Caffyns plc Annual Report 2025
Caffyns plc
Annual Report for the year ended
31 March 2025
Contents
Our Business
Results at a Glance 01
Operational and Business Review 02
Strategic Report 07
Governance
Board of Directors 20
Chairman’s Statement
on Corporate Governance 21
Directors’ Remuneration Report 28
Report of the Directors 42
Directors’ Responsibilities Statement 46
Financials
Report of the Independent Auditor 47
Income Statement 54
Statement of Comprehensive Income 55
Statement of Financial Position 56
Statement of Changes in Equity 57
Cash Flow Statement 58
Material Accounting Policies 59
Notes to the Financial Statements 66
Other Information
Five-year Review 96
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C Caffyns plc Annual Report 2025
£275.5 m 2%
Revenue
(£’000)
Revenue up 5% to £275.5 million
(2024: £262.1 million)
New car unit deliveries up by 2%
275,464
262,084
251,426
223,928
165,085
21
22
23
24
25
1% £30.7m
Underlying PBT/(LBT)
(£’000)
Used car unit sales up by 1% Aftersales revenues up by
8% to £30.7 million
(2024: £28.5 million)
606
(566)
3,140
4,574
1,876
21
22
23
24
25
Underlying EBITDA
(£’000)
Final dividend of 5.0 pence per
Ordinary share
(2024: 5.0 pence per Ordinary
share)
5,639
4,212
6,955
7,712
5,124
21
22
23
24
25
£8.5m £11.2m
Underlying earnings/
(loss) per ordinary share
(pence)
16.4
(17.3)
95.1
117.0
66.0
21
22
23
24
25
Net bank borrowings at
31 March 2025 of £8.5 million
(2024: £11.3 million),
as disclosed in note 22
Property portfolio valuation
at 31 March 2025 showed
an increased surplus to net
book value of £11.2 million
(2024: £10.7 million); this
surplus is not recognised in the
Company’s financial statements.
Our Business FinancialsGovernance Other information
01www.caffyns.co.uk
Stock code CFYN
Summary
Turnover in the financial year
ended 31 March 2025 (the “year”)
increased by 5% to £275.5 million
(2024:£262.1 million) and the Company
reported a welcome return to
profitability.
A strong performance from new cars
and aftersales generated an additional
£3.1 million of gross profit, a 10%
increase, which was pleasing given the
competitive marketplace. However,
profits from used car sales declined and
inflationary pressures on the cost base
remained high, which negated some
of the improvement in gross profits.
The underlying profit before tax of
£0.6 million for the year, which included
income of £0.1 million from the sale at
auction of a personalised number plate,
compared to an underlying loss of
£0.6 million in the prior year.
Statutory profit before tax for the
year was £0.2 million (2024: loss of
£1.5 million). The Company incurred
certain non-underlying costs, primarily
associated with the financing and
service costs of its defined-benefit
pension scheme, which were partly
offset by property disposal profits.
Actuarial adjustments arising on its
defined-benefit pension scheme have
been taken direct to reserves. Basic
earnings per share for the year were
6.4 pence (2024: deficit of 44.3 pence).
Underlying earnings per share for the
year were 16.4 pence (2024: deficit of
17.3 pence).
A strong
performance from new
cars and aftersales
generated an additional
£3.1 million of gross
profit, a 10% increase,
which was pleasing
given the competitive
marketplace.
new car registrations in the private and
small business sector, in which we
principally operate, actually fell by 4%.
Our own retail new car deliveries rose
by 2%, a better outcome than for the
comparable motor retail sector.
Our volume of used cars sales rose in
the year by 1%. Our performance in the
year was held back by falling volumes
at our Motorstore non-franchised
businesses in Ashford and Lewes.
Overall unit margins in the year were
stable against their level in the prior year.
Lower volumes of new car registrations
since the covid pandemic in 2020 have
also reduced the number of less than
4-year-old used cars available in the
market. In recognition of this scarcity,
procedures were further strengthened
to broaden our sources for replenishing
inventory but the sourcing of good
quality, well-priced used cars remained
challenging.
The Company’s defined benefit
pension scheme deficit, calculated
in accordance with the requirements
of IAS 19 Pensions, reduced to
£4.5 million at 31 March 2025
2024: £10.0 million). During the year the
Company made cash contributions to
the scheme of £4.2 million
(2024: 0.8 million).
The Company continues to own all but
two of the freeholds of the dealership
and office premises from which it
operates, and this provides the dual
strengths of a strong asset base and
minimal exposure to rent reviews.
The board declared an interim dividend
of 5.0 pence per Ordinary share
(2024: 5.0 pence), which was paid
in January 2025. The board remains
confident in the prospects of the
Company and is declaring a final
dividend for the year of 5.0 pence per
Ordinary share (2024: 5.0 pence).
Net bank borrowings at 31 March 2025
were £8.5 million (2024: £11.3 million),
which equated to gearing of 29%
(2024: 39%).
New and used car sales
The Company’s total revenues
increased by £13.5 million over the
previous year, of which £11.3 million
arose from the sale of new and
used cars.
Total UK new car registrations in the
year increased by 2% to 1.99 million as
the major car manufacturers continued
to lift new car production levels although
customers remained careful with their
discretionary spending. Within this total,
Operational and Business Review
02 Caffyns plc Annual Report 2025
Great efforts have been made over the
last twelve months to further enhance
and develop our omni-channel used car
offering for our customers, which allows
customers to interact with us in the way
that suits them best, from the traditional
showroom discussion through to an
online experience, and any combination
in between. We continue to see our
used car offering providing a major
opportunity for stronger growth. With
market conditions volatile, we continue
to actively monitor and control used
car stock turn and yield. The number
of used cars sold in the year again
exceeded the number of new cars sold,
although by a reduced multiple than in
the prior year.
Aftersales
Our aftersales business performed well
during the year with service revenues
rising by 8%. We continue to place
great emphasis on our customer
retention programmes and in growing
sales of service plans. Our parts
business also reported higher sales,
also up by 8% from the previous year.
Our people
I am very grateful for the dedication
of our employees and their efforts
throughout the year to provide our
customers with a first-class experience.
The Company benefits from a dedicated
workforce with more than a quarter
of employees having more than ten
years’ service. As a result of their hard
work and professionalism, the business
remains in a strong position in the
competitive retail environment in which
we operate, and we continue to be an
employer of choice in Kent and Sussex.
The Company has a long tradition
of investing in apprenticeship
programmes. Despite the pressures
on the business, we have kept our
apprenticeship numbers at a high
level and continue to see the benefits
flow through the business as more
apprentices complete their training.
Due to our apprentice numbers,
we continued to fully utilise our
apprenticeship levy payments within the
stipulated time limits. We remain firmly
committed to the long-term benefits of
apprenticeships and our recruitment
programme continues with the aim of
maintaining a healthy complement in
the current year, which will assist the
Company to continue to grow.
Operations
Our Audi businesses produced a
satisfactory financial performance in the
year, although with profits reduced from
the prior year. The franchise continues
to be boosted by the strength of the
brand, the excellent model range and
exciting new products.
Our Volkswagen businesses
underperformed in the year, partly as
a result of operational issues at one of
our four dealerships. The manufacturer
is the market leader in the UK and,
as a result of our internal actions, we
expect a markedly improved financial
performance in the coming year.
Our Volvo businesses performed well
in the year, with our Worthing business
returning to profitable trading. The
brand enjoys an excellent model range
of cars, which continue to be positively
received by customers.
The performance of our two Lotus
businesses, in Ashford and Lewes,
was strong with high levels of customer
demand for the Eletre and Emira new
car product in the year.
Our combined CUPRA/SEAT/Skoda
businesses continued to perform
satisfactorily and were boosted in the
year by the addition of the Skoda brand
to our existing Volkswagen dealership in
Eastbourne and the CUPRA and SEAT
brands to our existing Volkswagen
dealership in Worthing.
Our MG business in Ashford moved
into its fourth year of operation.
The business was able to generate
significant growth in the year, reflecting
the increasing market share of the
brand, and performed well.
Our Vauxhall business in Ashford
underperformed in the year following
a reduction in the brand’s national
new car market share. A review of
operational performance is expected to
lead to a brighter future for this brand.
Trading at Caffyns Motorstore, our
used car businesses in Ashford and
Lewes, remained subdued as the
business struggled to source high-
quality used cars. However, the concept
continues to be well received by our
customers, who particularly value the
Caffyns brand.
Our Business FinancialsGovernance Other information
03
Stock code CFYN
www.caffyns.co.uk
Operational and Business Review continued
Groupwide projects
We remain focused on generating
further improvements in the levels of
used car sales, used car finance income
and service labour sales. These three
areas will be key to achieving increases
in profitability in the coming years. In
addition, we continue to make very
good progress utilising technology
to enhance customers’ experience
throughout their buying journey, as well
as improving our aftersales retention.
Zero-emission vehicle
(“ZEV”) targets
With effect from 1 January 2024, the
Government announced that vehicle
manufacturers would be required to
meet annual minimum registration
targets for ZEV cars, with the target
for the 2024 calendar year set at 22%
of registrations. For the 2025 calendar
year, this minimum registration target
increased to 28%. Failure to achieve
the set target could result in potential
financial penalties being levied on the
manufacturer, although manufacturers
were provided with potential relief
against penalties by being able to carry
forward shortfalls into future years.
Registrations of ZEV cars in the first
calendar quarter of 2025 amounted to
21% of the market, some way below
the stipulated minimum of 28%. We
believe that the manufacturers that we
represent are well placed to meet the
challenges of the transition to zero-
emission vehicles.
Climate-related emissions
The board is acutely aware of
the impact that the Company’s
operations have on the environment,
its responsibility to minimise these
wherever possible, and to supporting
the Government’s efforts to transition
towards net zero carbon emissions.
To assist with this process, an
Environmental, Sustainability and
Efficiency Committee, headed by
a senior operational manager who
reports directly to the Chief Executive,
operated during the year, with the
remit of scrutinising and reducing
the Company’s energy usage. The
Committee was able to achieve
year-on-year savings in electricity, gas
and fuel usage of some 4% in the 2024
calendar year. The Company purchases
all its electricity from sources that are
certified as generating 100% renewable
electricity and investments were made
in the year to improve the efficiency of
lighting and heating equipment. Further
energy savings are expected in future
periods.
Property
We operate primarily from freehold
sites, which provides additional stability
to our business model. As in previous
years, our freehold premises were
valued at the balance sheet date by
chartered surveyors CBRE Limited,
based on an existing use valuation.
The excess of the valuation over net
book value of our freehold properties
at 31 March 2025 was £11.2 million
(2024: £10.7 million). No impairment
charges were deemed necessary in the
year (2024: £0.6 million). In accordance
with our accounting policies, this
surplus of £11.2 million has not been
incorporated into our accounts.
During the year, we incurred
capital expenditure of £1.1 million
(2024: £2.6 million). The Company
added additional franchises to two
existing sites at a cost of £0.6 million
alongside replacement spend on
existing assets and further installations
of electric charging points.
In December, the Board completed the
sale process of our freehold premises
in Lewes for a cash consideration
of £4.7 million, before costs of
disposal. Under the terms of the
sale, the Company has been granted
a nil-cost lease to keep its Lotus
Sussex and Motorstore Performance
businesses operating from the site until
October 2025.
The Company operates two of its
franchised businesses from leased
premises as well as having two leased
vehicle storage compounds, which are
shown on the balance sheet as right of
use assets. During the year, the lease
for one of those premises was extended
for a further five years. As a result, the
carrying value of the associated right of
use asset was increased by £0.2 million,
equal and opposite to an increase in its
lease liability.
Bank facilities and
borrowings
The Company’s banking facilities with
HSBC comprise a term loan, originally
of £7.5 million, repayable by instalments
over a twenty-year period to 2038 and
a revolving credit facility of £6.0 million,
both of which will next come up for
their periodic review in April 2026.
HSBC also provides an overdraft facility
of £3.5 million, reviewed annually.
The Company continues to enjoy a
supportive relationship with HSBC.
04 Caffyns plc Annual Report 2025
In addition to its facilities with HSBC,
the Company also has a revolving
credit facility of £4.0 million provided by
Volkswagen Bank, reviewed annually
with the next periodic review due in
October 2025.
The term loan and revolving credit
facilities provided by HSBC include
certain covenant tests covering interest,
borrowing and security levels. In the
light of the underlying trading losses
incurred in the prior year, HSBC
implemented a new covenant test
solely for the year under review, which
required the Company to achieve
certain quarterly EBITDA hurdles, all of
which were achieved. The covenant
test relating to security levels, which
continued unchanged in the year, was
also passed at each quarter-end during
the year. The previous covenant tests
relating to interest and borrowing levels
will then be reapplied with effect from
30 June 2025. The interest covenant
will be tested quarterly on a rolling
twelve-month basis and will require the
Company to exceed stipulated EBITDA
hurdles, based on the level of interest
incurred on its bank borrowings. The
borrowing covenant will also be tested
quarterly and will require secured bank
borrowings to be maintained below
stipulated multiples of EBITDA. Any
failure of a covenant test could result,
at the option of HSBC, in the borrowing
becoming repayable on demand.
During the year, cash absorbed by
operating activities was £0.3 million
(2024: cash generated of £0.1 million),
predominantly due to the increased
contribution in the year to the
Company’s defined-benefit pension
scheme. Changes in net working
capital generated cash of £1.2 million
(2024: £0.5 million), with inventories
and payables both increasing as levels
of new cars held on consignment from
manufacturers continued to return to
more normal levels. Other significant
cash movements in the year included
disposal proceeds from the sale of
freehold properties of £4.7 million (2024:
£Nil), capital expenditure of £1.1 million
(2024: £2.6 million), net receipts
of bank term loans of £0.6 million
(2024: repayments of £0.9 million)
and dividends paid to shareholders of
£0.3 million (2024: £0.5 million). Cash
balances held at 31 March 2025 were
£3.8 million, an increase of £3.3 million
from the previous year-end.
Bank borrowings, net of cash balances,
at 31 March 2025 were £8.5 million
(2024: £11.3 million) and as a
proportion of shareholders’ funds at
31 March 2025 were 29% (2024: 39%).
This reduction in gearing level reflected
cash received from the property sale
in the year combined with a lower
requirement for capital expenditure in
the year and a positive movement in
the deficit of the Company’s defined-
benefit pension scheme. In addition
to the year-end cash balances held,
available but undrawn banking facilities
with HSBC and Volkswagen Bank
at 31 March 2025 were £6.5 million
(2024: £7.5 million).
Taxation
The year produced a tax charge against
profits of £0.1 million (2024: credit of
£0.3 million). The effective tax rate for
the year, at 28%, was higher than the
standard rate of corporation tax in force
for the year of 25% due to the effect of
items disallowable for corporation tax.
The Company has outstanding
trading losses of £0.7 million
(2024: £1.3 million) available for relief
against profits in future accounting
periods as well as a corporate interest
restriction carried forward of £1.1 million
(2024: £Nil). There are no capital losses
awaiting relief. Capital gains that remain
unrealised, where potentially taxable
gains arising from the sale of properties
and goodwill have been rolled over
into replacement assets, amounted
to £3.9 million (2024: £5.9 million),
which could equate to a future
potential tax liability of £1.0 million
(2024: £1.5 million). The Company was
unable to utilise any of its Advanced
Corporation Tax in the year, leaving an
unchanged amount carried forward to
future trading periods of £0.3 million
(2024: £0.3 million).
Pension scheme
The Company’s defined benefit scheme
was closed to future accrual in 2010.
The board has little control over the
key assumptions in the valuation
calculations as required by accounting
standards and movements in yields of
gilts and bonds can have a significant
impact on the net funding position of
the scheme. At 31 March 2025, the
deficit of the scheme was £4.5 million
(2024: £10.0 million). The deficit,
net of deferred tax, was £3.4 million
(2024: £7.5 million). During the year
the Company made cash contributions
to the scheme of £4.2 million
(2024: £0.8 million).
The Scheme operates with a fiduciary
manager and the board, together
with the independent pension fund
trustees, continues to review options
to reduce the cost of operation and
its deficit. Actions that could further
reduce the risk profile of the assets
and more closely match the nature of
the Scheme’s assets to its liabilities
continue to be considered.
The pension cost under IAS 19 is
charged as a non-underlying cost and
amounted to £0.4 million in the year
(2024: £0.4 million).
The latest triennial valuation was at
31 March 2023 and was formally
submitted to the Pensions Regulator in
June 2024. A recovery plan to address
the Scheme deficit identified from this
triennial valuation was agreed with
the trustees under which the annual
recovery plan payment was set at a
base level of £0.8 million for the year
ended 31 March 2025, along with an
additional contribution of £1.0 million,
which was paid in the year. The
recurring annual recovery plan payment
for each subsequent year thereafter
will increase by 2.25%, with additional
contributions of £0.5 million in each of
the years ending 31 March 2026 and
2027 and an additional contribution
of £125,000 in the year ended
31 March 2028. Contributions in future
years beyond 2028 would then continue
at the base level until superseded by
any future new recovery plan to be
agreed between the Company and
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Stock code CFYN
A strong
performance from new
cars and aftersales
generated an improved
gross profit and, despite
inflationary pressures
on the cost base, a
significant turnaround
in underlying profit
before tax.
the trustees. In accordance with the
recovery plan, the Company made
deficit reduction contributions into the
Scheme during the year of £1.8 million
(2024: £0.8 million).
During the year, the Company sold a
freehold property in Lewes, which was
charged to the Scheme, for a cash
consideration of £4.7 million. In return
for releasing its security charge over
the property, the Scheme received
a cash contribution of £2.4 million in
December 2024.
Dividend
The board declared an interim
dividend of 5.0 pence per Ordinary
share (2024: 5.0 pence), which was
paid in January 2025. The board
remains confident in the prospects of
the Company and is declaring a final
dividend for the year of 5.0 pence
per Ordinary share (2024: 5.0 pence).
This will be paid on 8 August 2025
to shareholders on the register at
close of business on 11 July 2025
if approved by shareholders at the
Company’s Annual General Meeting
on 7 August 2025. The Ordinary
shares will be marked ex-dividend on
10 July 2025.
Strategy
Our continuing strategy is to focus
on growing our loyal customer base
through representing premium and
premium-volume franchises, maximising
opportunities for premium used cars
and delivering an excellent aftersales
service. We recognise that we operate
in a rapidly changing environment
and continue to carefully monitor the
appropriateness of this strategy. We
continue to seek opportunities to invest
in the future growth of our business.
We are concentrating on business
opportunities in stronger sectors to
deliver higher returns from fewer but
bigger sites. We continue to seek to
deliver performance improvement, in
particular, in our used car and aftersales
operations, and to enhance both the
purchasing and aftersales experience
for our customers.
Annual General Meeting
The Annual General Meeting will be held
on 7 August 2025 and will be an open
meeting, to which shareholders will be
invited to attend in person.
Outlook
The Company has a healthy new car
forward-order book, although trading
conditions in the early part of the
current financial year have remained
challenging, with inflationary pressures
and high interest rates continuing to
impact on our cost base, and on our
customers’ confidence levels.
Enquiry rates from retail customers for
electric cars have increased as retail
offers become more attractive and
customers’ confidence levels in the
product increase, although much of the
demand for electric cars continues to
come through the fleet channel. Our
manufacturers are well placed for the
future with a pipeline of market-leading
electric new car products due to come
to market.
Our Company enjoys an exceptional
workforce who represent excellent
brands. We also continue to enjoy
supportive relationships with our
banking partners, HSBC and
Volkswagen Bank, with undrawn
facilities at 31 March 2025 of
£6.5 million. The balance sheet is
appropriately funded and our freehold
property portfolio is a source of stability.
We remain confident in the prospects of
the Company and are ready to benefit
from future business opportunities.
S G M Caffyn
Chief Executive
10 June 2025
06 Caffyns plc Annual Report 2025
Operational and Business Review continued
Strategic Report
Source of UK market registrations: Society of Motor Manufacturers and Traders (“SMMT”).
Business performance
New and used cars
Our new unit deliveries increased by
2.3% in the year, against a challenging
economic background. The total UK
new car registrations rose by just
1.7% over the twelve-month period
and, within this total, the private and
small business sector to which we
have most exposure fell by 3.7%. New
car registrations to the fleet market in
the year rose, by 5.8%. Overall, we
were satisfied with the level of new car
deliveries achieved for the year.
Our used unit sales also increased, by
1.0% in the year, despite a reduction
in cars sold through our Motorstore
non-franchised used car businesses.
Transaction data released by the
Society of Motor Manufacturers and
Traders reported that nationwide used
car transactions were up by 5.5% for
the 2024 calendar year.
Aftersales
Over recent years, new car registration
levels have been adversely impacted
by several factors, from changes in
emissions regulations in 2018 and
2019, the covid-19 pandemic in 2020
and 2021 and the disruptions caused to
manufacturers’ production levels from
the global shortage of semiconductors
since 2020. This significantly reduced
the number of one to four-year-old cars
in circulation. Despite these factors,
aftersales revenues rose in the year by
8%, aided by further enhancements to
our aftersales marketing and retention
procedures.
EBITDA
EBITDA saw a significant improvement
during the year from positive trading
across both new car sales and
aftersales. However, the used car
market remained challenging, with
profits from used car trading reduced
from the previous year.
Business strategy
The Company continues to focus on the
premium and premium-volume market,
where it believes that there is greater
scope to deliver stronger sales, profits
and returns. Representation is held for a
strong portfolio of nine franchises being
Audi, CUPRA, Lotus, MG, SEAT, Skoda,
Vauxhall, Volkswagen and Volvo. We
generally operate from our own freehold
properties, which we believe offers
better long-term returns and greater
flexibility. Proceeds from disposals of
properties are generally reinvested in the
Company’s operations.
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07www.caffyns.co.uk
Stock code CFYN
Corporate social
responsibility, community
issues, human rights and
diversity
Caffyns has a long-standing Corporate
and Social Responsibility agenda
including its approach to its employees,
the environment, health and safety, and
the communities in which it operates.
We are also conscious of human rights
issues within the Company and the key
area that would impact our business,
our supply chain. Our supply chain is
predominantly the major international
motor manufacturers, who also take
these issues very seriously.
The UK Corporate Governance Code
includes a recommendation that
boards should consider the benefits
of diversity, including gender, when
making board appointments. The board
recognises the importance of gender
balance and the important requirement
to ensure that there is an appropriate
range of experience, balance of skills
and background on the board. We
will continue to make changes to the
composition of the board irrespective
of gender or any form of discrimination
so that the best candidate is appointed.
The Company does not comply with
the Listing Rule on diversity as less
than 40% of the directors are women,
as none of the posts of Chair, Chief
Executive, Senior Independent Director
nor Finance Director are held by a
woman, and as at least one individual
on the board of directors should be
from a minority ethnic background.
There are no vacant board positions,
with the last appointment having been
made in June 2019. The board will
remain mindful of its responsibilities
under Listing Rules as and when future
appointments are made.
Number
of board
members
Percentage
of the board
Number of
senior positions
on the board
Number in
executive
management
Percentage
of executive
management
Men 5 83% 4 9 90%
Women 1 17% — 1 10%
6 100% 4 10 100%
Number
of board
members
Percentage
of the board
Number of
senior positions
on the board
Number in
executive
management
Percentage
of executive
management
White British or Other White 6 100% 4 10 100%
Mixed/Multiple Ethnic Groups — — — — —
Asian/Asian British — — — — —
Black/African/Caribbean/
Black British — — — — —
Other ethnic group,
including Arab — — — — —
6 100% 4 10 100%
Executive Management represents
an Operations Board, which is
attended by the three executive board
directors and ten senior operational
management employees and there are
no vacant positions. The Company
seeks to promote talent from within,
whenever that is possible. The average
employment tenure of these senior
operational management employees is
24 years with the most recent external
appointment being in 2012.
The individuals who constitute the
tables above self-identified as to their
gender and ethnicity. The Company
does not ask about, nor record, the
ethnicity of its general workforce.
The table below gives the total number
of our employees in each category, by
gender, at 31 March 2025.
Female Male Total
Director 1 5 6
Executive
management 1 9 10
All other
employees 96 343 439
Employees
We recognise that our people are
our key asset and are responsible for
delivering our strategy. We continue
to invest in an enhanced training and
development programme, with support
from our manufacturer partners.
The positive approach shown by our
employees throughout the Company’s
businesses has been key to our
success.
Employees are encouraged to discuss
with management factors affecting the
Company and any other matters that
they are concerned about. In addition,
the board takes account of employees’
interests when making decisions. We
have an HR director who has day to day
responsibility for employee welfare.
Suggestions from employees aimed at
improving the Company’s performance
are welcomed.
08 Caffyns plc Annual Report 2025
Strategic Report continued
Good performance from employees is
recognised every four months by their
peer group who nominate employees
for awards and formal company-wide
recognition. A significant number of
employees are remunerated partly by
profit-related bonus schemes.
We have a dedicated Company intranet,
which keeps employees up to date
with Company developments and
activities. This platform also includes the
Company’s policies and procedures.
Long service awards were made during
the year to those staff with 25 years’
continuous service. All employment
policies remain compliant with current
legislation.
It is our policy to encourage career
development for all employees and to
help staff achieve job satisfaction and
increase their personal motivation.
We support the recruitment of
disabled people wherever possible.
Priority is given to those who become
disabled during their employment. It
is our policy, wherever practicable, to
provide continuing employment under
normal terms and conditions and to
provide training, career development
and promotion wherever appropriate.
Employment by the Company is
offered on the basis of the person’s
ability to work and not on the basis
of race, individual characteristics or
political opinion.
We have continued to recruit to our
apprenticeship programme, and
we are seeing the benefits of this
investment. We look to further recruit
both apprentices and others across the
Company’s businesses as we continue
to grow.
Principal risks and
uncertainties
Risk is an accepted part of doing
business and the Company has a risk
assessment process that facilitates
the identification and mitigation of risk.
Whilst the risk factors listed below
could cause our actual future results to
differ materially from expected results,
other factors could also adversely
affect the Company and they should,
therefore, not be considered to be a
complete set of all potential risks and
uncertainties. The risk factors should be
considered alongside the statement on
internal control and risk management
included in the Statement on Corporate
Governance on page 27 and those in
note 22 to the financial statements.
Principal risks Potential impact/material risk Key controls and mitigating factors
Business
conditions
and
the UK
economy
The profitability of the Company could be adversely affected
by a worsening of general economic conditions in the United
Kingdom, where all of its business is transacted. Other
relevant factors would include a pandemic-level infection,
interest rates, unemployment, fuel prices, inflation, indirect
taxation, the availability and cost of credit and other factors
that could affect the level of consumer confidence.
Monitoring of key macroeconomic
indicators against internal performance
leads to the anticipation of, and
mitigation for, expected volatilities. The
Company is not responsible for the
importation of new cars into the UK and
is not exposed to border frictions.
Conflicts
in Ukraine,
Yemen and
Gaza
The conflicts in Ukraine, Yemen and Gaza continue to be
a source of volatility in energy prices, particularly for gas,
as well as placing additional strain on manufacturers’ parts
supply chains. A sustained period of high energy prices
would have an effect on the Company’s cost base and
profitability, whilst disrupted supply chains could adversely
impact the receipt of an adequate supply of new cars from
the manufacturers that the Company represents. Whilst
currently confined to Ukrainian territory, the future progress
of this particular conflict is highly unpredictable and could
spread to other territories.
The Company purchases its electricity
and gas under long-term fixed priced
contracts, shielding it from short-
term movements in market prices.
The Company’s current fixed-price
contracts for gas and electricity are next
scheduled for price review in September
2025 and, for gas, in September 2026.
The Company represents a diversified
range of car manufacturers, diluting its
exposure to supply chain issues.
Vehicle
manufacturer
dependencies
Caffyns operates franchised motor dealerships. These
franchises are awarded to the Company by the vehicle
manufacturers. For ongoing business, the Company holds
franchise agreements for its dealership operations. These
agreements can be terminated by giving two years’ notice,
or less in the event of a serious unremedied breach, including
continued under-performance. The Company is not aware of
any existing breaches of these agreements.
Diversification through representing
multiple marques reduces the
potential dependency on any single
manufacturer. Revenue streams from
other activities (aftersales and used
cars) prevent over-reliance on new car
sales.
