REG - Caffyns PLC - Half-year Report <Origin Href="QuoteRef">CFYN.L</Origin> - Part 2

CaffynsAnnouncement

25/11/2016 07:05

- Part 2: For the preceding part double click  ID:nRSY1148Qa 

profit for the period           1,012         989           1,465     
 Taxation on normal trading (note 5)        (173)         (165)         (119)     
 Underlying earnings                        839           824           1,346     
 Underlying earnings per share              30.2p         29.9p         48.8p     
 Diluted earnings per share                 30.2p         29.4p         48.0p     
 
 
The number of fully paid ordinary shares in issue at the period end was
2,879,298 (2015: 2,879,298). Excluding the shares held for treasury, the
weighted average shares in issue for the purposes of the earnings per share
calculation were 2,773,616 (2015: 2,759,678). The shares granted under the
Company's SAYE scheme are dilutive. The number of dilutive shares under option
at fair value was 2,011 (2015: 39,133) giving a total diluted weighted average
number of shares of 2,775,627 (2015: 2,798,811). 
 
The Directors consider that underlying earnings per share figures provide a
better measure of comparative performance. 
 
7.             DIVIDENDS 
 
Ordinary shares of 50p each 
 
The interim dividend proposed at the rate of 7.50 pence per share (2015: 7.25
pence) is payable on 6 January 2017 to shareholders on the register at the
close of business on 16 December 2016.  The shares will be marked ex-dividend
on 15 December 2016. 
 
Preference shares 
 
Preference dividends were paid in October 2016.  The next preference dividends
are payable in April 2017.  The cost of the preference dividends has been
included within finance costs. 
 
8.             PENSIONS 
 
The pension scheme deficit reflects a defined benefit obligation that has been
updated to reflect its valuation as at 30 September 2016. This has been
calculated by a qualified actuary using a consistent valuation method to that
which was adopted in the audited financial statements for the year ended 31
March 2016 and in the period to 30 September 2015, and which complies with the
accounting requirements of IAS 19 (revised). 
 
The net liability for defined benefit obligations has increased from
£4,980,000 at 31 March 2016 to £13,953,000 at 30 September 2016. The increase
of £8,973,000 comprises the net charge to the Statement of Financial
Performance of £100,000 and a net remeasurement loss charged to the Statement
of Comprehensive Income of £9,055,000 less contributions of £182,000. Although
assets have increased, the liabilities have increased by a greater amount as a
result of a decrease in the discount rate from 3.35% at 31 March 2016 to 2.20%
at 30 September 2016. 
 
9.             DISCONTINUED OPERATIONS 
 
In April, the Group sold the business and assets (excluding the freehold
property) of its Land Rover business to Harwoods Limited ("Harwoods"). Cash
consideration of £7.5 million comprised £5.5 million for goodwill together
with £0.2 million for property, plant and equipment and £1.9 million for
inventories less £0.1 million 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 Harwoods will continue
to operate the Land Rover business remains with the Group, and is being leased
to Harwoods for a period of up to three years from 29 April 2016 subject to a
two-year tenant-only break clause. 
 
As a result of this transaction, the operating activities attributed to that
business have been disclosed as a discontinued operation. 
 
                                                      Half year to30 September2016£'000  Half year to30 September2015£'000  Year to31 March2016£'000  
                                                                                                                                                      
                                                                                                                                                      
 Revenue                                              5,828                              22,196                             46,089                    
 Cost of sales                                        (5,516)                            (19,942)                           (41,169)                  
 Gross profit                                         312                                2,254                              4,920                     
 Operating expenses                                   (370)                              (1,668)                            (3,473)                   
 Operating (loss)/profit                              (58)                               586                                1,447                     
 Finance expense                                      (3)                                (28)                               (55)                      
 (Loss)/profit before taxation                        (61)                               558                                1,392                     
 Income tax credit/(expense)                          10                                 (95)                               (78)                      
 (Loss)/profit attributed to discontinued operations  (51)                               463                                1,314                     
 Profit on sale of business net of deferred tax       3,888                              -                                  -                         
 Profit for the period from discontinued operations   3,837                              463                                1,314                     
 
 
The results of the business shown above represent its trading from the start
of the financial year until disposal on 29 April 2016. 
 
                                                 Half year to30 September2016£'000  
                                                                                    
 Proceeds generated on sale of business          7,512                              
 Sale of property, plant and equipment           (218)                              
 Transfer of inventories                         (1,921)                            
 Transfer of liabilities                         116                                
                                                 5,489                              
 Associated transaction costs:                                                      
 Professional fees                               (470)                              
 Adjustments arising on completion               (230)                              
 Provision for onerous costs                     (105)                              
 Net transaction costs                           (805)                              
 Net gain on sale of business                    4,684                              
 Deferred tax expense                            (796)                              
 Profit on sale of business net of deferred tax  3,888                              
                                                                                    
 
 
10.           RISKS AND UNCERTAINTIES 
 
There are a number of potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of
the financial year and could cause actual results to differ materially from
expected and historical results. The Board believes these risks and
uncertainties to be consistent with those disclosed in our latest Annual
Report, including general economic factors, their impact on the Group's
defined benefit pension scheme, liquidity and financing, the Group's
dependency on its manufacturers' and their stability, used car prices and
regulatory compliance. Following the UK's decision to leave the EU, a degree
of uncertainty in the UK economy has been created and we believe that the main
risks to arise from this relate to consumer confidence and the potential
impact that Sterling/Euro exchange rates may have on vehicle prices. 
 
11.           RESPONSIBILITY STATEMENT 
 
We confirm to the best of our knowledge: 
 
a)             the Half Year Report has been prepared in accordance with IAS34
'Interim Financial Reporting'; 
 
b)             the Half Year Report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure and Transparency Rules (indication of
important events during the first six months and their impact on the set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year); and 
 
c)             the Half Year Report includes a fair review of the information
required by DTR 4.2.8R of the Disclosure and Transparency Rules (disclosure of
related parties' transactions and changes therein). 
 
By order of the Board 
 
S G M Caffyn 
 
Chief Executive 
 
M Warren 
 
Finance Director 
 
24 November 2016 
 
INDEPENDENT REVIEW REPORT 
 
to Caffyns plc 
 
Introduction 
 
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report of Caffyns plc for the six
months ended 30 September 2016 which comprises the Condensed Consolidated
Statement of Financial Performance, the Condensed Consolidated Statement of
Comprehensive Income, the Condensed Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the Condensed
Consolidated Cash Flow Statement and the related notes. We have read the other
information contained in the half yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements. 
 
This report is made solely to the company, in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board. Our review work has been undertaken so
that we might state to the company those matters we are required to state to
it in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company for our review work, for this report, or for the
conclusion we have formed. 
 
Directors' responsibilities 
 
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority. 
 
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union. 
 
Our responsibility 
 
Our responsibility is to express a conclusion on the condensed set of
financial statements in the half-yearly financial report based on our review. 
 
Scope of review 
 
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion. 
 
Conclusion 
 
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2016 is not prepared,
in all material respects, in accordance with International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority. 
 
Grant Thornton UK LLP 
 
Auditor 
 
Gatwick 
 
24 November 2016 
 
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