Caffyns plc

Caffyns plc Annual Report 2026

Caffyns plc

Annual Report for the

year ended 31 March 2026

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

Consolidated Financials

Report of the Independent Auditor 47

Income Statement 53

Statement of Comprehensive Income 54

Statement of Financial Position 55

Statement of Changes in Equity 56

Cash Flow Statement 57

Material Accounting Policies 58

Notes to the Financial Statements 64

Other Information

Five-year Review 94

Our Dealerships 95

Visit us online

www.caffyns.co.uk

2026

£’000

2025

£’000

Revenue 270,661 275,464

Underlying EBITDA (see note below and note 4) 3,605 5,639

Underlying (loss)/profit before tax (see note below) (1,487) 606

(Loss)/profit before tax (1,721) 246

2026

pence

2025

pence

Underlying (losses)/earnings per share (see note 10) (40.7) 16.4

(Losses)/earnings per share (47.2) 6.4

Proposed final dividend per Ordinary share 5.0 5.0

Dividends per Ordinary share for the year 10.0 10.0

Note: Underlying results exclude items that have non-trading attributes due to their size, nature

or incidence or are unrelated to the primary motor trade business of the Company and which

management, therefore, consider should be disclosed separately to enable a full understanding

of the operating results (see page 60). Non-underlying items for the year totalled a charge

of £234,000 (2025: £360,000) and are detailed in note 3 to these consolidated financial

statements. Underlying EBITDA of £3,605,000 (2025: £5,639,000) represents operating profit

before non-underlying items of £1,478,000 (2025: £3,498,000) adding back depreciation and

amortisation of £2,127,000 (2025: £2,141,000).

Results at a Glance

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

£270.7 m (11)%

Revenue

(£’000)

Revenue down 2% to

£270.7 million

(2025: £275.5 million)

New car unit deliveries

down by 11%

270,661

275,464

262,084

251,426

223,928

4% £32.7m

Underlying (LBT)/PBT

(£’000)

Used car unit sales up by 4% Aftersales revenues up by

6% to £32.7 million

(2025: £30.7 million)

(1,487)

606

(566)

3,140

4,574

£(1.5)m 5.0p

Underlying earnings/(loss)

per Ordinary share (pence)

Underlying loss before tax of

£1.5 million

(2025: profit of £0.6 million)

Final dividend of 5.0 pence per

Ordinary share

(2025: 5.0 pence per Ordinary

share)

(40.7)

16.4

(17.3)

95.1

117.0

£7.3m £10.7m

Underlying EBITDA

(£’000)

Net bank borrowings at

31 March 2026 of £7.3 million

(2025: £8.5 million),

as disclosed in note 22

Property portfolio valuation

at 31 March 2026 showed

a reduced surplus to net

book value of £10.7 million

(2025: £11.2 million); this

surplus is not recognised

in the Company’s financial

statements.

3,605

5,639

4,212

6,955

7,712

Operational and Business Review

Summary

The Company encountered significant

trading headwinds during the financial

year ended 31 March 2026 (the “year”),

resulting in turnover falling by 2% to

£270.7 million (2025: £275.5 million)

and a loss before tax position.

Volumes of new cars sold in the year

fell by 11%. Used cars and aftersales

fared better with both achieving volume

growth in the year despite a very

competitive marketplace. However,

profits from used car sales declined

and inflationary pressures on the cost

base remained high. The underlying loss

before tax for the year of £1.5 million,

which included income of £0.3 million

from the sale at auction of a veteran

car and a personalised number plate,

compared to an underlying profit

before tax of £0.6 million in the prior

year, which included £0.1 million from

the sale at auction of a personalised

number plate.

The statutory loss before tax for the year

was £1.7 million (2025: profit before

tax of £0.2 million) with the Company

incurring certain non-underlying costs,

primarily associated with the financing

and service costs of its defined benefit

pension scheme (the “scheme”).

Actuarial adjustments arising on the

scheme have been taken direct to

reserves. The basic losses per share for

the year were 47.2 pence

(2025: earnings per share of 6.4 pence).

The underlying losses per share for the

year were 40.7 pence (2025: earnings

per share of 16.4 pence).

New and used car sales

The Company’s total revenues fell by

£4.8 million over the prior year

(2025: increase of £13.4 million), which

arose from the sale of fewer new cars.

Total UK new car registrations in the year

increased by 3% to 2.05 million as the

market was buoyed by new Chinese

brands entering the UK market, although

customers remained careful with their

discretionary spending. Within this,

total new car registrations in the private

and small business sector, in which we

principally operate, rose by 5%. Our own

retail new car deliveries fell by 11% as

many of the brands that we represent

suffered from a decline in their retail

performance against strong competition

from new market entrants. We already

represent a number of Chinese-owned

brands and are in discussions which

could lead to the addition of further

Chinese brands to our portfolio.

Our volume of used car sales in the

year rose by 4% with our performance

boosted by rising volumes from the

expansion to our representation

for the CUPRA and SEAT brands.

However, overall unit margins in the

year fell by 5% against their level in the

prior year. Lower volumes of new car

registrations in the years following the

covid pandemic in 2020 have reduced

the number of less than four-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 remains challenging.

Great efforts have been made over the

last twelve months to further enhance

and develop our omni-channel used

car offering, 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. Whilst

market conditions have been volatile,

we have continued 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, and by an increased

multiple than in the prior year.

The Company has taken a number

of actions to increase order take and

reduce costs and these are delivering

improvements. Key areas are the

procurement of quality used car stock

at sensible prices, better management

on new and used inventory to reduce

both stocking interest and depreciation

costs of ageing stock, together with

general control on vehicle sales costs

such as marketing.

The Company’s defined benefit

pension scheme deficit, calculated

in accordance with the requirements

of IAS 19 Pensions, reduced to

£1.4 million at 31 March 2026

(2025: £4.5 million). During the year,

the Company made cash contributions

to the scheme of £1.3 million

(2025: £4.2 million). Contributions in the

prior year were boosted from the sale of

a surplus freehold premises in Lewes.