Our Business FinancialsGovernance Other information
09www.caffyns.co.uk
Stock code CFYN
Principal risks Potential impact/material risk Key controls and mitigating factors
Vehicle
manufacturer
marketing
programmes
Vehicle manufacturers provide a wide variety of marketing
programmes, which are used to promote new vehicle sales.
A withdrawal or reduction in these programmes would have
an adverse impact on our business.
By representing multiple marques, the
Company believes that this diversity
reduces the potential impact on the
Company. In addition, the Company
continues to develop its own marketing
initiatives.
Used car
prices
The value of our used car inventory could decline significantly
if market prices were to quickly fall. A large proportion of our
business comprises used car sales and such declines could
have a material impact through reduced profits on sales and
write-downs in the value of inventories.
Close monitoring of the ageing of
vehicle inventories and a firm policy of
inventory management help to mitigate
this risk. Any impact is also mitigated
by revenue streams being balanced
between aftersales, new car and used
car sales.
Transition
to electric
vehicle
power-trains
Government announcements have indicated that solus petrol
and diesel powertrains will no longer be permitted in new
vehicles sold after 2030, although hybrids will be allowed to
be sold until 2035. This change may result in disruption to the
supply and demand for new cars in the run up to 2030, and
to the used car market.
Ensuring that our premises are
developed to be able to adapt to
the expected future shift towards
battery-electric vehicles and that our
representation of manufacturers is
broad based to spread risk.
Aftersales
revenues
The maintenance of battery-electric propulsion systems is
expected to be less labour intensive and to require fewer
replacements parts, in comparison to an equivalent petrol
or diesel-powered engine. As a result, aftersales revenues
are likely to fall in coming years as the transition to battery-
electric vehicles accelerates.
Careful control of the cost base of
aftersales departments to ensure that
costs remain commensurate with the
levels of available revenues and more
active upselling to ensure that revenue
per vehicle is maximised.
Environmental
legislation
The transition to new battery-electric propulsion systems
will pose risks to the business from a number of sources:
additional investment required in providing an adequate
charging infrastructure; lower demand for petrol and diesel-
powered vehicles, potentially impacting on residual values;
and space constraints for when potentially faulty battery-
electric vehicles need to be quarantined, prior to repair.
Representation of multiple marques
reduces the potential dependency
on any single manufacturer. Early
installation of charging infrastructure
minimises the likely necessity of
installing additional electrical supply
infrastructure.
Liquidity and
financing
Liquidity and financing risks relate to our ability to pay for
goods and services enabling us to trade. Our principal
sources of finance are from our bankers by way of committed
borrowing facilities, from manufacturers to fund the
purchases of inventories, and trade credit from our suppliers.
A withdrawal of facilities, or failure to renew them when due,
could lead to a significant reduction in the trading capability
of the Company.
We work closely with providers of
finance to help reduce this risk by
managing expectations of trading
results and utilisation of facilities. The
status of our bank facilities is set out
in note 22. These negotiated facilities
provide sufficient liquidity and funding.
We do not presently hedge against
interest rate movements, but the
position is kept under regular review.
10 Caffyns plc Annual Report 2025
Strategic Report continued
Principal risks Potential impact/material risk Key controls and mitigating factors
Regulatory
compliance
The Company is subject to regulatory compliance risk,
which could arise from a failure to comply fully with the laws,
regulations or codes applicable.
Non-compliance could lead to fines, cessation of certain
business activities or public reprimand.
The direction of new regulatory policy
is monitored through close contact
with relevant trade and representative
bodies, and these are carefully
considered when developing strategy.
Information
systems
The Company is dependent upon certain business-critical
systems which, if interrupted for any considerable length of
time, could have a material effect on the efficient running of
our businesses.
A series of contingency plans are in
place that would enable the resumption
of operations within a short space of
time, thus mitigating the likelihood of
material loss.
Competition
Caffyns competes with other franchised vehicle dealerships,
private buyers and sellers, internet-based dealers,
independent service and repair shops and manufacturers
that have entered the retail market. The sale of new and
used cars, the performance of warranty repairs, routine
maintenance business and the supply of spare parts operate
in highly competitive markets. The principal competitive
factors are price, reputation, customer service and
knowledge of a manufacturer’s brands and models. We also
compete with funders who finance customers’ car purchases
directly.
We regularly monitor our competitors’
activities and seek to price our products
competitively, optimise customer
service, efficiently utilise our customer
database and fully understand our
manufacturers’ brands and products.
The
distribution
and sale of
vehicles
Sales agreements are granted by manufacturers based on
standards but agreements are restricted to areas of influence
granted by manufacturers, who also determine choice of
partner, enabling them to restrict entry into the franchise or
the number of outlets any one dealer can hold. Aftersales
agreements are legislated by a Block Exemption, dictating
that aftersales businesses that meet a manufacturer’s
qualitative standards criteria have an entitlement to represent
that brand’s aftersales service and parts franchise.
By continuing to focus on providing
excellent customer facilities, excellent
customer service and by providing
high-level representation for the
Company’s manufacturer partners,
current business relationships will be
maintained, providing opportunities for
selective growth.
Pension
scheme
Caffyns operates a defined benefit pension scheme, which
was closed to new entrants in 2006 and closed to future
accrual in 2010. The scheme relies on achieving satisfactory
investment returns sufficient to meet the present value of
the accrued liabilities. Reduced investment returns or higher
liabilities due to increased mortality rates and/or continuing
record low interest rates could adversely affect the surplus
or deficit of the scheme and may result in increased cash
contributions in future.
The Company regularly reviews the
position of the defined benefit pension
scheme and company representatives
attend the meetings held by the trustees
of the pension scheme. The Company
continues to review possible options to
mitigate the risk of underlying volatility
causing an increase in the deficit.
Political
uncertainties
The recent change of government in the United States of
America, alongside numerous global developments, such
as the conflicts in Ukraine, Yemen and Gaza, means that a
degree of uncertainty exists in the economic outlook. We
believe the main risks to arise relate to consumer confidence,
new car production levels, the potential impact that sterling/
euro exchange rates may have on vehicle pricing, and the
possible imposition of tariffs and/or restrictions on the imports
of cars and parts into the United Kingdom.
We continue to focus on delivering an
excellent service to new and existing
customers, giving confidence in our
operations and building a strong loyal
base and to maintaining our close
working relationship with our nine
manufacturers.
Our Business FinancialsGovernance Other information
11www.caffyns.co.uk
Stock code CFYN
Environment and climate
change
The Taskforce on Climate-related
Financial Disclosures (“TCFD”) has
published four “pillars” relating to
disclosures, categorised under the
headings of Governance, Strategy, Risk
Management and Metrics and Targets.
This Annual Report contains certain of
the recommended disclosures, although
constraints on available resources
mean that we continue to be in the
early stages of this journey and that
more time will be required to allow
for a full consideration of the issues
and outcomes. Regulatory guidance
continues to emerge in this area,
which will be considered as part of our
future work. We expect to be able to
widen our disclosures in future Annual
Reports.
In accordance with Listing Rule
9.8.6R(8), we have disclosed in the
tables below certain climate-related
financial disclosures aligned to the four
“pillars” listed above and the eleven
recommended disclosures contained
within the TCFD additional guidance
(Implementing the Recommendations
of the Task Force on Climate-Related
Financial Disclosures (2021 TCFD
Annex)). For each of the recommended
disclosures we have laid out whether
our disclosures are fully or partial
compliant, or non-compliant with
the recommendations of the TCFD
and the future steps planned to be
taken to ensure our disclosures are
compliant in the future, including
relevant timeframes.
At 31 March 2025, the Company
considers that it is fully compliant
for the disclosures required for both
recommendations under Governance,
is compliant for one of the three
recommendations under Strategy,
but is non-compliant for two of the
recommendations. Compliance has
been achieved for all recommendations
under Risk Management. For Metrics
and Targets, partial compliance
has been achieved for two
recommendations, whilst the Company
remains non-compliant for the remaining
recommendation.
The recommendations for which the
Company is currently unable to be fully
compliant require more time before
full implementation can be achieved.
It is expected that full implementation
of these TCFD recommendations will
require up to a further three years,
except for the measurement of Scope 3
emissions, where no time frame can
currently be determined, as further
clarity is required to identify which
emissions would be applicable for the
Company to have to measure.
The Company’s strategic priority for
the current financial year was returning
the Company to profitable trading and
this absorbed significant management
time. As a result, no significant progress
has been made in some of the
recommendations related to “Strategic”
and “Metrics and targets” matters
required by TCFD. Accordingly, we have
retained the timeline commitments to
achieve these metrics largely in line with
the previous year financial statements.
For the four “pillars” relating to disclosures, the Company’s current position is as follows:
Recommendation
Recommended
disclosures Summary of progress
Disclosure
compliance
GOVERNANCE
Disclosure of
the board’s
governance
around climate-
related risks and
opportunities
a) Describe the
board’s oversight
of climate-
related risks and
opportunities
The board of directors retains ultimate responsibility for the
Company’s environmental policies and for seeking to minimise
the effect of our operations on the environment and has formally
accepted oversight of climate-related issues. This includes
the development of principles and approaches to protecting
the environment to the extent that we are able, minimising
the environmental impact of our business and providing a
framework to manage climate-related risks.
Through the establishment of an Environmental, Sustainability
and Efficiency Committee (see below), the climate-related risks
and opportunities relevant to the Company have been identified.
The Board receives climate-related energy consumption
reports from management on a monthly basis throughout
the year and can use the Environmental, Sustainability and
Efficiency Committee as a conduit to both receive climate-
based information and disseminate guidance and instructions to
branch-based management.
Compliant.
12 Caffyns plc Annual Report 2025
Strategic Report continued
Recommendation
Recommended
disclosures Summary of progress
Disclosure
compliance
b) Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities
In 2022, an Environmental, Sustainability and Efficiency
Committee was established under the leadership of a senior
manager to assist with the process of identifying climate-
related risks and opportunities and to review the Company’s
environmental footprint, including its energy usage. The
Committee aims to meet twice each year, which it achieved in
the period under review. The risks and opportunities identified
and agreed are set out later in this report on pages 15 and 16.
This Committee reports directly to the Chief Executive, who then
reports on its work to the board.
Since its implementation, the Committee has also identified and
implemented several energy-saving measures and continues to
develop plans for further reductions, which are expected to yield
results in the next reporting period.
The board continues to consider whether any external assistance
would be beneficial to review and quantify our carbon emissions.
Compliant.
STRATEGY
Disclosure of
the actual and
potential impacts
of climate-
related risks and
opportunities on
the Company’s
business, strategy
and financial
planning, where
such information is
material
a) Describe
the climate-
related risks and
opportunities the
organisation has
faced over the
short, medium and
long term
The actual and potential impacts from climate change are
described on pages 15 and 16. The Company has assessed
short-term as being between 0 and 3 years from the balance
sheet date, with medium term being within 3 and 10 years and
long term more than ten years from the balance sheet date.
The most fundamental change to our business will arise from
the transition from cars powered by fossil fuels to cars powered
by non-fossil fuels by 2030, most likely battery-electric but
possibly also hydrogen. Energy supply, particularly of electricity
and gas, will require close monitoring to ensure supplies are
sustainable and affordable. The Company will continue its policy
of entering into long-term contracts at fixed prices for the supply
of electricity and gas.
Compliant.
b) Describe
the impact of
climate-related
risks and
opportunities on
the organisation’s
businesses,
strategy, and
financial planning
The board considers climate-related factors when determining
its future strategy for the business and in assessing major plans
of action.
However, no specific goals and targets have yet been set. The
board monitors energy usage on a monthly basis and, once
targets can be set and adopted, will monitor progress being
made in regard to their achievement.
At the current time it is envisaged that the net impact on
future revenues and profits from the climate-related risks and
opportunities so far identified is unlikely to be significant.
Non-compliant
with further
work required
to set targets
for reductions
in carbon
emissions. This
is expected to
be completed
within the next
two years.
c) Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate-
related scenarios,
including a 2°C or
lower scenario
Limited work has been able to be completed in determining
the resilience of our strategy under different climate-related
scenarios and further work is required in this area.
Non-
compliant. This
is expected to
be completed
within the next
three years.
Our Business FinancialsGovernance Other information
13www.caffyns.co.uk
Stock code CFYN
Recommendation
Recommended
disclosures Summary of progress
Disclosure
compliance
RISK MANAGEMENT
Disclosure of how
the Company
identifies,
assesses and
manages climate-
related risks
a) Describe the
risk management
processes for
identifying and
assessing
climate-related
risks.
The Company’s Environmental, Sustainability and Efficiency
Committee has worked with the executive directors in order
to identify risks arising from climate-related change and
these are detailed later in this report on pages 15 and 16.
Information published by industry-specific bodies, such as
the National Franchised Dealers Association and the Society
of Motor Manufacturers and Traders, as well as the Business
Development Groups run by the vehicle manufacturers that the
Company represents, and Government publications have all
been used in order to assist in the identification and assessment
of climate-related risks. The review of existing risks and
consideration of potential new risks is a standing agenda item
for the board on at least two of the eight meetings scheduled to
be held during each year.
Compliant.
b) Describe the
organisation’s
processes for
managing
climate-related
risks.
Identified risks for all areas of the business are subject to regular
review and assessment to ensure that they remain accurate,
relevant and comprehensive. Where appropriate, this includes
discussions with external third parties such as insurers and
finance providers. The Company’s Risk Register is based
on a grid-based system where risks are assessed for their
potential impact on the business and likelihood of occurring
to produce a combined significance ranking. At the biannual
meetings where the risk register is reviewed and updated,
discussions are directed primarily at those risks deemed to be
the most significant. Information provided by the Environmental,
Sustainability and Efficiency Committee is incorporated into the
review process.
Compliant.
c) Describe
how processes
for identifying,
assessing,
and managing
climate-related
risks are
integrated into
the organisation’s
overall risk
management.
The Company’s Environmental, Sustainability and Efficiency
Committee will continue to identify, assess and manage climate-
related risks that may impact on our operations. The Risk
Register maintained by the board covers all identified business
risks and includes those arising from climate change.
We will be reliant on our manufacturers to control the new car
transition away from fossil-fuel powered engines by the supply of
appropriately powered new cars, but we will continue to monitor
our diversity of manufacturer representation.
Compliant.
METRICS AND TARGETS
Disclose the
metrics used by
the organisation
to assess and
manage climate-
related risks and
opportunities,
where such
information is
material.
a) Disclose the
metrics used by
the organisation
to assess
climate-related
risks and
opportunities
in line with its
strategy and risk
management
process.
Our identification of climate-related risks and opportunities is
shown on pages 15 and 16. Metrics covering electricity and
gas consumption levels are in place, being an aftersales energy
efficiency ratio of aftersales turnover as a proportion of energy
consumed in kWhs in a given rolling 12-month period and a
property efficiency ratio of energy consumed in kWhs in a given
rolling 12-month period to the square meterage of buildings.
The Company’s dealership operations are then ranked against
these two metrics. Further work continues to identify additional
specific metrics in relation to: (i) climate change; (ii) land use and
ecological sensitivity; (iii) solid waste and single-use plastics; and
(iv) product diversification, which would be beneficial in order to
promote best practice in energy usage across the Company.
Partial
compliance.
This is
expected to
be completed
within the next
two years.
14 Caffyns plc Annual Report 2025
Strategic Report continued
Recommendation
Recommended
disclosures Summary of progress
Disclosure
compliance
b) Disclose Scope
1, Scope 2, and, if
appropriate, Scope
3 greenhouse
gas (GHG)
emissions, and the
related risks.
We disclose on page 18 our Scope 1 and Scope 2 emissions
caused by activities in the financial year.
We do not currently disclose our Scope 3 emissions (being
other indirect emissions from the extraction and production of
purchased materials and fuels for which the Company does not
own or control) as further clarity is required as to what emissions
are applicable for the Company, and how that data would be
practicably obtained without imposing a disproportionate burden
on the effective operation of our businesses.
Partial
compliance,
except for the
disclosure
of Scope 3
emissions.
No timeframe
can currently
be set for the
completion of
this task.
c) Describe the
targets used by
the organisation to
manage climate-
related risks and
opportunities
and performance
against targets.
Further work is required in order to allow targets to be set
in relation to: (i) climate change; (ii) land use and ecological
sensitivity; (iii) solid waste and single-use plastics; and (iv)
product diversification.
The Company’s aim remains to consistently reduce its energy
usage, and hence, the amount of CO
2
it emits from its business
activities, and to contribute towards worldwide efforts to limit
global warming to 1.5% above pre-industrial levels.
Non-
compliant. This
is expected to
be completed
within the next
two years.
Key climate-related risks
Description of the risk Potential financial impact
Timescale, likelihood
and magnitude
The transition from cars powered by internal
combustion engines to battery-electric
powertrains will be a profound technological
change and the initial projected direction of
change may not prove to be the ultimate
destination. Such changes will also place
significant pressures on supply chains,
potentially restricting the availability of new car
supply.
Residual values of existing battery-electric
vehicles have already proved volatile, so
stock-holding risks will increase whilst this
transition occurs. A limited investment has
been made in workshop equipment to
facilitate the servicing of battery-electric
vehicles and the value of this equipment
could be compromised if the technology
was to change. Lack of availability of new
car supply would impact on revenues.
Highly likely to occur over
the medium term (defined as
between 3 and 10 years) with
the potential of the magnitude
to be severe.
Battery-electric vehicles can cost more
than the equivalent models powered by
internal combustion engines, although this
price differential has been falling over time
as production methods improve. However,
battery components remain expensive. High
energy prices mean that the running cost
savings of battery-electric vehicles may not
achieve desired levels.
Customers’ preferences for the early
adoption of new battery-electric
technologies might be adversely impacted
by cost considerations. This might result
in over-supply to the market and market
disruption in order to bring supply and
demand back into equilibrium.
Likelihood of occurring is
considered possible over the
short and medium terms,
defined as between 0 and 10
years, with the potential of the
magnitude to be major.
Our Business FinancialsGovernance Other information
15www.caffyns.co.uk
Stock code CFYN
Description of the risk Potential financial impact
Timescale, likelihood
and magnitude
Battery-electric vehicles are comprised of fewer
parts, will use less fluids and should suffer less
brake degradation due to regenerative braking
methods, all of which would result in less
aftersales revenue. However, these vehicles
are also likely to require more high-skilled and
complex diagnostic work.
On balance, overall aftersales revenues
are expected to reduce during the
transition phase, although the existing fleet
of cars powered by internal combustion
engines will remain on UK roads for many
years to come.
Highly likely to occur over
the medium term with the
potential of the magnitude to
be major.
Increased prevalence of battery-electric
vehicles will require a significant investment
in charging infrastructure, including potential
upgrades to the levels of electrical supplies to
our dealership premises. Once installed, this
charging infrastructure will also result in higher
on-going operating costs due to the increases
in electricity prices.
The investment in capital assets might
be at risk if the pace or direction of the
technological changes associated with
battery-electric vehicles were to change
and higher operating costs could only be
mitigated by external reductions in energy
prices.
Likelihood of occurring is
considered likely over the
short and medium terms with
the potential of the magnitude
to be major.
Increasing variability in the UK climate and
increasing frequency of more extreme climate
events increase the risk of more potentially
damaging events to buildings and associated
infrastructure.
Costs of insuring the Company’s buildings
and associated infrastructure may
increase and costs of lower-level repairs,
which are not covered by insurance, might
increase.
Likely to occur over the
medium term with the
potential of the magnitude to
be moderate.
Key climate-related opportunities
Description of the opportunity Potential financial impact
Timescale, likelihood
and magnitude
The transition from cars powered by internal
combustion engines to battery-electric
powertrains will present a major opportunity
for additional new car sales as it provides
a heightened reason for companies and
individuals to more quickly adopt to the new
technologies.
Additional new car revenues, as well as
those from associated revenue streams.
Likely to occur over the
medium term (defined as
between 3 and 10 years) with
the potential of the magnitude
to be major.
Closer scrutiny of energy use, particularly for
heating, ventilation and air-conditioning, and
for equipment in our aftersales workshops,
should allow for the identification of further
savings in energy usage.
Lower and more stable operating costs. Highly likely to occur over
the short and medium terms,
defined as between 0 and 10
years with the potential of the
magnitude to be moderate.
Climate-related actions
The Company is aware of its
environmental responsibilities arising
from its motor retailing and aftersales
activities and recognises that some
of its activities affect the environment.
Our Health, Safety and Environment
Officer has received formal training
in environmental management and is
appropriately experienced in this field.
Our policy is to promote and operate
processes and procedures which, so far
as is reasonably practicable, avoid or
minimise the contamination of water, air
or the ground.
Licences are obtained from the relevant
authorities, where required, to operate
certain elements of the Company’s
business. Waste is disposed of by
authorised contractors and is recycled
where possible. Special care is taken in
the storage of fuels and oils. Through
the management of these activities, we
seek to minimise any adverse effects of
our activities on the environment.
We also seek to reduce our energy
and water consumption and our use
of plastic materials, particularly those
of single-use plastics. Use of the
latest building materials is made in
the construction of new sites and the
refurbishment of existing locations.
Audit processes are in place to measure
energy and materials usage and make
recommendations for improvements.
A regime to periodically test electrical
systems is in place throughout the
Company’s premises.
The Company has mapped out its
journey towards net-zero carbon
emissions by the Government’s current
target date of 2050. This journey
comprises four main strands, being
electricity, gas, transport and other
energy usage.
16 Caffyns plc Annual Report 2025
Strategic Report continued
The Company uses significant
amounts of electricity in its operations,
which it purchases under fixed-price
term contracts, normally for two-
year periods although the current
contract is for a 12-month period to
30 September 2025. The Company
purchases all its electricity from
sources that are certified as generating
100% renewable electricity. Whilst the
electricity that the Company consumes
comes direct from the national grid and
therefore is associated with carbon
emissions, an amount equivalent to the
Company’s usage would not produce
any emissions in its generation so, in
practical terms, its purchased electricity
is emissions-free. Our electricity
usage in 2025 was 2.16 million kWhs
(2024: 2.19 million kWhs) and comprised
some two-thirds of our annual energy
usage.
The Company also uses significant
amounts of gas in its operations, with
usage in 2025 amounting to 1.02 million
kWhs (2024: 1.07 million kWhs), being
approximately 31% of its energy usage.
As for electricity, purchases are made
under fixed-price term contracts,
normally for two-year periods, and the
current contracts is next scheduled
for renewal in September 2026. The
primary use of gas is for central heating
purposes through gas boilers, which
are at various stages in their life cycle.
The original production of these gas
boilers would itself have been energy
intensive, so the Company’s approach
is to ensure that these boilers continue
in use until they reach the end of their
economic life. The gas boilers have an
estimated life span of between ten and
fifteen years, so the Company does
not intend to install any new gas boilers
after 2035. Between now and 2035 the
Company is committed to investigating
alternative heating sources, such as air-
and ground-source heat pumps, as and
when gas boilers need replacement.
Where these alternatives are practically
and commercially viable, the Company
will seek to avoid the purchase of
replacement gas boilers.
The third strand to the Company’s
usage is its own fleet of demonstrator
and courtesy cars, which equate to
some 4% of its energy usage. The
manufacturers that the Company
represents are all in various stages of
transitioning their new car offerings
away from cars powered by internal
combustion engines and towards hybrid
and battery-electric powertrains. In the
2025 calendar year battery-electric
cars comprised 19.6% of all new car
registrations in the United Kingdom,
whilst hybrid cars, excluding mild
hybrids, made up a further 22.0%
of new car registrations. New cars
powered solely by internal combustion
engines therefore represented less than
half of new car registrations in 2024.
The Government has stipulated no
new cars that are solely powered by an
internal combustion engine will be able
to be sold in the United Kingdom after
the end of 2030. As our manufacturers
transition away from petrol and diesel-
powered cars, our own fleet of vehicles
increasingly reflects that movement.
At 31 March 2025, 35% of our own
demonstrator, courtesy and staff car
fleet comprised either alternatively
fuelled or battery-electric cars, up from
28% at the previous year-end.
The final strand to the Company’s
energy usage is its water usage. As
water will always be required in order
to operate the Company’s premises
and the preparation of clean water is
unlikely to become totally carbon-free,
it is anticipated that our emissions
in this area will ultimately need to be
covered through a carbon-offsetting
arrangement.
Reducing carbon
and waste
During the year, we have continued
to assess and monitor our energy use
and, where practicable, we continue
to implement measures in order to
reduce the environmental impact of
our activities.
Climate change influences seasonal
energy usage and whilst, at times, we
benefit from milder weather, we are
aware that any adverse change could
affect energy usage. To minimise our
energy usage we continue, where
practicable, to install LED lighting at
our sites as this uses significantly less
energy than conventional lighting. In
addition, we limit the duration of periods
when full lighting is used, using sensors
and timers to further reduce the energy
we use.
We continue to improve our energy
use and efficiency by replacing old
equipment with new efficient units
and ensuring workshop doors are
closed when not in use by fitting
automatic closing devices. Water use in
valeting areas uses recycling facilities,
where practicable, and all sites have
appropriate water filtration systems.
At one dealership, we are able to
generate electricity through the use
of roof-mounted photovoltaic cells,
whilst elsewhere, we use air-sourced
heat pumps to reduce electricity
consumption. We seek to limit our
paper consumption and waste through
increasingly paperless communications
and systems, and to minimise the use
of plastic materials.
Streamlined energy
and carbon reporting
This section includes our mandatory
reporting of greenhouse gas
emissions for the period 1 January to
31 December 2024, the latest annual
period for which data is available, and
is pursuant to the Companies Act
2006 (Strategic Report and Directors’
Report) Regulations 2013. We report
our emissions data using an operational
control approach taking data for
which we deem ourselves responsible,
including both energy consumption and
vehicle usage for business use.
Our Business FinancialsGovernance Other information
17www.caffyns.co.uk
Stock code CFYN
In the 2024 calendar year, our businesses emitted 662 tonnes of carbon dioxide (“CO
2
”) (2023: 701 tonnes). Our emissions are
principally of CO
2
and are from the following sources:
Greenhouse gas emissions data
Tonnes of
CO
2
2024
Tonnes of
CO
2
2023
Tonnes of
CO
2
2022
Scope 1
Gas consumption 186.8
195.5
213.2
Owned transport 35.3
52.4
55.0
Water supply 1.5
3.0
4.4
Scope 2
Purchased electricity (location-based emissions) 446.9
454.4
442.2
Purchased electricity (market-based emissions) 0.0*
0.0*
310.4
Generated electricity (8.8)
(4.4)
(5.5)
Statutory total 661.7
700.9
709.3
Revenue (£million) 272.5 275.7 235.3
* The Company purchases its electricity from a supplier that was able to certificate that an equivalent amount of electricity has been generated by wind and hydro
assets matched to renewable energy guarantees of origin, enabling zero emission reporting.
Scope 1 and Scope 2 energy
consumption and greenhouse gas
emissions data has been calculated in
line with the Greenhouse Gas (“GHG”)
protocol methodology. Emission
Factor Databases have been used,
which are consistent with the UK
Government environmental reporting
guidance, utilising the current published
kWh gross calorific value and CO
2
e
emissions factors relevant for the
reporting calendar year. We have
selected emissions per £million of
revenues per tonne as our intensity ratio
as this, in our view, provides the best
comparative measure over time.
2022 intensity ratio: 3.0 tonnes of
CO
2
per £million of revenue
2023 intensity ratio: 2.5 tonnes of
CO
2
per £million of revenue
2024 intensity ratio: 2.4 tonnes of
CO
2
per £million of revenue
The Company’s total energy
consumption for the period 1 January
to 31 December 2024 was 3.3 million
kWh (2023: 3.5 million kWh). The
methodology for calculating this
annual energy consumption figure was
the same as that outlined above for
producing the estimate of the Company
greenhouse gas emissions. All of the
Company’s energy consumption arose
in the United Kingdom.
Our greenhouse gas emissions
associated with waste arise from a
number of waste streams generated
from our business. For conversion to
carbon dioxide equivalent (“CO
2
e”) data
are not readily available for a number
of our waste streams, so we have
chosen to report this in weight and
percentage of waste recycled compared
to waste sent to landfill, as opposed to
CO
2
e. Waste in 2024 was 479 tonnes
(2023: 435 tonnes) of which 80% was
recycled (2023: 80%) with the balance
incinerated to generate electricity. We
continue to work with our recycling
partners to maximise waste that can be
recycled.
