Caffyns PLC said on Friday its half-year profit had virtually disappeared as costs outpaced revenue growth, and gave a mixed outlook.
The car dealership chain based in Eastbourne, Sussex, said pre-tax profit collapsed to just £44,000 in the six months ending September 30, from £1.6 million l he previous year, although turnover rose 13% to £134.3m, from £119.0m.
Cost of sales increased by 15% from £102.8 million to £118.3 million, and net finance costs doubled from £696,000 to £1.5 million .
As a result, the company cut its interim dividend by 33%, taking it from 7.5p to 5.0p.
Shares in Caffyns were down 14% at 471.00 pence at midday on Friday in London.
Looking ahead, Caffyns said she was confident in its prospects despite a faltering UK economy.
Managing director Simon Caffyn offered a mixed outlook: “Our forward order bank for new cars is strong, with improved supply levels, and we are targeting better performance for used cars at the end of the year. second half. However, the high level of economic and political uncertainty, both in the UK and overseas, is concerning. Given these uncertainties, the Board remains cautious for the second half of the year. Our balance sheet is well funded and our portfolio of freehold real estate is a source of great stability.
This article is originally published on zonebourse.com