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

(2025: 5.0 pence), which was paid

in January 2026. Despite the losses

incurred in the year, 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 (2025: 5.0 pence).

Net bank borrowings at 31 March 2026

were £7.3 million (2025: £8.5 million),

which equated to gearing of 24%

(2025: 29%).

We faced significant trading headwinds during the

financial year ended 31 March 2026 and have taken a

number of actions to increase order take and reduce

costs. These actions are delivering improvement.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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, up

by 4% from the prior 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.

On 5 January 2026 Mike Warren, our

Finance Director since May 2016, stood

down from the board. Mike has played

a hugely significant role in the Company

over the last decade and the board

and I would like to thank him for his

outstanding contribution throughout this

period. Joelle Timperley was appointed

as the Company’s new Chief Financial

Officer on 5 January 2026. Joelle is

a chartered accountant and CIMA

Fellow has many years of relevant

finance experience. Subsequent to the

year-end, the board has agreed with

Joelle to modify her contract to allow

her to concentrate on the strategic and

operational aspects of her role over a

three-day week and Mike Warren has

agreed to extend his employment, two

days a week, as a Financial Controller

for Joelle. We are fortunate to have the

wisdom and experience of both Joelle

and Mike going forward.

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 grow.

Operations

Our franchise businesses have

experienced a very difficult year as many

of the manufacturers we represent

have been adversely impacted by new

entrants to the UK market. Our Audi

and MG businesses fared the best,

with both businesses improving their

financial performance in comparison

with the prior year.

In June 2025, we closed our Caffyns

Motorstore used car business in

Lewes. Trading at our remaining

Caffyns Motorstore business in Ashford

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.

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% and for 2026 to 33%.

Failure to achieve the set target could

result in potential financial penalties

being levied on the manufacturer,

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

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 2026

amounted to 23% of the market, some

way below the stipulated minimum

of 33%.

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 operated during

the year, headed by a senior operational

manager who reports directly to the

Chief Executive. The remit of the

Committee was to scrutinise and seek

to reduce the Company’s energy usage.

The Committee was able to achieve

year-on-year savings in electricity, gas

and fuel usage of some 2% in the 2025

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.

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.

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 were next scheduled to

come up for their periodic review in

April 2027. The Company’s bankers

recognise the current difficulties being

experienced by the motor retail sector

and remain very supportive and,

subsequent to the end of the year,

this review date was extended by

twelve months to April 2028. HSBC

also provides an overdraft facility of

£3.5 million, reviewed annually.

In addition to its facilities with HSBC,

the Company also has a revolving credit

facility of £4.0 million (2025: £4.0 million)

provided by Volkswagen Bank, reviewed

annually with the next periodic review

due in October 2026. At 31 March 2026

the Company was utilising £1.0 million

of this facility (2025: £1.0 million).

The Company continues to enjoy

supportive relationships with both

HSBC and Volkswagen Bank.

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 year, HSBC agreed

to waive the covenant tests covering

interest and borrowing levels at

30 September and 31 December 2025

and replaced them with a new covenant

test, solely for the year under review,

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 2026

was £10.7 million (2025: £11.2 million),

reflecting adjustments in the commercial

property market. No impairment

charges were deemed necessary in the

year (2025: £Nil). In accordance with

our accounting policies, this surplus of

£10.7 million has not been incorporated

into our accounts.

During the year, we incurred

capital expenditure of £0.8 million

(2025: £1.1 million). The Company’s

spend in the year related primarily to the

replacement of existing assets that had

reached the end of their economic life.

The Company continues to enjoy supportive

relationships with both HSBC and Volkswagen Bank.

Operational and Business Review

continued

Caffyns plc Annual Report 2026www.caffyns.co.uk

which required the Company to achieve

an EBITDA hurdle for the full financial

year, which was achieved. The covenant

test relating to security levels, which

continued unchanged in the year, was

passed at each quarter-end during the

year. EBITDA hurdles have been agreed

for each of the financial quarters in the

coming year ending 31 March 2027,

which the directors are confident of

achieving. The previous covenant tests

relating to interest and borrowing levels

will then be reapplied with effect from

30 June 2027. The Group is reliant

on the HSBC borrowing facility of

£14.2 million. Any failure of a covenant

test would render the borrowing facilities

from HSBC to become repayable on

demand, at the option of the lender,

and would put the going concern

assessment at risk.

During the year, cash generated from

operating activities was £2.5 million

(2025: cash absorbed of £0.3 million),

predominantly due to reduced

contributions to the Company’s

defined benefit pension scheme.

Changes in net working capital

generated cash of £3.3 million

(2025: £1.2 million), with inventories and

payables both increasing from higher

levels of new cars held on consignment

from manufacturers. Other significant

cash movements in the year included

capital expenditure of £0.8 million

(2025: £1.1 million), repayments

of bank term loans of £0.4 million

(2025: net receipt of £0.6 million),

repayments on leases of £0.4 million

(2025: £0.5 million) and dividends

paid to shareholders of £0.3 million

(2025: £0.3 million). Cash balances held

at 31 March 2026 were £4.6 million, an

increase of £0.8 million from the prior

year-end.

Bank borrowings, net of cash

balances, at 31 March 2026 were

£7.3 million (2025: £8.5 million) and as

a proportion of shareholders’ funds at

31 March 2026 were 24%

(2025: 29%). In addition to the year-

end cash balances held, available

but undrawn banking facilities with

HSBC and Volkswagen Bank at

31 March 2026 were £6.5 million (2025:

£7.5 million).

Taxation

The year produced a tax credit against

losses of £0.4 million (2025: tax charge

on profits of £0.1 million). The effective

tax rate for the year, at 25%, was in line

with the standard rate of corporation tax

in force for the year.