Future emissions
legislative changes
The Government had indicated that
the sale of vehicles powered solely by
an internal combustion engine will be
banned from the end of 2030 onwards
although hybrid vehicles, which are
powered by a combination of a battery
and an internal combustion engine, will
be allowed to be sold up to the end
of 2035. After that time, all vehicles
will need to be powered without the
use of an internal combustion engine.
The implementation of this intended
legislation will bring significant change
to the motor retail industry, and we are
working with our manufacturers to more
fully develop our transitional plans. We
have already installed electric charging
points in all our dealerships, although
further installations will be required in
the coming years. A number of the
other actions we have already taken
are detailed below and we anticipate
fuller disclosures of our plans, and their
possible impact on the business, will be
made in future Annual Reports.
Health and safety
The board recognises its responsibility
to members of staff and others working
or visiting our facilities to provide, so
far as is reasonably practicable, an
environment that is safe and without
risk to their health and this is always
the first agenda item at each board
meeting. The board maintains ultimate
responsibility for health and safety
issues with a full-time Health, Safety
and Environment Officer responsible
on a day-to-day basis, supported by all
levels of management.
The Company’s policy is to identify
potential hazards, assess the risks
presented by its activities and to
provide systems and procedures that
18 Caffyns plc Annual Report 2025
Strategic Report continued
allow our staff to take responsible
decisions in their work in relation to
their own, and others’, safety. We
promote awareness of potential risks
and hazards and implementation of
corresponding preventative or remedial
actions through online health and
safety systems, operations manuals
and monthly communication on topical
issues. With clear lines of operating
unit responsibility, staff are supported
by specialist guidance from the Health,
Safety and Environment Officer. All our
staff have access to a detailed health
and safety guide.
Section 172 statement
Section 172 of the Companies Act
2006 requires directors to take into
consideration the interests of all
stakeholders and other matters in
their decision-making. The directors
continue to have regard to the interests
of the Company’s employees and other
stakeholders, the impact of its activities
on the community, the environment
and the Company’s reputation for
good business conduct, when making
decisions. In this context, acting in
good faith and fairly, the directors
consider what is most likely to promote
the success of the Company for its
members in the long-term. We explain
in this Annual Report how the board
engages with stakeholders.
• Relations with key stakeholders,
such as shareholders and suppliers,
are considered in more detail on
page 27;
• The Company’s employees are
recognised as vital to its success
and employee relations are
considered in more detail on pages
3, 8, 9 and 43. The Chief Executive
regularly visits the Company’s sites,
speaking to staff whilst he is there
and reporting to the board on the
outcome of those visits. The board
continues to review its methods of
engagement with its employees. In
addition, the board takes account of
employees’ interests when making
decisions;
• The directors are fully aware of
their responsibilities to promote
the success of the Company in
accordance with section 172 of the
Companies Act 2006. To ensure the
Company operates in line with good
corporate practice, all directors
receive refresher training annually on
the scope and application of section
172. This encourages the board
to reflect on how the Company
engages with its stakeholders and
opportunities for enhancement in
the future and was considered at the
Company’s board meeting in March
2024. As required, the Company
Secretary provides support to the
board to help ensure that sufficient
consideration is given to issues
relating to the matters set out in
s172(1)(a)-(f);
• The board regularly reviews the
Company’s principal stakeholders
and how it engages with them. This
is achieved through information
provided by management and
also by direct engagement with
stakeholders themselves; and
• We aim to work responsibly with our
stakeholders, including suppliers.
The board periodically reviews its
policies covering anti-corruption and
anti-bribery, equal opportunities and
whistleblowing.
During the year under review, ended
31 March 2025, the key decisions taken
by the board included:
Dividends: The Company is aware
of its responsibility to shareholders
to provide a return on the investment
that they have made and has returned
dividends per Ordinary share in excess
of £4 over the last two decades. The
financial performance of the business
improved in the year to underlying
profits of £0.6 million and the board
declared an interim dividend of
5.0 pence to holders of the Ordinary
shares. The board remains confident in
the prospects of the Company and is
declaring a final dividend for the year of
5.0 pence per Ordinary share.
Lewes freehold: The Company’s
freehold property in Lewes was deemed
surplus to requirements as no long-term
motor trade use for the property had
been identified. The board therefore
decided that maximum value would be
gained through a sale of the freehold
and the property was sold in December
2024 for a cash consideration of
£4.65 million, before costs.
Pension scheme triennial valuation:
The latest triennial valuation of
the Company’s defined benefit
pension scheme was effective from
31 March 2023. The Scheme has
operated with an actuarial deficit for
a number of years with a recovery
plan having been agreed between
the Company and the Scheme’s
trustees following the previous triennial
valuation in 2020. The board remains
very mindful of its responsibilities to its
current and previous employees who
are members of the Scheme and for
the need to appropriately deal with
the Scheme’s deficit, whilst ensuring
that the Company has adequate
resources to develop and strengthen
its businesses in order to ensure its
future success. The Company has
worked collaboratively with the trustees
of the Scheme during the year and
was able to reach agreement for a new
recovery plan, which was submitted
to the regulator before the submission
deadline of 30 June 2024. In December
2024, the Company sold its freehold
property in Lewes and, in return for the
pension scheme trustees releasing their
security charge over the property, paid
over £2.4 million to the pension scheme
as an additional deficit-reduction
contribution.
Additional manufacturer
representation: The board continues
to seek new opportunities to maximise
the effectiveness of its existing property
portfolio and was pleased to be able
to add the CUPRA and SEAT brands
to its premises in Worthing, alongside
the existing operation for Volkswagen.
The Company also added the Skoda
brand to its existing Volkswagen
operations in Eastbourne 2024 and
the Board continues to seek additional
opportunities.
By order of the board
S G M Caffyn
Chief Executive
10 June 2025
Our Business FinancialsGovernance Other information
19www.caffyns.co.uk
Stock code CFYN
20 Caffyns plc Annual Report 2025
Governance
Board of Directors 20
Chairman’s Statement on Corporate
Governance 21
Directors’ Remuneration Report 28
Report of the Directors 42
Directors’ Responsibilities Statement 46
Board of Directors
Directors
RICHARD C WRIGHT PG Dip FIMI FCIM
Chairman
SIMON G M CAFFYN MA FIMI
Chief Executive
MICHAEL WARREN BSc FCA
Finance
SARAH J CAFFYN BSc FCIPD
AICSA FIMI
Human Resources
STEPHEN G BELLAMY BCom CA(NZ)
Non-executive
and senior independent director
NIGEL T GOURLAY BSc
Non-executive
Bankers
HSBC BANK PLC
1 Centenary Square, Birmingham B1 1HQ
VOLKSWAGEN BANK
Brunswick Court, Yeomans Drive,
Blakelands, Milton Keynes MK14 5LR
Independent Auditor
BDO LLP
Statutory Auditor
55 Baker Street, London W1U 7EU
Company Secretary
SARAH J CAFFYN BSc FCIPD AICSA FIMI
Companies House Caffyns public limited company (00105664)
This statement explains how the
Company has applied the main and
supporting principles of corporate
governance and describes the
Company’s compliance with the
provisions of the UK Corporate
Governance Code (the “Code”), as
published in 2018 by the Financial
Reporting Council and available at
www.frc.org.uk.
The Company has complied with the
provisions of the Code throughout the
year ended 31 March 2025 in so far
as this has been possible given the
size of its operations and the available
resources. Areas where the Company
has not been able to fully comply are
set out below, explaining the nature of
non-compliance.
• Provision 10 requires that non-
executive directors should not
serve for more than nine years as
longer service could impair their
independence. Mr R C Wright
was appointed to the board on
1 November 2011 so exceeded
nine years’ service in a previous
financial year. Mr N T Gourlay was
appointed as a non-executive
director on 26 September 2013
so exceeded nine years’ service
in a previous financial year. Mr S
G Bellamy was appointed in June
2019 and remains independent. The
board is satisfied that both Mr R C
Wright and Mr N T Gourlay continue
to act independently and to robustly
challenge the executive, where
appropriate.
• Provision 11 requires that at
least half the board, excluding
the Chairman, should consist
of independent non-executive
directors. The board is satisfied the
composition of the board and the
committees reflects the compact
nature of the board and size of
the Company as a whole, and
that the non-executive directors
have shown that they are able to
work independently and provide
appropriate challenge of the
executive management;
• Provision 19 requires that the
Chairman should not remain in
post beyond nine years from the
date of their appointment. Mr R C
Wright was appointed as Chairman
on 26 July 2012 so has exceeded
nine years’ service in the role as
Chairman. The board is satisfied that
Mr R C Wright will continue to chair
the board in an appropriate manner;
• Provision 24 requires that the
chairman of the board should not
be a member of the Audit & Risk
Committee. The Company believes
that an Audit & Risk Committee
of three non-executive directors
operates better than with just two
members and, due to the size of the
board, the Chairman needs to be a
member in order to achieve this;
• Provision 36 requires that
remuneration schemes for
directors should promote long-term
shareholdings by executive directors
and support alignment with
long-term shareholder interests.
The Company has operated Save
As You Earn schemes for all eligible
employees, including directors, but
does not currently have an open
scheme in operation. The Company
does not operate a Long-Term
Incentive Plan (“LTIP”) for directors,
primarily due to the volatility in the
share price and relative lack of
liquidity in the trading of its shares.
However, all executive directors
are Ordinary shareholders and
those shareholdings are detailed on
page 37;
• Provision 39 requires that only
directors’ salaries should be
pensionable. The Company
Secretary, who is also a director, is a
member of the Company’s defined
contribution pension scheme on the
same terms as all other employees
and any bonus payments made
to her are pensionable. This is a
long-standing arrangement that also
aligns with the treatment of pension
contributions on bonus payments
for the wider employee base. The
board is satisfied and has decided
that it would not be in the best
interests of the Company to change
her existing employment contract;
• Provision 40 requires that notice
periods for directors should be one
year or less. The Chief Executive has
a service contract that runs for more
than twelve months (see page 32
of the Directors’ Remuneration
Report). This also is a long-standing
arrangement. The Remuneration
Committee reviews the position
annually and has decided that it
would not be in the best interests of
the Company to change his existing
contract.
A description of the Company’s
business model and strategy is set out
in the Strategic Report on page 7.
Financials Other information
21www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Chairman’s Statement on Corporate Governance
22 Caffyns plc Annual Report 2025
Chairman’s Statement on Corporate Governance
continued
Structure of the board and
its key activities
The board is collectively responsible for
the long-term success of the Company
and for ensuring that it operates to a
governance standard that serves the
best interests of the Company. The
board sets the strategy of the Company
and its individual trading businesses
and ensures that the Company has in
place the financial and human resources
it needs to meet its objectives. There
is a written schedule of matters
reserved for board decision, which is
summarised below.
Schedule of matters
reserved for decision by
the board
• Health and safety policy;
• Business strategy;
• Approval of significant capital
projects and other investments;
• Principal terms of agreement for
the Company’s principal banking
facilities;
• Annual business plan and budget
monitoring;
• Risk management strategy and
internal control and governance
arrangements;
• Approval of acquisitions and
divestments;
• Changes to management and
control structure;
• Significant changes to accounting
policies and/or practices;
• Financial reporting to shareholders;
• Dividend policy;
• Changes in employee share
incentives;
• Reviewing the overall corporate
governance arrangements;
• Appointments to the board and its
committees;
• Policies relating to directors’
remuneration and service;
• Prosecution, defence or settlement
of material litigation;
• Any alterations to the share capital
of the Company;
• Approval of all circulars and
announcements to shareholders;
• Major changes to the Company’s
pension schemes; and
• Insurance cover, including directors’
and officers’ liability insurance and
indemnification of the directors.
The Chairman takes responsibility for
ensuring that the directors receive
accurate, timely and clear information.
Monthly financial information is provided
to the directors. Regular and ad hoc
reports and presentations are circulated,
with all board and committee papers
being issued in advance of meetings by
the Company Secretary. In addition to
formal board meetings, the Chairman
maintains regular contact with the
Chief Executive and other directors to
discuss specific issues. In furtherance
of their duties, the directors have full
access to the Company Secretary and
may take independent professional
advice at the Company’s expense.
The board believes that, given the
experience and skills of its directors,
the identification of training needs is
best left to the individual’s discretion.
If any developmental need is identified
through the board’s formal appraisal
process or by an individual director,
the Company makes the necessary
resources available.
As part of their role, the non-executive
directors constructively challenge and
help develop proposals on strategy.
The non-executive directors scrutinise
management’s performance in meeting
agreed goals and objectives and
monitor the reporting of performance.
They satisfy themselves on the
integrity of financial information and
that the Company’s financial controls
and systems of risk management are
robust and defensible. They determine
appropriate levels of remuneration of
executive directors and have a prime
role in appointing and, where necessary,
removing executive directors, and in
succession planning. The non-executive
directors meet formally, without the
executive directors, at least once a year.
Operating within prescribed delegated
authority, such as capital expenditure
limits, the operational running of the
Company and its businesses is carried
out by the executive directors, led by
the Chief Executive.
The board delegates certain of its duties
to its Audit & Risk, Nomination and
Remuneration Committees, each of
which operates within prescribed terms
of reference. These are set out on the
Company’s website. The responsibilities
of the board’s committees are set out
on pages 23 and 24 of this report and in
the Directors’ Remuneration Report.
The board has evaluated the
performance of its Audit & Risk and
Remuneration Committees for the
year under review. The Chairman and
the respective committee chairman
take responsibility for carrying out any
actions recommended as a result of that
evaluation.
Performance evaluation
The board has established a procedure
to evaluate its performance, as well
as its Audit & Risk and Remuneration
committees, and its individual directors,
which is carried out in each financial
year. Detailed questionnaires are
completed by the directors, who then
debate any matters arising.
Individual director evaluation has
shown that each director continues to
demonstrate commitment to the role.
The non-executive directors, led by
the senior independent director, have
carried out a performance evaluation
of the Chairman after taking account
of the views of the executive directors.
The Chairman has reviewed the
performance of the non-executive
directors and the Chief Executive.
The Chief Executive has reviewed the
other executive directors. The board
intends to carry out further performance
evaluations but will keep under review
the method and frequency.
The latest board evaluation process
concluded that the board and
committees were operating effectively,
with clear demarcation of the respective
responsibilities of individual directors
and board committees. The board is
satisfied that all directors are each able
Financials Other information
23www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
to devote the amount of time required
to attend to the Company’s affairs and
their duties as a board member. The
Chairman discusses with each director
any training and development needs.
Board composition and
independence
At 10 June 2025, the board comprised
three executive directors and three
non-executive directors, one of whom
is the Chairman. Mr R C Wright is
the non-executive Chairman and
Mr S G M Caffyn is the Chief Executive.
The Chairman leads the board and
the Chief Executive manages the
Company and implements the strategy
and policies adopted by the board.
There is a clear division of responsibility
between the role of the non-executive
Chairman and the Chief Executive; this
is recorded in a written statement which
is reviewed and agreed annually by the
board. The Chairman is responsible for
leadership of the board and ensuring its
effectiveness for all aspects of its role.
The Company maintains appropriate
directors’ and officers’ insurance
in respect of legal action against
its directors.
Directors’ conflict
of interest
Conflicts of interest can include
situations where a director has an
interest that directly or indirectly
conflicts, or may possibly conflict,
with the interests of the Company.
The board operates a formal system
for directors to declare at all board
meetings all conflicts of interest. The
non-conflicted directors must act in the
way they consider, in good faith, would
be most likely to promote the success
of the Company.
Balance and challenge
The non-executive directors
complement the skills and experience
of the executive directors, providing
the requisite degree of judgement
and scrutiny to the decision-making
process at board and committee
level. Mr S G Bellamy is the senior
independent director.
The board maintains and regularly
reviews a register of all interests, offices
and appointments that are material
to be considered in the assessment
of the independence of directors and
has concluded that there are not, in
relation to any director, any relationships
or circumstances regarded by the
Company as affecting their exercising
independent judgement.
Re-election of directors
All directors will seek re-election
annually in accordance with the
latest corporate governance
recommendations.
Meetings and attendance
There were eight meetings of the board
in the year under review. All directors
were in attendance for all of the
meetings.
Nomination Committee
Our Nomination Committee comprises
two non-executive directors, the non-
executive Chairman and the Chief
Executive. The members are:
R C Wright (Chairman)
N T Gourlay
S G Bellamy
S G M Caffyn
The Nomination Committee is
responsible for leading the process for
appointments to the board and meets
at least once a year. The Committee
is chaired by Mr R C Wright. The
Company Secretary or alternate also
attends meetings in her capacity as
secretary of the Committee. Where
the matters discussed relate to the
Chairman, such as in the case of
selection and appointment of the
Company Chairman, the senior
independent director chairs the
Committee. New directors receive a full,
formal and tailored induction on joining
the board.
The principal responsibilities of the
Committee are as follows:
• To regularly review the structure,
size and composition of the board
and make recommendations to the
board regarding any adjustments
deemed appropriate;
• To prepare the description of the
role and capabilities required for
a particular board appointment.
Executive search consultants may
be retained as appropriate to assist
in this process;
• To identify, and nominate for the
approval by the board, candidates
to fill board vacancies as and when
they arise;
• To satisfy itself, with regard to
succession planning, that processes
are in place regarding both board
and senior appointments; and
• To undertake an annual performance
evaluation to ensure that all
members of the board have devoted
sufficient time to their duties.
The Committee met twice during the
year. All members eligible to attend were
present at both the meetings.
Audit & Risk Committee
Our Audit & Risk Committee comprises
two non-executive directors and the
Chairman. The members are:
S G Bellamy (chairman)
R C Wright
N T Gourlay
The Committee is chaired by
Mr S G Bellamy. The Company
Secretary, or alternate, also attends
meetings in her capacity as secretary
of the Committee. The chairman of
the Committee is considered by the
board as having recent and relevant
financial experience. The board also
remains satisfied that the Committee
as a whole has competence relevant
to the sectors in which the Company
operates. The chairman of the board is
on the Committee due to his experience
and the small number of non-executive
directors on the board. The board are
satisfied with this arrangement. The
Audit & Risk Committee meets at least
three times a year. The meetings are
attended by invitation by the executive
directors and by the head of the
internal audit function and the internal
auditor, and by representatives of the
24 Caffyns plc Annual Report 2025
Chairman’s Statement on Corporate Governance
continued
Company’s external Auditor, at the
Chairman’s discretion.
The Committee’s meetings in quarters
one and three coincide with the
Company’s reporting timetable for
its audited financial statements and
unaudited interim condensed financial
statements respectively. During these
meetings, the Committee:
• Reviews the drafts of the financial
statements and preliminary and
interim results announcements; and
• Reviews all published accounts
(including interim reports) and
post-audit findings before their
presentation to the board, focusing
in particular on accounting
policies, compliance, management
judgement and estimates, and
considers the reports of the external
auditor on the unaudited interim
condensed financial statements
and the full-year audited financial
statements.
At the second of these meetings,
the Committee reviews the external
audit plan.
The Committee’s third meeting is
primarily concerned with:
• Reviewing the Company’s systems
of control and their effectiveness;
• Significant corporate governance
issues, such as those relating to the
regulation of financial services;
• Reviewing the external Auditor’s
performance;
• Reviewing the risk register and
making recommendations to the
board on the content and relative
importance of the risks identified;
• Recommending to the board
the reappointment, or not, of the
external auditor; and
• Reviewing the effectiveness and
independence of the external
auditor, including monitoring the
level of audit and non-audit fees.
The Committee met three times in
the year and all directors were in
attendance at all the meetings. The
Committee reviewed the effectiveness
of the Company’s system of internal
control and financial risk management
during the year, including the review
of the Company’s risk register, and
including consideration of reports
from both the internal and external
auditors. The Committee reported the
results of its work to the board and
the board considered these reports
when reviewing the effectiveness of
the Company’s system of internal
control which forms part of the board’s
high-level risk review performed
during the year. The effectiveness of
the internal audit function was also
monitored.
The Committee provides advice to the
board on whether the Annual Report
is fair, balanced and provides the
necessary information shareholders
require to assess the Company’s
performance, business model and
strategy. In doing so, the following
issues have been addressed
specifically:
• Review of key strategic risks: The
Committee chairman conducts an
annual review of key strategic risks.
The review highlights the key risks
based on a combination of likelihood
and impact, and then also considers
what appropriate mitigating factors
should be implemented (highlights
from this work are included in the
Strategic Report).
• Review of poorly performing
dealerships: As part of both
the interim and year-end review
processes, consideration is given
to any requirement for potential
impairments against the book
value of property, plant and
equipment, investment property
and goodwill relating to poorly
performing locations. Management
then follow up with detailed action
plans to either improve dealership
performance or seek an exit
solution. The Committee also
reviews progress on these plans at
the following review. The Committee
is satisfied that no impairments were
required in relation to the carrying
value of cash generating units
(“CGUs”) in the financial year.
• Going concern and financial
viability: The Finance Director
provides an assessment of the
Company’s ability to continue to
trade on a going concern basis
for a period of one year from the
date of approval of this Annual
Report. Forecasts are based on
financial plans agreed with the
board (budgets or forecasts), the
Company’s most recent trading
results, and include a range of
possible downside scenarios.
The assumptions that underpin
the assessments are considered
and discussed in detail when the
Committee meets. The conclusion
of that review is included in
the Going Concern section of
this report.
• Inventory valuation: The value
of new and used cars, as well as
the provision for slow-moving and
obsolete inventory, can have a
significant influence on the inventory
valuation in the financial statements.
The Committee has considered
the Company’s procedures and
controls, which are satisfactory, to
reduce the risk of misstatement in
relation to inventory valuation.
• Pensions: The Company operates
a defined benefit pension scheme,
closed to future accrual, which has
an excess of liabilities over the value
of assets owned by the scheme.
The assessment of the valuation
of the scheme is based on several
key assumptions, which can have a
significant impact on the valuation
of the deficit. The Committee has
considered the assumptions used
for the valuation of the assets and
liabilities of the scheme and is
satisfied that these are reasonable.
The 2024 Corporate Governance Code
will be applicable for financial periods
beginning on or after 1 January 2025
and the requirements of Provision 29 will
apply from financial periods beginning
1 January 2026. Management are in
the process of considering changes
to existing practices that will be
required to comply with the above
new requirements as at the due date.
Financials Other information
25www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Ahead of full introduction of the Code,
the Committee already monitors the
Company’s risk management and
internal control framework and carries
out an annual review of its effectiveness.
This review was carried out at its
meeting in November 2024.
Mr S G Bellamy will attend the 2025
Annual General Meeting and will be
available at that meeting to answer
any questions regarding the workings
of the Audit & Risk Committee that
shareholders may wish to raise.
Anti-bribery
During the year, as well as its routine
business, the Committee continued to
monitor the suitability of the Company’s
controls designed to combat bribery
to satisfy itself of the adequacy of
its systems and procedures for the
prevention of bribery and corruption,
particularly in the light of the Bribery Act
2010. It has reviewed the Company’s
anti-bribery policy statement that has
been adopted by the board.
Whistleblowing
The Committee has reviewed the
arrangements for its employees to
raise, in confidence, concerns about
possible improprieties in relation to
financial reporting, suspected fraud and
dishonest acts, or other similar matters,
commonly known as “whistleblowing”.
The Committee reviews any such
reported incidences and any
improvements to internal procedures
that may be required.
Non-audit services
provided by the
external Auditor
Non-audit services provided by the
Company’s Auditor require prior
approval from the Audit & Risk
Committee based on an assessment
against permissible services and
associated fee levels. The only
non-audit service provided in the year
by the Auditor was an interim review,
which is a permissible service under the
FRC’s ethical standards.
The Committee ensures that the
Auditor’s objectivity and independence
are safeguarded by ensuring that the
level of fees is not material to either
the Company or to the Auditor. The
report from BDO LLP confirming their
independence and objectivity was
reviewed by the chairman of the Audit
& Risk Committee and the Finance
Director. Fees payable to the Auditor
are set out in note 4 to the financial
statements.
Effectiveness and
independence of the
external Auditor
The Committee is responsible for
advising the board on the appointment
of the Auditor, assessing their
independence and formulating policy
on the award of non-audit work. The
current auditor is BDO LLP and the year
under review is their sixth year of tenure.
They were appointed as the result of
a formal competitive tender process
in 2019.
Non-audit work is only awarded to the
external Auditor after due consideration
of matters of objectivity, independence,
value for money, quality of service
and efficiency.
At the conclusion of each year’s
audit, the performance of the external
Auditor is reviewed by the Committee,
with the executive directors, covering
such areas as quality of audit team,
business understanding, audit approach
and process management. Where
appropriate, actions are agreed against
the points raised and subsequently
monitored for progress.
The Company maintains an internal
audit function, which reports to the
Audit & Risk Committee. During the
year, the Committee reviewed the work
of the internal audit function and was
satisfied that it remained effective and
appropriate for the Company’s needs.
Tax strategy and objective
As a responsible taxpayer, the
Company is committed to establishing,
maintaining and monitoring the
implementation of an appropriate tax
strategy. Our tax strategy is aligned
with our objective of paying the
correct amount of tax at the right time.
Commercial transactions are therefore
structured in the most tax-efficient
way but without resorting to artificial
arrangements that we would regard as
abusive. There is an ethical dimension
to achieving this objective. The ethical
dimension reflects the need to mitigate
the risk to the Company’s reputation
that would arise from tax strategy that
entails aggressive tax planning.
A copy of the Company’s tax strategy
is available from its corporate website,
www.caffynsplc.co.uk.
Going concern
The directors have considered the going
concern basis and have undertaken
a detailed review of trading and cash
flow forecasts for a period of one year
from the date of approval of this Annual
Report. This has focused primarily
on the achievement of the banking
covenants associated with the term loan
and revolving credit facilities provided
by HSBC, which cover levels of interest,
borrowing and freehold property
security. Following the underlying
loss made in the previous financial
period, agreement was reached with
HSBC to implement a new covenant
test that required the Company to
achieve minimum cumulative Senior
EBITDA hurdles, which were £Nil for
the quarter ended 30 June 2024,
£1.0 million for the half-year ended
30 September 2024, £1.5 million for the
nine months ended 31 December 2024
and £3.0 million for the full financial year
ended 31 March 2025. These covenant
tests were passed for all quarters
of the year. For the purposes of this
26 Caffyns plc Annual Report 2025
Chairman’s Statement on Corporate Governance
continued
calculation, Senior EBITDA was defined
as the Company’s underlying profits
before Senior Interest (that being paid
to HSBC and VW Bank on its term loan
and revolving credit facility borrowings),
corporation tax, depreciation and
amortisation.
Under the Company’s interest cover
covenant test, to be reapplied from
30 June 2025, it will be required to
make Senior EBITDA, which is at least
three times the level of its Senior Interest
incurred. Under the borrowings test,
also to be reapplied from 30 June 2025,
the Company’s borrowings from HSBC
and VW Bank on its term loan and
revolving credit facilities must be less
than 400% of its Senior EBITDA.
The Company’s final covenant test over
its levels of freehold property security
requires that the level of its bank
borrowings do not exceed 70% of the
independently assessed value of its
charged freehold properties. This test
was passed at 31 March 2025.
Once reapplied on 30 June 2025, these
covenants will then continue to be
tested quarterly. Financial modelling for
the coming twelve-month period has
allowed the directors to conclude that
there is satisfactory headroom in the
Company’s banking covenants.
Any failure of a covenant test would
render the borrowing facilities from
HSBC to become repayable on
demand, at the option of the lender.
The directors have also given
consideration to the current
uncertainties in the state of the UK
economy, as well as to cost pressures
that have impacted businesses such as
increases to staffing costs from the rise
in the National Minimum and National
Living Wages, from business rates and
from increases to funding costs from
continuing high interest base rates.
The directors have also considered
the Company’s working capital
requirements. The Company meets its
day-to-day working capital requirements
through short-term stocking loans,
bank overdraft and revolving-credit
facility, and medium-term revolving
credit facilities and term loans. At the
year-end, the medium-term banking
facilities included a term loan with an
outstanding balance of £5.1 million and
a revolving credit facility of £6.0 million
from HSBC, its primary bankers, with
both facilities being next renewable
during the going concern period in
April 2026. HSBC also make available
a short-term overdraft facility of
£3.5 million, which is renewed annually
each August. The Company also has
a short-term revolving-credit facility
from Volkswagen Bank of £4.0 million,
which is next scheduled for renewal in
October 2025. The Company maintains
strong relationships with HSBC and VW
Bank and, based on the discussions
to date regarding the renewal of the
facilities, the directors are of the opinion
that there is a reasonable expectation
that all facilities will be renewed at their
scheduled expiry dates.
