
computed in accordance with IFRSs, this announcement does not itself contain
sufficient information to comply with IFRSs.
The financial information set out does not constitute the Company's statutory
accounts for the year ended 31 March 2025, but is derived from those accounts.
Statutory accounts for the year ended 31 March 2024 have been delivered to the
Registrar of Companies and those for the year ended 31 March 2025 will be
delivered following the Company's annual general meeting. The auditors have
reported on those accounts: their reports were unqualified, did not draw
attention to any matters by way of emphasis without qualifying their report
and did not contain statements under section 498(2) or (3) Companies Act 2006
or equivalent preceding legislation.
A copy of the annual report for the year ended 31 March 2025 will be available
at www.caffynsplc.co.uk and will be posted to shareholders by 4 July 2025.
3. GOING CONCERN
The directors have considered the going concern basis and have undertaken a
detailed review of trading and cash flow forecasts for a period of one year
from the date of approval of this Annual Report. This has focused primarily
on the achievement of the banking covenants associated with the term loan and
revolving credit facilities provided by HSBC, which cover levels of interest,
borrowing and freehold property security. Following the underlying loss made
in the previous financial period agreement was reached with HSBC to implement
a new covenant test solely for the current year which required the Company to
achieve minimum cumulative Senior EBITDA hurdles, which were £Nil for the
quarter ended 30 June 2024, £1.0 million for the half-year ended 30 September
2024, £1.5 million for the nine months ended 31 December 2024 and £3.0
million for the full financial year ended 31 March 2025. These covenant tests
were passed for all quarters of the year.
Under the Company's interest cover covenant test, to be reapplied from 30 June
2025, it will be required to make underlying profits before Senior
Interest (that being paid to HSBC and VW Bank on its term loan and revolving
credit facility borrowings), corporation tax, depreciation and amortisation
("Senior EBITDA") for a rolling twelve-month period which is at least three
times the level of Senior Interest. Under the borrowings test, also to be
reapplied from 30 June 2025 the Company's borrowings from HSBC and VW Bank on
its term loan and revolving credit facilities must be less than 400% of its
Senior EBITDA.
The Company's final covenant test over its levels of freehold property
security requires that the level of its bank borrowings do not exceed 70% of
the independently assessed value of its charged freehold properties. This test
was passed at 31 March 2025.
Once reapplied on 30 June 2025, these covenants will then continue to be
tested quarterly. Financial modelling for the coming twelve-month period has
allowed the directors to conclude that there is satisfactory headroom in the
Company's banking covenants.
Any failure of a covenant test would render the borrowing facilities from HSBC
to become repayable on demand, at the option of the lender.
The directors have also given consideration to the current uncertainties in
the state of the UK economy, as well as to cost pressures which have impacted
businesses such as increases to staffing costs from the rise in the National
Minimum and National Living Wages, from business rates and from increases to
funding costs from continuing high interest base rates.
The directors have also considered the Company's working capital requirements.
The Company meets its day-to-day working capital requirements through
short-term stocking loans, bank overdraft and revolving-credit facility, and
medium-term revolving credit facilities and term loans. At the year-end, the
medium-term banking facilities included a term loan with an outstanding
balance of £5.1 million and a revolving credit facility of £6.0 million from
HSBC, its primary bankers, with both facilities being next renewable during
the going concern period in April 2026. HSBC also make available a short-term
overdraft facility of £3.5 million, which is renewed annually each August.
The Company also has a short-term revolving-credit facility from Volkswagen
Bank of £4.0 million, which is next scheduled for renewal in October 2025.
The Company maintains strong relationships with HSBC and VW Bank and, based on
the discussions to date regarding the renewal of the facilities, the directors
are of the opinion that there is a reasonable expectation that all facilities
will be renewed at their scheduled expiry dates. At 31 March 2025 the Company
held cash in hand balances of £3.8 million and had undrawn borrowing
facilities of £6.5 million, all of which would be immediately available.
The directors have a reasonable expectation that the Company has adequate
resources and headroom against the covenant tests to be able to continue in
operational existence for the foreseeable future and for a period of one year
from the date of approval of the Annual Report. For those reasons, they
continue to adopt the going concern basis in preparing this Annual Report.
4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
These judgements and estimates are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Certain critical accounting estimates in applying the Company's accounting
policies are listed below.