The Company has outstanding trading

losses of £4.0 million (2025: £0.7 million)

available for relief against profits in

future accounting periods as well

as a corporate interest restriction

carried forward of £1.3 million (2025:

£1.1 million). There are no capital losses

awaiting relief. Capital gains which

remain unrealised, where potentially

taxable gains arising from the sale of

properties and goodwill have been rolled

over into replacement assets, amounted

to £3.5 million (2025: £3.9 million), which

could equate to a future potential tax

liability of £0.9 million (2025: £1.0 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 (2025: £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 2026, the

deficit of the scheme was £1.4 million

(2025: £4.5 million). The deficit, net of

deferred tax, was £1.1 million

(2025: £3.4 million). During the year, the

Company made cash contributions to

the scheme of £1.3 million

(2025: £4.2 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 £0.2 million in the year

(2025: £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 2024, to be increased

in each subsequent year thereafter by

2.25%. Additional cash contributions

to the scheme were agreed, being

£1.0 million in the year ended

31 March 2025, £0.5 million in the years

ending 31 March 2026 and 2027 and

an additional contribution of £0.1 million

in the year ending 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 the trustees until

the projected end of the recovery plan

in the year ending 31 March 2031. As

at 31 March 2026 all contributions as

required under the recovery plan had

been paid.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Operational and Business Review

continued

A new triennial valuation will take

place as at 31 March 2026 and will be

submitted to the Pensions Regulator

before the end of June 2027.

Dividend

The board declared an interim dividend

of 5.0 pence per Ordinary share

(2025: 5.0 pence), which was paid

in January 2026. 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 (2025: 5.0 pence).

This will be paid on 11 August 2026

to shareholders on the register at

close of business on 10 July 2026

if approved by shareholders at the

Company’s Annual General Meeting on

6 August 2026. The Ordinary shares will

be marked ex-dividend on 9 July 2026.

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,

with particular focus on the new

entrants to the UK marketplace.

We are concentrating on business

opportunities that deliver higher returns

from fewer but larger sites.

year have remained challenging, with

inflationary pressures and high interest

rates continuing to impact on our

cost base.

We have appointed a new marketing

agent across the business having seen

increased levels of enquiry during a

trial period. Enquiry rates from retail

customers for electric cars have

increased as retail offers become more

attractive and prices are closer to petrol

and diesel equivalents. Customers’

confidence levels in the product have

increased and the ongoing war in Iran

has made electric cars more desirable,

although much of the demand for these

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.

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 6 August 2026 and will be an open

meeting, to which shareholders will be

invited to attend in person.

Outlook

The Company has taken a number

of actions to increase order take and

reduce costs and these are delivering

improvements. Key areas are the

procurement of quality used car stock

at sensible prices, better management

on new and used inventory to reduce

both stocking interest and depreciation

costs of ageing stock, together with

general control on vehicle sales costs

such as marketing.

The new car forward-order book is

steady, although trading conditions in

the early part of the current financial

We have appointed a new marketing agent across

the business having seen increased levels of enquiry

during a trial period.

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 2026 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

18 June 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

Strategic Report

The Operational and Business Review, which forms part of the Strategic Report, principally covers the development and

performance of the business and the external environment and is set out on pages 2 to 6. The main Key Performance

Indicators are:

Financial 2026 2025

Revenue (£ million) 270.66 275.46

Underlying EBITDA (£ million) – see note 4 3.61 5.64

(Loss)/profit for the year before tax (£ million) (1.49) 0.25

Underlying (losses)/earnings per share (pence) (40.7) 16.4

(Losses)/earnings per share (pence) (42.7) 6.4

Bank overdrafts and loans (net of cash in hand balances) (£ million) 7.26 8.55

Gearing (%) 24.3 28.6

Note: Underlying results exclude items that have non-trading attributes due to their size, nature or incidence and are detailed in Note 3 to the Financial Statements.

Other and non-financial 2026 2025

UK new car market – total registrations (million) 2.05 1.99

UK new car market – retail and small business sector registrations (million) 0.85 0.81

Caffyns new car unit sales (‘000) 5.05 5.66

Caffyns used car unit sales (‘000) 5.92 5.71

Caffyns aftersales revenues (excluding internal sales) (£ million) 25.11 23.28

Company employees (full-time equivalents) 414 415

Source of UK market registrations: Society of Motor Manufacturers and Traders (“SMMT”).

Business Performance

New and used cars

Our new unit deliveries fell by 10.7%

in the year, against a challenging

economic background and market

disruption from several new overseas

entrants. The total UK new car

registrations rose by 3.4% over the

twelve-month period and, within this

total, the private and small business

sector to which we have most exposure

fell by 5.2%. New car registrations

to the fleet market in the year rose,

by 2.1%.

Our used unit sales increased, by

3.7% 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 2.2% for

the 2025 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

in the years following the covid-19

pandemic. This significantly reduced

the number of one to four-year-old cars

in circulation. Despite these factors,

aftersales revenues rose in the year by

6%, aided by further enhancements to

our aftersales marketing and retention

procedures.

EBITDA

EBITDA saw a significant reduction

during the year from adverse trading

across from new car sales and from

continuing upward pressures on the

Company’s cost base.

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. Whilst the

Company’s defined benefit pension

scheme remains in a deficit position,

sale proceeds have also been applied to

reduce this deficit.

Business model

Caffyns is one of the leading motor retail and aftersales companies in the south-east of England. The Company’s

principal activities are the sale and maintenance of motor vehicles.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

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 and

that at least one individual on the board

of directors should be from a minority

ethnic background. There are currently

no vacant board positions, with the

last appointment having been made in

January 2026 when Ms J N Timperley

was appointed as the Company’s new

Chief Financial Officer. 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 4 66% 3 9 75%

Women 2 33% 1 3 25%

6 100% 4 12 100%

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 12 100%

Mixed/Multiple Ethnic Groups – – – – –

Asian/Asian British – – – – –

Black/African/Caribbean/

Black British – – – – –

Other ethnic group,

including Arab – – – – –

6 100% 4 12 100%

Executive Management represents an

Operations Board, which is attended by

the three executive board directors and

eight senior operational management

employees and there are no vacant

positions. In addition, Executive

Management also included the previous

Finance Director, who does not attend

Operations Board meetings but was

still considered to be part of Executive

Management whilst he handed over his

role to the new Chief Financial Officer.