At 31 March 2025, the Company held
cash in hand balances of £3.8 million
and had undrawn borrowing facilities
of £6.5 million, all of which would be
immediately available.
Information concerning the Company’s
liquidity and financing risk are set
out on page 10 and note 22 to the
financial statements.
The directors have a reasonable
expectation that the Company has
adequate resources and headroom
against the covenant tests to be able
to continue in operational existence for
the foreseeable future and for a period
of one year from the date of approval of
the Annual Report. For those reasons,
they have concluded that there is no
material uncertainty and they continue
to adopt the going concern basis in
preparing this Annual Report.
Viability statement
In accordance with provision 31 of the
UK Corporate Governance Code, the
directors have assessed the viability
of the Company over a three-year
period to 31 March 2028 and have
concluded that the Company is viable
over that chosen period. The directors
believe this period to be appropriate
as the Company’s strategic review
considered by the board encompasses
this period. In making their assessment,
the directors have considered the
Company’s current financial position
and performance and its cash flow
projections, including future capital
expenditure, in relation to the availability
of finance and funding facilities,
and have considered these factors
in relation to the principal risks and
uncertainties as explained in the Report
of the Directors.
The Company’s primary borrowing
facilities will next come up for periodic
review within that three-year period,
in April 2026. The Company has a
strong relationships with its funding
banks and the directors are satisfied
that these facilities will be renewable at
their current levels and on acceptable
commercial terms.
During the year ended 31 March 2025,
the board carried out a robust
assessment of the emerging and
principal risks facing the Company,
including those that would threaten its
business model, future performance,
solvency or liquidity. The directors
believe that the Company is well
placed to manage its business risks
successfully, having considered the
principal risks and uncertainties.
Accordingly, taking into account the
Company’s current position and subject
to the principal risks faced by the
business, the board has a reasonable
expectation that the Company will be
able to continue in operation and to
meet its liabilities as they fall due in the
period up to 31 March 2028.
Financials Other information
27www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Risk management and
internal controls
The board is responsible for
maintaining a sound system of
internal controls, including financial,
operational and compliance controls
and risk management, and reviews
the effectiveness of the system at
least annually in order to safeguard
shareholders’ investment and the
Company’s assets. The system is
designed to manage rather than
eliminate risk and can provide only
reasonable and not absolute assurance
against material misstatement or loss.
The board has completed a robust
assessment of the Company’s
emerging and principal risks, including
a description of its principal risks, the
procedures that are in place to identify
emerging risks, and an explanation of
how these risks are being managed
or mitigated.
The board has reviewed the
effectiveness of the system of internal
control. In particular, it has reviewed and
updated the process for identifying and
evaluating the significant risks affecting
the business and the policies and
procedures by which these risks are
managed.
Management are responsible for
the identification and evaluation of
significant risks applicable to their
areas of business together with the
design and operation of suitable internal
controls. These risks are assessed on
a regular basis and may be associated
with a variety of internal or external
sources, including control breakdowns,
disruption to information systems,
competition, natural catastrophe,
customer or supplier actions and
regulatory requirements. The process
used by the board is to review the
effectiveness of the system of internal
control, including a review of legal
compliance, health and safety and
environmental issues on a six-monthly
basis. Insurance and risk management
and treasury issues are reviewed
annually or more frequently if necessary.
In addition, the Audit & Risk Committee
reviews the scope of audits, the half-
yearly and annual financial statements
(including compliance with legal and
regulatory requirements) and reports
to the board on financial issues raised
by both the internal and external
audit functions. Financial control is
exercised through an organisational
structure, which has clear management
responsibilities with segregation of
duties, authorisation procedures and
appropriate information systems.
The system of annual budgeting with
monthly reporting and comparisons
to budget is a key control over the
business and in the preparation of
consolidated accounts.
There is an ongoing programme of
internal audit visits to monitor financial
and operational controls throughout
the Company. The executive directors
receive regular reports from the
internal audit and health and safety
monitoring functions, which include
recommendations for improvement.
Financial reporting
The directors consider the Annual
Report and Accounts, taken as a whole,
to be fair, balanced and understandable,
and provides the information necessary
for shareholders to assess the
Company’s position, performance,
business model and strategy.
Relations with
shareholders
The board values the constructive views
of its shareholders and recognises
their interest in the Company’s strategy
and performance, board membership
and quality of management. The views
of major shareholders are reported
back to the board as appropriate.
The non-executive directors are
available to attend meetings with major
shareholders. The principal methods of
communication with private investors
are the Interim Report, the Annual
Report and the Annual General Meeting.
Information on the Company is also
included on its corporate website,
www.caffynsplc.co.uk.
The Annual General Meeting is used
to communicate with investors.
The chairmen of the Audit & Risk,
Remuneration and Nomination
Committees are available to answer
questions. Separate resolutions are
proposed on each issue so that they
can be given proper consideration and
there is a resolution to approve the
Annual Report and financial statements.
The Company counts all proxy votes
and, after it has been dealt with by a
show of hands, indicates the level of
proxies lodged on each resolution.
Relations with suppliers
The board maintains close relationships
with its suppliers and, in particular, with
the nine motor manufacturers for which
it currently holds operating franchises:
namely Audi, CUPRA, Lotus, MG,
SEAT, Skoda, Vauxhall, Volkswagen
and Volvo. The Chief Executive holds
regular meetings with these parties
and the Company’s operations are
split into three divisions, with the head
of each division specifically tasked
with maintaining a close and mutually
beneficial relationship with their
manufacturer. For its wider supplier
base, the Company ensures that it
operates in an ethical manner, ensuring
that invoices are settled within agreed
terms. The average credit period taken
for trade-related purchases in the year
under review was twenty-eight days
(2024: twenty-seven days).
By order of the board
R C Wright
Chairman
10 June 2025
Annual Statement
from the Chairman
of the Remuneration
Committee
Introduction
On behalf of your board, I am
pleased to present our Directors’
Remuneration Report for the year
ended 31 March 2025. The Directors’
Remuneration Report has been
prepared on behalf of the board by
the Remuneration Committee in
accordance with the requirements of the
Companies Act 2006 and the Large and
Medium-sized Companies and Groups
(Accounts and Reports) (Amendments)
Regulations 2013, and is split into two
sections:
• The directors’ remuneration policy
sets out the Company’s policy on
remuneration, which was subject
to a binding shareholder vote at
the Annual General Meeting on
3 August 2023. This remuneration
policy will continue to be voted on in
the future at least once every three
years; and
• The annual report on remuneration
sets out the payments and awards
made to the directors and details the
link between company performance
and remuneration for the financial
year ended 31 March 2025.
The information set out on pages 29 to
41, which comprise of the remuneration
disclosures are, where stated, subject
to audit in accordance with the relevant
statutory requirements.
Remuneration outcomes
for the financial year ended
31 March 2025
Annual bonus opportunities for the
directors are based on the achievement
of an underlying profit before tax
target, subject to the discretion of
the Remuneration Committee. The
necessary profit target was not
achieved in relation to the financial year
ended 31 March 2025. As a result, no
bonuses were awarded to the executive
directors.
Key remuneration
decisions for the
forthcoming financial year
ending 31 March 2026
Under the Company’s annual salary
review, the base salaries for both the
executive and non-executive directors
were increased by 2.0% with effect from
1 April 2025. Salaries for employees in
general were increased by an overall
average of 3.4% from that date.
Conclusion
The directors’ remuneration policy
that follows this annual statement
sets out the Committee’s principles
on remuneration for the future and the
annual report on remuneration provides
details of the remuneration for the year
ended 31 March 2025.
The Committee will continue to be
mindful of shareholder views and
interests and we believe that our
directors’ remuneration policy continues
to be aligned with the achievement of
the Company’s business objectives.
By order of the board
N T Gourlay
Chairman of the Remuneration
Committee
10 June 2025
28 Caffyns plc Annual Report 2025
Directors’ Remuneration Report
Remuneration policy
The policy of the Committee is to ensure that the executive directors are fairly rewarded for their individual contributions to the
Company’s overall performance and to provide a competitive remuneration package to executive directors to attract, retain
and motivate individuals of the calibre required to ensure that the Company is managed successfully in the interests of all
stakeholders. In addition, the Committee’s policy is that a substantial proportion of the remuneration of the executive directors
should be performance related.
The Company’s directors’ remuneration policy is voted on every three years and was last approved by shareholders at the
Annual General Meeting held on 3 August 2023 and became effective from that date. The full policy was disclosed in the 2023
Annual Report, which is available on the Caffyns plc website located at www.caffynsplc.co.uk.
The main elements of the remuneration package of executive directors are set out below:
Purpose and link to
strategy Operation Maximum potential value Performance metrics
Base salary
Provide competitive
remuneration that will
attract and retain high-
calibre executive directors
to develop and implement
the Company’s strategy,
without paying more than
necessary, and having
regard to the views of
shareholders and other
stakeholders.
Reviewed annually effective
from 1 April to reflect role,
responsibility and performance
of the individual and the
Company, and to take account
of rates of pay for comparable
roles in similar companies.
Paid in twelve equal monthly
instalments during the year.
When selecting comparators,
the Committee has regard to
the Company’s revenue, market
worth and business sector.
There is no prescribed
maximum increase, although
the Committee carefully
considers any increases
against those awarded to
the Company’s employees,
taken as a whole. The
annual rate of any increase is
set out in the Annual Report
in the section covering
remuneration for the year
and the following year.
The Committee considers
individual salaries at the
appropriate Committee
meeting each year, taking
due account of the factors
noted in the operation of the
salary policy.
Benefits
Provide market
competitive benefits
consistent with the role.
Benefits consist of the provision
of a company car, private
medical health insurance,
business-related and certain
other subscriptions, and
the opportunity to join any
Company savings-related share
option scheme.
The cost of providing
benefits varies from time to
time and is borne wholly by
the Company, except for
the cost of private medical
health insurance where the
Company contributes half of
the cost.
Not applicable.
Remuneration policy
Financials Other information
29www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Purpose and link to
strategy Operation
Maximum
potential value Performance metrics
Annual bonus
Incentivises
achievement of
business objectives by
providing a reward for
performance against
annual targets.
Paid in cash after the end of the
financial year to which it relates.
Up to 100% of
salary.
Targets based on the underlying profit
before tax of the Company.
The Committee sets threshold and
maximum targets on an annual basis. In
general:
• A percentage of the maximum bonus
is payable for hitting the threshold
target; and
• 100% of the maximum bonus is
payable for meeting or exceeding the
maximum target.
A sliding scale operates between
threshold and maximum performance.
Payment of any bonus is subject to
the discretion of the Committee and, if
deemed appropriate, a bonus of up to
10% of salary may be paid in exceptional
circumstances, despite the threshold
target not being reached.
Long-term incentives
Alignment of interests
with shareholders by
providing long-term
incentives delivered in
the form of shares.
Executive directors are able to
apply for maximum entitlement
under the rules of any Company
savings-related share option
scheme.
No other long-term incentive
scheme is considered
appropriate for the Company’s
specific circumstances.
See page 37 for
details.
Not applicable.
Pension
Attract and retain
executive directors
for the long-term by
providing funding for
retirement.
Executive directors are eligible
to join the Company’s defined
contribution pension scheme on
the same terms as staff generally.
In accordance with the rules of
the pension scheme, bonuses
are pensionable.
As a result of changes in
pensions’ legislation effective
from 6 April 2006, executive
directors can choose to be paid
a salary supplement in lieu of the
employers’ contribution to the
Company’s pension scheme.
3% of base salary
plus bonus.
Not applicable.
Remuneration policy continued
30 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Notes to the policy table
The remuneration policy is designed to
support the strategy and promote long-
term sustainable success. There is no
link between the levels of remuneration
earned by the executive directors and
the Company’s share price.
When reviewing the remuneration policy,
the Remuneration Committee remains
mindful of the Company’s purpose,
values and culture.
Performance conditions
The Committee selected the
performance conditions as they are
central to the Company’s strategy and
are key metrics used by the executive
directors to oversee the operation of
the business. The performance targets
for the annual bonus are determined
annually by the Committee.
The performance targets for any annual
bonus in the coming financial year
ending 31 March 2026 are based on
achievement of a pre-set profit before
tax for that year. The target profit
would be the profit excluding property
profits and losses and pension fund
costs or gains. The Remuneration
Committee also reserves the right to
make additional adjustments to the
profit target when calculating bonus
entitlement for items (losses or gains)
that they considered not to be part of
normal underlying profit for that year.
Furthermore, in determining whether to
award a bonus, the Committee would
also take into account factors such
as dividend cover and year-on-year
changes to the net asset value of the
Company. The Committee is of the
opinion that these performance targets
are commercially sensitive and that it
would therefore be detrimental to the
Company to disclose their details in
advance. The targets will be disclosed
after the end of the financial year in the
Directors’ Remuneration Report in next
year’s Annual Report.
In exceptional circumstances, the
Remuneration Committee would have
the discretion to pay a maximum of
10% of salary as a bonus, even if
performance were to be below the
threshold required.
Differences from
remuneration policy for all
employees
All employees of the Company are
entitled to base salary and benefits.
The opportunity to earn commission
or a bonus is made available to a high
proportion of employees. The maximum
opportunity available is based on the
seniority and responsibility of the role.
Statement of consideration
of employment conditions
of employees elsewhere in
the Company
The Committee receives reports on
an annual basis on the level of pay
rises awarded across the Company
and takes these into account when
determining salary increases for
executive directors. In addition, the
Committee receives reports on the
structure of remuneration for senior
management in the tier below the
executive directors and uses this
information to ensure a consistency of
approach for its most senior managers.
The Committee does not specifically
invite employees to comment on the
directors’ remuneration policy, but it
does take note of any comments made
by employees.
Statement of consideration
of shareholder views
The board would carefully consider
any shareholder feedback and any
actions to be taken would be built
into the Committee’s business for
the ensuing period. This, and any
additional feedback received from
shareholders from time to time, would
be considered by the Committee as
part of the Company’s annual review of
remuneration policy.
Approach to recruitment
remuneration
The Committee’s approach to
recruitment remuneration is to offer
a market-competitive remuneration
package sufficient to attract high-calibre
candidates who are appropriate to the
role but without paying any more than is
necessary.
Any new executive director’s
remuneration package would include
the same elements and be in line with
the policy table set out earlier in the
directors’ remuneration policy, including
the same limits on performance-related
remuneration.
Were an internal candidate promoted
to the board, the original grant terms
and conditions of any bonus or share
awards made before that promotion
would continue to apply.
Reasonable relocation and other similar
expenses may be paid if appropriate.
Financials Other information
31www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Directors’ service contracts, notice periods and termination payments
Provision Policy Details
Contractual
provisions
on a change
of control of
the Company
Other provisions
in specific service
contracts
Notice periods
in executive
directors’
service
contracts.
Twelve months by executive
directors and the Company.
Executive directors
may be required to
work during the notice
period.
Twelve months
by executive
directors and
the Company.
S G M Caffyn may give
six months’ notice but is
entitled to two years’ notice
from the Company and an
unreduced early retirement
pension.
M Warren may give six
months’ notice and is
entitled to six months’
notice from the Company.
Compensation
for loss of
office.
No more than twelve months’
basic salary, bonus and
benefits (including Company
pension contributions).
None. None, except
for the Chief
Executive.
Termination payment to S G
M Caffyn following a change
of control comprises a cash
amount equal to two years’
basic salary, bonus and
benefits (including Company
pension contributions).
Treatment of
annual bonus
on termination.
Bonuses that have already
been declared are payable in
full. In the event of termination
by the Company (except for
cause), a prorated bonus to the
end of the notice period would
also be payable.
None. None. None.
Treatment
of unvested
options from
savings-related
share option
schemes.
Good leavers may exercise
their options within six months
of cessation (one year for
death).
Options of leavers for fraud,
dishonesty or misconduct
lapse. Options of other leavers
may be exercised within six
months of cessation, but only
to the extent that they would
ordinarily become vested
during that time. There is no
discretion to treat any such
leaver as a “good leaver”.
Other than death,
“good leaver”
circumstances
comprise: injury,
disability, redundancy,
retirement or transfer
of employing business
outside the Company.
The number of options
that can be exercised
is reduced pro rata to
reflect the proportion
of the vesting period
before cessation.
The number of
options that can
be exercised
is reduced pro
rata to reflect
the proportion
of the vesting
period before
cessation.
Not applicable.
Exercise of
discretion.
Intended only to be relied upon
to provide flexibility in unusual
circumstances.
The Committee’s
determination would
consider the particular
circumstances of the
executive director’s
departure and the
recent performance of
the Company.
Not applicable. Not applicable.
32 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Provision Policy Details
Contractual
provisions
on a change
of control of
the Company
Other provisions
in specific service
contracts
Outside
appointments.
Subject to approval. Board approval must
be sought.
Not applicable. Not applicable.
Non-executive
directors.
Appointed for three-year terms. Early termination by
either the Company
or the director may
occur with six months’
notice. Fees for that
period would be paid
as compensation if
the early termination
was requested by the
Company.
Not applicable. Not applicable.
In the event of the negotiation of a compromise or settlement agreement between the Company and a departing director, the
Committee may make payments it considers reasonable in settlement of potential legal claims. Such payments may also include
reasonable reimbursements of professional fees in connection with such agreements.
The Committee may also include the reimbursement of repatriation costs or fees for professional or outplacement advice in the
termination package, if it considers it reasonable to do so. It may also allow the continuation of benefits for a limited period.
Service contracts
Executive directors are appointed under rolling service contracts, whereas non-executive directors each have a fixed-term
appointment of three years, renewable upon expiry at the Company’s discretion. When considering the reappointment of a
non-executive director, the board reviews their attendance at, and participation in, meetings and their overall performance,
and takes into account the balance of skills and experience of the board as a whole.
Director
Commencement
of current renewal
contract Expiry
Unexpired terms at
31 March 2025
R C Wright 27 July 2024 26 July 2027 28 months
N T Gourlay 26 September 2022 25 September 2028 42 months
S G Bellamy 18 June 2022 17 June 2028 39 months
In March 2025, the contracts for Mr N T Gourlay and Mr S G Bellamy were extended by a further three-year period.
Copies of directors’ service contracts and letters of appointment are available for inspection at the Company’s registered office.
Fees from external directorships
None of the executive directors holds office as a non-executive director of other companies other than in a voluntary or honorary
(that is, unpaid) capacity. The Company does not have a formal policy on whether an executive director may or may not keep
fees gained from holding an external non-executive directorship. This would be decided on a case-by-case basis.
Financials Other information
33www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Total remuneration opportunity for the year ending 31 March 2026
The chart below illustrates the remuneration that would be paid to each of the executive directors under three different
performance scenarios: (i) below threshold; (ii) on target; and (iii) outperformance.
The elements of remuneration have been categorised into two components: (i) fixed; and (ii) annual variable (annual bonus
awards).
Each element of remuneration is defined in the table below:
S G M Caffyn
Below threshold
Target
Outperformance
50% £648,000
20% £405,000
£324,000
50%
80%
100%
M Warren
Below threshold
Target
Outperformance
50% £332,000
20% £208,000
£166,000
50%
80%
100%
S J Caffyn
Below threshold
Target
Outperformance
50% £106,000
20% £66,000
£53,000
50%
80%
100%
Fixed
Annual bonus
Element Description
Fixed
Base salary and benefits in kind
Annual variable
Annual bonus awards
The on-target scenario assumes that for the annual bonus, underlying profit before tax would be 121% of the threshold target.
Non-executive directors’ fee policy
The policy for the remuneration of the non-executive directors is as set out below. Non-executive directors are not entitled to a
bonus, cannot participate in the Company’s savings-related share option scheme and are not eligible for pension arrangements
or any other employment benefits.
Purpose and link to strategy Operation
Maximum
potential value
Performance
metrics
Non-executive directors’ fees
Attract non-executive directors
who have a broad range of
experience and skills to oversee
the implementation of the
Company’s strategy.
Non-executive directors’ fees are
determined by the board within
the limits set out in the Articles
of Association and are paid in
twelve equal, monthly instalments
during the year.
Reviewed annually to reflect
the role, responsibility and
performance of the individual
and the Company. Annual rate
of increase set out in the annual
report on remuneration for
the year under review and the
following year. No prescribed
maximum annual increase.
None.
When reviewing the level of fees paid to non-executive directors, care is taken to ensure that no conflicts of interest arise and
no non-executive director would take part in discussions concerning their own fees.
34 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Annual report on remuneration
Total single figure of remuneration for the year ended 31 March 2025 (audited)
The following table shows a total single figure of remuneration in respect of qualifying services for the year ended
31 March 2025, for each director, together with comparative figures for the year ended 31 March 2024. The information
provided in this part of the Directors’ Remuneration Report is subject to audit.
Salary and fees
£’000
Taxable benefits
£’000
Annual bonus
£’000
In lieu of pension
contributions
£’000
Total single
figure
£’000
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Executive
S G M Caffyn 318 318 9 16 — — 10 10 337 344
M Warren 163 163 6 6 — — 4 4 173 173
S J Caffyn 50 50 1 6 — — 2 2 53 58
Total 531 531 16 28 — — 16 16 563 575
Non-executive
R C Wright 73 73 — — — — — — 73 73
N T Gourlay 36 36 — — — — — — 36 36
S G Bellamy 36 36 — — — — — — 36 36
Total 145 145 — — — — — — 145 145
676 676 16 28 — — 16 16 708 720
Employment benefits made available to the executive directors include the provision of a company car, a 50% contribution
towards the cost of private medical health and the cost of appropriate subscriptions.
Remuneration received by the directors can be analysed between Fixed and Variable sums as follows:
Total Fixed sums
£’000
Total Variable sums
£’000
Total single figure
£’000
2025 2024 2025 2024 2025 2024
Executive
S G M Caffyn 337 344 — — 337 344
M Warren 173 173 — — 173 173
S J Caffyn 53 58 — — 53 58
Total 563 575 — — 563 575
Non-executive
R C Wright 73 73 — — 73 73
N T Gourlay 36 36 — — 36 36
S G Bellamy 36 36 — — 36 36
Total 145 145 — — 145 145
708 720 — — 708 720
Financials Other information
35www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Annual bonus (audited)
Bonuses are earned by reference to the financial year and paid in May or June following the end of the financial year and after
completion of the external audit. Any bonuses accruing to the executive directors in respect of the year ended 31 March 2025
were based on the underlying profit before tax, as shown below.
Bonus paid as a percentage of base salary
S G M Caffyn M Warren S J Caffyn
Threshold Target Maximum
Actual
performance Max Actual Max Actual Max Actual
Underlying result
before tax (£’million)* £1.41 £1.66 £3.52 £0.61 100% 0% 100% 0% 100% 0%
Bonus receivable 15% 25% 100% 0% £0 £0 £0
* The underlying profit before tax is calculated after taking account of the cost of such bonus, including employer’s National Insurance charges and contributions in
lieu of pension contributions.
Pension entitlements and cash allowances (audited)
One executive director, the Company Secretary, was a deferred member of the Company’s closed defined benefit pension
scheme at 31 March 2025 (2024: one). The defined benefit pension scheme will provide a pension to the Company Secretary of
a maximum of two-thirds of final salary in respect of benefits accrued up to 31 March 2006. From 1 April 2006 until 1 April 2010,
when the scheme closed to future accrual, the accrued benefits of this director were based on a “career average” basis and
based upon earnings in each financial year. Under the rules of the scheme, the Company Secretary is eligible for a pension at
normal retirement age of 65. If early retirement is taken before age 65, the accrued pension is discounted by 5% per annum
(2024: 5%) simple, except where the Company consents to early retirement between 60 and 65 when no discount would be
applied. Pensions paid increase in line with price indexation, which may be limited. On death, a one-half spouse’s pension
becomes due. Children’s allowances up to a maximum of 100% of the executive’s pension may be payable, including any
spouse’s pension. Allowance would be made to transfer value payments for discretionary benefits. The total annual accrued
pension excludes transferred-in benefits.
Normal
retirement date
Total annual accrued defined
benefit pension at
31 March 2025
£’000
Total annual accrued defined
benefit pension at
31 March 2024
£’000
S J Caffyn 12 December 2033 44 41
The pension for the Company Secretary for service since 2010 has been provided on a contributory basis through the
Company’s defined contribution pension scheme. In certain years, the Company Secretary elected not to be included in the
defined contribution pension scheme and, instead, to be paid a salary supplement in lieu of the employer’s contribution to the
Company’s defined contribution pension scheme.
In the year to 31 March 2025, one of the executive directors was a member of the Company’s defined contribution pension
scheme (2024: one).
The non-executive directors are not members of the Company’s defined contribution pension scheme (2024: none).
36 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Directors’ interests in shares (audited)
The interests of the directors and their families in the shares of the Company are as follows:
As at 31 March 2025 As at 31 March 2024
Ordinary
11%
Preference
7%
Preference Ordinary
11%
Preference
7%
Preference
R C Wright 7,500 — — 7,500 — —
S G M Caffyn 78,199 1,600 200 78,199 1,600 200
M Warren 8,036 — — 8,036 — —
S J Caffyn 48,323 1,655 — 48,323 1,655 —
N T Gourlay 4,893 — — 4,893 — —
S G Bellamy 5,000 — — 5,000 — —
There are no contractual requirements for directors to own shares in the Company, although they are encouraged to become
shareholders in order to increase the alignment of their interests with those of other shareholders. At 31 March 2025, all directors
held a direct interest in the Ordinary shares of the Company.
All-employee share scheme (audited)
At 31 March 2025, no share options were held by any director.
Performance graph and table
The chart below shows the Company’s eight-year annual Total Shareholders Return performance against the FTSE Small-Cap
Total Return Index, which is considered an appropriate comparison to other public companies of a similar size.
FTSE Small Cap TSR Caffyns TSR
31/03/2017 31/03/2018 31/03/2019 31/03/2020 31/03/2021 31/03/2022 31/03/2023 31/03/2024 31/03/2025
25
50
75
100
125
150
175
200
Financials Other information
37www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Chief Executive’s remuneration
The table below sets out the total remuneration delivered to the Chief Executive over each of the last ten years, valued using the
same methodology as applied to the total single figure of remuneration.
Chief Executive: S G M Caffyn
Financial years ended 31 March 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total single remuneration
figure (£’000) 410 388 302 364 319 281 576 453 344 337
Annual bonus as percentage
of maximum opportunity 43% 31% 0% 19% 0% 0% 83% 37% 0% 0%
Annual percentage change in remuneration of directors and employees
The table below shows the percentage increases/(decreases) in the directors’ salary, taxable benefits and annual bonus over the
relevant reporting periods noted in the table compared to the average of all employees.
S G
M Caffyn
(Chief
Executive)
S J Caffyn
(Company
Secretary)
M Warren
(Finance
Director)
R C
Wright
(Non-
executive
Chairman
S G
Bellamy
(Non-
executive
director)
N T
Gourlay
(Non-
executive
director)
All
employees
% change
Year to
31 March 2021
Salary/fees (13.1)% (4.7)% (6.9)% (8.9)% (5.0)% (5.0)% (4.2)%
Benefits 3.5% 43.7% (45.4)% 0.0% 0.0% 0.0% 13.6%
Annual bonus 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 62.3%
% change
Year to
31 March 2022
Salary/fees 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Benefits (1.1)% 47.2% (24.8)% 0.0% 0.0% 0.0% 4.9%
Annual bonus ∞ ∞ ∞ 0.0% 0.0% 0.0% 64.0%
% change
Year to
31 March 2023
Salary/fees 3.5% 3.5% 3.5% 3.5% 15.5% 15.5% 4.4%
Benefits 0.1% (22.2)% 9.5% 0.0% 0.0% 0.0% 4.9%
Annual bonus (53.8)% (53.8)% (53.8)% 0.0% 0.0% 0.0% (10.8)%
% change
Year to
31 March 2024
Salary/fees 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Benefits (25.6)% 2.9% (9.0)% 0.0% 0.0% 0.0% (3.8)
Annual bonus (100.0)% (100.0)% (100.0)% 0.0% 0.0% 0.0% (24.0)%
% change
Year to
31 March 2025
Salary/fees 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 5.0%
Benefits (58.3)% (81.5)% 3.2% 0.0% 0.0% 0.0% (20.0)%
Annual bonus 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 13.6%
The underlying package of benefits in kind for the directors, and for employees in general, remained unchanged in comparison
to the prior years, although the outcomes were different. Care should be exercised when considering the percentage changes,
given the relatively small monetary values involved in each year.