Retirement benefit obligation
The Company has a defined benefit pension scheme. The obligations under this
scheme are recognised in the balance sheet and represent the present value of
the obligation calculated by independent actuaries, with input from
management. These actuarial valuations include assumptions such as discount
rates, return on assets and mortality rates. These assumptions vary from time
to time, depending on prevailing economic conditions. Details of the
assumptions used are provided in note 24 to the 2025 Annual Report. At 31
March 2025, the net liability of the scheme included in the Statement of
Financial Position was £4.5 million (2024: £10.0 million).
Impairment
The carrying value of property, plant and equipment and goodwill are tested
annually for impairment as described in notes 12, 13, 14 and 16 to the 2025
Annual Report. For the purposes of the annual impairment testing, the
directors recognise Cash Generating Units (CGUs) to be those assets
attributable to an individual dealership, which represents the smallest group
of assets which generate cash inflows that are independent from other assets
or CGUs. The recoverable amount of each CGU is based on the higher of its fair
value less costs to sell and its value in use. The fair value less costs to
sell of each CGU is based upon the market value of any property contained
within it and is determined by an independent valuer, and its value in use is
determined through discounting future cash inflows (as described in detail in
note 16 to the 2025 Annual Report). As a result of this review, the directors
considered that no impairments (2024: £0.6 million) were required to the
carrying value of its property assets.
Inventory provisions
The Company carries significant inventories of new and used cars, as well as
operating its own fleet of sales demonstrators and courtesy cars for service
customers. These cars are valued at the lower of cost and net realisable value
by reference to trade valuation guides, after adjusting for the mileage and
condition of the cars. At the year-end, the Company held a provision against
the cost of its used inventory of £0.3 million (2024: £0.3 million). The
directors considered that this provision was sufficient to ensure that
inventories were shown at the lower of cost and net realisable value.
5. Non-underlying items
The following amounts have been presented as non-underlying items in these
financial statements:
2025 2024
£'000 £'000
Net gain on disposal of freehold property 64 41
Other income, net 64 -
Within operating expenses:
Service cost on pension scheme (15) (18)
Property impairments - (604)
(15) (622)
Non-underlying items within operating profit 49 (581)
Net finance expense on pension scheme (409) (398)
Non-underlying items within net finance expense (409) (398)
Total non-underlying items before taxation (360) (979)
Taxation credit on non-underlying items 90 245
Total non-underlying items after taxation (270) (734)
Underlying results exclude items that, in the judgement of the directors, have
non-trading attributes, being unrelated to the primary motor trade business of
the Company. Management therefore consider these items should be disclosed
separately in order to enable a full understanding of the operating results.
Non-underlying items comprise only profits and losses from disposal of
freehold property, gains arising from lease extensions from freehold property,
impairment charges against non-current assets, costs attributable to vacant
properties held pending their disposal, net financing return and service cost
on pension obligations in respect of the defined benefit pension scheme, which
is closed to future accrual, and companywide operational restructuring and
redundancy costs. All other activities are treated as underlying but are not
designed to replace the requirements of International Financial Reporting
Standards.
6. Finance expense
2025 2024
£'000 £'000
Interest payable on bank borrowings 955 920
Interest payable on inventory stocking loans 1,612 1,454
Interest on lease liabilities 150 133
Finance costs amortised 124 122
Preference dividends (see note 9) 72 72
Other miscellaneous interest 5 -
Finance income on interest in lease (26) (21)
Finance expense 2,892 2,680
7. Tax
2025 2024
£'000 £'000
Current tax
UK corporation tax - (152)
Adjustments recognised in the period for current tax of prior periods 152 -
Total charge/(credit) 152 (152)
Deferred tax (see note 17)
Origination and reversal of temporary differences (33) (201)
Change in corporation tax rate - 36
Adjustments recognised in the period for deferred tax of prior periods (49) (24)
Total credit (82) (189)
Tax charge/(credit) in the Income Statement 70 (341)
2025 2024
The tax charge/(credit) arises as follows: £'000 £'000
On normal trading 160 (96)
On non-underlying items (see note 5) (90) (245)
Tax charge/(credit) in the Income Statement 70 (341)
The charge for the year can be reconciled to the profit per the Income
Statement as follows:
2025 2024
£'000 £'000
Profit/(loss) before tax 246 (1,545)
Tax at the UK corporation tax rate of 25% (2024: 25%) 62 (386)
Tax effect of expenses that are not deductible in determining taxable profit 326 232
Movement in rolled over and held over gains (490) (226)
Effect of change in corporation tax rate - 36
Other differences 69 27
Adjustment to tax charge in respect of prior periods 103 (24)
Tax charge/(credit) for the year 70 (341)
The current year total tax credit is impacted by the effect of non-deductible
expenses, which includes non-qualifying depreciation.
