REG - Caffyns PLC - Half Yearly Report <Origin Href="QuoteRef">CFYN.L</Origin> - Part 2
28/11/2014 07:10
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The interest on overdue taxation relates to the corporation tax due on a VAT
repayment made to the Company in the year ended 31 March 2005. While the tax
due had been the subject of dispute with HM Revenue & Customs, it has been
provided for in the accounts but not paid.
The net financing return and service cost on pension obligations in respect of
the defined benefit scheme closed to future accrual is presented as a
non-underlying item due to the volatility of this amount.
4. FINANCE EXPENSE
Half year to30 September2014£'000 Half year to30 September2013£'000 Year to31 March2014£'000
Interest payable on bank borrowings 236 161 299
Vehicle stocking plan interest 237 221 433
Financing costs amortised 58 26 48
Interest on overdue taxation (see note 3) 79 - -
Preference dividends 51 51 102
Total finance costs 661 459 882
Interest payable on bank borrowings is after capitalising interest in
additions to freehold properties of £8,000 (2013: £20,000) at a rate of 3.8%
(2013: 3.6%).
5. TAXATION
Half year to30 September2014 Half year to30 September2013 Year to31 March2014
£'000 £'000 £'000
Current UK corporation tax
Charge for the period (4) - -
Adjustment in respect of prior years 24 - -
Total tax credit 20 - -
Deferred tax
Origination and reversal of timing differences (185) (204) (351)
Adjustment for change in rate of corporation tax:
On normal trading - 131 131
Non-underlying - 202 202
Adjustments recognised in the period for deferred tax of prior periods - - (137)
Total (charge)/credit (185) 129 (155)
Total tax (charged)/credited in the Statement of Financial Performance (165) 129 (155)
The tax charge/(credit) arises as follows:
On normal trading (211) (97) (78)
Non-underlying 46 226 (77)
Total (charge)/credit (165) 129 (155)
Taxation for the half year has been provided at the effective rate of taxation
of 21% (2014: 21%) expected to apply to the whole year on ordinary trading.
Tax on non-underlying items is provided at the actual rate applicable. The UK
corporation tax rate reduction from 21% to 20% has been enacted and will be
effective from 1 April 2015.
6. 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 period. 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 the earnings and the weighted average number of shares used
in the calculations are set out below.
Half year to Half year to Year to
30 September 30 September 31 March
Basic 2014 2013 2014
£'000 £'000 £'000
Profit before tax 1,213 727 1,566
Taxation (165) 129 (155)
Earnings 1,048 856 1,411
Basic earnings per share 38.0p 30.8p 51.0p
Diluted earnings per share 37.5p 30.6p 50.3p
Adjusted
Profit before tax 1,213 727 1,566
Adjustment: Non-underlying items (note 3) (21) 300 600
Underlying profit before tax 1,192 1,027 2,166
Taxation (211) (97) (78)
Underlying earnings 981 930 2,088
Underlying earnings per share 35.6p 33.5p 75.5p
Diluted earnings per share 35.1p 33.3p 74.4p
The number of fully paid ordinary shares in issue at the period end was
2,757,213 (2013: 2,754,881). The weighted average shares in issue for the
purposes of the earnings per share calculation were 2,757,213(2013:
2,776,897). The shares granted under the Company's SAYE scheme are dilutive.
The weighted average number of dilutive shares under option at fair value was
35,409 (2013: 18,107) giving a total diluted weighted average number of shares
of 2,792,622 (2013: 2,795,004).
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 6.75p per share (2013: 6.0p) is
payable on 9 January 2015 to shareholders on the register at the close of
business on 12 December 2014. The shares will be marked ex-dividend on 10
December 2014.
Preference shares
Preference dividends have been paid in October 2014. The next preference
dividends are payable in April 2015. The cost of the preference dividends has
been included within finance costs.
8. PENSIONS
The net liability for defined benefit obligations has increased from
£11,360,000 at 31 March 2014 to £11,852,000 at 30 September 2014. The increase
of £492,000 comprises the net charge to the Statement of Financial Performance
of £251,000 and a net remeasurement loss charged to Reserves of £433,000 less
contributions of £192,000. The net remeasurement loss has arisen principally
due to decreased bond yields, which determines the discount rate used and,
consequently, the value of the liabilities over the period. The main
assumptions subject to change are the discount rate 4.0% (31 March 2014 -
4.3%) and the rate of increase in inflation at 3.1% (31 March 2014 - 3.2%).
The resulting increased liabilities have been mitigated by improved returns on
the scheme's assets.
9. RELATED PARTY TRANSACTIONS
There have been no new related party transactions that have taken place in the
first six months of the current financial year that have materially affected
the financial position or performance of the Group during that period and
there have been no material changes in the related party transactions
described in the last Annual Report that could do so.
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, manufacturers'
dependency and stability, used car prices and regulatory compliance.
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 S Harrison
Finance Director
28 November 2014
INDEPENDENT REVIEW REPORT
to Caffyns plc
Introduction
We have reviewed the condensed set of financial statements in the Half Year
Report for the six months ended 30 September 2014 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's members, as a body, in accordance
with ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review work has been
undertaken so that we might state to the Company's members those matters we
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