38 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Comparison of the pay of the Chief Executive to other employees
The table below shows the ratio of the single figure annual remuneration of Mr S G M Caffyn, the Chief Executive, to the median,
25th and 75th percentile paid employee. Their total remuneration includes wages and salaries, taxable benefits, commissions
and bonuses, and pension benefits.
Methodology Population
25th
percentile Median
75th
percentile
Year to 31 March 2025 Option A Employee salary
Employee total remuneration
CEO to employee pay ratio
£23,000
£23,000
14:1
£28,000
£33,000
10:1
£34,000
£42,000
8:1
Year to 31 March 2024 CEO to employee pay ratio 20:1 14:1 10:1
Year to 31 March 2023 CEO to employee pay ratio 22:1 15:1 10:1
Year to 31 March 2022 CEO to employee pay ratio 25:1 17:1 13:1
Year to 31 March 2021 CEO to employee pay ratio 13:1 9:1 7:1
Year to 31 March 2020 CEO to employee pay ratio 17:1 11:1 8:1
The pay ratio disclosure above complies with Regulation 18 of The Companies (Miscellaneous Reporting) regulations 2018.
These ratios have been prepared using Option A in the regulations by ranking the annualised earnings of those employees of the
Company in employment on 31 March 2025, the last day of the financial year under review. Earnings includes salary, bonuses,
variable elements of pay such as commissions and overtime, holiday and sickness pay, company pension contributions and
the taxable value of benefits-in-kind. The Company’s Chairman and non-executive directors have been excluded from the
calculation as they receive a fee rather than a salary. Any employees on zero-hour contracts have been included if they worked
in the month of March 2025.
Change in remuneration of the Chief Executive
The base salary of the Chief Executive did not change between 31 March 2024 and 31 March 2025. The Company’s Regional
Directors and Heads of Business were awarded a salary increase of 3%. Neither the Chief Executive nor the comparator group
received any changes to their employment benefits during the year. The Chief Executive did not receive a bonus for either
the year under review, nor for the previous financial year. The bonuses earned by the comparator group increased by 51%
compared to the prior year. The comparator group comprises Regional Directors and Heads of Business and has been selected
on the basis that these managers have direct senior operational management responsibilities.
Relative importance of spend on pay
The table below sets out the total spend on pay in the two years to 31 March 2025 compared with other disbursements from
profit (i.e. distributions to shareholders). These were the most significant outgoings for the Company in the last financial year.
Spend in
2025
£’000
Spend in
2024
£’000
Change
%
Spend on staff pay (including directors) 16,892 15,830 6.7%
Profit distributed by way of dividend 273 539 (49.4)%
The board is declaring a final dividend of 5.0 pence per Ordinary share for the year ended 31 March 2025, in addition to an
interim dividend of 5.0 pence that was paid during the year. The total dividend payable in respect of the year to 31 March 2025
will therefore be £273,000 (2024: £270,000).
Financials Other information
39www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Implementation of the remuneration policy for the coming financial year ending
31 March 2026
The annual salaries and fees to be paid to directors in the coming financial year are set out in the table below, together with any
increases expressed as a percentage.
2026
salary/fees
£’000
2025
salary/fees
£’000
Increase
%
S G M Caffyn 324 318 2.0
M Warren 166 163 2.0
S J Caffyn 53 52 2.0
R C Wright 74 73 2.0
N T Gourlay 37 36 2.0
S G Bellamy 37 36 2.0
The basis for determining annual bonus payments for the financial year ending 31 March 2026 is set out in the policy table in the
Directors’ Remuneration Report on page 30. The profit targets are considered commercially sensitive because of the information
that it could provide to the Company’s competitors and consequently these profit targets will only be disclosed after the end of
the financial year in the Directors’ Remuneration Report in the 2026 Annual Report.
Consideration by the directors of matters relating to directors’ remuneration
The Committee
The Committee is responsible for reviewing and recommending the framework and policy for remuneration of the executive
directors and of senior management. The Committee’s terms of reference are available on the Company’s corporate website.
The members of the Committee at 31 March 2025 were Mr N T Gourlay (Chairman), Mr R C Wright and Mr S G Bellamy. Mr S G
Bellamy was an independent non-executive director throughout the year. The Committee met three times during the year and all
members were present.
The primary role of the Committee is to set the directors’ remuneration policy and accordingly to:
• review, recommend and monitor the level and structure of remuneration for the executive directors and to review and monitor
the level and structure of remuneration of other senior executives;
• approve the remuneration package for the executive directors;
• determine the balance between base pay and performance-related elements of the package to align executive directors’
interests with those of shareholders and other stakeholders; and
• approve annual incentive payments for executive directors.
Summary of activity during the year ended 31 March 2025
During the year, the Committee conducted its annual review of all aspects of the remuneration packages of the executive
directors to ensure that they continue to reward and motivate achievement of medium and long-term objectives and align their
interests with those of shareholders and other stakeholders. Accordingly, the Committee’s activities during the year included:
• reviewing the basic salaries of the executive directors and reviewing and monitoring the level and structure of remuneration of
other senior executives;
• reviewing the basic salary of the Company’s Chairman. This review was performed by Mr N T Gourlay and Mr S G Bellamy
only; and
• setting the annual performance targets in line with the Company’s plan for the coming financial year ending 31 March 2026
and determining the amounts that may potentially have been payable for the financial year under review ended
31 March 2025.
40 Caffyns plc Annual Report 2025
Directors’ Remuneration Report continued
Statement of voting at the 2024 Annual General Meeting
At the last Annual General Meeting, votes to approve the Directors’ Remuneration Report were cast as follows:
Votes for % Votes against % Withheld %
3,456,277 99.90 1,947 0.06 900 0.04
Statement of voting at the 2023 Annual General Meeting
A shareholder vote on the directors’ remuneration policy is required at least every third year. The policy was last voted on at the
2023 Annual General Meeting and will be voted on again at the 2026 Annual General Meeting. Votes at the 2023 meeting on the
directors’ remuneration policy were cast as follows:
Votes for % Votes against % Withheld %
2,652,631 99.96 800 0.03 100 0.01
Mr N T Gourlay will attend the 2025 Annual General Meeting and will be available at that meeting to answer any questions that
shareholders may wish to raise.
By order of the board
N T Gourlay
Chairman of the Remuneration Committee
10 June 2025
Financials Other information
41www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
The directors present their report and
the financial statements for the year
ended 31 March 2025. The corporate
governance statement on pages 21 to
27 forms part of this Directors’ report.
Results and dividends
The results of the Company for the year
are set out in the financial statements
on pages 54 to 95. An interim dividend
of 5.0 pence per share was paid to
shareholders on 10 January 2025.
The board is recommending a final
dividend of 5.0 pence per share (2024:
5.0 pence) making a total of 10.0
pence per share (2024: 10.0 pence).
Total Ordinary dividends paid in the
year amounted to £273,000 (2024:
£539,000). Dividends paid in the year to
preference shareholders were £72,000
(2024: £72,000) as set out in note 11 to
the financial statements.
Future developments of the Company
are set out in the Operational and
Business Review on pages 2 to 6.
Financial risk management
Consideration of principal risks and
uncertainties is included on pages 9 to
11 of the Strategic Report, including the
management of financial risks. These
are also outlined further in note 22 to
the financial statements.
Appointment and
replacement of the
Company’s directors
The rules for the appointment and
replacement of the Company’s directors
are detailed in the Company’s Articles of
Association. Directors are appointed by
ordinary resolution at a general meeting
by shareholders entitled to vote or by
the board, either to fill a vacancy or as
an addition to the existing board. The
appointment of non-executive directors
is on the recommendation of the
Nomination Committee; the procedure
is detailed in the Chairman’s Statement
on Corporate Governance on page 23.
Directors
Details of the directors who served
during the year and who remained
in office at 31 March 2025 are set
out below.
Mr R C Wright PG Dip FIMI FCIM was
appointed Chairman on 26 July 2012.
He joined the board as a non-executive
director and Chairman-elect on
1 November 2011. He has previously
held senior executive roles with the Ford
Motor Company including: Director,
European Operations at Jaguar Cars
Limited; Director of Sales, Ford Motor
Company Limited; and President/
Managing Director of Ford Belgium NV.
He was Chairman of API Group plc
from 2001 until 31 October 2014, and
sat on the advisory board of Warwick
Business School, University of Warwick,
for several years. He is the former Chair
of the board of National Savings and
Investments, part of HM Treasury. He
is currently an advisor to a number of
privately held companies.
Mr N T Gourlay BSc, a Chartered
Accountant, joined the board
as a non-executive director on
26 September 2013. He spent more
than twenty years with the BAT plc
group of companies. In 2003, Mr
Gourlay co-founded Animos LLP, a
business consultancy of which he
remains a partner.
Mr S G Bellamy BCom CA(NZ) joined
the board on 18 June 2019and has
been chairman and non-executive
director to a wide range of both
public and private companies and
chairman of, and advisor to, investment
committees and capital providers. He
was previously joint founder and Chief
Executive Officer of Accretion Capital
LLP and Chief Operating Officer and
Chief Financial Officer of Sherwood
International Plc. Prior to Sherwood,
he was a UK Investment Director of
Brierley Investments, an active investor
in quoted UK companies. He is
currently Chairman of TheWorks.co.uk
plc, an AIM quoted family-friendly
value retailer, and a non-executive
director of Empresaria Group plc, an
AIM-quoted global staffing group. He is
a New Zealand Chartered Accountant
and worked at Coopers & Lybrand
(now PwC), both in New Zealand and
New York.
Mr S G M Caffyn MA FIMI joined
the board on 16 July 1992 and
was appointed Chief Executive on
1 May 1998. He graduated from
Cambridge in 1983 having read
engineering, and subsequently worked
for Andersen Consulting. He joined the
Company in 1990.
Mr M Warren BSc FCA joined the board
on 31 May 2016 and was appointed
Finance Director on 31 July 2016. He is
a Chartered Accountant and spent
twenty-one years with H.R. Owen plc
of which the eight years until April 2015
were as Finance Director. He graduated
from Southampton in 1986 having
read civil engineering and subsequently
worked for PwC.
Ms S J Caffyn BSc FCIPD AICSA FIMI
has over thirty years’ Human Resource
experience across several different
sectors. She joined the board on
28 April 2003 as Human Resources
Director, having previously been Group
Personnel Manager and Company
Secretary. A Chartered Company
Secretary, she has governance
experience from several not-for-profit
organisations.
Directors’ indemnity
and insurance
The Company’s Articles of Association
permit the board to grant the directors
indemnities in relation to their duties
as directors in respect of liabilities
incurred by them in connection with
any negligence, default, breach of
duty or breach of trust in relation to
the Company. In line with market
practice, each director has the benefit
of a deed of indemnity. The Company
has also purchased insurance cover
for the directors against liabilities
arising in relation to the Company,
as permitted by the Companies Act
2006. This insurance does not cover
fraudulent activity.
42 Caffyns plc Annual Report 2025
Report of the Directors
ShareSave scheme
The Company encourages employee
share ownership through the provision
of periodic Save As You Earn schemes,
although no scheme is currently
operating.
Mr S G M Caffyn and Ms S J Caffyn
are directors of Caffyn Family Holdings
Limited, which owns all of the
2,000,000 6% Cumulative Second
Preference shares, which have full
voting rights, except in relation to
matters that under the Listing Rules (as
amended from time to time) are required
to be voted on by premium-listed
securities, being the Ordinary shares.
The market price of the Company’s
Ordinary shares at 31 March 2025 was
£4.50 and the range of market prices
during the year was £4.25 to £5.25.
Compensation for
loss of office
In the event of his employment with
the Company being terminated, Mr S
G M Caffyn is entitled to receive from
the Company a sum equivalent to twice
his annual emoluments, which applied
immediately before his termination.
Ms S J Caffyn is entitled to receive from
the Company a sum equivalent to her
annual emoluments, which applied
immediately before her termination, and
Mr M Warren is entitled to receive from
the Company a sum equivalent to six
months’ emoluments, which applied
immediately before his termination.
Emoluments include a proportion of the
available bonus, which the expired part
of the measured period for bonus bears
to the whole of such measurement
period. The executive directors’ service
contracts commenced from the date of
their appointment to the board.
In the event of the Chairman’s or a non-
executive director’s employment with
the Company being terminated, they are
entitled to receive from the Company a
sum equivalent to six months’ fees.
Greenhouse gas emissions
Information on greenhouse gas
emissions is set out in the Strategic
Report on page 18.
Employees
Employees are encouraged to discuss
with management any matters that
they are concerned about and issues
affecting the Company. The Chief
Executive regularly visits the Company’s
sites, speaking to staff whilst he is there.
He reports to the board on the outcome
of these visits. In addition, the board
takes account of employees’ interests
when making decisions. Suggestions
from employees aimed at improving the
Company’s performance are welcomed.
The board reviews feedback from the
employee consultation group on pay
and bonuses, as well as reviewing all
exit interview feedback. The board
also meets with senior staff during the
strategic review process. The Company
has a Human Resources director, Ms
S J Caffyn. Further information on
employees, including those who are
disabled, is set out in the Strategic
Report on pages 8 and 9 and the
Section 172 statement on page 19.
Share capital and the rights
and obligations attaching
to shares
As at 31 March 2025, the issued share
capital of the Company comprised
Ordinary shares of 50p each and three
classes of preference share, namely 7%
Cumulative First Preference shares of
£1 each, 11% Cumulative Preference
shares of £1 each, and 6% Cumulative
Second Preference shares of 10p
each. Details of the share capital of the
Company are set out in note 26 to the
financial statements.
Subject to applicable statutes and other
shareholders’ rights, shares may be
issued with such rights and restrictions
as the Company may by ordinary
resolution decide.
Holders of Ordinary shares are entitled
to attend and speak at general meetings
of the Company, to appoint one or more
proxies (and, if they are corporations,
corporate representatives). Holders of
Ordinary shares are entitled to receive a
dividend, if one is declared, and a copy
of the Company’s Annual Report and
Accounts.
Holders of Cumulative First Preference
shares are entitled, in priority to any
payment of dividend on any other
class of shares, to a fixed cumulative
preferential dividend at the rate of 7%
per annum.
Subject to the rights of the holders of
Cumulative First Preference shares,
holders of 6% Cumulative Second
Preference shares of 10 pence each
are entitled in priority to any payment of
dividend on any other class of shares to
a fixed cumulative preferential dividend
at the rate of 6% per annum.
Subject to the rights of the holders of
Cumulative First Preference shares and
6% Cumulative Second Preference
shares of 10 pence, holders of 11%
Cumulative Preference shares of £1
each are entitled in priority to any
payment of dividend on any other
class of shares to a fixed cumulative
preferential dividend at the rate of 11%
per annum. The percentage of the total
share capital represented by each class
of share as at 31 March 2025 is shown
below. The full rights and obligations
attaching to the Company’s shares are
set out in the Company’s Articles of
Association, copies of which can be
obtained from Companies House or by
writing to the Company Secretary.
Financials Other information
43www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
Property
The Company valued its portfolio of
freehold premises as at 31 March 2025.
The valuation was carried out by CBRE
Limited, Chartered Surveyors, based on
an existing use valuation. The excess
of the valuation over net book value
at that date was £11.2 million (2024:
£10.7 million). In accordance with the
Company’s accounting policies, this
surplus has not been incorporated into
these financial statements.
Voting rights, restrictions
on voting rights and
deadlines for voting rights
Shareholders (other than any who,
under the provisions of the Articles
of Association or the terms of the
shares they hold, are not entitled
to receive such notices from the
Company) have the right to receive
notice of, and attend, and to vote at
all general meetings of the Company.
The Company’s Auditor has similar
rights, except that they may not vote.
A resolution put to the vote at any
general meeting is to be decided on a
show of hands unless (before or on the
declaration of the result of the show
of hands or on the withdrawal of any
demand for a poll) a poll is properly
demanded.
Every member present in person at a
general meeting has, on the calling of a
poll, one vote for every Ordinary share
of which the member is the holder,
and one vote for every 6% Cumulative
Second Preference share of which the
member is the holder. In the case of
joint holders of a share, the vote of the
member whose name stands first in
the register of members is accepted to
the exclusion of any vote tendered by
any other joint holder. Unless the board
decides otherwise, a shareholder may
not vote at any general meeting or class
meeting or exercise any rights in relation
to meetings, whilst any amount of
money relating to their shares remains
outstanding.
A member is entitled to appoint a proxy
to exercise all or any of their rights to
attend and speak and vote on their
behalf at a general meeting. Further
details regarding voting at the Annual
General Meeting can be found in the
notes to the Notice of the Annual
General Meeting. To be effective,
paper proxy appointments and voting
instructions must be received by the
Company’s registrars no later than 48
hours before a general meeting.
There are no restrictions on the transfer
of Ordinary shares other than certain
restrictions which may be imposed
pursuant to the Articles of Association
of the Company, certain restrictions,
which may, from time to time, be
imposed by laws and regulations (for
example in relation to insider dealing),
restrictions pursuant to the Company’s
share dealing code whereby directors
and certain employees of the Company
require prior approval to deal in the
Company’s shares, and where a person
has failed to provide the Company with
information concerning the interests in
those shares.
The Company is not aware of any
arrangements or agreements between
shareholders that may result in
restrictions on the transfer of Ordinary
shares or on voting rights.
Modern Slavery Act 2015
In the light of the legislation regarding
employment and human rights, in
particular the Modern Slavery Act
2015, the board continues to review
its policies and risk management
processes to determine additional
measures that may be required to
prevent slavery and human trafficking
taking place in any part of its
businesses, or in its supply chains.
We expect all who have, or seek
to have, a business relationship
with Caffyns plc or with any of our
employees, to familiarise themselves
with our anti-slavery values and to act at
all times in a way that is consistent with
those values.
The board has adopted a Statement on
Slavery and Human Trafficking, which
can be found on its corporate website
at www.caffynsplc.co.uk.
44 Caffyns plc Annual Report 2025
Report of the Directors continued
Significant direct or indirect shareholdings
At 10 June 2025, the directors were aware of the following interests in 3% or more of the nominal value of the Ordinary share
capital (excluding treasury shares) of the Company:
Ordinary shares %
Maland Pension Fund (Pershing Nominees Ltd RKCLT) 565,000 20.7
Charles Stanley 200,240 7.3
Armstrong Investments (Nortrust Nominees) 129,000 4.7
HSBC Republic Bank Suisse SA 128,349 4.7
Caffyns Pension Fund 125,570 4.6
A W Caffyn/B Lees 107,409 3.9
K E Caffyn 104,804 3.8
M I Caffyn 103,495 3.8
Fostering relationships
with stakeholders
Details of the Company’s engagement
with stakeholders are explained in more
detail on pages 19.
The Company also engages with its
suppliers in order to maintain good
relationships, and with its prospective
and actual customers by offering
excellent service and an attractive omni-
channel retail experience.
Business at the Annual
General Meeting
As well as dealing with formal business,
the Company takes the opportunity
afforded at the Annual General Meeting
to provide up-to-date information
about the Company’s trading position
and to invite and answer questions
from shareholders on its policies
and business. At the Annual General
Meeting, a separate resolution is
proposed for each substantive matter.
The Company’s Annual Report and
financial statements are posted to
shareholders, together with the Notice
of Annual General Meeting summarising
the business proposed, giving the
requisite period of notice.
Political donations
The Company made no donations to
political parties in either the current or
previous financial year.
Auditor
BDO LLP has indicated its willingness
to continue as the independent Auditor
to the Company and a resolution
concerning its reappointment will
be proposed at the Annual General
Meeting in August 2025.
All of the directors as at the date of this
report have taken all the steps that they
ought to have taken as a director to
make themselves aware of any relevant
audit information and to establish that
the Company’s auditors are aware of
that information. The directors are not
aware of any relevant audit information
of which the Company’s Auditor is
unaware.
By order of the board
S J Caffyn
Company Secretary
10 June 2025
Financials Other information
45www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
UK-adopted international accounting
standards and applicable law and
regulations.
Company law requires the directors
to prepare financial statements for
each financial year. Under that law,
the directors are required to prepare
the group financial statements and
have elected to prepare the company
financial statements in accordance with
UK-adopted international accounting
standards. Under company law, the
directors must not approve the financial
statements unless they are satisfied that
they give a true and fair view of both
the state of affairs and of the profit or
loss for the group and company for that
period.
In preparing these financial statements
the directors are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• state whether they have been
prepared in accordance with UK-
adopted international accounting
standards, subject to any material
departures disclosed and explained
in the financial statements;
• prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and the Company will
continue in business; and
• prepare a Director’s Report, a
Strategic Report and Directors’
Remuneration Report which
comply with the requirements of the
Companies Act 2006.
The directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the Company’s transactions and
disclose with reasonable accuracy at
any time the financial position of the
Company and enable them to ensure
that the financial statements comply
with the Companies Act 2006.
They are also responsible for
safeguarding the assets of the Company
and hence for taking reasonable steps
for the prevention and detection of fraud
and other irregularities. The directors are
responsible for ensuring that the Annual
Report and Accounts, taken as a whole,
are fair, balanced, and understandable
and provides the information necessary
for shareholders to assess the Group’s
performance, business model and
strategy.
Website publication
The directors are responsible for
ensuring the Annual Report and the
financial statements are made available
on a website. Financial statements are
published on the Company’s corporate
website, www.caffynsplc.co.uk, in
accordance with legislation in the United
Kingdom governing the preparation and
dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The maintenance and
integrity of the Company’s website is
the responsibility of the directors. The
directors’ responsibility also extends
to the ongoing integrity of the financial
statements contained therein.
Directors’ responsibilities
pursuant to Disclosure
Guidance and Transparency
Rules 4 (“DTR 4”)
The directors confirm to the best of their
knowledge that:
• the financial statements have
been prepared in accordance with
the applicable set of accounting
standards, give a true and fair view
of the assets, liabilities, financial
position and profit and loss of the
Group and the Company; and
• the Annual Report includes a fair
review of the development and
performance of the business and
the financial position of the Group
and Company, together with a
description of the principal risks and
uncertainties that they face.
Approved on behalf of the board.
S G M Caffyn M Warren
Chief Executive Finance Director
10 June 2025
46 Caffyns plc Annual Report 2025
Directors’ Responsibilities Statement
Financials Other information
47www.caffyns.co.uk
GovernanceOur Business Governance Financials
Stock code CFYN
Financ ials
Report of the Independent Auditor 47
Income Statement 54
Statement of Comprehensive Income 55
Statement of Financial Position 56
Statement of Changes in Equity 57
Cash Flow Statement 58
Material Accounting Policies 59
Notes to the Financial Statements 66
Report of the
Independent
Auditor
Opinion on the financial
statements
In our opinion:
• the financial statements give
a true and fair view of the
state of the Group’s and of the
Parent Company’s affairs as at
31 March 2025 and of the Group’s
profit for the year then ended;
• the Group financial statements
have been properly prepared in
accordance with UK adopted
international accounting standards;
• the Parent Company financial
statements have been properly
prepared in accordance with UK
adopted international accounting
standards and as applied in
accordance with the provisions of
the Companies Act 2006; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies
Act 2006.
We have audited the financial
statements of Caffyns Plc (the ‘Parent
Company’) and its subsidiaries
(the ‘Group’) for the year ended
31 March 2025 which comprise
the Group and Company Income
Statement, the Group and Company
Statement of Comprehensive Income,
the Group and Company Statement
of Financial Position, the Group and
Company Statement of Changes
in Equity, the Group and Company
Cash Flow Statement and notes to
the financial statements, including
material accounting policy information.
The financial reporting framework that
has been applied in their preparation
is applicable law and UK adopted
international accounting standards
and as regards the Parent Company
financial statements, as applied in
accordance with the provisions of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law.
Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section of
our report. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis
for our opinion. Our audit opinion is
consistent with the additional report to
the Audit & Risk Committee.
Independence
Following the recommendation of
the Audit & Risk Committee, we
were appointed by the members on
25 July 2019 to audit the financial
statements for the year ended
31 March 2020 and subsequent
financial periods. The period of total
uninterrupted engagement including
retenders and reappointments is
six years, covering the years ended
31 March 2019 to 31 March 2025. We
remain independent of the Group and
the Parent Company in accordance
with the ethical requirements that are
relevant to our audit of the financial
statements in the UK, including the
FRC’s Ethical Standard as applied
to listed public interest entities, and
we have fulfilled our other ethical
responsibilities in accordance with these
requirements. The non-audit services
prohibited by that standard were not
provided to the Group or the Parent
Company.
48 Caffyns plc Annual Report 2025
Report of the Independent Auditor
continued
Conclusions relating to
going concern
In auditing the financial statements,
we have concluded that the Directors’
use of the going concern basis of
accounting in the preparation of the
financial statements is appropriate. Our
evaluation of the Directors’ assessment
of the Group and the Parent Company’s
ability to continue to adopt the going
concern basis of accounting included:
• Evaluating the Directors’
assessment of going concern
through analysis of the Group’s
cash flow forecast through
to 30 June 2026 including
assessing and challenging the
key assumptions underlying the
forecasts. We have also considered
any publicly available information
for indicators that contradict
management’s key assumptions.
• As part of the this process we have
considered the impact of factors
such as inflationary pressures on
employee and other costs. We
have also sensitised these forecasts
by adjusting the assumptions for
growth in profits and cash flows.
• We also obtained an understanding
of the financing facilities, including
the nature of these facilities,
repayment terms and covenants.
We then assessed the facility
headroom and covenant compliance
calculations on both a base case
scenario, and the sensitised
forecasts.
• We considered the likelihood of the
sensitised forecasts happening.
• We considered the Directors’
assessment of the Group’s main
banking facilities which fall due
for renewal within the going
concern assessment period. We
assessed the likelihood of the
individual facilities being renewed to
confirm that there was no material
uncertainty to be disclosed.
Based on the work we have
performed, we have not identified
any material uncertainties relating to
events or conditions that, individually
or collectively, may cast significant
doubt on the Group and the Parent
Company’s ability to continue as a
going concern for a period of at least
twelve months from when the financial
statements are authorised for issue.
In relation to the Parent Company’s
reporting on how it has applied the
UK Corporate Governance Code, we
have nothing material to add or draw
attention to in relation to the Directors’
statement in the financial statements
about whether the Directors considered
it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the
responsibilities of the Directors with
respect to going concern are described
in the relevant sections of this report.
Overview
Key audit matters
2025 2024
Defined benefit pension scheme 4 4
No changes were made to the identified key audit matters during the year.
Materiality
Group financial statements as a whole
£700,000 (2024: £680,000) based on 0.25% (2024: 0.25%) of revenue.
An overview of the scope
of our audit
Our Group audit was scoped by
obtaining an understanding of the
Group and its environment, the
applicable financial reporting framework
and the Group’s system of internal
control. On the basis of this, we
identified and assessed the risks of
material misstatement of the Group
financial statements including with
respect to the consolidation process.
We then applied professional judgement
to focus our audit procedures on the
areas that posed the greatest risks to
the Group financial statements. We
continually assessed risks throughout
our audit, revising the risks where
necessary, with the aim of reducing the
Group risk of material misstatement to
an acceptable level, in order to provide
a basis for our opinion.
Components in scope
The Group has four entities including
the Parent Company, which holds 100%
shareholding in all other entities. Three
of the four entities above are dormant
and have been for several years.
Accordingly, based on the nature of the
entities within the Group, all the dormant
entities have been grouped into one
component with the Parent Company
also being a single component. For the
dormant entities component, no risk
assessment procedures have been
performed given that there is no activity
within the individual entities and there
is no aggregation risk arising from their
balance sheets brought forward from
prior years.
For the Caffyns plc component, being
the only trading entity and Parent
Company of the Group, we used
a combination of risk assessment
procedures and further audit procedures
to support the Group opinion. These
further audit procedures included
procedures on the entire financial
information of the component, including
performing substantive procedures.
