REG - Caffyns PLC - Final Results <Origin Href="QuoteRef">CFYN.L</Origin> - Part 2
27/05/2016 11:03
- Part 2: For the preceding part double click ID:nRSa4761Za
scheme (173) (481)
Interest on overdue taxation relating to prior years - (82)
(173) (563)
Total non-underlying items before taxation (222) 8,966
Income tax expense - tax charge on non-underlying items 49 (1,865)
Total after tax (173) 7,101
The following amounts have been presented as non-underlying items in these
financial statements:
There were branch specific redundancy costs of £28,000 (2015: £39,000).
The Group sold most of its freehold property in Upperton Road, Eastbourne for
£1,581,000 and land in Goring Road, Worthing for £360,000 generating net gains
of £281,000 and £71,000 respectively. Other losses on disposal totalled
£35,000.
On 8 February 2016, the Company purchased 218,268 First Preference Shares for
108 pence each and 206,664 New Preference Shares for 167 pence each pursuant
to a Redemption Option offered to shareholders. Given the nature of the
transaction, the associated legal and professional costs of this purchase have
been treated as non-underlying together with the premium paid on redemption.
In 2015, the net financing return and service cost on pension obligations in
respect of the defined benefit scheme closed to future accrual was presented
as a non-underlying item due to the volatility of the amount. Agreement had
been reached with the trustees of the Group's defined benefit pension scheme
that the inflation measure used in payment increases for pensions in excess of
GMP would change from RPI to CPI for members (or dependants of members) who
were in service on or after 1 April 1991. Having considered the requirements
of IAS 19 'Employee benefits', this change had been recorded as a plan
amendment through the Income Statement. The change from RPI to CPI resulted in
a gain in the Income Statement of £8,861,000 in the year ended 31 March 2015.
The interest on overdue taxation relates to the corporation tax due on a VAT
repayment made to the Group in the year ended 31 March 2015. While the tax due
had been the subject of dispute with HM Revenue and Customs, it had been
provided for in the accounts, subsequently being paid in April 2015 with the
associated interest paid in March 2016.
6. FINANCE EXPENSE
2016 2015
£'000 £'000
Interest payable on bank borrowings 292 489
Vehicle stocking plan interest 652 509
Financing costs amortised 104 125
Interest on overdue taxation (see note 5) - 82
Preference dividends (see note 9) 87 102
Finance expense 1,135 1,307
Interest payable on bank borrowings is after capitalising interest on additions to freehold properties of £22,000 at a rate of 3.5% (2015: £8,000, rate: 3.8%).
7. TAXATION
2016£'000 2015£'000
Current tax
UK corporation tax (294) (249)
Deferred tax
Origination and reversal of temporary differences (87) (1,969)
Adjustments recognised in the period due to change in rate of corporation tax 184 -
Adjustments recognised in the period for deferred tax of prior periods 49 35
146 (1,934)
Total tax charged in the Income Statement (148) (2,183)
The tax charge arises as follows:
On normal trading (197) (318)
Non-underlying (see note 5) 49 (1,865)
(148) (2,183)
2016 2015
£'000 £'000
The charge for the year can be reconciled to the profit per the Income Statement as follows:
Profit before tax 2,635 11,438
Tax at the UK corporation tax rate of 20% (2015: 21%) (527) (2,402)
Tax effect of expenses that are not deductible in determining taxable profit (23) (23)
Accounting depreciation/impairment for which no tax relief is due (107) (109)
Difference between accounts profits and taxable profits on capital asset disposals 108 126
Movement in rolled over and held over gains 47 190
Re-measurement of deferred tax due to change in rate of corporation tax 184 -
Adjustments to tax charge in respect of prior years 170 35
Tax charge for the year (148) (2,183)
8. EARNINGS PER 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 post-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:
Adjusted Basic
2016£'000 2015£'000 2016£'000 2015£'000
Profit before tax 2,635 11,438 2,635 11,438
Adjustments:
Non-underlying items (note 5) 222 (8,966) - -
Adjusted profit before tax 2,857 2,472 2,635 11,438
Taxation (197) (318) (148) (2,183)
Earnings 2,660 2,154 2,487 9,255
Earnings per share 96.4p 78.1p 90.1p 335.5p
Diluted earnings per share 94.8p 77.0p 88.7p 330.7p
The number of fully paid ordinary shares in circulation at the year-end was
2,879,298 (2015: 2,758,733). The weighted average shares in issue for the
purposes of the earnings per share calculation were 2,759,371 (2015:
2,757,527). The shares granted under the Company's SAYE scheme are dilutive.