The Company seeks to promote talent

from within, whenever that is possible.

Excluding the directors and the

previous Finance Director, the average

employment tenure of these senior

operational management employees is

25 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 2026.

Female Male Total

Director 2 4 6

Executive

management 1 9 10

All other

employees 116 353 469

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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 26 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

Middle East,

Ukraine,

Yemen and

Gaza

The conflicts in the Middle East, 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.

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 electricity and gas are next scheduled

for price review 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 are generally on a rolling basis and can be

terminated by giving two years’ notice, or less in the event

of a serious unremedied breach, including continued

under-performance. One manufacturer operates fixed-term

contracts. 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

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

replacement 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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 current Administration in the United States of America,

alongside numerous global developments, such as the

conflicts in the Middle East, 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

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 partially

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 2026, 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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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

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 for

inclusion in the

2028 Annual

Report.

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 for

inclusion in the

2029 Annual

Report.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

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 our operations. The Risk

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 twelve month period and

a property efficiency ratio of energy consumed in kWhs in

a given rolling twelve 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 for

inclusion in the

2028 Annual

Report.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 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

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 for

inclusion in the

2028 Annual

Report.

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 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.

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

Description of the risk Potential financial impact

Timescale, likelihood

and magnitude

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 that, 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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 twelve month period

to 30 September 2026. 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 2.20 million kWhs

(2024: 2.16 million kWhs) and

comprised some two-thirds of our

annual energy usage. Underlying energy

savings have been achieved but these

have been countered by increased on-

site charging of electric cars.

The Company also uses significant

amounts of gas in its operations,

with usage in 2025 amounting to

0.97 million kWhs (2024: 1.02 million

kWhs), being a little under one-third

of its energy usage, as we continue

to control energy use in our premises.

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 one-twentieth 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 23.4%

of all new car registrations in the United

Kingdom, whilst hybrid cars, excluding

mild hybrids, made up a further 25.0%

of new car registrations. New cars

powered solely by internal combustion

engines therefore represented just less

than half of new car registrations in

2025. 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 2026,

37% of our own demonstrator, courtesy

and staff car fleet comprised either

alternatively fuelled or battery-electric

cars, compared to 35% 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 2025, 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

Strategic Report

continued

In the 2025 calendar year, our businesses emitted 598 tonnes of carbon dioxide (“CO

”) (2024: 662 tonnes). Our emissions are

principally of CO

and are from the following sources:

Greenhouse gas emissions data

Tonnes of

2025

Tonnes of

2024

Tonnes of

2023

Scope 1

Gas consumption 176.8

186.8

195.5

Owned transport 31.9

35.3

52.4

Water supply 3.2

1.5

3.0

Scope 2

Purchased electricity (location-based emissions) 390.3

446.9

454.4

Purchased electricity (market-based emissions) 0.0*

0.0*

Generated electricity (4.5)

(8.8)

(4.4)

Statutory total 597.7

661.7

700.9

Revenue (£million) 268.1 272.5 275.7

* 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. UK

Government GHG Conversion Factors

for Company Reporting databases

have been used, which are consistent

with the UK Government environmental

reporting guidance, utilising the current

published kWh gross calorific value

and CO

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.

2023 intensity ratio: 2.5 tonnes of CO

per £million of revenue

2024 intensity ratio: 2.4 tonnes of CO

per £million of revenue

2025 intensity ratio: 2.2 tonnes of

per £million of revenue

The Company’s total energy

consumption for the period 1 January

to 31 December 2025 was 3.3 million

kWh (2024: 3.3 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

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

e. Waste in 2025 was 473 tonnes

(2024: 479 tonnes) of which 85% was

recycled (2024: 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

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

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

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 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

2026. 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 2026, 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. Although trading

conditions in the current financial year

have been difficult and the Company

has incurred an underlying loss, the

board remains confident in the future

prospects of the Company. An interim

dividend of 5.0 pence per Ordinary

share was declared and the board is

proposing a final dividend for the year of

5.0 pence per Ordinary share.

Pension scheme triennial valuation:

The latest completed triennial valuation

of the Company’s defined benefit

pension scheme (the “Scheme”) was

effective from 31 March 2023 with

the next review at 31 March 2026

having just started. The Scheme has

operated with an actuarial deficit for a

number of years with a recovery plan

agreed between the Company and

the Scheme’s trustees to address the

Scheme’s deficit. 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 to improve the

Scheme’s financial position.

Additional manufacturer

representation: The board continues

to seek new opportunities to maximise

the effectiveness of its existing property

portfolio.

By order of the board

S G M Caffyn

Chief Executive

18 June 2026

Caffyns plc Annual Report 2026

Stock code CFYN

Our Business Consolidated

Financials

Governance Other information

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

Joelle N Timperley BA FCMA

Chief Financial Officer

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

Kreston Reeves Audit LLP

Statutory Auditor

168 Shoreditch High Street, London E1 6RA

Company Secretary

Sarah J Caffyn

BSc FCIPD AICSA FIMI

Registered Office Saffrons Rooms, Meads Road, Eastbourne, East Sussex BN20 7DR

Telephone (0371) 664 0300

Companies House Caffyns public limited company (00105664)

Caffyns plc Annual Report 2026www.caffyns.co.uk

Chairman’s Statement on Corporate Governance

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 is not

required to comply with the Code

but, where it does not, it is required

to explain its non-compliance. The

directors take governance very seriously

and seek to comply with the Code for

best practice.

The Company has complied with the

provisions of the Code throughout the

year ended 31 March 2026 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. Both Mr R C Wright,

who was appointed to the board on

1 November 2011, and

Mr N T Gourlay, who was appointed

as a non-executive director on

26 September 2013, 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

exceeded nine years’ service in a

previous financial year in his 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 relative lack of liquidity in the

trading of its shares and the weak

link between share price and financial

performance. Of the executive

directors, Mr S G M Caffyn and Ms

S J Caffyn 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 would be 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.