Financials Other information
49www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Procedures performed at the
component level
As detailed above, we have not
performed any procedures at the
component level due to all entities
continuing to remain dormant in the
current financial year.
Changes from the prior year
There have been no significant changes
to the Group audit scope compared to
the prior year.
Climate change
Our work on the assessment of
potential impacts on climate-related
risks on the Group’s operations and
financial statements included:
• Enquiries and challenge of
management to understand the
actions they have taken to identify
climate-related risks and their
potential impacts on the financial
statements and adequately disclose
climate-related risks within the
annual report;
• Our own qualitative risk assessment
taking into consideration the sector
in which the Group operates and
how climate change affects this
particular sector; and
• Review of the minutes of board and
Audit & Risk Committee meeting
and other papers related to climate
change and performed a risk
assessment as to how the impact
of the Group’s commitment as set
out in the Strategic Report may
affect the financial statements and
our audit.
We challenged the extent to which
climate-related considerations have
been reflected, where appropriate,
in management’s going concern
assessment and viability assessment.
We also assessed the consistency of
management’s disclosures included as
Statutory Other Information on pages
12 to 19 with the financial statements
and with our knowledge obtained from
the audit.
Based on our risk assessment
procedures, we did not identify there
to be any Key Audit Matters that were
materially affected by climate-related
risks.
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our audit of
the financial statements of the current
period and include the most significant
assessed risks of material misstatement
(whether or not due to fraud) that we
identified, including those which had
the greatest effect on: the overall audit
strategy, the allocation of resources in
the audit, and directing the efforts of the
engagement team. These matters were
addressed in the context of our audit of
the financial statements as a whole, and
in forming our opinion thereon, and we
do not provide a separate opinion on
these matters.
Key audit matter
How the scope of our audit addressed the key
audit matter
Defined benefit
pension
scheme
Refer to note 24
and accounting
policies on pages
61 and 62
The Group operates a defined benefit pension
scheme, which is accounted for in accordance
with IAS19 (Revised) Employee Benefits.
Management exercises judgements in agreeing
the actuarial assumptions, with assistance
from their actuaries, which have a significant
impact on the valuation of the pension scheme
liability recognised on the statement of financial
position.
The valuation of the defined benefit pension
scheme is sensitive to movements in these key
assumptions.
The valuation of the liability is therefore
considered a significant risk and a key audit
matter.
We performed an assessment to confirm that the
amounts and disclosures presented in the financial
statements were determined in accordance with the
principles of IAS19 Employee Benefits (Revised),
and on a consistent basis.
Working with our external actuarial experts, we
confirmed the appropriateness of the actuarial
valuation methodologies and the key assumptions
used, including the discount rate, inflation and
mortality rates with reference to relevant market
data and industry practice.
We also considered the competence, capabilities,
and objectivity of management’s actuarial expert, as
well as our own.
Key observations:
Based on the procedures performed, we
considered the assumptions and judgements made
by management to be appropriate.
50 Caffyns plc Annual Report 2025
Report of the Independent Auditor
continued
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements Parent Company financial statements
2025
£
2024
£
2025
£
2024
£
Materiality 700,000 680,000
700,000
680,000
Basis for determining
materiality
0.25% of revenue 0.25% of revenue 0.25% of revenue 0.25% of revenue
Rationale for the
benchmark applied
We applied professional judgement to determine 0.25% of revenue to be a relevant
measure to assess the Group and the Parent Company, relevant to the size of its
operation.
Performance materiality 525,000 510,000 525,000 510,000
Basis for determining
performance materiality
On the basis of our risk assessment, together with our assessment of the Group’s
control environment, previous low level of misstatements our judgement is that
performance materiality for the financial statements should be 75% of materiality.
Rationale for the
percentage applied for
performance materiality
See above See above See above See above
Reporting threshold
We agreed with the Audit & Risk Committee that we would report to them all individual audit differences in excess of
£35,000 (2024: £34,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
document entitled ‘Annual Report’ other than the financial statements and our Auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Financials Other information
51www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Corporate governance statement
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern
and longer-term
viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on pages 25 and 26;
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 26; and
• The Directors’ statement on whether they have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities set out on pages 25 and 26.
Other Code
provisions
• Directors’ statement on fair, balanced and understandable set out on page 27;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 27;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 27; and
• The section describing the work of the Audit & Risk Committee set out on pages 23 to 25.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic
report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which
we are required
to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration report
to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
52 Caffyns plc Annual Report 2025
Report of the Independent Auditor
continued
Responsibilities of
Directors
As explained more fully in the Directors’
responsibilities statement, the Directors
are responsible for the preparation of
the financial statements and for being
satisfied that they give a true and fair
view, and for such internal control as
the Directors determine is necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud
or error.
In preparing the financial statements,
the Directors are responsible for
assessing the Group’s and the
Parent Company’s ability to continue
as a going concern, disclosing, as
applicable, matters related to going
concern and using the going concern
basis of accounting unless the
Directors either intend to liquidate the
Group or the Parent Company or to
cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
for the audit of the
financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
financial statements.
Extent to which the audit
was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud. The extent to which our
procedures are capable of detecting
irregularities, including fraud, is
detailed below:
Non-compliance with laws
and regulations
Based on:
• Our understanding of the Group and
the industry in which it operates;
• Discussion with management and
those charged with governance
including the Audit & Risk
Committee;
• Obtaining and understanding of the
Group’s policies and procedures
regarding compliance with laws and
regulations;
we considered the significant laws
and regulations to be the applicable
accounting framework, UK tax
legislation and the UK Listing Rules.
The Group is also subject to laws and
regulations where the consequence of
non-compliance could have a material
effect on the amount or disclosures in
the financial statements, for example
through the imposition of fines or
litigations. We identified such laws and
regulations to be FCA legislation.
Our procedures in respect of the
above included:
• Review of minutes of meetings of
those charged with governance for
any instances of non-compliance
with laws and regulations;
• Review of correspondence with
regulatory and tax authorities for any
instances of non-compliance with
laws and regulations;
• Review of financial statement
disclosures and agreeing to
supporting documentation;
• Involvement of tax specialists in
the audit;
• Review of legal expenditure
accounts to understand the nature
of expenditure incurred.
Fraud
We assessed the susceptibility of
the financial statements to material
misstatement, including fraud. Our risk
assessment procedures included:
• Obtaining an understanding of
controls designed to prevent and
detect irregularities, including
specific consideration of controls
and Group accounting policies
relating to significant accounting
estimates;
• Communicating potential fraud
risks to all engagement team
members (which included motor
dealership specialists) and remained
alert to any indications of fraud
or non-compliance with laws and
regulations throughout the audit;
• Assessing journals entries as part of
our planned audit approach, with a
particular focus on journal entries to
key financial statement areas such
as revenue and inventories; and
• Consideration of significant
management judgements,
particularly in respect of the
underlying assumptions in
impairment assessments and
estimating the defined pension
benefit liability (as detailed within key
audit matters above).
Based on our risk assessment, we
considered the areas most susceptible
to fraud to be revenue recognition and
management override of controls
Our procedures in respect of the above
included:
• Testing journals entries that
exhibited unusual posting patterns;
• Testing all unexpected journals to
revenue;
• Testing vehicle revenue cut-off at
year end and;
• Assessing significant estimates
made by management for bias.
Financials Other information
53www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
We also communicated relevant
identified laws and regulations and
potential fraud risks to all engagement
team members who were all deemed
to have appropriate competence and
capabilities and remained alert to any
indications of fraud or non-compliance
with laws and regulations throughout
the audit.
Our audit procedures were designed
to respond to risks of material
misstatement in the financial
statements, recognising that the risk of
not detecting a material misstatement
due to fraud is higher than the risk
of not detecting one resulting from
error, as fraud may involve deliberate
concealment by, for example, forgery,
misrepresentations or through collusion.
There are inherent limitations in the audit
procedures performed and the further
removed non-compliance with laws
and regulations is from the events and
transactions reflected in the financial
statements, the less likely we are to
become aware of it.
A further description of our
responsibilities is available on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
Auditor’s report.
Use of our report
This report is made solely to the Parent
Company’s members, as a body, in
accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit
work has been undertaken so that we
might state to the Parent Company’s
members those matters we are required
to state to them in an auditor’s 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 Parent Company
and the Parent Company’s members
as a body, for our audit work, for this
report, or for the opinions we have
formed.
Diane Campbell
(Senior Statutory Auditor)
For and on behalf of BDO LLP,
Statutory Auditor
London, United Kingdom
BDO LLP is a limited liability partnership
registered in England and Wales (with
registered number OC305127).
10 June 2025
Group and Company
Note
2025
£’000
2024
£’000
Revenue 2 275,464 262,084
Cost of sales (240,774 ) (230,389 )
Gross profit 34,690 31,695
Operating expenses
Distribution costs (21,572 ) (19,913 )
Administration expenses (10,101 ) (10,605 )
Operating profit before other income 3,017 1,177
Other income 5 530 356
Operating profit 3,547 1,533
Operating profit before non-underlying items 3,498 2,114
Non-underlying items within operating profit 3 49 (581 )
Operating profit 4 3,547 1,533
Finance expense 7 (2,892 ) (2,680 )
Finance expense on pension scheme 8 (409 ) (398 )
Net finance expense (3,301 ) (3,078 )
Profit/(loss) before taxation 246 (1,545 )
Profit/(loss) before tax and non-underlying items 606 (566 )
Non-underlying items within operating profit 3 49 (581 )
Non-underlying items within finance expense on pension scheme 3 (409 ) (398 )
Profit/(loss) before taxation 246 (1,545 )
Taxation 9 (70 ) 341
Profit/(loss) for the year attributable to the owners of the parent 176 (1,204 )
Earnings/(loss) per share
Basic 10 6.4 p (44.3 )p
Diluted 10 6.4 p (44.3 )p
Underlying earnings/(loss) per share
Basic 10 16.4 p (17.3 )p
Diluted 10 16.4 p (17.3 )p
See accompanying notes to the financial statements.
54 Caffyns plc Annual Report 2025
Income Statement
for the year ended 31 March 2025
Group and Company
Note
2025
£’000
2024
£’000
Profit/(loss) for the year 176 (1,204 )
Items that will not be reclassified subsequently to profit and loss:
Remeasurement of net defined benefit liability 24 1,707 (1,652 )
Deferred tax on remeasurement 25 (427 ) 413
Total other comprehensive income/(expense), net of taxation 1,280 (1,239 )
Total comprehensive income/(expense) for the year 1,456 (2,443 )
See accompanying notes to the financial statements.
Financials Other information
55www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Statement of Comprehensive Income
for the year ended 31 March 2025
Note
Group
2025
£’000
Group
2024
£’000
Company
2025
£’000
Company
2024
£’000
Non-current assets
Right-of-use assets 12 2,200 2,343 2,200 2,343
Property, plant and equipment 13 38,080 38,714 38,080 38,714
Investment properties 14 2,513 7,216 2,513 7,216
Interest in lease 15 — 65 — 65
Goodwill 16 286 286 286 286
Deferred tax asset 25 224 568 224 568
Investment in subsidiary undertakings 17 — — 250 250
Current assets
Inventories 18 44,425 42,251 44,425 42,251
Trade and other receivables 19 10,113 7,310 10,113 7,310
Interest in lease 15 65 160 65 160
Current tax recoverable 39 190 39 190
Cash and cash equivalents 3,762 438 3,762 438
Total assets 101,707 99,541 101,957 99,791
Current liabilities
Interest-bearing bank overdrafts and loans 21 1,445 1,445 1,445 1,445
Trade and other payables 20 51,781 45,597 52,031 45,847
Lease liabilities 23 642 501 642 501
Net current assets 4,536 2,806 4,286 2,556
Non-current liabilities
Interest-bearing bank loans 21 10,863 10,308 10,863 10,308
Lease liabilities 23 1,720 2,106 1,720 2,106
Preference shares 26 812 812 812 812
Retirement benefit obligations 24 4,523 10,036 4,523 10,036
Total liabilities 71,786 70,805 72,036 71,055
Net assets 29,921 28,736 29,921 28,736
Capital and reserves
Share capital 26 1,439 1,439 1,439 1,439
Share premium account 272 272 272 272
Capital redemption reserve 707 707 707 707
Non-distributable reserve 1,531 1,724 1,531 1,724
Retained earnings 25,972 24,594 25,972 24,594
Total equity attributable to shareholders 29,921 28,736 29,921 28,736
56 Caffyns plc Annual Report 2025
Statement of Financial Position
at 31 March 2025
Group and Company
Note
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Non-
distributable
reserve
£’000
Retained
earnings
£’000
Total
£’000
At 1 April 2024 1,439 272 707 1,724 24,594 28,736
Total comprehensive
Income
Profit for the year — — — — 176 176
Other comprehensive
income — — — — 1,280 1,280
Total comprehensive
income for the year — — — — 1,456 1,456
Transactions with
owners:
Dividends 11 — — — — (273 ) (273 )
Issue of shares – SAYE 27 — — — — 2 2
Transfer arising from disposal of
Held for Sale Asset — — — (193 ) 193 —
At 31 March 2025 1,439 272 707 1,531 25,972 29,921
for the year ended 31 March 2024
Group and Company
Note
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Non-
distributable
reserve
£’000
Retained
earnings
£’000
Total
£’000
At 1 April 2023 1,439 272 707 1,724 27,520 31,662
Total comprehensive
expense
Loss for the year — — — — (1,204 ) (1,204 )
Other comprehensive
expense — — — — (1,239 ) (1,239 )
Total comprehensive
expense for the year — — — — (2,443 ) (2,443 )
Transactions with
owners:
Dividends 11 — — — — (539 ) (539 )
Issue of shares – SAYE 27 — — — — 220 220
Purchase of own
shares — — — — (195 ) (195 )
Share-based payment 27 — — — — 31 31
At 31 March 2024 1,439 272 707 1,724 24,594 28,736
Financials Other information
57www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Statement of Changes in Equity
for the year ended 31 March 2025
Group and Company
Note
2025
£’000
2024
£’000
Net cash (outflow)/inflow from operating activities 28 (303 ) 119
Investing activities
Proceeds on disposal of investment property 4,620 —
Proceeds on disposal of property, plant and equipment 93 57
Purchases of property, plant and equipment (1,063 ) (2,575 )
Receipt from investment in lease 185 185
Net cash inflow/(outflow) from investing activities 3,835 (2,333 )
Financing activities
Revolving credit facility utilised 6,500 1,000
Revolving credit facility repaid (6,500 ) (1,000 )
Secured loan received 1,000 —
Secured loans repaid (375 ) (875 )
Unsecured loan received — 350
Unsecured loan repaid (70 ) (35 )
Issue of shares – SAYE scheme 2 220
Purchase of own shares for treasury — (195 )
Dividends paid (273 ) (539 )
Repayment of capital element of lease liabilities (492 ) (500 )
Net cash outflow from financing activities (208 ) (1,574 )
Net increase/(decrease) in cash and cash equivalents 3,324 (3,788 )
Cash and cash equivalents at beginning of year 438 4,226
Cash and cash equivalents at end of year 3,762 438
See accompanying notes to the financial statements.
58 Caffyns plc Annual Report 2025
Cash Flow Statement
for the year ended 31 March 2025
Basis of preparation and statement of compliance
The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Judgements made by the directors in the application of accounting policies that have significant effect on the financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in note 1.
The consolidated financial statements are prepared in Sterling, which is both the functional currency of the Company and its
subsidiaries and the presentational currency of the Group. All values are rounded to the nearest thousand pounds (£’000) except
where otherwise indicated.
Standards, amendments and interpretations to existing Standards that are not yet
effective and have not been adopted early by the Group
New/Revised International Financial Reporting Standards
Effective Date:
Annual periods
beginning on or after:
IAS 1 Amendments to IAS 1: Classification of Liabilities as Current or Non-current 1 January 2024
IAS 7 & IFRS 7 Amendments to IAS 7 and IFRS 7: Supplier Finance Agreements 1 January 2024
IFRS 16 Amendments to IFRS 16: Lease Liability in a Sale and Leaseback 1 January 2024
IAS 1 Non-current liabilities with Covenants 1 January 2024
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided not to adopt early. Whilst these standards and interpretations
are not effective for, and have not been applied in the preparation of, these financial statements, the following could have a
material impact on the Group’s financial statements going forward:
New/Revised International Financial Reporting Standards
Effective Date:
Annual periods
beginning on or after:
IAS 21 Amendments to IAS 21: Lack of Exchangeability (Amendment to IAS 21 The
Effects of Changes in Foreign Exchange Rates)
1 January 2025
IFRS 9 Amendments to the Classification and Measurement of Financial Instruments 1 January 2026
IFRS 7 Contracts Referencing Nature-dependant Electricity 1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
The Group is currently assessing the effect of these new accounting standards and amendments.
The Group does not expect to be eligible to apply IFRS 19 Subsidiaries without Public Accountability: Disclosures.
There are no other standards and interpretations in issue but not yet adopted that the directors anticipate will have a material
effect on the reported income or net assets of the Group.
Financials Other information
59www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Going concern
The directors have considered the going
concern basis and have undertaken
a detailed review of trading and cash
flow forecasts for a period of one year
from the date of approval of this Annual
Report. This has focused primarily
on the achievement of the banking
covenants associated with the term loan
and revolving credit facilities provided
by HSBC, which cover levels of interest,
borrowing and freehold property
security. Following the underlying loss
made in the previous financial period
agreement was reached with HSBC
to implement a new covenant test
solely for the current year that required
the Company to achieve minimum
cumulative Senior EBITDA hurdles,
which were £Nil for the quarter ended
30 June 2024, £1.0 million for the
half-year ended 30 September 2024,
£1.5 million for the nine months ended
31 December 2024 and £3.0 million
for the full financial year ended
31 March 2025. These covenant tests
were passed for all quarters of the year.
Under the Company’s interest cover
covenant test, to be reapplied from
30 June 2025, it will be required to
make underlying profits before Senior
Interest (that being paid to HSBC and
VW Bank on its term loan and revolving
credit facility borrowings), corporation
tax, depreciation and amortisation
(“Senior EBITDA”) for a rolling twelve-
month period which is at least three
times the level of Senior Interest. Under
the borrowings test, also to be reapplied
from 30 June 2025, the Company’s
borrowings from HSBC and VW Bank
on its term loan and revolving credit
facilities must be less than 400% of its
Senior EBITDA.
The Company’s final covenant test over
its levels of freehold property security
requires that the level of its bank
borrowings do not exceed 70% of the
independently assessed value of its
charged freehold properties. This test
was passed at 31 March 2025.
Once reapplied on 30 June 2025, these
covenants will then continue to be
tested quarterly. Financial modelling for
the coming twelve-month period has
allowed the directors to conclude that
there is satisfactory headroom in the
Company’s banking covenants.
Any failure of a covenant test would
render the borrowing facilities from
HSBC to become repayable on
demand, at the option of the lender.
The directors have also given
consideration to the current
uncertainties in the state of the UK
economy, as well as to cost pressures
that have impacted businesses such as
increases to staffing costs from the rise
in the National Minimum and National
Living Wages, from business rates and
from increases to funding costs from
continuing high interest base rates.
The directors have also considered
the Company’s working capital
requirements. The Company meets its
day-to-day working capital requirements
through short-term stocking loans,
bank overdraft and revolving-credit
facility, and medium-term revolving
credit facilities and term loans. At the
year-end, the medium-term banking
facilities included a term loan with an
outstanding balance of £5.1 million and
a revolving credit facility of £6.0 million
from HSBC, its primary bankers, with
both facilities being next renewable
during the going concern period in
April 2026. HSBC also make available
a short-term overdraft facility of
£3.5 million, which is renewed annually
each August. The Company also has
a short-term revolving-credit facility
from Volkswagen Bank of £4.0 million,
which is next scheduled for renewal in
October 2025. The Company maintains
strong relationships with HSBC and VW
Bank and, based on the discussions
to date regarding the renewal of the
facilities, the directors are of the opinion
that there is a reasonable expectation
that all facilities will be renewed at their
scheduled expiry dates.
At 31 March 2025, the Company held
cash in hand balances of £3.8 million
and had undrawn borrowing facilities
of £6.5 million, all of which would be
immediately available.
The directors have a reasonable
expectation that the Company has
adequate resources and headroom
against the covenant tests to be able
to continue in operational existence for
the foreseeable future and for a period
of one year from the date of approval of
the Annual Report. For those reasons,
they have concluded that there is no
material uncertainty and they continue
to adopt the going concern basis in
preparing this Annual Report.
60 Caffyns plc Annual Report 2025
Material Accounting Policies
continued
For servicing work, the Company
promises to complete the work in
accordance with the contract. This
obligation is satisfied when the
customer takes collection of their
vehicle on completion of the work. If
a customer takes out a service plan,
the Company has a future obligation to
complete agreed work over a set period
of time. These obligations are only
completed in full once those elements
of the service plan have expired. Where
the Company sells a service plan
alongside a vehicle, the service element
is distinct from the vehicle sale and is
subject to a fixed and determinable
transaction price. Each individual
service included within the service plan
is considered distinct and revenue is
recognised at a point in time when the
services have been carried out. Further
information can be found in note 2.
The obligation of supplying vehicle
parts to customers is satisfied when the
customer takes delivery of the goods.
Supplier income
The Company receives income from
brand partners and other suppliers.
These are generally based on achieving
certain predetermined objectives,
such as specific sales volumes and
maintaining agreed operational
standards. The supplier income
received is recognised as a deduction
from cost of sales at the point when it is
reasonably certain that the targets have
been achieved for the relevant period
and when income can be measured
reliably based on the terms of each
relevant supplier agreement. Supplier
income that has been earned but not
invoiced at the balance sheet date is
recognised in other receivables.
Manufacturer bonuses are reported
within cost of sales.
Non-underlying items
Non-underlying items are those items
that are unusual because of their
size, nature or incidence and which
management consider should be
disclosed separately to enable a full
understanding of the operating results.
Non-underlying items comprise only
profits and losses from disposal of
freehold property, gains arising from
lease extensions from freehold property,
impairment charges against non-current
assets, costs attributable to vacant
properties held pending their disposal,
net financing return and service cost
on pension obligations in respect of
the defined benefit pension scheme,
which is closed to future accrual, and
companywide operational restructuring
and redundancy costs. All other
activities are treated as underlying.
The net financing return and service
cost on pension obligations in respect
of the defined benefit pension scheme,
which is closed to future accrual, are
presented as non-underlying items
due to the inability of management to
influence the underlying assumptions
from which the charges are derived.
All other activities are treated as
underlying.
Retirement benefit costs
The Company operates the Caffyns
Pension Scheme, which is a defined
benefit pension scheme. The defined
benefit scheme defines the amount of
pension benefit that an employee will
receive on retirement, dependent on
one or more factors including age, years
of service and final salary. The Scheme
was closed to new members in 2006
and to future accrual in April 2010.
Under IAS 19 (Revised) Employee
Benefits, the defined benefit deficit is
included on the Statement of Financial
Position. Liabilities are calculated based
on the current yields on high-quality
corporate bonds and on market
conditions. Surpluses are only included
to the extent that they are recoverable
through reduced contributions in the
future or through refunds from the
Scheme.
Financials Other information
61www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Remeasurement arising from experience
adjustments and changes in actuarial
assumptions each year are charged or
credited, net of deferred tax, to retained
earnings and shown in the Statement of
Comprehensive Income.
An interest expense or income is
calculated on the defined benefit liability
or asset, respectively, by applying the
discount rate to that defined benefit
liability or asset.
The Company also provides pension
arrangements for employees under
defined contribution schemes.
Contributions for these schemes are
charged to the Income Statement in the
year in which they are payable.
The carrying amount of deferred tax
assets is reviewed at each financial
year-end date and reduced to the
extent that it is no longer probable that
sufficient taxable profits will be available
to allow all, or part of, the asset to be
recovered.
Deferred tax is calculated at the tax
rates that are expected to apply in
the period when the liability is settled
or the asset is realised. Deferred tax
is charged or credited in the Income
Statement, except when it relates to
items charged or credited within other
comprehensive income, in which case
the deferred tax is also dealt with in
other comprehensive income. The tax
base of an item considers its intended
method of recovery by either sale
or use.
Property, plant and
equipment
Land and buildings used in the business
are stated in the Statement of Financial
Position at cost. The property held at
the date of transition to IFRSs in 2007
was recognised at deemed cost, being
the carrying amount at the date of
transition to IFRSs. The date of the last
valuation undertaken under its previous
GAAP was in 1995.
Depreciation on buildings is charged
to the Income Statement. On the
subsequent sale of a property, the
attributable surplus remaining in the
non-distributable reserve is transferred
directly to accumulated profits.
Properties in the course of construction
are carried at cost, less any recognised
impairment loss. Cost includes
professional fees and attributable
borrowing costs. Depreciation of these
assets, on the same basis as other
property assets, commences when the
assets are ready for their intended use.
Properties are regarded as purchased
or sold on the date on which contracts
for the purchase or sale become
unconditional. The gain or loss
62 Caffyns plc Annual Report 2025
Material Accounting Policies
continued
arising on the disposal of an asset is
determined as the difference between
the sales proceeds and the carrying
amount of the asset and is recognised
in the Income Statement.
Other assets are stated at cost less
accumulated depreciation and any
recognised impairment loss.
The residual value of all assets,
depreciation methods and useful
economic lives, if significant, are
assessed annually.
The recoverable amount is the higher
of fair value less costs to sell and
value in use. In assessing value in use,
the estimated future cash inflows are
discounted to their present value using
a pre-tax discount rate that reflects
current market assessments of the time
value of money and the risks specific
to the asset for which the estimates
of future cash inflows have not been
adjusted.
If the recoverable amount of an asset
or CGU is estimated to be less than its
carrying amount, the carrying amount
of the asset (CGU) is reduced to its
recoverable amount.
Financials Other information
63www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Where an impairment loss subsequently
reverses, the carrying amount of the
asset (CGU) is increased to the revised
estimate of its recoverable amount, but
so that the increased carrying amount
does not exceed the carrying amount
that would have been determined had
no impairment loss been recognised
for the asset (CGU) in prior years.
A reversal of an impairment loss is
recognised as income immediately,
unless the relevant asset is carried at
a revalued amount, in which case the
reversal of the impairment loss is treated
as a revaluation increase.
For the purpose of impairment testing,
assets are grouped together into the
smallest group of assets that generates
cash inflows from continuing use that
are largely independent of the cash
inflows from other groups of assets.
Management have determined that the
CGUs are the individual dealerships for
each franchise.
64 Caffyns plc Annual Report 2025
Material Accounting Policies
continued
Preference shares
Preference shares are accounted for as
non-current liabilities, as they have the
attributes of debt. Preference dividends
are accounted for as finance charges
within finance expenses.
Financials Other information
65www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Certain critical accounting estimates in applying the Company’s accounting policies are listed below.
2. General information
Caffyns plc is a public limited company incorporated in England and Wales under the Companies Act 2006 and is listed on the
London Stock Exchange. The address of the registered office is given on page 20. Its revenue is attributable to the sole activity
of operating as a motor retailer in the south-east of the United Kingdom and comprises revenue from:
66 Caffyns plc Annual Report 2025
Notes to the Financial Statements
for the year ended 31 March 2025
2. General information continued
Sales of motor vehicles, parts and aftersales services
The Group’s full revenue recognition policy is set out in the section on Material Accounting Policies under the heading Revenue
Recognition. The Group generates revenue through the sale of new and used motor vehicles and of parts (together comprising
Sale of goods as shown above), and through facilitating the delivery of new cars under an agency sales model as well as the
provision of aftersales services in the form of vehicle servicing, maintenance and repairs and introducing customers to finance
companies (together comprising Rendering of services as shown above).
The Group recognises revenue from the sale of new and used motor vehicles when a customer takes possession of the vehicle,
at which point they have an obligation to pay in full and as such control is considered to transfer at this point. The Group typically
receives cash equal to the invoice amount for most direct retail sales to consumers at the time the consumer takes possession
of the vehicle. When the consumer has taken out a finance agreement to purchase the vehicle, the Group receives payment
from the finance company at the time the consumer takes possession of the vehicle. Payment terms on sales to corporate
customers typically range from seven to ten days. The Company acts as an agent in instances where it facilitates sales that have
been arranged by the manufacturer.