The total tax charge for the year is made up as follows:
2025 2024
£'000 £'000
Total current tax charge/(credit) 152 (152)
Deferred tax charge/(credit)
Credited in the Income Statement (82) (189)
Charged/(credited) against other comprehensive income 427 (413)
Total deferred tax credit 345 (602)
Total tax charge/(credit) for the year 497 (754)
Factors affecting the future tax charge
The Company has unrelieved trading losses of £0.7 million (2024: £1.3
million) and a Corporate Interest Restriction of £1.1 million (2024: £Nil),
both of which will be available for offset against profits made in future
periods.
A deferred tax asset totalling £0.4 million (2024: £0.3 million) has been
accounted for in deferred tax (see note 17).
The Company also has unrelieved advance corporation tax of £0.3 million
(2024: £0.3 million), which is available to be utilised against future
mainstream corporation tax liabilities and is accounted for in deferred tax
(see note 17).
8. Earnings per ordinary share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year.
Treasury shares are treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares and the pots-tax effect
of dividends and/or interest on the assumed conversion of all dilutive options
and other dilutive potential ordinary shares.
Reconciliations of earnings and weighted average number of shares used in the
calculations are set out below.
Underlying Basic
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Profit/(loss) before tax 246 (1,545) 246 (1,545)
Adjustments:
Non-underlying items (note 5) 360 979 - -
Profit/(loss) before tax 606 (566) 246 (1,545)
Tax (note 7) (160) 96 (70) 341
Profit/(loss) after tax 446 (470) 176 (1,204)
Earnings/(loss) per share (pence) 16.4p (17.3)p 6.4p (44.3)p
Diluted earnings/(loss) per share (pence) 16.4p (17.3)p 6.4p (44.3)p
2025 2024
£'000 £'000
Underlying earnings/(loss) after tax 446 (470)
Underlying earnings/(loss) per share (pence) 16.4 (17.3)
Underlying diluted earnings/(loss) per share (pence) 16.4 (17.3)
Non-underlying losses after tax (270) (734)
Loss per share (pence) (10.0) (27.0)
Diluted loss per share (pence) (10.0) (27.0)
Total earnings/(loss) 176 (1,204)
Earnings/(loss) per share (pence) 6.4p (44.3)p
Diluted earnings/(loss) per share (pence) 6.4p (44.3)p
The number of fully paid Ordinary shares in circulation at the year-end was
2,726,811 (2024: 2,726,306). The weighted average number of shares in issue
for the purposes of the earnings per share calculation were 2,726,797 (2024:
2,717,861). The shares granted under the Company's SAYE scheme have been
treated as dilutive. For the purposes of this calculation, the weighted
average number of shares in issue for the purposes of the earnings per share
calculation were 2,726,959 (2024: 2,718,023).
9. Dividends
2025 2024
£'000 £'000
Preference shares
7% Cumulative First Preference 12 12
11% Cumulative Preference 48 48
6% Cumulative Second Preference 12 12
Included in finance expense (see note 6) 72 72
Ordinary shares
Interim dividend of 5.0 pence per ordinary share paid in respect 136 135
of the current year (2024: 5.0 pence)
Final dividend paid of 5.0 pence per Ordinary share in respect of the 137 404
March 2024 year end (2023: 15.0 pence)
273 539
The Board is declaring a final dividend of 5.0 pence per ordinary share in
respect of the year ended 31 March 2025.
10. Right-of-use assets
£'000
Deemed cost
At 1 April 2024 4,024
Additions in the year 245
At 31 March 2025 4,269
Accumulated depreciation
At 1 April 2024 1,681
Depreciation for the year 388
At 31 March 2025 2,069
Net book value
At 31 March 2025 2,200
The right-of-use assets above represent four long-term property leases for
premises from which the Company operates a Volkswagen dealership in Brighton,
a Volvo dealership in Worthing and two car storage compounds in Eastbourne and
Tunbridge Wells. During the year one of these leases was extended by a further
five years.
