Wednesday, July 23, 2008
Caffyns downbeat in the face of tough year
Brian Carte, Caffyns chairman, has said the future of the automotive retail market looks uncertain as the dealer group faces a tough year.
At Caffyns' AGM, Carte told shareholders 2008 was proving to be a difficult year: “The market for new cars continues to be under severe pressure, with new car registrations down by 2.5% since March.
“June, in particular, was a challenging month for national registrations within our main markets, with the private and small business user sectors declining by 14% when compared to the same month last year.”
Carte accredited the downturn to turmoil in the credit markets and the resultant decline in consumer confidence.
He said: “This decline in consumer activity, and consequent margin pressure, has resulted in a difficult trading environment for the first quarter of our financial year, conditions which are shared by our competitors in the sector.
“The outlook remains uncertain although we expect trading conditions to remain challenging. New car sales are expected to be generated by consumers deciding to downsize vehicles with lower CO2 emissions and lower vehicle excise duty rates.”
Caffyns’ share price has taken a nose dive since the start of March this year, falling from 840p to 545p today, giving the company a market capitalisation of £26.59 million.
Carte has also written to all shareholders today in response to the letter sent by shareholder activist, New Fortress Holdings.
Mark Bruce-Smith, who represents investment company New Fortress Holdings which owns 4.65% of Caffyns shares, wrote a letter calling for change to improve the business’s "dire performance".
Carte strongly refutes Bruce-Smith’s claims, saying Caffyn’s performance was “far from being dire, are unjustified and do not reflect the reality of the company's performance”.
DATED: 23.07.08
FEED: AM
At Caffyns' AGM, Carte told shareholders 2008 was proving to be a difficult year: “The market for new cars continues to be under severe pressure, with new car registrations down by 2.5% since March.
“June, in particular, was a challenging month for national registrations within our main markets, with the private and small business user sectors declining by 14% when compared to the same month last year.”
Carte accredited the downturn to turmoil in the credit markets and the resultant decline in consumer confidence.
He said: “This decline in consumer activity, and consequent margin pressure, has resulted in a difficult trading environment for the first quarter of our financial year, conditions which are shared by our competitors in the sector.
“The outlook remains uncertain although we expect trading conditions to remain challenging. New car sales are expected to be generated by consumers deciding to downsize vehicles with lower CO2 emissions and lower vehicle excise duty rates.”
Caffyns’ share price has taken a nose dive since the start of March this year, falling from 840p to 545p today, giving the company a market capitalisation of £26.59 million.
Carte has also written to all shareholders today in response to the letter sent by shareholder activist, New Fortress Holdings.
Mark Bruce-Smith, who represents investment company New Fortress Holdings which owns 4.65% of Caffyns shares, wrote a letter calling for change to improve the business’s "dire performance".
Carte strongly refutes Bruce-Smith’s claims, saying Caffyn’s performance was “far from being dire, are unjustified and do not reflect the reality of the company's performance”.
DATED: 23.07.08
FEED: AM