The Group recognises revenue from the provision of aftersales services when the service has been completed, at which point
customers have an obligation to pay in full. The Group typically receives cash equal to the invoice amount for most direct retail
sales to consumers at the time the service has been completed. Payment terms on sales to corporate customers typically range
from 30 to 60 days.
All revenue recognised in the Income Statement is from contracts with customers and no other revenue has been recognised.
No impaired losses have been recognised on any receivables arising from a contract with a customer.
Due to the nature of the Group’s contractual relationships with customers and the nature of the services provided, there are
no timing differences between revenue recognised in the Income Statement and trade receivables being recognised in the
Statement of Financial Position.
There have been no significant judgements regarding the timing of transactions or the associated transaction price.
The transaction price is set out in individual contractual agreements and there is a range of prices based on the types of goods
and services offered. There are no variable pricing considerations.
Contract liabilities relating to aftersales service plans
Where the Group receives an amount of consideration in advance of completion of performance obligations under a contract
with a customer, the value of the advance consideration is, initially, recognised as a contract liability within liabilities. Revenue is
subsequently recognised as the performance obligations are completed over the period of the contract (i.e. as control is passed
to the customer). Contract liabilities are presented within trade and other payables in the Statement of Financial Position and
disclosed in note 20 Trade and other payables. Approximately one-third of the value of these liabilities would be anticipated to be
recognised as revenue in each of the next three financial years.
Contract costs
The Group applies the practical expedient in paragraph 94 of IFRS 15 Revenue from Contracts and recognises the incremental
costs of obtaining contracts as an expense when incurred if the amortisation period of the assets that the Group otherwise
would have recognised is one year or less. The Group is satisfied that any incremental costs incurred in obtaining contracts that
extend for more than one year is immaterial.
Transaction price allocation to remaining performance obligations
The Group applies the practical expedient in paragraph 121 if IFRS 15 and does not disclose information about remaining
performance obligations that have original expected durations of one year or less.
Financials Other information
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2. General information continued
3. Non-underlying items
2025
£’000
2024
£’000
Net gain on disposal of freehold property 64 41
Other income, net 64 41
Within operating expenses:
Service cost on pension scheme (15) (18)
Property impairments — (604)
(15) (622)
Non-underlying items within operating profit 49 (581)
Net finance expense on pension scheme (409) (398)
Non-underlying items within net finance expense (409) (398)
Total non-underlying items before taxation (360) (979)
Taxation credit on non-underlying items 90 245
Total non-underlying items after taxation (270) (734)
Underlying results exclude items that, in the judgement of the directors, have non-trading attributes, being unrelated to the
primary motor trade business of the Company. Management therefore consider these items should be disclosed separately
in order to enable a full understanding of the operating results. Non-underlying items comprise only profits and losses from
disposal of freehold property, gains arising from lease extensions from freehold property, impairment charges against non-
current assets, costs attributable to vacant properties held pending their disposal, net financing return and service cost on
pension obligations in respect of the defined benefit pension scheme, which is closed to future accrual, and company-wide
operational restructuring and redundancy costs. All other activities are treated as underlying but are not designed to replace the
requirements of International Financial Reporting Standards.
4. Operating profit
Operating profit has been arrived at after charging/(crediting):
2025
£’000
2024
£’000
Employee benefit expense 19,045 18,017
Net gain on disposal of property, plant and equipment (64) (41)
Short-term lease rentals payable – land and buildings 68 112
Rental income (328) (315)
The Company applies the exemption in IFRS 16 Leases not to recognise right-of-use assets and liabilities for leases with a
duration of less than twelve months.
68 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
138 124
The Company’s Statutory Auditor is BDO LLP.
The statutory audit of the Caffyns Pension Scheme is performed by Cooper Parry LLP.
A description of the work of the Audit & Risk Committee is set out in the Chairman’s Statement on Corporate Governance
on pages 23 to 25 and includes an explanation of how auditor objectivity and independence is safeguarded when non-audit
services are provided by the Statutory Auditor.
The Company refers to underlying profit and underlying EBITDA as being key alternative performance measures when
considering the results for the year. These performance metrics can be reconciled to the Company’s result for the year as
follows:
2025
£’000
2024
£’000
Profit/(loss) for the year 176 (1,204)
Tax charge/(credit) (note 9) 70 (341)
Profit/(loss) before tax 246 (1,545)
Net finance expense (notes 7 and 8) 3,301 3,078
Non-underlying items within operating profit (note 3) (49) 581
Depreciation charged on property, plant and equipment, right-of-use assets and
investment properties (notes 12, 13 and 14) 2,141 2,098
Other income 530 356
6. Employee benefit expense
Average number of full-time equivalents employees 415 414
Financials Other information
69www.caffyns.co.uk
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6. Employee benefit expense continued
Directors’ emoluments were:
2025
£’000
2024
£’000
Salaries and other short-term employee benefits 708 720
Details of the directors’ remuneration are provided in the Directors’ Remuneration Report on pages 28 to 41.
Key management personnel includes the directors and other key operational employees.
7. Finance expense
8. Finance expense on pension scheme
2025
£’000
2024
£’000
Defined benefit pension scheme net finance expense (see note 24) 409 398
70 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
9. Tax
The tax charge/(credit) arises as follows:
2025
£’000
2024
£’000
On normal trading 160 (96)
On non-underlying items (see note 3) (90) (245)
Tax charged/(credited) in the Income Statement 70 (341)
The charge/(credit) for the year can be reconciled to the profit per the Income Statement as follows:
2025
£’000
2024
£’000
Profit/(loss) before tax 246 (1,545)
Tax at the UK corporation tax rate of 25% (2024: 25%) 62 (386)
Tax effect of expenses that are not deductible in determining taxable profit 326 232
Movement in rolled over and held over gains (490) (226)
Change in corporation tax rate
—
36
Other differences
69
27
Adjustment to tax charge in respect of prior periods 103 (24)
Tax charge/(credit) for the year 70 (341)
The current year total tax charge was impacted by the effect of non-deductible expenses, which includes non-qualifying
depreciation.
The total tax charge/(credit) for the year is made up as follows:
2025
£’000
2024
£’000
Total current tax charge/(credit) 152 (152)
Deferred tax charge/(credit)
Credited in the Income Statement (82) (189)
Charged/(credited) against other comprehensive expense 427 (413)
Total deferred tax charge/(credit) 345 (602)
Total tax charge/(credit) for the year 497 (754)
Financials Other information
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9. Tax continued
Factors affecting future tax charges
The Company has unrelieved trading losses of £0.7 million (2024: £1.3 million) and a Corporate Interest Restriction of
£1.1 million (2024: £Nil), both of which will be available for offset against profits made in future periods.
A deferred tax asset totalling £0.4 million (2024: £0.3 million) has been accounted for in deferred tax (see note 25).
The Company also has unrelieved advance corporation tax of £0.3 million (2024: £0.3 million), which is available to be utilised
against future mainstream corporation tax liabilities and is accounted for in deferred tax (see note 25).
10. Earnings per Ordinary 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 year. 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 earnings and weighted average number of shares used in the calculations are set out below.
2025
£’000
2024
£’000
Underlying earnings/(loss) after tax 446 (470)
Underlying earnings/(loss) per share (pence) 16.4 (17.3)
Underlying diluted earnings/(loss) per share (pence) 16.4 (17.3)
Non-underlying losses after tax (270) (734)
Losses per share (pence) (10.0) (27.0)
Diluted losses per share (pence) (10.0) (27.0)
Total earnings/(losses) 176 (1,204)
Earnings/(loss) per share (pence) 6.4p (44.3)p
Diluted earnings/(loss) per share (pence) 6.4p (44.3)p
The number of fully paid Ordinary shares in circulation at the year-end was 2,726,811 (2024: 2,726,306). The weighted average
number of shares in issue for the purposes of the earnings per share calculation were 2,726,797 (2024: 2,717,861). The shares
granted under the Company’s SAYE scheme have been treated as dilutive. For the purposes of this calculation, the weighted
average number of shares in issue for the purposes of the earnings per share calculation were 2,726,959 (2024: 2,718,023).
72 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
11. Dividends
2025
£’000
2024
£’000
Preference shares
7% Cumulative First Preference 12 12
11% Cumulative Preference 48 48
6% Cumulative Second Preference 12 12
Included in finance expense (see note 7) 72 72
Ordinary shares
Interim dividend of 5.0 pence per Ordinary share paid in respect
of the current year (2024: 5.0 pence) 136 135
Final dividend paid of 5.0 pence per Ordinary share in respect of the
March 2024 year-end (2023: 15.0 pence) 137 404
273 539
The Board is declaring a final dividend of 5.0 pence per Ordinary share in respect of the year ended 31 March 2025.
12. Right-of-use assets
Group and Company £’000
Deemed cost
At 1 April 2023 3,631
Additions 393
At 31 March 2024 4,024
Deemed cost
At 1 April 2024 4,024
Additions 245
At 31 March 2025 4,269
Accumulated depreciation
At 1 April 2023 1,283
Depreciation for the year 398
At 31 March 2024 1,681
Accumulated depreciation
At 1 April 2024 1,681
Depreciation for the year 388
At 31 March 2025 2,069
Net book value
At 31 March 2025 2,200
At 31 March 2024 2,343
The right-of-use assets above represent four long-term property leases for premises from which the Company operates
a Volkswagen dealership in Brighton, a Volvo dealership in Worthing and two car storage compounds in Eastbourne and
Tunbridge Wells. During the year one of these leases was extended by a further five-year period.
Depreciation charges of £388,000 (2024: £398,000) in respect of right-of-use assets were recognised within Administration
Expenses in the Income Statement.
The interest expense on the associated lease liability of £150,000 (2024: £133,000) is disclosed in note 7. Payments made in
the year on the above leases were £456,000 (2024: £448,000).
Payments made in the year under other leases with contractual periods of 12 months or less, which have not been required to
be capitalised, of £68,000 (2024: £112,000) are disclosed in note 4.
Financials Other information
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13. Property, plant and equipment
Short-term leasehold improvements for both the Company and the Group comprises net book value of £1,167,000
(2024: £1,242,000) in the Statement of Financial Position.
Depreciation charges of £1,671,000 (2024: £1,589,000) in respect of property, plant and equipment was recognised within
Administration Expenses in the Income Statement. Based on the valuation of the Company’s freehold properties undertaken
by CBRE, no impairment charges were required in the year. In the prior financial year, an impairment charge of £400,000 was
required to be taken against the cost of one freehold property to ensure that the related cash generating unit (“CGU”) remained
disclosed at the higher of its value in use or fair value less costs of disposal.
The freehold properties were originally revalued externally on 31 March 1995 by Herring Baker Harris, Chartered Surveyors, at
open market value for existing use (which then approximated to fair value). Freehold properties acquired since that date, and the
other assets listed above, have been stated at cost in accordance with IAS 16 Property, Plant and Equipment.
The Company valued its portfolio of freehold premises and investment properties as at 31 March 2025. The valuation was
carried out by CBRE Limited, Chartered Surveyors, in accordance with the Royal Institution of Chartered Surveyors valuation
– global and professional standards requirements. The valuation is based on existing use value, which has been calculated by
applying various assumptions as to tenure, letting, town planning, and the condition and repair of buildings and sites including
ground and groundwater contamination. Management are satisfied that this valuation is materially accurate. The excess of the
valuation over net book value, as at 31 March 2025, of those sites was £11.2 million (2024: £10.7 million). In accordance with
the Company’s accounting policies, this surplus has not been incorporated into these financial statements.
74 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
14. Investment properties
Depreciation charges of £82,000 (2024: £111,000) in respect of Investment properties were recognised within Administration
Expenses in the Income Statement. Based on the valuation of the Company’s freehold properties undertaken by CBRE, no
impairment charges were required in the year. In the prior financial year, an impairment charge of £204,000 was required to be
taken against the cost of one freehold property to ensure that the related cash generating unit (“CGU”) remained disclosed at its
fair value less costs of disposal.
The fair value measurement of the CGU in its entirety was categorised as a Level 3 within the hierarchy set out in IFRS 13
Fair Measurement. The valuation technique that is used to measure the fair value less costs of disposal is consistent with
that applied in respect of the Company’s property, plant and equipment, which is set out in note 12. The following are key
assumptions on which the directors based their determination of fair value less costs of disposal in respect of that CGU:
• Market value of buildings per square foot: £188
• Market value of site per acre: £3,461,000
• Initial and reversionary yields: Between 6.5% and 8.3%, respectively
• Costs of disposal: Between 5.7% and 5.8% of fair value
As described in note 13, the total excess of the valuation of all of the Company’s freehold properties over net book value as at
31 March 2025 was £11.2 million (2024: £10.7 million). Investment properties accounted for £0.6 million (2024: £0.6 million) of
this surplus.
On 29 October, the board exchanged contracts for the sale of the Company’s freehold premises in Lewes. At that time,
completion of the sale was dependent on the successful outcome of ground surveys, which had to be completed within a four-
month period from exchange. At the half-year, management’s judgement at the balance sheet date was that the transaction was
reasonably certain to complete and would do so within a twelve-month period. Accordingly, the property was reclassified from
Investment Properties and shown as an Asset held for sale within Current assets in the Interim Report.
Group and Company
2025
£’000
2024
£’000
Held for Sale asset (Lewes Property)
Net book value transferred from Investment Properties 4,621 —
Disposals proceeds (net of costs) (4,620) —
Loss on disposal (1) —
As a result of the disposal, a transfer of £193,000 was made from the revaluation reserve to retained earnings.
Financials Other information
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15. Net investment in lease
Group and Company
2025
£’000
2024
£’000
Due after more than one year — 65
Due within one year 65 160
At 31 March 65 225
The premises shown above are sub-let to a third party under a lease, which has the same terms and duration as the Company’s
own lease.
16. Goodwill
For the purposes of the annual impairment testing, goodwill is allocated to a CGU. Each CGU is allocated against the lowest
level within the entity at which goodwill is monitored for management purposes. Consequently, the directors recognise CGUs to
be those assets attributable to individual dealerships and the table above sets out the allocation of goodwill into the individual
dealership CGUs. The carrying amount of goodwill allocated to the Volkswagen, Brighton CGU is the only amount considered
significant in comparison with the Group’s total carrying amount of goodwill.
Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate that the
carrying amount may not be recoverable and a potential impairment may be required. Impairment reviews have been performed
for all CGUs for the years ended 31 March 2024 and 2025.
Valuation basis
The recoverable amount of each CGU is based on the higher of its fair value less selling costs and value in use. The fair value
less selling costs of each CGU is based initially upon the market value of any property contained within it and is determined by
an independent valuer as described in note 13. Where the fair value less selling costs of a CGU indicates that an impairment
may have occurred, a discounted cash flow calculation is prepared in order to assess the value in use of that CGU, involving the
application of a pre-tax discount rate to the projected, risk-adjusted pre-tax cash inflows and terminal value.
The two CGUs noted below both relate to leasehold premises and, therefore, only the value-in-use calculation is appropriate.
Period of specific projected cash flows (Volkswagen, Brighton CGU)
The recoverable amount of the Volkswagen, Brighton CGU is based on value in use. Value in use is calculated using cash flow
projections for a five-year period from 1 April 2025 to 31 March 2030. These projections are based on the most recent budget
that has been approved by the board being the budget for the year ending 31 March 2026. The key assumptions in the most
recent annual budget on which the cash flow projections are based relate to expectations of sales volumes and margins,
and expectations around changes in the operating cost base. These assumptions are based on past experience, adjusted to
expected changes, and on external sources of information. The cash flows include ongoing capital expenditure required to
maintain the dealership, but exclude any growth capital expenditure projects to which the Group was not committed at the
reporting date.
76 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
16. Goodwill continued
In the initial year of the impairment test, this CGU is forecast to have net cashflows of £0.3 million growing by 39% over a
four-year period to reach £0.4 million by 2030. This anticipated growth reflects the products and markets in which the CGU
operates and does not give rise to an impairment. Forecast growth from internal forecasts is based on a combination of internal
and external information. Based on these forecasts, the headroom available on the total future profits is £1.5 million (2024:
£1.4 million) before an impairment would be necessary.
Period of specific projected cash flows (Volvo, Worthing CGU)
The recoverable amount of the Volvo, Worthing CGU is based on value in use. Value in use is calculated using cash flow
projections for a five-year period from 1 April 2025 to 31 March 2030. These projections are based on the most recent budget
that has been approved by the board being the budget for the year ending 31 March 2026. The key assumptions in the most
recent annual budget on which the cash flow projections are based relate to expectations of sales volumes and margins,
and expectations around changes in the operating cost base. These assumptions are based on past experience, adjusted to
expected changes, and on external sources of information. The cash flows include ongoing capital expenditure required to
maintain the dealership, but exclude any growth capital expenditure projects to which the Group was not committed at the
reporting date.
In the initial year of the impairment test, this CGU is forecast to have net cashflows of £0.3 million growing by 31% over a
four-year period to reach £0.5 million by 2030. This anticipated growth reflects the products and markets in which the CGU
operates and does not give rise to an impairment. Forecast growth from internal forecasts is based on a combination of
internal and external information. Based on these forecasts, the headroom available on the total future profits is £0.3 million
(2024: £0.5 million) before an impairment would be necessary.
Discount rate
The cash flow projections have been discounted using a rate derived from the Group’s pre-tax weighted average cost of capital,
adjusted for industry and market risk. The discount rate used was 12.4% (2024: 12.4%).
Terminal growth rate
The cash flows subsequent to the forecast period are extrapolated into the future over the useful economic life of the CGU using
a steady or declining growth rate that is consistent with that of the product and industry. These cash flows form the basis of
what is referred to as the terminal value. The growth rate to perpetuity beyond the initial budgeted cash flows used in the value in
use calculations to arrive at a terminal value is 0.5% (2024: 0.5%). Terminal growth rates are based on management’s estimate
of future, long-term average growth rates.
Conclusion
At 31 March 2025, no impairment charge in respect of goodwill was identified (2024: no impairment charge).
Sensitivity to changes in key assumptions
Impairment testing is dependent on estimates and judgements, particularly as they relate to the forecasting of future cash flows.
The outcome of the impairment test is not sensitive to reasonably possible changes in respect of the projected cash flows, the
discount rate applied, nor in respect of the terminal growth rate assumed.
17. Investments in subsidiary undertakings
The Company owns the whole of the issued Ordinary share capital of Caffyns Wessex Limited, Caffyns Properties Limited and
of the subsidiaries. All subsidiary undertakings are registered in England and Wales and have their registered office at Saffrons
Rooms, Meads Road, Eastbourne, East Sussex, BN20 7DR.
Financials Other information
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18. Inventories
All vehicle inventories held under consignment stocking arrangements are deemed to be assets of the Group and are included
on the Statement of Financial Position from the date of consignment. The corresponding liabilities to the manufacturers are
included within trade and other payables. Inventories can be held on consignment for a maximum consignment period set by
the manufacturer, which is generally between 180 and 365 days. Interest is payable in certain cases for part of the consignment
period, at various rates indirectly linked to the Bank of England base rate.
During the year, £20,000 (2024: £7,000) was recognised in respect of the write-down of inventories of spare parts due to
general obsolescence.
19. Trade and other receivables
Group and Company
2025
£’000
2024
£’000
Allowance for doubtful debts (16) (8)
9,017 5,962
Prepayments 402 513
All amounts are due within one year.
The Group makes an impairment provision for all debts that are considered unlikely to be collected. At 31 March 2025, trade
receivables were shown net of an allowance for impairment of £16,000 (2024: £8,000). The charge recognised during the year
was £16,000 (2024: credit of £16,000).
Trade receivables have been classified at amortised cost under IFRS 9 Financial Instruments.
Group and Company
2025
£’000
2024
£’000
Not impaired:
Neither past due nor impaired 8,892 5,785
Past due up to three months but not impaired 125 177
At 31 March 9,017 5,962
78 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
19. Trade and other receivables continued
All amounts are due within one year.
Credit risk
The Company’s principal financial assets are trade receivables, bank balances and cash that represent the Company’s maximum
exposure to credit risk in relation to financial assets.
Before granting any new customer credit terms, the Company uses external credit rating agencies to assess the potential new
customer’s credit quality and to define credit facility limits to be made available. These credit limits and creditworthiness are
regularly reviewed. The concentration of credit risk is limited due to the customer base being large and unrelated. The Company
has no customer that represents more than 5% of the total balance of trade receivables.
20. Trade and other payables
2025
£’000
2024
£’000
Obligations relating to consignment stock 13,792 12,569
Vehicle stocking loans 8,623 8,058
Social security and other taxes 1,769 856
Other creditors 1,015 618
Group total 51,781 45,597
Amounts owed to Group undertakings 250 250
Company total 52,031 45,847
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for these trade-related purchases was 28 days (2024: 27 days).
During the current year, vehicle deposits in the prior year of £512,000 have been reclassified from trade payables to other
creditors.
The directors consider that the carrying amount of trade payables approximates to fair value.
The Group finances the purchases of new car inventory through the use of consignment funding facilities provided by its
manufacturer partners and which are shown above as Obligations relating to consignment stock. Vehicles are physically
supplied by the manufacturers with payment deferred until the earlier of the registration of the vehicle or the end of the
consignment period, generally between 180 and 365 days. In certain circumstances, consignment periods can be extended
with the agreement of the manufacturer. The consignment funding facilities attract interest at a commercial rate.
Financials Other information
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GovernanceOur Business Governance Financials
20. Trade and other payables continued
The Group utilises vehicle stocking loans to assist with the purchase of certain used car inventory. Facilities are available from
both its manufacturer partners and a third-party finance provider and are generally available for a period of 90 days from the date
of purchase. These vehicle stocking loans attract interest at a commercial rate.
Interest charges on consignment stocking loans and vehicle stocking loans described above for the year ended 31 March 2025
were £1,612,000 (2024: £1,454,000).
The obligations relating to consignment stock are all subject to retention of title clauses for the vehicles to which they relate.
Obligations for used and demonstrator cars, that have been funded are secured on the vehicles to which they relate and are
shown above as vehicle stocking loans. From a risk perspective, the Company’s funding is split between manufacturers through
their related finance arms and that funded by the Company through bank borrowings.
The movements in deferred income in the year were as follows:
2025
£’000
2024
£’000
At 1 April 452 493
Utilisation of deferred income in the year (1,015) (865)
Income received and deferred in the year 974 824
At 31 March 411 452
Management are satisfied in respect of the brought-forward deferred income for both the year under review and prior years,
that the amount of deferred income not recognised as revenue in the year is not material.
21. Interest-bearing loans and borrowings
Note 22 sets out the maturity profile of non-current liabilities. The directors estimate that there is no material difference between
the fair value of the Company’s borrowings and their book value. The loan and overdraft facilities provided to the Company of
£18.8 million (2024: £19.3 million) are secured by a general debenture and fixed charges over certain freehold properties.
80 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
22. Financial instruments
Group and Company
2025
carrying
value
£’000
2024
carrying
value
£’000
Carrying value of financial assets
and liabilities:
Primary financial instruments
held or issued to finance operations Classification
Long-term bank borrowings (note 21) Financial liability measured at amortised cost (10,688) (10,063)
Long-term other loan (note 21) Financial liability measured at amortised cost (175) (245)
Bank revolving credit facility (note 21) Financial liability measured at amortised cost (1,000) (1,000)
Secured short-term bank borrowings
(note 21) Financial liability measured at amortised cost (375) (375)
Unsecured short-term borrowings Financial liability measured at amortised cost (70) (70)
Trade and other payables (note 20) Financial liability measured at amortised cost (49,490) (44,289)
Lease liabilities (note 23) (2,362) (2,607)
Trade and other receivables (note 19) Financial asset at amortised cost 9,711 6,797
Preference share capital (note 26) Financial liability measured at amortised cost (812) (812)
The amounts noted in the above table are the
same for the Company except for:
Trade and other payables (note 20) Financial liability measured at amortised cost (49,650) (44,539)
Capital management
The Group views its financial capital resources as primarily comprising share capital, bank loans and overdrafts, vehicle stocking
credit lines and operating cash flow.
The board’s policy is to maintain a strong capital base to facilitate market confidence and safeguard the Group’s ability to
continue as a going concern whilst maximising the return on capital to the Group’s shareholders. The Group monitors its capital
through closely scrutinising and reviewing its cash flows. The capital of the Group is £29.9 million (2024: £28.7 million) and
comprises share capital, share premium, retained earnings and other reserve accounts: the capital redemption reserve, the
non-distributable reserve and the other reserve. In order to maintain or adjust the capital structure, the Group may adjust the
level of dividends paid to the holders of Ordinary shares, return capital to shareholders, issue new shares or sell assets to
reduce debt. The Group’s ratio of net bank loans and overdrafts to equity was 29% at 31 March 2025 (2024: 39%). Capital
requirements imposed externally by HSBC are that borrowings should not exceed 70% of the current open-market value for
existing use of the Group’s freehold properties, certain of which are subject to a fixed charge.
Financials Other information
81www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
22. Financial instruments continued
The underlying pre-tax return as a proportion of equity for the year was a return of 2.0% (2024: negative return of 2.0%).
The Company has occasionally repurchased its own shares in the market and cancelled them to promote growth in earnings per
share. There is no predetermined plan for doing this, although the Company has permission from its shareholders to buy back
up to 15% of its equity in any one financial year. The Company may also purchase its own shares to satisfy share incentives
issued to employees and these shares are then held as treasury shares.
Treasury policy and procedures
The Company’s activities expose it primarily to the financial risks of changes in interest rates. There are no fixed rate borrowings
other than preference shares.
Interest rate management
The objective of the Group’s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings at variable rates expose the Group to cash flow interest rate risk, whereas borrowings
at fixed rates expose the Group to fair value interest rate risk. The Group does not currently hedge any interest rate risk.
Interest rate risk sensitivity analysis
As all of the Group’s borrowings and vehicle stocking credit lines are floating rate instruments, they therefore have a sensitivity
to changes in market rates of interest. The effect of a change of 100 basis points in interest rates for floating rate instruments
outstanding at the period end, on the assumption that the instruments at the period end were outstanding for the entire period,
would change interest charges by £172,000 (2024: £194,000) before tax relief.
Credit risk management
The Group’s receivables are all denominated in sterling. The Group is exposed to credit risk, primarily in respect of its trade
receivables and financial assets. Trade receivables are stated net of provision for estimated impairment losses. Exposure to
credit risk in respect of trade receivables is mitigated by the Group’s policy of only granting credit to certain customers after
an appropriate evaluation of their credit risk. Credit risk also arises in respect of amounts due from manufacturers in relation to
bonuses and warranty receivables. This risk is mitigated by the range of manufacturers dealt with, the Group’s procedures in
effecting timely collection of amounts due, and management’s belief that it does not expect any manufacturer to fail to meet its
obligations. Finance assets comprise cash balances. The counterparties are major banks and management do not expect any
counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying amount of the
financial asset in the Statement of Financial Position.
These objectives, policies and strategies are consistent with those applied in the previous year.
Group and Company
2025
carrying
value &
fair value
£’000
2024
carrying
value &
fair value
£’000
Bank balances and cash equivalents 3,762 438
The net bank borrowings of the Company at 31 March 2025 were £8.5 million (2024: £11.3 million).
82 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
22. Financial instruments continued
2025
£’000
2024
£’000
Interest-bearing overdrafts and loans due within one year 1,445 1,445
Interest-bearing bank loans due after more than one year 10,862 10,308
Less: Cash and cash equivalents (3,762) (438)
At 31 March 8,545 11,315
All borrowings are denominated in sterling. The effective interest rates for all borrowings are based on bank base rates.
Information regarding classification of balances and interest and the range of interest rates applied in the year to 31 March 2025
are set out in the following table:
Carrying value
& fair value Classification
Interest
classification
Interest rate
range
Current: within one year or on demand
Bank revolving-credit facility 1,000 Amortised cost Floating VBBR* + 2.64%
Bank term loan 375 Amortised cost Floating SONIA** + 2.75%
Other loan 70 Amortised cost Fixed 1.54%
Trade and other payables 49,490 Amortised cost – –
Carrying value
& fair value Classification
Interest
classification
Interest rate
range
Not repayable within one year
Term loan 4,688 Amortised cost Floating SONIA** + 2.75%
Revolving credit facility 6,000 Amortised cost Floating SONIA** + 2.75%
Other loan 175 Amortised cost Fixed 1.54%
Preference share capital 812 Amortised cost Fixed –
* Volkswagen Bank Base Rate, a base rate calculated by Volkswagen Bank United Kingdom Branch.