Depreciation charges of £388,000 (2024: £398,000) in respect of right-of-use
assets were recognised within Administration Expenses in the Income Statement.
The interest expense on the associated lease liability of £150,000 (2024:
£133,000) is disclosed in note 6. Payments made in the year on the above
leases were £456,000 (2024: £448,000).
Payments made in the year under other leases with contractual periods of 12
months or less, which have not been required to be capitalised, were £68,000
(2024: £112,000).
11. Property, plant and equipment
Freehold Leasehold Fixtures & Plant &
property improvements fittings machinery Total
£'000 £'000 £'000 £'000 £'000
Cost or deemed cost
At 1 April 2024 43,250 1,995 5,735 4,741 55,721
Additions at cost 388 10 398 269 1,065
Disposals (27) - (225) (67) (319)
At 31 March 2025 43,611 2,005 5,908 4,943 56,467
Accumulated depreciation
At 1 April 2024 8,500 753 4,400 3,354 17,007
Depreciation charge 718 85 453 415 1,671
Disposals - - (224) (67) (291)
At 31 March 2025 9,218 838 4,629 3,702 18,387
Net book value
31 March 2025 34,393 1,167 1,279 1,241 38,080
Short-term leasehold property for both the Company and the Group comprises net
book value of £1,167,000 in the Statement of Financial Position (2024: £1,
242,000).
Depreciation charges of £1,671,000 (2024: £1,589,000) in respect of
property, plant and equipment was recognised within Administration Expenses in
the Income Statement. Based on the valuation of the Company's freehold
properties undertaken by CBRE, no impairment charges (2024: £400,000) were
required to be taken against the cost of a freehold property to ensure that
the related cash generating unit ("CGU") remained disclosed at its fair value
less costs of disposal.
The Company valued its portfolio of freehold premises and investment
properties as at 31 March 2025. The valuation was carried out by CBRE Limited,
Chartered Surveyors, in accordance with the Royal Institution of Chartered
Surveyors valuation - global and professional standards requirements. The
valuation is based on existing use value which has been calculated by applying
various assumptions as to tenure, letting, town planning, and the condition
and repair of buildings and sites including ground and groundwater
contamination. Management are satisfied that this valuation is materially
accurate. The excess of the valuation over net book value as at 31 March 2025
of those sites was £11.2 million (2024: £10.7 million). In accordance with
the Company's accounting policies, this surplus has not been incorporated into
these financial statements.
12. Investment properties
£'000
Cost
At 1 April 2024 9,650
Reclassified to Held for Sale Asset (6,265)
At 31 March 2025 3,385
Accumulated depreciation
At 1 April 2024 2,434
Depreciation charge 82
Reclassified to Held for Sale Asset (1,644)
At 31 March 2025 872
Net book value
At 31 March 2025 2,513
Depreciation charges of £82,000 (2024: £111,000) in respect of Investment
properties were recognised within Administration Expenses in the Income
Statement. Based on the valuation of the Company's freehold properties
undertaken by CBRE, no impairment charges (2024: £204,000) were required to
be taken against the cost of one freehold property to ensure that the related
cash generating unit ("CGU") remained disclosed at its fair value less costs
of disposal.
As described in note 11, the total excess of the valuation of all of the
Company's freehold properties over net book value as at 31 March 2025 was
£11.2 million (2024: £10.7 million). Investment properties accounted for
£0.6 million (2024: £0.6 million) of this surplus.
On 29 October, the board exchanged contracts for the sale of the Company's
freehold premises in Lewes. At that time completion of the sale was dependent
on the successful outcome of ground surveys, which had to be completed within
a four-month period from exchange. At the half-year management's judgement at
the balance sheet date was that the transaction was reasonably certain to
complete and would do so within a twelve-month period. Accordingly, the
property was reclassified from Investment Properties and shown as an Asset
held for sale within Current assets in the Interim Report.