Subsequent to the year-end, the

Chief Financial Officer has become

a member of the Company’s defined

contribution pension scheme;

• Provision 40 requires that notice

periods for directors should be one

year or less. The Chief Executive

previously had a service contract

that provided a notice period of two

years (see page 32 of the Directors’

Remuneration Report), which was a

long-standing arrangement. During

the year, the Chief Executive has

been issued with a new service

contract that will reduce the notice

period down to one year from

1 December 2026. Provision 40

will therefore be complied with for

the coming financial year ending

31 March 2027.

A description of the Company’s

business model and strategy is set out

in the Strategic Report on page 7.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

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

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 18 June 2026, 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

Caffyns plc Annual Report 2026www.caffyns.co.uk

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, with the exception of

Ms S J Caffyn who was unable to

attend two 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

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 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 is

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

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Chairman’s Statement on Corporate Governance

continued

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

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 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 fixed

assets including 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 at least 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 is applicable for financial periods

beginning on or after 1 January 2025

and the requirements of Provision

29 apply from financial periods

beginning on or after 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. 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

March 2026.

Mr S G Bellamy will attend the 2026

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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 Kreston Reeves Audit

LLP confirming their independence

and objectivity was reviewed by the

chairman of the Audit & Risk Committee

and the Chief Financial Officer. 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 Kreston Reeves Audit

LLP and the year under review is their

first year of tenure. They were appointed

as the result of a formal competitive

tender process in 2025 and replaced

BDO LLP. BDO LLP resigned on

1 October 2025 and, under Section 519

of the Companies Act, confirmed that

there were no matters regarding their

ceasing to hold office that needed to be

brought to the attention of members or

creditors of the Company.

As part of their normal cycle of reviews,

the Financial Reporting Council (“FRC”)

reviewed the audit by BDO LLP of the

Company’s 31 March 2025 financial

statements. The FRC’s report identified

a number of areas in which the audit

could be improved, of which the three

most significant related to confirmation

of the physical existence of vehicle

consignment stocks, the recognition in

inventory of certain vehicles under

buy-back arrangements and the

occurrence and accuracy of vehicle

sales recognised in the year. The

chairman of the Audit & Risk Committee

received the FRC’s final report in April

2026 and has been told the FRC will

contact him to discuss their report.

The findings of the report have been

discussed with the other members

of the Audit & Risk Committee and

with the BDO LLP audit partner. The

March 2025 audit was the sixth annual

audit performed by BDO LLP and, on

completion and before the FRC review

had been completed, the Audit & Risk

Committee decided that length of

tenure would be an appropriate moment

to put the audit out to competitive

tender. As a result of that tender

exercise the board appointed Kreston

Reeves Audit LLP as Auditor and

BDO LLP resigned in October 2025.

Kreston Reeves Audit LLP has been

made aware of the FRC’s report

findings. The Audit & Risk Committee

has carefully reviewed the audit

approach proposed by Kreston Reeves

Audit LLP and is satisfied that it will

address the principal areas of concern

raised by the FRC.

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 financial statements have been

prepared on a going concern basis,

which the directors consider appropriate

for the reasons set out below.

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. HSBC has

agreed to implement a new earnings

covenant test solely for the year ending

31 March 2027 that will require the

Company to achieve certain minimum

cumulative quarterly Senior EBITDA

hurdles.

Under the Company’s interest cover

covenant test, to be reapplied from

30 June 2027, 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 2027, 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 at each quarter-end does

not exceed 70% of the independently

assessed value of its charged freehold

properties. This covenant test will

remain in force in the coming year.

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Chairman’s Statement on Corporate Governance

continued

The Group is reliant on the HSBC

borrowing facility of £14.2 million. Any

failure of a covenant test would render

the borrowing facilities from HSBC to

become repayable on demand, at the

option of the lender, and would put the

going concern assessment at risk.

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 higher energy costs,

from business rates and from increases

to funding costs due to 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 £4.7 million

(2025: £5.1 million) and a revolving

credit facility of £6.0 million

(2025: £6.0 million) from HSBC, its

primary bankers, with both facilities

next being renewable during the going

concern period in April 2027. The

Company’s bankers recognise the

current difficulties being experienced

by the motor retail sector and remain

very supportive and, subsequent to

the end of the year, this review date

was extended by twelve months to

April 2028. HSBC also make available

a short-term overdraft facility of

£3.5 million (2025: £3.5 million), which

is renewed annually each August. The

Company also has a short-term facility

from Volkswagen Bank of £4.0 million

(2025: £4.0 million), which is renewed

annually each October. 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 2026, the Company held

cash in hand balances of £4.6 million

and had undrawn borrowing facilities of

£6.5 million, all of which are 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 at

least 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 2029 and have concluded

that the Company is viable over that

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 were next scheduled to come

up for periodic review within that

three-year period, in April 2027.

Subsequent to the end of the year, this

review date was extended by twelve

months to April 2028. The Company

has 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 2026,

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 2029.

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

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 thirty-four days (2025:

twenty-eight days).

By order of the board

R C Wright

Chairman

18 June 2026

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

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 2026. 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. The remuneration

policy will be voted on at the Annual

General Meeting scheduled for

6 August 2026, and thereafter 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 2026.

The information set out on pages 29 to

41, which comprises the remuneration

disclosures is, where stated, subject to

audit in accordance with the relevant

statutory requirements.

Remuneration outcomes for

the financial year ended 31

March 2026

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 2026. As a result, no

bonuses were awarded to the executive

directors.

Key remuneration decisions

for the forthcoming financial

year ending 31 March 2027

The Company’s annual salary review

has not yet been determined and the

base salaries for both the executive and

non-executive directors currently remain

unchanged. Salaries for any employees

on National Minimum Wage increased

as required by 4.1% from 1 April 2026.

Once determined, the annual salary

review is likely to be retrospective

to 1 April 2026 and details of any

increases will be disclosed in the 2027

Annual Report.

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 2026.

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

18 June 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

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. A resolution will be placed before

shareholders at the forthcoming Annual General Meeting in August 2026 to approve the directors’ remuneration policy as set

out below.

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

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

employer’s contribution to the

Company’s pension scheme.