The weighted average number of dilutive shares under option at fair value was
45,703 (2015: 41,169) giving a total diluted weighted average number of shares
of 2,805,074 (2015: 2,798,696).
9. DIVIDENDS
2016 2015
Paid £'000 £'000
Preference
7.0% Cumulative First Preference* 18 25
11.0% Cumulative Preference* 57 65
6.0% Cumulative Second Preference 12 12
Included in finance expense (see note 6) 87 102
Ordinary
Interim dividend paid in respect of the current year of 7.25p (2015: 6.75p) 200 186
Final dividend paid in respect of the March 2015 year end of 13.5p (2014: 12.0p) 373 331
573 517
Proposed
In addition, the directors are proposing a final dividend in respect of the year ended 31 March 2016 of 14.5p per share which will absorb £401,000 of shareholders' funds (2015: 13.5p per share absorbing £372,000). The shares will go ex-dividend on 30 June 2016. The proposed final dividend is subject to approval by shareholders at the forthcoming Annual General Meeting and has not been included as a liability in these financial statements.
*Redemption of preference shares and change to coupon rate
On 8 February 2016, the Company bought back 218,268 6.5% Cumulative First Preference shares and 206,664 10% Cumulative Preference shares. The voting rights attributable to both Preference shares have been removed and at the same time the coupon rates have been raised from 6.5% to 7% and from 10% to 11% respectively.
10. NOTES TO THE CASH FLOW STATEMENT
2016£'000 2015£'000
Profit before taxation 2,635 11,438
Adjustment for share redemption premium and costs 292 -
Adjustment for net finance expense 1,350 1,788
4,277 13,226
Adjustments for:
Depreciation of property, plant and equipment and investment properties 1,148 1,080
Impairment of property, plant and equipment - 20
Change in retirement benefit obligations (324) (9,222)
Gain on disposal of property, plant and equipment (317) (814)
Share-based payments 51 51
Operating cash flows before movements in working capital 4,835 4,341
Increase in inventories (1,029) (5,043)
Increase in receivables (1,235) (1,051)
Increase in payables 241 6,030
Cash generated by operations 2,812 4,277
Income taxes (325) (11)
Interest paid (1,135) (1,225)
Net cash derived from operating activities 1,352 3,041
11. POST BALANCE SHEET EVENTS
Dividend
A final dividend of 14.5p per ordinary share (2015: 13.5p) has been
recommended by the Directors.
Disposal of the Land Rover business
The Company announced on 16 March 2016 that it had entered into an agreement,
conditional upon the approval of holders of the Company's Ordinary Shares, to
sell the business and assets (excluding the freehold property) of its Land
Rover Business to Harwoods Limited.
The Company had been informed that its current five year contract with Jaguar
Land Rover as an authorised dealer of new Land Rovers would not be renewed
when it expires on 31 May 2016. The details of the transaction and effect on
the Company were set out in a circular to shareholders dated 17 March 2016 and
ordinary shareholders voted on a resolution put to a General Meeting of the
Company on 21 April 2016 to approve the sale of the business on the terms
agreed. The contract, accordingly, became unconditional once the ordinary
resolution was passed.
Cash consideration of £7.5m comprised £5.5m for goodwill together with £0.2m
for tangible fixed assets and £1.9m for stocks less £0.1m in respect of
liabilities transferred. The total consideration was received at completion on
29 April 2016.
Ownership of the freehold property in Lewes from which the Land Rover Business
operates remains with the Company, and is being leased to the Buyer for a
period of up to three years from Completion subject to a two year tenant only
break clause.
The following disposal group identifies those assets and associated
liabilities that were transferred to Harwoods on completion.
29 April 2016£'000
Property, plant and equipment 207
Inventories 1,920
Assets directly associated with the disposal group 2,127
Trade and other payables (115)
Liabilities directly associated with the disposal group (115)
Disposal group 2,012
Acquisition of Freehold property
The Company announced on 27 April 2016 that it had exercised options to
acquire the freehold of three parcels of land, approximately 3.7 acres in
aggregate, in Angmering, West Sussex. The total consideration payable is £2.3
million in cash of which £1.5m is payable on 27 October 2016 and £0.8m on 27
October 2016 (or earlier at the option of the vendors but not before 27 July
2016).
The Company intends to relocate its existing Audi dealership in Worthing to
the site acquired. Planning permission for the proposed relocation was
initially refused by Arun District Council on 31 March 2016. However,
following Counsel's advice in relation to the grounds for a planning appeal,
the Company intends appealing against this decision.
This information is provided by RNS
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