** Sterling Overnight Index Average.
The maturity of non-current borrowings is as follows:
Borrowings Leases Preference shares Total
Group and Company
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
Between one and two years 10,758 10,133 336 441 — — 11,094 10,749
Between two and five years 105 175 738 1,101 — — 843 1,101
Over five years — — 646 564 812 812 1,458 1,376
At 31 March 10,863 10,308 1,720 2,106 812 812 13,395 13,226
With regard to the table above, maturities include amounts drawn under bank term loans and revolving credit facilities,
manufacturer loans, lease liabilities and preference shares. The Company’s revolving credit facility with HSBC can continue to
be drawn in whole, or part, at any time, under a facility which continues until April 2026. The maturities of the bank borrowings
represent the final payment dates for those drawn facilities as at 31 March 2025. The maturities of lease liabilities represent the
undiscounted future repayments on those leases. The preference shares are not redeemable so have no set repayment date.
Financials Other information
83www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
22. Financial instruments continued
In the table below, cash flows from preference shares have been restricted to the total borrowing outstanding at the balance
sheet date. If the bank revolving credit facilities drawn at the year-end were redrawn at the Group’s usual practice of three-
monthly drawings, the total cash outflows, assuming interest rates remain at the same rates as at year-end, contractual
payments over the next five years on an undiscounted basis would be:
Borrowings Leases Preference shares Total
Group and Company
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
Within one year 2,273 2,321 547 642 60 60 2,880 3,023
Between one and two years 10,824 11,016 451 547 60 60 11,335 11,623
Between two and three years 71 71 448 451 60 60 579 582
Between three and four years 35 71 347 448 60 60 442 579
Between four and five years — 35 154 348 60 60 214 408
Over five years — — 1,108 562 512 512 1,620 1,074
Contractual cash flows within five
years of the balance sheet date 13,203 13,514 3,055 2,998 812 812 17,070 17,289
The Group has a term loan with HSBC, first entered into in March 2018 with a loan advance of £7.5 million, at a rate of interest
of 2.75% above SONIA. The loan has a current four-year term to next expire in April 2026, and is repayable over 20 years.
The balance outstanding on this term loan at 31 March 2025 was £5.1 million (2024: £5.4 million) with capital repayments in
the year of £0.4 million. HSBC also make available to the Group a revolving credit facility of £6.0 million at a rate of interest
of 2.75% above SONIA. This facility has a four-year term and expires in April 2026. The balance drawn as at 31 March 2025
was £6.0 million (2024: £5.0 million). These facilities are subject to covenants which, for the current year, were tested quarterly
with respect to debt/freehold property values and Senior EBITDA levels. All covenant tests were passed in the year ended
31 March 2025. The failure of a covenant test would render these facilities repayable on demand at the option of the lender.
The Company’s interest cover covenant test will be reapplied from 30 June 2025 and will require underlying profits before
Senior Interest (that being paid to HSBC and VW Bank on its term loan and revolving credit facility borrowings), corporation tax,
depreciation and amortisation (“Senior EBITDA”) for a rolling twelve-month period to be at least three times the level of Senior
Interest. Under the borrowings test, also to be reapplied from 30 June 2025, the Company’s borrowings from HSBC and VW
Bank on its term loan and revolving credit facilities must be less than 400% of its Senior EBITDA.
The Company’s final covenant test over its levels of freehold property security requires that the level of its bank borrowings do
not exceed 70% of the independently assessed value of its charged freehold properties.
Once reapplied on 30 June 2025, all covenant tests will then continue to be tested quarterly.
No reduction in term loan or revolving credit facilities is expected to apply consequent to the trading results for the year ended
31 March 2025.
The Group also had £7.5 million of combined annual overdraft and revolving credit facilities (2024: £7.5 million) from HSBC
and Volkswagen Bank United Kingdom Branch and these facilities are next due for renewal in August and October 2025,
respectively. The directors have every expectation that these facilities will be renewed based on the current discussions with the
relevant banks. These facilities carry interest rates of 2.75% above UK bank base rate and 2.64% above VBBR, respectively.
The ongoing costs associated with the bank facilities are included in finance expense (see note 7).
The preference shares in issue do not have a maturity date as they are non-redeemable.
84 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
23. Lease liabilities
24. Retirement benefit scheme
Group and Company
2025
£’000
2024
£’000
Fair value of scheme assets 55,880 58,769
Present value of the defined benefit pension obligation (60,403) (68,805)
Scheme deficit at 31 March (4,523) (10,036)
Description of scheme
The Company operates a pension scheme, the Caffyns Pensions Scheme (“the Scheme”), which provides benefits based on
final pensionable pay until 31 March 2006. With effect from 1 April 2006, the Scheme closed to new entrants and all members
in the final salary section were transferred to the career average section for future service and certain benefits were reduced.
Depending on the proportion of pensionable pay purchased, the Company contribution rates varied between 4% and 15%. With
effect from 1 April 2010, the Scheme closed to future accrual with all members transferred to a defined contribution scheme for
their future service. As part of the 2014 funding valuation, it was agreed that the inflation measure used to set in-deferment and
in-payment increases for pensions in excess of guaranteed minimum pensions would change from the Retail Prices Index to the
Consumer Prices Index for members (or dependents of members) who were in service on, or after, 1 April 1991.
The Trustees are responsible for the operation and governance of the Scheme, including making decisions regarding the
Scheme’s funding and investment strategy, in conjunction with the Company. The assets of the Caffyns Pensions Scheme,
administered by Capita Employee Solutions, are held separately from those of the Company, being held in separate funds by the
trustees of the Caffyns Pensions Scheme. The Scheme rules do not impose a restriction on the level of Scheme asset that may
be reported under IAS 19. The Scheme has been registered with the Pensions Regulator and is subject to the scheme-specific
funding requirements as outlined in UK legislation. The liabilities are determined by a qualified independent actuary based on
triennial valuations using the projected unit method. The most recent completed actuarial valuation was at 31 March 2023.
Description of expected cash flows to and from the Scheme
As part of the 31 March 2023 funding valuation, the Trustees and the Company agreed a recovery plan with a view to eliminating
the scheme-specific funding shortfall by January 2031. This recovery plan requires the Company to make basic annual deficit-
reduction contributions to the Scheme, starting at £0.8 million in the year and increasing thereafter by 2.25% per annum. In
addition, the Company agreed to make an additional payment of £2.1 million over a four-year period, with £1 million being paid
in the current year, £0.5 million in each of the following two years and £0.1 million in the year ending 31 March 2028. During
the year, the Company sold a freehold property in Lewes for a cash consideration of £4.7 million. The Scheme held a security
charge over the property and, in return for releasing that charge, received an additional cash contribution into the Scheme of
£2.4 million. In total, over the year to 31 March 2025, the Company contributed £4.2 million (2024: £0.8 million) to fund the
existing deficit.
The Company and the Scheme also agreed that the monetary excess of any Ordinary dividends paid to shareholders in excess
of 22½ pence per Ordinary share in any given year until the end of the present recovery plan will be matched by a further equal
contribution into the Scheme.
Financials Other information
85www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
24. Retirement benefit scheme continued
Over the year to 31 March 2026, the Company expects to contribute a minimum of £1.3 million in relation to deficit reduction
contributions. In addition, the Company will continue to make contributions towards risk benefits and to meet the administrative
expenses of the Scheme and its Pension Protection Fund levies.
The liabilities of the Scheme are based on the current value of expected benefit payment cash flows to members of the Scheme
over the coming decades. The mean average duration of the liabilities is approximately 11 years. Expected benefit payments in
the year to 31 March 2026 are £5.0 million.
Risks to the Scheme
The ultimate cost of the Scheme to the Company will depend upon actual future events rather than the assumptions made.
Many of the assumptions made are unlikely to be borne out in practice and, as such, the cost of the Scheme may be higher, or
lower, than disclosed. In general, the risk to the Company is that assumptions underlying the disclosures, or the calculation of
contribution requirements, are not borne out in practice and the cost to the Company is higher than expected.
More specifically, the Scheme exposes the Company to actuarial risks such as:
• Interest rate risk – the present value of the defined benefit liability is calculated using a discount rate determined by
reference to market yields of corporate bonds, whereas the Scheme holds a mixture of investments. A decrease in market
yield on high-quality corporate bonds will increase the Company’s defined benefit liability, although it is expected that this
would be offset partially by an increase in the fair value of certain of the Scheme’s assets;
• Investment risk – the Scheme’s assets at 31 March 2025 are invested by two appointed fiduciary management companies,
SEI Investments (Europe) and Towers Watson Limited. The Company is in the process of transitioning its appointed fiduciary
manager to Towers Watson Limited. The investment in various types of asset funds is intended to reduce risk whilst
maintaining planned returns;
• Longevity risk – the Company is required to provide benefits for life for the members of the Caffyns Pensions Scheme.
Increases in life expectancy of the members will increase the defined benefit liability;
• Inflation risk – a significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will
increase the Company’s liability. A portion of the Scheme’s assets are inflation-linked debt securities, which would mitigate
some of the effect of inflation.
The Company has applied IAS 19 Employee Benefits (Revised) to this scheme and the following disclosures relate to this
Standard. The Company recognises any remeasurement (actuarial gains and losses) in each period in the Statement of
Comprehensive Income.
Results of most recent actuarial valuation
The assumptions that have the most significant effect on the results of the valuation are those relating to rates of mortality, the
discount rate used to reflect the present value of scheme liabilities, and the rate of inflation. As at the year-end, the last available
actuarial valuation was at 31 March 2023 and showed that the market value of the assets of the Caffyns Pensions Scheme
were £61.9 million and that the value of those assets represented 93% of the actuarial value of the benefits that had accrued to
employees at that date. The deficit arising at 31 March 2023 of £4.8 million, compared to a deficit of £10.0 million under IAS 19,
and was due to different assumptions being adopted for the triennial valuation.
The costs and liabilities of the Caffyns Pensions Scheme are based on actuarial valuations. At the year-end, the latest available
full actuarial valuation carried out at 31 March 2023, was updated to 31 March 2025 by Willis Towers Watson, independent
qualified actuaries, for the requirements of IAS 19. Details of the actuarial assumptions are as follows:
2025 2024
Mortality tables used: females 104% of SAPS series 3 104% of SAPS series 2
Mortality tables used: males 109% of SAPS series 3 109% of SAPS series 2
Future improvements in mortality CMI 2023 + 1.25% CMI2021 + 1.25%
Discount rate 5.65% 4.80%
Inflation (CPI) 2.80% 2.85%
Pension increase for in-payment benefits (CPI max 5%) 2.80% 2.85%
The discount rate adopted is based upon the yields of high-quality corporate bonds of appropriate duration.
86 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
24. Retirement benefit scheme continued
The sensitivities regarding the principal assumptions used to measure scheme liabilities are set out below:
Assumption Change in assumption Impact on scheme liabilities
Discount rate Increase/decrease by 0.1% +/- £0.6 million
Pension increases Increase/decrease by 0.1% +/- £0.4 million
Mortality Increase/decrease by 0.1% +/- £2.4 million
The fair value of assets of the Caffyns Pensions Scheme for each class of asset, all of which have a quoted market price in an
active market, are as follows:
Market value
2025
£’000
2024
£’000
LDI fund 19,591 20,957
Growth fund 35,649 37,159
Equity instruments 640 653
At 31 March 55,880 58,769
Two fiduciary managers, Towers Watson Limited and SEI Investments (Europe) Limited operated in the year with the role of
fiduciary manager in transition from SEI Investments (Europe) to Towers Watson Limited. The fiduciary managers operate with
the objective of improving the performance of the assets of the Caffyns Pensions Scheme. Assets of the Scheme (excluding
cash in the trustees’ administrative bank account) at 31 March 2025 were invested 35% (2024: 36%) in LDI funds, 64%
(2024: 63%) in return enhancing growth funds and 1% (2024: 1%) in Caffyns plc shares.
In accordance with the requirements of IAS 19 Employee Benefits, the expected return on assets is based on the discount rate
noted above of 5.65% and not the return on the underlying portfolio of investments. Consequently, the charge to the Income
Statement for the year ending 31 March 2026 is expected to be approximately £234,000.
Equity instruments include shares in Caffyns plc, which are detailed in note 29.
The assumptions used by the actuary are the best estimates based on market conditions chosen from a range of possible
actuarial assumptions, which, due to the timescales covered, may not necessarily be borne out in practice.
Life expectancy at age 65 (in years):
2025
Male
2025
Female
2024
Male
2024
Female
Member currently aged 65 20.8 23.7 20.8 23.6
Member currently aged 45 22.1 25.1 22.1 25.1
A liability for the defined benefit pension scheme deficit is included in the Statement of Financial Position under the heading of
non-current liabilities.
Analysis of the movement in the net liability for defined benefit obligations recognised
in the Statement of Financial Position
2025
£’000
2024
£’000
At 1 April (10,036) (8,799)
Expense recognised in the Income Statement (424) (416)
Contributions paid by the Company 4,230 831
Net remeasurement recognised in other comprehensive income 1,707 (1,652)
At 31 March (4,523) (10,036)
Financials Other information
87www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
24. Retirement benefit scheme continued
Total expense recognised in the Income Statement
2025
£’000
2024
£’000
Interest cost 3,195 3,236
Interest income on Scheme assets (2,786) (2,838)
Interest – net (see note 8) 409 398
Current service cost 15 18
424 416
Changes in the present value of the defined benefit pension obligation
2025
£’000
2024
£’000
At 1 April 68,805 70,325
Service cost 15 18
Interest cost 3,195 3,236
Actuarial (gains)/losses – experience (920) 596
Actuarial (gains)/losses – demographic assumptions
(156)
98
Actuarial gains – financial assumptions
(6,054)
(1,073)
Benefits paid (4,482) (4,395)
At 31 March 60,403 68,805
In October 2018, the High Court issued a judgement, which required pension schemes to equalise members’ benefits to
address the unequal effect of Guaranteed Minimum Pensions between genders. In assessing the present value of the pension
liabilities, an allowance for the liabilities to increase by 0.9% continues to be made for the estimated cost of this Guaranteed
Minimum Pensions equalisation process.
The Company is aware of a UK High Court legal ruling in June 2023 between Virgin Media Limited and NTL Pension Trustees
II Limited, which decided that certain historical rule amendments were invalid if they were not accompanied by actuarial
certifications. The ruling was subject to appeal and, in July 2024, the Court of Appeal confirmed the UK High Court ruling from
July 2023. The Company, together with the Caffyns Pension Scheme trustees, has carried out an initial risk assessment in
relation to the ruling and is confident that proper procedure would have been followed at the time of any rule changes. If there
is an impact to the Caffyns Pension Scheme, there is currently much uncertainty as to how the ruling should be reflected by the
Company in its financial statements and, as a result, it is not possible at present to estimate the impact, if any, from the legal
ruling. It is expected that further legal cases will be required to settle some of the uncertainties that remain. No adjustments have
been made to the defined benefit liability recognised in these financial statements in relation to this legal ruling.
Movement in the fair value of scheme assets
2025
£’000
2024
£’000
At 1 April 58,769 61,526
Interest income 2,786 2,838
Actuarial losses – financial assumptions (5,423) (2,031)
Contributions paid by the Company 4,230 831
Benefits paid (4,482) (4,395)
At 31 March 55,880 58,769
88 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
25. Deferred tax
Group and Company
The following are the major deferred tax assets and liabilities recognised and the movements thereon during the current and
prior reporting period.
Accelerated
tax
depreciation
£’000
Unrealised
capital gains
£’000
Retirement
benefit
obligations
£’000
Short-term
temporary
differences
£’000
Trading
losses
and CIR
£’000
Recoverable
ACT
£’000
Total
£’000
At 1 April 2023 (990) (1,690) 2,200 104 — 342 (34)
Change in tax rates
and prior year
adjustments 23 — — — — 1 24
Arising from
origination and
reversal of
temporary differences (157) 225 (104) (125) 326 — 165
Recognised in other
comprehensive
income — — 413 — — — 413
At 31 March 2024 (1,124) (1,465) 2,509 (21) 326 343 568
At 1 April 2024 (1,124) (1,465) 2,509 (21) 326 343 568
Prior year
adjustments (163) — — — 212 — 49
Arising from
origination and
reversal of
temporary differences (37) 490 (952) 622 (89) — 34
Recognised in other
comprehensive
income — — (427) — — — (427)
At 31 March 2025 (1,324) (975) 1,130 601 449 343 224
The movement in items arising from origination and reversal of temporary difference in the table above arise primarily from
the requirement to spread forward the pension contributions made in the year of £4.2 million (2024: £0.8 million) to the
defined-benefit Caffyns Pension Scheme, as required under tax legislation, and the disposal of freehold property in the year.
The Company carries a balance of surplus unrelieved advanced corporation tax (“ACT”), which can be utilised to reduce
corporation tax payable subject to a restriction of 25% of taxable profits less shadow ACT calculated at 25% of shareholder
Ordinary dividends. Shadow ACT has no effect on the corporation tax payable itself but any surplus shadow ACT on dividends
must be fully absorbed before surplus unrelieved ACT can be utilised. At the commencement of the financial year under review
on 1 April 2024, there was no Shadow ACT outstanding. During the year, Shadow ACT generated by the payment of dividends
was unable to be utilised, so no surplus ACT could be utilised in the year. The remaining value of surplus ACT available for
utilisation in future periods at 31 March 2025 was £343,000 (2024: £343,000). Shadow ACT carried forward at 31 March 2025
was £203,000 (2024: £135,000).
Financials Other information
89www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
25. Deferred tax continued
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and it is considered that this requirement is fulfilled. The offset amounts are as follows:
2025
£’000
2024
£’000
Deferred tax liabilities (2,299) (2,610)
Deferred tax assets 2,523 3,178
At 31 March 224 568
The unrealised capital gains include deferred tax on gains recognised on revaluing the land and buildings in 1995 and where
potentially taxable gains arising from the sale of properties have been rolled over into replacement assets. Such tax would
become payable only if such properties were sold without it being possible to claim rollover relief.
Trading losses and Corporate Interest restrictions available for use in future periods amounted to £1.8 million (2024: £1.3 million).
Based on forecasts prepared, the Directors conclude that these losses will reverse against future profitability.
26. Called-up share capital
The 7% Cumulative First Preference shares have rights to a fixed dividend and, in the event of a winding-up, a priority to the
Ordinary shares for a capital repayment. The shares do not have voting rights.
The 11% Cumulative Preference shares have rights to a fixed dividend and, in the event of a winding-up, a priority to the
Ordinary shares for a capital repayment. The shares do not have voting rights.
The 6% Cumulative Second Preference shares continue to have voting rights (one vote per Second Preference share) except in
relation to matters, which under the Listing Rules, as amended from time to time, are required to be voted on only by Ordinary
shareholders.
Although the Articles of Association of the Company give the directors discretion to pay the preference dividend only if they
consider there are adequate profits, such dividends are cumulative. For this reason, the directors consider that the preference
shares have the characteristic of a financial liability rather than equity, and, consequently, the preference shares are included as a
non-current liability. None of the preference shares have rights of conversion.
90 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
27. Share-based payments
All grants made under the Company’s Save As You Earn (“SAYE”) schemes are for periods of three years and vest in Ordinary
shares. The market value of the shares at the date of the grant of the 2020 SAYE scheme options was £3.85.
The fair value of the grants made under the SAYE scheme is charged to the Income Statement over the vesting period based on
the valuation derived from an adjusted Black-Scholes model. The volatility factor for movements in the Company’s share price
used in the valuation model was estimated at 65%.
The Company did not operate a SAYE scheme in the year so the total expense included within operating profit relating to
share-based payments was £Nil (2024: £31,000), with an associated tax credit to the Income Statement and Equity of £Nil
(2024: £8,000).
28. Notes to the cash flow statement
Group and Company
2025
£’000
2024
£’000
Profit/(loss) before tax for the year 246 (1,545)
Adjustments for net finance expense 3,301 3,078
3,547 1,533
Adjustments for:
Depreciation and impairments of property, plant and equipment, investment
properties and right-of-use assets 2,141 2,702
Cash payments into the defined benefit pension scheme (4,230) (831)
Profit on disposal of property, plant and equipment (64) (41)
Share-based payments — 31
Operating cash flows before movements in working capital 1,394 3,394
Increase in inventories (2,173) (2,262)
Increase in receivables (2,802) (189)
Increase in payables 6,194 1,944
Cash generated by operations 2,613 2,887
Tax paid, net of refunds — (68)
Interest paid (2,916) (2,700)
Net cash (absorbed by)/derived from operating activities (303) 119
All interest payments are treated as operating cash movements as they arise from movements in working capital.
Financials Other information
91www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
28. Notes to the cash flow statement continued
Reconciliation of debt
Group and Company:
Bank
and other
loans
£’000
Revolving
credit
facilities
£’000
Lease
liabilities
£’000
Preference
shares
£’000
Liabilities
arising from
financing
activities
£’000
Bank
and cash
balances
£’000
Net
debt
£’000
At 1 April 2023 6,312 6,000 2,714 812 15,838 (4,226) 11,612
Cash movement (559) — (633) — (1,192) 3,788 2,596
Non-cash movement — — 526 — 526 — 526
At 31 March 2024 5,753 6,000 2,607 812 15,172 (438) 14,734
Current liabilities 445 1,000 501 — 1,946 (438) 1,508
Non-current liabilities 5,308 5,000 2,106 812 13,226 — 13,226
At 31 March 2024 5,753 6,000 2,607 812 15,172 (438) 14,734
At 1 April 2024 5,753 6,000 2,607 812 15,172 (438) 14,734
Cash movement (445) 1,000 (642) — (87) (3,324) (3,411)
Non-cash movement — — 397 — 397 — 397
At 31 March 2025 5,308 7,000 2,362 812 15,482 (3,762) 11,720
Current liabilities 445 1,000 642 — 2,087 (3,762) (1,675)
Non-current liabilities 4,863 6,000 1,720 812 13,395 — 13,395
At 31 March 2025 5,308 7,000 2,362 812 15,482 (3,762) 11,720
Non-cash movements in lease liabilities relate to an extension in the year of an existing lease and interest charges.
92 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
29. Related parties
Caffyns Pension Scheme
Details of contributions are disclosed in note 24.
The Caffyns Pension Scheme held the following investments in the Company:
Fair value
2025
£’000
2024
£’000
Shares held:
125,570 (2024: 125,570) Ordinary shares of 50 pence each 565 565
12,862 (2024: 12,862) 11% Cumulative Preference shares of £1 each 20 20
At 31 March 585 585
During the year to 31 March 2025, the Company paid management fees of £336,000 (2024: £275,000) on behalf of the
Caffyns Pension Scheme. These costs comprised the Pension Protection Fund levy, actuarial advisory fees and external
administration fees.
Financials Other information
93www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
30. Leases as a lessor
The Group’s as a lessor – finance leases
At 31 March 2025, the Company had an interest in a single lease. The total future minimum lease receipts payable are:
Group and Company
2025
£’000
2024
£’000
Within one year 77 185
In two to three years — 78
In three to four years — —
In four to five years — —
Beyond five years — —
77 263
Finance income on the net investment in the lease was £26,000 (2024: £21,000).
Group and Company
2025
£’000
2024
£’000
Gross undiscounted cash flows 77 263
Unearned finance income (12) (38)
Net investment in lease 65 225
The Group as lessor – operating leases
The Company’s gross property rental income earned during the year from the direct lease of three (2024: three) investment
properties owned by the Group was £328,000 (2024: £315,000). No contingent rents were recognised in income (2024: £Nil).
At 31 March 2025, there were contracts for land and buildings with tenants for the following lease rentals receivable:
Group and Company
2025
£’000
2024
£’000
Within one year 263 311
In two to three years 263 255
In three to four years 241 209
In four to five years 241 209
Beyond five years 891 944
1,899 1,928
94 Caffyns plc Annual Report 2025
Notes to the Financial Statements continued
for the year ended 31 March 2025
Financials Other information
95www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials
Five Year Review
(unaudited)
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
Income Statement
Revenue 165,085 223,928 251,426 262,084 275,464
Underlying operating profit 3,142 5,690 4,827 2,114 3,498
Finance expense (1,266) (1,116) (1,687) (2,680) (2,892)
Underlying profit/(loss) before tax 1,876 4,574 3,140 (566) 606
Non-underlying items (452) (189) (50) (979) (360)
Profit/(loss) before tax 1,424 4,385 3,090 (1,545) 246
Profit/(loss) after tax 1,410 2,999 2,524 (1,204) 176
EBITDA 5,124 7,712 6,955 4,212 5,439
Basic earnings/(loss) per Ordinary share 52.4p 111.3p 93.6p (44.3)p 6.4p
Underlying earnings/(loss) per Ordinary share 66.0p 117.0p 95.1p (17.3)p 16.4p
Dividend per Ordinary share payable in respect of the year 0.00p 22.50p 22.50p 10.00p 10.00p
2021
£’000
2022
£’000
2023
£’000
2024
£’000
2025
£’000
As at year-end
Shareholders’ funds 27,586 34,731 31,662 28,736 29,921
Property, plant and equipment* 45,375 46,621 45,676 45,930 40,593
Bank overdrafts and loans (net) 10,327 10,428 8,086 11,315 8,545
Bank overdrafts and loans/shareholders’ funds (gearing) 37% 30% 26% 39% 29%
Retirement benefit liability 9,434 2,797 8,799 10,036 4,523
* Represents property, plant and equipment and investment properties.
96 Caffyns plc Annual Report 2025
AUDI
BRIGHTON:
EASTBOURNE:
WORTHING:
200 Dyke Road, Brighton BN1 5AT (01273 553061) Edward Road,
Eastbourne BN23 8AS (01323 525700) Roundstone Lane, Worthing
BN16 4BD (01903 231111)
MG
ASHFORD:
Monument Way, Orbital Park, Ashford TN24 0HB (01233 504620)
CUPRA
TUNBRIDGE WELLS:
WORTHING
North Farm Industrial Estate, Tunbridge Wells TN2 3EL (01892 515700)
Nightingale Avenue, Worthing BN12 6FH (01903 257017)
LOTUS
KENT:
SUSSEX:
Monument Way, Orbital Park, Ashford TN24 0HB (01233 504630)
Brooks Road, Lewes BN7 2DN (01903 444148)
SEAT
TUNBRIDGE WELLS:
WORTHING
North Farm Industrial Estate, Tunbridge Wells TN2 3EL (01892 515700)
Nightingale Avenue, Worthing BN12 6FH (01903 926505)
SKODA
ASHFORD:
EASTBOURNE:
TUNBRIDGE WELLS:
The Boulevard, Ashford TN24 0GA (01233 504600)
Lottbridge Drove, Eastbourne BN23 6PW (01323 925441)
North Farm Industrial Estate, Tunbridge Wells TN2 3EL (01892 515700)
VAUXHALL
ASHFORD:
Monument Way, Orbital Park, Ashford TN24 0HB (01233 504604)
VOLKSWAGEN
BRIGHTON:
EASTBOURNE:
HAYWARDS HEATH:
WORTHING:
Victoria Road, Portslade BN41 1YD (01273 425600)
Lottbridge Drove, Eastbourne BN23 6PW (01323 647141)
Market Place, Haywards Heath RH16 1DB (01444 451511)
Nightingale Avenue, Worthing BN12 6FH (01903 837878)
VOLVO
EASTBOURNE:
WORTHING:
Lottbridge Drove, Eastbourne BN23 6PJ (01323 418300)
Palatine Road, Worthing BN12 6JH (01903 507124)
MOTORSTORE
ASHFORD:
LEWES:
Monument Way, Orbital Park, Ashford TN24 0HB (01233 504624)
Brooks Road, Lewes BN7 2DN (01903 444148)
HEAD OFFICE
EASTBOURNE:
Meads Road, Eastbourne BN20 7DR (01323 730201
Financials Other information
97www.caffyns.co.uk
Stock code CFYN
GovernanceOur Business Governance Financials Other information
Our Dealerships
Caffyns plc Annual Report 2025
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