2025 2024
Group and Company £'000 £'000
Held for Sale asset (Lewes Property)
Net book value transferred from Investment Properties 4,621 -
Disposals proceeds (net of costs) (4,620) -
Loss on disposal (1) -
As a result of the disposal, a transfer of £193,000 was made from the
revaluation reserve to retained earnings.
13. Net investment in lease
2025 2024
£'000 £'000
Due after more than one year - 65
Due within one year 65 160
At 31 March 65 225
The premises shown above are sub-let to a third-party under a lease which has
the same terms and duration as the Company's own lease.
14. Goodwill
Group and Company: £'000
Cost
At 1 April 2024 and 31 March 2025 481
Provision for impairment
At 1 April 2024 and 31 March 2025 195
Carrying amounts allocated to CGUs
Volkswagen, Brighton 200
Audi, Eastbourne 86
At 31 March 2025 286
For the purposes of the annual impairment testing, goodwill is allocated to a
CGU. Each CGU is allocated against the lowest level within the entity at which
goodwill is monitored for management purposes. Consequently, the directors
recognise CGUs to be those assets attributable to individual dealerships and
the table above sets out the allocation of goodwill into the individual
dealership CGUs. The carrying amount of goodwill allocated to the Volkswagen,
Brighton CGU is the only amount considered significant in comparison with the
Group's total carrying amount of goodwill.
Goodwill impairment reviews are undertaken annually, or more frequently if
events or changes in circumstances indicate that the carrying amount may not
be recoverable and a potential impairment may be required. Impairment reviews
have been performed for all CGUs for the years ended 31 March 2024 and 2025.
Valuation basis
The recoverable amount of each CGU is based on the higher of its fair value
less selling costs and value in use. The fair value less selling costs of each
CGU is based initially upon the market value of any property contained within
it and is determined by an independent valuer as described in note 13. Where
the fair value less selling costs of a CGU indicates that an impairment may
have occurred, a discounted cash flow calculation is prepared in order to
assess the value in use of that CGU, involving the application of a pre-tax
discount rate to the projected, risk-adjusted pre-tax cash inflows and
terminal value.
The two CGUs noted below both relate to leasehold premises and therefore only
the value-in-use calculation is appropriate.
Period of specific projected cash flows (Volkswagen, Brighton CGU)
The recoverable amount of the Volkswagen, Brighton CGU is based on value in
use. Value in use is calculated using cash flow projections for a five-year
period from 1 April 2025 to 31 March 2030. These projections are based on the
most recent budget which has been approved by the board being the budget for
the year ending 31 March 2026. The key assumptions in the most recent annual
budget on which the cash flow projections are based relate to expectations of
sales volumes and margins, and expectations around changes in the operating
cost base. These assumptions are based on past experience, adjusted to
expected changes, and on external sources of information. The cash flows
include ongoing capital expenditure required to maintain the dealership, but
exclude any growth capital expenditure projects to which the Group was not
committed at the reporting date.
In the initial year of the impairment test this CGU is forecast to have net
cashflows of £0.3 million growing by 39% over a four year period to reach
£0.4 million by 2030. This anticipated growth reflects the products and
markets in which the CGU operates and does not give rise to an impairment.
Forecast growth from internal forecasts are based on a combination of internal
and external information. Based on these forecasts, the headroom available on
the total future profits is £1.5 million (2024: £1.4 million) before an
impairment would be necessary.
Period of specific projected cash flows (Volvo, Worthing CGU)
The recoverable amount of the Volvo, Worthing CGU is based on value in use.
Value in use is calculated using cash flow projections for a five-year period
from 1 April 2025 to 31 March 2030. These projections are based on the most
recent budget which has been approved by the board being the budget for the
year ending 31 March 2026. The key assumptions in the most recent annual
budget on which the cash flow projections are based relate to expectations of
sales volumes and margins, and expectations around changes in the operating
cost base. These assumptions are based on past experience, adjusted to
expected changes, and on external sources of information. The cash flows
include ongoing capital expenditure required to maintain the dealership, but
exclude any growth capital expenditure projects to which the Group was not
committed at the reporting date.
In the initial year of the impairment test this CGU is forecast to have net
cashflows of £0.3 million growing by 31% over a four year period to reach
£0.5 million by 2030. This anticipated growth reflects the products and
markets in which the CGU operates and does not give rise to an impairment.