3% of base salary plus

bonus.

Not applicable.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 2027 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

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 the

Company and six months by

the executive director.

Executive directors

may be required to

work during the notice

period.

None. S G M Caffyn is entitled

to two years’ notice from

the Company if notice

given by the Company

before 1 December 2026,

and thereafter one year’s

notice.

J N Timperley is entitled

to, and can give, three

months’ notice until

20 October 2026 and

thereafter six months’

notice both by the

Company and the

executive director.

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 pro-rated 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.

Outside

appointments.

Subject to approval. Board approval must

be sought.

Not applicable. Not applicable.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Provision Policy Details

Contractual

provisions on

a change of

control of the

Company

Other provisions

in specific service

contracts

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.

During the year, the Company entered into a replacement employment contract with Mr S G M Caffyn as his contract had

included a clause that the contract would end on 1 December 2025, his 65th birthday. The new employment contract effectively

mirrored his existing contract but made amendments to the terms of his notice period due from the Company in light of current

Corporate Governance recommendations. The provision of employment benefits remained unchanged.

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 2026

R C Wright 27 July 2024 26 July 2027 16 months

N T Gourlay 26 September 2025 25 September 2028 30 months

S G Bellamy 18 June 2025 17 June 2028 27 months

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

Total remuneration opportunity for the year ending 31 March 2027

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).

S G M Caffyn J N Timperley

Below threshold

Target

Outperformance

50% £662,000

20% £414,000

£331,000

50%

80%

100%

Below threshold

Target

Outperformance

50% £218,000

20% £136,000

£109,000

50%

80%

100%

Ms J N Timperley was appointed as Chief Financial Officer on 5 January 2026 on an annual salary of £180,000. In April 2026 her

contract was amended to reduce her working days from full-time to three days a week with a pro-rata reduction in annual salary

to £108,000.

S J Caffyn

Below threshold

Target

Outperformance

50% £136,000

20% £85,000

£68,000

50%

80%

100%

In October 2025 the contract of Ms S J Caffyn was amended to increase her working hours to 19 hours a week, with a

consequent pro-rata increase in salary to £67,000.

Each element of remuneration is defined in the table below:

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 234% 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

Base salary

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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Annual report on remuneration

Total single figure of remuneration for the year ended 31 March 2026 (audited)

The following table shows a total single figure of remuneration in respect of qualifying services for the year ended

31 March 2026, for each director, together with comparative figures for the year ended 31 March 2025. 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

2026 2025 2026 2025 2026 2025 2026 2025 2026 2025

Executive

S G M Caffyn 324 318 10 9 – – 10 10 344 337

M Warren

128 163 4 6 – – 3 4 135 173

J N Timperley

42 – 1 – – – 1 – 44 –

S J Caffyn

59 50 2 1 – – – 2 61 53

Total 553 531 17 16 – – 14 16 584 563

Non-executive

R C Wright 74 73 – – – – – – 74 73

N T Gourlay 37 36 – – – – – – 37 36

S G Bellamy 37 36 – – – – – – 37 36

Total 148 145 – – – – – – 148 145

701 676 17 16 – – 14 16 732 708

Mr M Warren resigned on 5 January 2026 and was replaced on the same date by Ms J N Timperley. Mr M Warren continues to be employed but not in the role of

a director.

Ms S J Caffyn increased the length of her working week to 19 hours from 1 October 2025.

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. Under the terms of his employment

contract, Mr S G M Caffyn is entitled to the provision of two company cars.

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

2026 2025 2026 2025 2026 2025

Executive

S G M Caffyn 344 337 – – 344 337

M Warren 135 173 – – 135 173

J N Timperley 44 – – – 44 –

S J Caffyn 61 53 – – 61 53

Total 584 563 – – 584 563

Non-executive

R C Wright 74 73 – – 74 73

N T Gourlay 37 36 – – 37 36

S G Bellamy 37 36 – – 37 36

Total 148 145 – – 148 145

732 708 – – 732 708

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

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 2026

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)* £1.21 £1.46 £3.35 £(1.49) 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 2026 (2025: 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

(2025: 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 2026

£’000

Total annual accrued

defined benefit pension at

31 March 2025

£’000

S J Caffyn 12 December 2033 48 44

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 2026, one of the executive directors was a member of the Company’s defined contribution pension

scheme (2025: one). Subsequent to the year-end, a second executive director has elected to become a member of the

Company’s defined contribution pension scheme.

The non-executive directors are not members of the Company’s defined contribution pension scheme (2025: none).

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 2026 As at 31 March 2025

Ordinary

11%

Preference

Preference Ordinary

11%

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 – –

J N Timperley

– – – – – –

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 – –

Shareholding on resignation as a director on 5 January 2026. Mr M Warren continued to be employed but not in the role of a director.

Appointed on 5 January 2026.

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 2026, all directors

held a direct interest in the Ordinary shares of the Company, with the exception of Ms J N Timperley.

All-employee share scheme (audited)

At 31 March 2026, 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.

100

125

150

175

200

31/03/2018 31/03/2019 31/03/2020 31/03/2021 31/03/2022 31/03/2023 31/03/2024 31/03/2025

31/03/2026

AIM:VTU LSE:CFYN FTSE Small Cap LSE:MOTR

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

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 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Total single remuneration

figure (£’000) 388 302 364 319 281 576 453 344 337 344

Annual bonus as percentage

of maximum opportunity 31% 0% 19% 0% 0% 83% 37% 0% 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. Ms J N Timperley joined the board in

January 2026 so has not been included in the table below as there is no comparative amount. She will be included in the 2027

Annual Report.

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%

% change

Year to

31 March 2026

Salary/fees 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 3.4%

Benefits 19.4% 50.0% (3.0)% 0.0% 0.0% 0.0% (22.5)%

Annual bonus 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% (8.8)%

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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 2026 Option A Employee salary

Employee total remuneration

CEO to employee pay ratio

£25,000

14:1

£31,000

£33,000

10:1

£22,000

£42,000

8:1

Year to 31 March 2025 CEO to employee pay ratio 14:1 10:1 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 2026, 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 2026.

