REG - Caffyns PLC - Disposal

CaffynsAnnouncement

30/10/2024 07:00

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RNS Number : 1018K  Caffyns PLC  30 October 2024

Caffyns plc ("Caffyns")

 

Sale of freehold property at Brooks Road, Lewes

 

Caffyns announces that it has entered into an agreement (the "SPA") with Lidl
Great Britain Limited (the "Purchaser") for the sale of its freehold premises
at Brooks Road, Lewes (the "Premises") (the "Disposal"). Consideration for the
Disposal is £4.65 million (the "Consideration") to be paid in cash by the
Purchaser on completion of the SPA ("Completion"). Completion is subject
solely to the successful outcome of ground surveys on the Premises, to be
conducted by the Purchaser. Completion of the agreement for sale is required
within a four-month period.

 

Caffyns has operated its Lotus Sussex franchised dealership ("Lotus Sussex")
from a showroom building at the Premises since 2021, when it regained
possession of the Premises following the expiry of lease arrangements entered
into with Harwoods Limited for the operation of the Jaguar Land Rover
franchised dealership sold to Harwoods Limited by Caffyns in 2016. Since 2021,
part of the Premises has been sublet to third party tenants on short leases.

 

As a term of the Disposal, Caffyns has been granted an occupational lease at a
peppercorn rent to enable it to continue to operate Lotus Sussex from the
Premises from Completion until the end of October 2025, ahead of its
relocation.

 

As at 31 March 2024, the gross asset value of the Premises in Caffyns' audited
accounts was £4.65 million. In the year ended 31 March 2024, the Premises
generated a rental income before tax of £0.08 million. Further financial
information is shown at Appendix 1 to this announcement.

 

The directors of Caffyns (the "Directors") consider the Premises to be surplus
to the Company's long-term operational needs and that, in the directors'
opinion, the Disposal is in the best interests of Caffyns' shareholders as a
whole.

 

The Caffyns Pension Fund (the "Fund"), which, as at the date of this
announcement, is in a deficit position, holds a security charge over the
Premises. To maintain the financial position of the Fund post Completion, the
Fund will receive £2.40 million of the Consideration and new security charges
over other freehold property owned by Caffyns with a value of at least £2.25
million (the "Security"). Once the Security is in place, the remaining £2.25
million of the Consideration will be released to Caffyns and will be used to
reduce its bank borrowing levels and facilitate additional working capital.

 

After allowing for costs, the Disposal is not expected to produce any
meaningful profit or loss and, therefore, is not expected to impact materially
upon Caffyns' net asset position. Interest savings from utilising part of the
Consideration to reduce Caffyns' bank borrowings is expected to offset the
loss of rental income from the Premises, with no meaningful net impact on
Caffyns' future earnings.

 

Enquiries: Sarah Caffyn Director/ Company
Secretary                     Telephone: 01323 730201
 

 
 
 

29 October 2024

 

 

Appendix 1 - Financial information

 

A pro-forma unaudited balance sheet for Caffyns is shown below to illustrate
the expected effect of the freehold property disposal. The balance sheet has
been extracted from the audited financial statements for the year ended 31
March 2024.

                                             Pre-sale                      Post-sale

                                             of property   Freehold        of property

                                             at 31 March   property sale   at 31 March

                                             2024          £'000           2024

                                             £'000                         £'000
 Non-current assets
 Right-of-use assets                         2,343         -               2,343
 Property, plant and equipment               38,714        -               38,714
 Investment properties                       7,216         (4,650)         2,566
 Interest in lease                           65            -               65
 Goodwill                                    286           -               286
 Deferred tax asset                          568           -               568
                                             49,192        (4,650)         44,542
 Current assets
 Inventories                                 42,251        -               42,251
 Trade and other receivables                 7,310         -               7,310
 Interest in lease                           160           -               160
 Current tax recoverable                     190           -               190
 Cash and cash equivalents                   438           2,250           2,688
                                             50,349        2,250           52,599
 Total assets                                99,541        (2,400)         97,141
 Current liabilities
 Interest-bearing bank overdrafts and loans  1,445         -               1,445
 Trade and other payables                    45,597        -               45,597
 Lease liabilities                           501           -               501
                                             47,543        -               47,543
 Net current assets                          2,806         2,250           5,056
 Non-current liabilities
 Interest-bearing bank loans                 10,308        -               10,308
 Lease liabilities                           2,106         -               2,106
 Preference shares                           812           -               812
 Retirement benefit obligations              10,036        (2,400)         7,636
                                             23,262        (2,400)         20,862
 Total liabilities                           70,805        (2,400)         68,405

 Net assets                                  28,736        -               28,736

 Capital and reserves
 Share capital                               1,439         -               1,439
 Share premium account                       272           -               272
 Capital redemption reserve                  707           -               707
 Non-distributable reserve                   1,724         -               1,724
 Retained earnings                           24,594        -               24,594
 Total equity attributable to shareholders   28,736        -               28,736

 

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