Forecast growth from internal forecasts are based on a combination of internal
and external information. Based on these forecasts, the headroom available on
the total future profits is £0.3 million (2024: £0.5 million) before an
impairment would be necessary.
Discount rate
The cash flow projections have been discounted using a rate derived from the
Group's pre-tax weighted average cost of capital, adjusted for industry and
market risk. The discount rate used was 12.4% (2024: 12.4%).
Terminal growth rate
The cash flows subsequent to the forecast period are extrapolated into the
future over the useful economic life of the CGU using a steady or declining
growth rate that is consistent with that of the product and industry. These
cash flows form the basis of what is referred to as the terminal value. The
growth rate to perpetuity beyond the initial budgeted cash flows used in the
value in use calculations to arrive at a terminal value is 0.5% (2024: 0.5%).
Terminal growth rates are based on management's estimate of future long-term
average growth rates.
Conclusion
At 31 March 2025, no impairment charge in respect of goodwill was identified
(2024: no impairment charge).
Sensitivity to changes in key assumptions
Impairment testing is dependent on estimates and judgements, particularly as
they relate to the forecasting of future cash flows. The outcome of the
impairment test is not sensitive to reasonably possible changes in respect of
the projected cash flows, the discount rate applied, nor in respect of the
terminal growth rate assumed.
15. Inventories
Group and Company: 2025 2024
£'000 £'000
Vehicles 29,420 28,547
Vehicles on consignment 13,792 12,569
Oil, spare parts, materials and work in progress 1,213 1,135
At 31 March 44,425 42,251
2025 2024
Group and Company: £'000 £'000
Inventories recognised as an expense during the year 237,494 227,959
Inventories stated at net realisable value 1,072 985
Carrying value of inventories subject to retention of title clauses 27,092 25,384
All vehicle inventories held under consignment stocking arrangements are
deemed to be assets of the Group and are included on the Statement of
Financial Position from the date of consignment. The corresponding liabilities
to the manufacturers are included within trade and other payables. Inventories
can be held on consignment for a maximum consignment period set by the
manufacturer, which is generally between 180 and 365 days. Interest is payable
in certain cases for part of the consignment period, at various rates
indirectly linked to the Bank of England base rate.
During the year, £20,000 (2024: £7,000) was recognised in respect of the
write-down of inventories of spare parts due to general obsolescence.
16. Trade and other payables
2025 2024
£'000 £'000
Trade payable 23,727 21,206
Obligations relating to consignment stock 13,792 12,569
Vehicle stocking loans 8,623 8,058
Social security and other taxes 1,769 856
Accruals 2,444 1,838
Deferred income 411 452
Other creditors 1,015 618
At 31 March 51,781 45,597
Trade and other payables principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for these
trade-related purchases was 28 days (2024: 27 days).
During the current year, vehicle deposits in the prior year of £512,000 have
been reclassified from trade payables to other creditors.
The directors consider that the carrying amount of trade payables approximates
to fair value.
The Group finances the purchases of new car inventory through the use of
consignment funding facilities provided by its manufacturer partners and which
are shown above as Obligations relating to consignment stock. Vehicles are
physically supplied by the manufacturers with payment deferred until the
earlier of the registration of the vehicle or the end of the consignment
period, generally 180 days. In certain circumstances consignment periods can
be extended with the agreement of the manufacturer. The consignment funding
facilities attract interest at a commercial rate.
The Group utilises vehicle stocking loans to assist with the purchase of
certain used car inventory. Facilities are available from both its
manufacturer partners and a third-party finance provider and are generally
available for a period of 90 days from the date of purchase. These vehicle
stocking loans attract interest at a commercial rate.
Interest charges on consignment stocking loans and vehicle stocking loans
described above for the year ended 31 March 2025 were £1,612,000 (2024:
£1,454,000).
The obligations relating to consignment stock are all subject to retention of
title clauses for the vehicles to which they relate. Obligations for used and
demonstrator cars which have been funded are secured on the vehicles to which
they relate and are shown above as vehicle stocking loans. From a risk
perspective, the Company's funding is split between manufacturers through
their related finance arms and that funded by the Company through bank
borrowings.
The movements in deferred income in the year were as follows:
2025 2024
£'000 £'000
At 1 April 452 493
Utilisation of deferred income in the year (1,015) (865)
Income received and deferred in the year 974 824
At 31 March 411 452
17. Deferred tax
The following are the major deferred tax assets and liabilities recognised and
the movements thereon during the current and prior reporting period.