Change in remuneration of the Chief Executive

The base salary of the Chief Executive increased by 2.0% between 31 March 2025 and 31 March 2026. The Company’s

Regional Directors and Heads of Business were awarded a salary increase of 2.0%. 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 reduced

by 41% 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 2026 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

2026

£’000

Spend in

2025

£’000

Change

Spend on staff pay (including directors) 17,484 16,892 3.5%

Profit distributed by way of dividend 273 273 0.0%

The board is declaring a final dividend of 5.0 pence per Ordinary share for the year ended 31 March 2026, 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 2026

will therefore be £273,000 (2025: £273,000).

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Remuneration Report

continued

Implementation of the remuneration policy for the coming financial year ending 31 March 2027

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.

2027

annualised

salary/fees

£’000

2026

annualised

salary/fees

£’000

Increase

to hourly

rate

S G M Caffyn 331 324 2.0

J N Timperley

109 180 1.0

S J Caffyn

68 51 2.0

R C Wright 76 74 2.0

N T Gourlay 38 37 2.0

S G Bellamy 38 37 2.0

In April 2026 Ms J N Timperley reduced her contractual working week from five days to three days with a consequent pro-rata reduction in her annual salary from

£180,000 to £108,000. She was subsequently awarded a 1.0% pay increase, retrospective to 1 April 2026.

In October 2025 Ms S J Caffyn increased her working hours to 19 hours a week and received a pro-rata increase to her salary based on an unchanged

hourly rate.

The basis for determining annual bonus payments for the financial year ending 31 March 2027 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 2027 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 2026 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 2026

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 2026.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Statement of voting at the 2025 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 99.98 600 0.02 0 0.00

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 2026 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

18 June 2026

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Report of the Directors

The directors present their report and

the financial statements for the year

ended 31 March 2026. 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 53 to 94. An interim dividend of

5.0 pence per Ordinary share was paid

to shareholders on 7 January 2026. The

board is recommending a final dividend

of 5.0 pence per Ordinary share

(2025: 5.0 pence) making a total of 10.0

pence per Ordinary share (2025: 10.0

pence). Total Ordinary dividends paid in

the year amounted to £273,000

(2025: £273,000). Dividends paid in the

year to preference shareholders were

£72,000 (2025: £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

10 and 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 22.

Directors

Details of the directors who served

during the year and who remained

in office at 31 March 2026 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 2019 and 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. 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.

Ms J N Timperley BA FCMA joined

the board on 5 January 2026 as Chief

Financial Officer to replace

Mr M Warren, the previous Finance

Director, who resigned on the same

day. She has over twenty-five years’

experience across a wide range of

industries, including the last fifteen

years in senior finance leadership roles

as Chief Financial Officer and Finance

Director. During this time, she has held

positions with organisations including

EDF and Iveco Group.

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.

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 2026 was

£4.00 and the range of market prices

during the year was £4.00 to £5.00.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Compensation for loss of

office

Mr S G M Caffyn is entitled to receive

from the Company a sum equivalent

to two years’ annual emoluments,

which applies immediately before his

termination, up to 1 December 2026

and thereafter a sum equivalent to his

annual emoluments. Ms S J Caffyn is

entitled to receive from the Company

a sum equivalent to her annual

emoluments, which applies immediately

before her termination, and

Ms J N Timperley is entitled to receive

from the Company a sum equivalent to

six months’ emoluments. 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 page 8 and the Section 172

statement on page 19.

Share capital and the rights

and obligations attaching to

As at 31 March 2026, the issued share

capital of the Company comprised

Ordinary shares of 50 pence 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 10 pence 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 2026 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Report of the Directors

continued

£’000 %

Authorised

500,000 7% Cumulative First Preference shares of £1 each 500 12.35

1,250,000 11% Cumulative Preference shares of £1 each 1,250 30.86

3,000,000 6% Cumulative Second Preference shares of 10p each 300 7.41

4,000,000 Ordinary shares of 50p each 2,000 49.38

4,050 100.00

Allotted, called-up and fully paid

170,732 7% Cumulative First Preference shares of £1 each 171 7.60

441,401 11% Cumulative Preference shares of £1 each 441 19.59

2,000,000 6% Cumulative Second Preference shares of 10p each 200 8.89

Total Preference shares recognised as a financial liability 812 36.08

2,879,298 Ordinary shares of 50p each 1,439 63.92

2,251 100.00

Property

The Company valued its portfolio of

freehold premises as at 31 March 2026.

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 £10.7 million

(2025: £11.2 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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Significant direct or indirect shareholdings

At 18 June 2026, 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 Limited RKCLT) 606,000 22.2

Charles Stanley (Rock (Nominees) Ltd) 192,245 7.1

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 page 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

Kreston Reeves Audit LLP was

appointed as the Company’s Auditor

on 9 October 2025 as a result of a

competitive tender process. Kreston

Reeves Audit 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 2026.

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 Auditor is 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

18 June 2026

Caffyns plc Annual Report 2026

Stock code CFYN

Consolidated

Financials

Other informationOur Business Governance

Directors’ Responsibilities Statement

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 Directors’ 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 J N Timperley

Chief Executive Chief Financial Officer

18 June 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

Report of the

Independent

Auditor

Opinion on the financial

statements

In our opinion:

We have audited the financial

statements of Caffyns plc (the “Parent

Company”) and its subsidiaries

(the “Group”), for the year ended

31 March 2026 which comprise

the consolidated statement of

comprehensive income, the

consolidated and company statements’

of financial position, the consolidated

and company statements’ of changes in

equity, the consolidated and company

statements’ of cashflows and notes

to the financial statements, including

a summary of significant accounting

policies.

• the financial statements of Caffyns

plc give a true and fair view of the

state of the Group’s and of the

Parent Company’s affairs as at

31 March 2026 and of the Group’s

loss for the year then ended and of

the Group’s cashflows position as at

31 March 2026;

• the Group and Parent financial

statements have been properly

prepared in accordance with UK

adopted international accounting

standards; and

• the Group and Parent Company

financial statements have been

prepared in accordance with the

requirements 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 are independent of the

Group in accordance with the ethical

requirements that are relevant to our

audit of the financial statements in the

UK, including the Financial Reporting

Council’s Ethical Standard as applied

to listed entities, and we have fulfilled

our other ethical responsibilities in

accordance with these requirements.

