Caffyns improves FY underlying profit, has cautious outlook

Shares in Caffyns are up more than 5% as it posted an improved underlying pre-tax profit for the full year, accompanied by rises in like-for-like sales of new and used cars, and a cautious outlook.

"Our businesses performed well in what was a challenging marketplace," said chief executive Simon Caffyn in a statement.

Underlying pre-tax profit was £2.05m, up from £1.4m. LFL new car sales rose 9.3%, while LFL used car sales gained 15.9%,

"The year to 31 March 2017 has seen us deliver new car sales ahead of the market in addition to impressive growth in used car sales and aftersales," said the chief executive.

"Low interest rates and attractive marketing offers have continued to underpin the motor retail sector with most cars now being sold under contracts rather than by outright purchase."

However, Caffyn said, UK's decision to leave the EU, coupled with the wider challenge to the UK economy from the weakness of sterling, meant the board remains cautious for the coming year.

This was particularly given the market consensus for a smaller new car market in 2017.

"We are well placed for organic growth and with low gearing and cash reserves, the company is also in a position to exploit future business opportunities."

Revenue from continuing operations for the year was up 14% to £212.6m. Dividend for the year was 22.5p, from 21.75p.

At 10:52 BST, shares in Caffyns were up 5.05% to 520p each.