Accelerated tax Unrealised capital gains Retirement benefit obligations Short-term Trading
depreciation £'000 £'000 temporary differences Losses and CIR Recoverable
£'000 £'000 £'000 ACT Total
£'000 £'000
At 1 April 2024 (1,124) (1,465) 2,509 (21) 326 343 568
Prior year adjustments (163) - - - 212 - 49
Arising from origination (37) 490 (952) 622 (89) - 34
and reversal of
temporary differences
Recognised in other -
comprehensive income - - (427) - - (427)
At 31 March 2025 (1,324) (975) 1,130 601 449 343 224
The movement in items arising from origination and reversal of temporary
difference in the table above arise primarily from the requirement to spread
forward the pension contributions made in the year of £4.2 million (2024:
£0.8 million) to the defined-benefit Caffyns Pension Scheme, as required
under tax legislation, and the disposal of freehold property in the year.
The Company carries a balance of surplus unrelieved advanced corporation tax
("ACT"), which can be utilised to reduce corporation tax payable subject to a
restriction of 25% of taxable profits less shadow ACT calculated at 25% of
shareholder Ordinary dividends. Shadow ACT has no effect on the corporation
tax payable itself but any surplus shadow ACT on dividends must be fully
absorbed before surplus unrelieved ACT can be utilised. At the commencement of
the financial year under review on 1 April 2024, there was no Shadow ACT
outstanding. During the year, Shadow ACT generated by the payment of dividends
was unable to be utilised, so no surplus ACT could be utilised in the year.
The remaining value of surplus ACT available for utilisation in future periods
at 31 March 2025 was £343,000 (2024: £343,000). Shadow ACT carried forward
at 31 March 2025 was £203,000 (2024: £135,000).
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and it is considered that this requirement is fulfilled. The offset amounts
are as follows:
2025 2024
£'000 £'000
Deferred tax liabilities (2,299) (2,610)
Deferred tax assets 2,523 3,178
At 31 March 224 568
The unrealised capital gains include deferred tax on gains recognised on
revaluing the land and buildings in 1995 and where potentially taxable gains
arising from the sale of properties have been rolled over into replacement
assets. Such tax would become payable only if such properties were sold
without it being possible to claim rollover relief.
Trading losses available for use in future periods amounted to £1.8 million
(2024: £1.3 million). Based on forecasts prepared the Directors conclude that
these losses will reverse against future profitability.
18. Notes to the cash flow statement
2025 2024
£'000 £'000
Profit/(loss) before tax for the year 246 (1,545)
Adjustments for net finance expense 3,301 3,078
3,547 1,533
Adjustments for:
Depreciation of property, plant and equipment, investment properties and
right-of-use assets 2,141 2,702
Cash payments into the defined-benefit pension scheme (4,230) (831)
Profit on disposal of property, plant and equipment (64) (41)
Share-based payments - 31
Operating cash flows before movements in working capital 1,394 3,394
Increase in inventories (2,173) (2,262)
Increase in receivables (2,802) (189)
Increase in payables 6,194 1,944
Cash generated by operations 2,613 2,887
Tax paid, net of refunds - (68)
Interest paid (2,916) (2,700)
Net cash (absorbed by)/derived from operating activities (303) 119
All interest payments are treated as operating cash movements as they arise
from movements in working capital.
Reconciliation of debt
Liabilities
Bank Revolving arising from Bank
and other credit Lease Preference financing and cash balances Net
Group and loans facilities liabilities shares activities £'000 debt
Company: £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2024 5,753 6,000 2,607 812 15,172 (438) 14,734
Cash movement (445) 1,000 (642) - (87) (3,324) (3,411)
Non-cash movement - - 397 - 397 - 397
At 31 March 2025 5,308 7,000 2,362 812 15,482 (3,762) 11,720
Current liabilities 445 1,000 642 - 2,087 (3,762) (1,675)
Non-current liabilities 4,863 6,000 1,720 812 13,395 - 13,395
At 31 March 2025 5,308 7,000 2,362 812 15,482 (3,762) 11,720
Non-cash movements in lease liabilities relate to an extension in the year of
an existing lease and the interest charge.
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