We believe that the audit evidence

we have obtained is sufficient and

appropriate to provide a basis for our

opinion.

An overview of the scope of

our audit

As part of designing our audit, we

determined materiality and assessed

the risks of material misstatement in

the financial statements. In particular,

we looked at where the directors made

subjective judgements, for example

in respect of significant accounting

estimates that involved making

assumptions and considering future

events that are inherently uncertain. We

also addressed the risk of management

override of internal controls, including

evaluating whether there was evidence

of bias by the directors that represented

a risk of material misstatement due to

fraud. We tailored the scope of our audit

to ensure that we performed sufficient

work to be able to give an opinion on

the financial statements as a whole,

taking into account the structure of the

Group and the Parent Company, the

accounting processes and controls, and

the industry in which they operate.

Our scoping considerations for the

Group audit were based both on

financial information and risk. In total

we have identified a single distinct

component within the Group financial

statements.

Consolidated Financials

Report of the Independent Auditor 47

Income Statement 53

Statement of Comprehensive Income 54

Statement of Financial Position 55

Statement of Changes in Equity 56

Cash Flow Statement 57

Material Accounting Policies 58

Notes to the Financial Statements 64

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Report of the Independent Auditor

continued

The table below summarises for the Parent Company and its subsidiaries, the level of assurance gained:

Group component Level of assurance

Caffyns plc

Full statutory audit (Kreston Reeves Audit LLP)

Caffyns Properties Limited

Outside of the scope

Caffyns Wessex Limited

Outside of the scope

Fasthaven Limited

Outside of the scope

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on

the audit and in forming our audit opinion. Based on our professional judgement, we determined materiality and performance

materiality for the financial statements of the Group and of the Parent Company as follows:

Group financial statements Parent Company financial statements

Materiality

£1,300,000 £1,300,000

Basis for determining

materiality

0.5% of Group revenue 0.5% of Company revenue

Rationale for the

benchmark applied

The Group’s revenue is generated by

the Parent Company operating as a car

dealership and as such a revenue-focused

benchmark is considered appropriate.

Future profitability of the company

is driven by the company’s ability to

generate revenue and this is the focus of

the users of the financial statements.

This aligns with the disclosed key

performance indicators, which in turn

reflect the focus areas of users of the

financial statements being the business

performance.

The company operates as a car

dealership with high volumes of sales

across multiple dealerships. As such

a revenue-focused benchmark is

considered appropriate. Future profitability

of the company is driven by the

company’s ability to generate revenue,

and this is the focus of the users of the

financial statements.

This aligns with the disclosed key

performance indicators, which in turn

reflect the focus areas of users of the

financial statements being the business

performance.

Performance materiality

£975,000 £975,000

Basis for determining

performance materiality

75% of materiality 75% of materiality

Reporting threshold

£65,000 £65,000

Rationale for the

percentage applied for

performance materiality

5% of materiality 5% of materiality

We reported all audit differences found in excess of our reporting threshold to the Audit & Risk Committee.

Caffyns plc Annual Report 2026www.caffyns.co.uk

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) 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, including our discussion of going concern, 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. This is not a

complete list of all risks identified by our audit.

The use of Going Concern basis of accounting was assessed as a key audit matter and has been covered in the subsequent

‘Conclusions relating to going concern’ section of this report.

Defined benefit pension scheme–Retirement benefit obligations £1,422,000 (2025: £4,523,000)

Significance and nature of the key audit matter How our audit addressed the key audit matter

The Group operates a defined benefit pension scheme,

which is accounted for in accordance with IAS 19 Employee

Benefits. The valuation of the defined benefit obligation

involves the use of significant actuarial assumptions,

including discount rates, inflation rates, and mortality

assumptions.

Management, with the assistance of external actuarial

specialists, exercises judgement in determining these

assumptions. Small changes in these assumptions can have

a material impact on the valuation of the pension liability

recognised in the statement of financial position.

Due to the inherent estimation uncertainty, the sensitivity of

the valuation to key assumptions, and the level of judgement

involved, we considered the valuation of the defined benefit

pension scheme to be an area of significant audit focus and

therefore a key audit matter.

We assessed whether the valuation of the defined benefit

pension scheme and the associated disclosures were

prepared in accordance with IAS 19 Employee Benefits and

applied consistently.

With the assistance of our actuarial specialists, we evaluated

the appropriateness of the actuarial valuation methodology

and challenged the key assumptions used, including the

discount rate, inflation and mortality assumptions, by

reference to external market data and established industry

practices.

We also assessed the competence, capabilities and

objectivity of management’s actuarial expert, as well as the

adequacy of the work performed by our own specialists in

supporting our audit conclusions.

Key observations:

Based on procedures performed, we considered the assumptions and judgements made by management to be appropriate.

Conclusions relating to going

concern

In auditing the consolidated financial

statements, we have concluded that

the directors’ use of the going concern

basis of accounting in the preparation of

the consolidated financial statements is

appropriate.

We performed the following audit

procedures:

• Gaining an understanding of the

systems and controls around

management’s going concern

assessment, including for the

preparation and review process for

forecasts and budgets.

• Evidence was obtained that

management have undertaken a

formal going concern assessment

to 31 December 2028, including

sensitivity analysis on cash flow

forecasts, clear consideration

of external factors including the

increase in interest rates and the

potential liquidity impact of these on

cash balances including available

facilities.

• We tested the mechanical integrity

of forecast model by checking the

accuracy and completeness of

the model, including challenging

the appropriateness of estimates

and assumptions with reference

to empirical data and external

evidence.

• We considered post year-end

performance of the business

and any significant events which

may impact the going concern of

the Group.

• We reviewed the correspondence

from HSBC confirming its ongoing

support of the Group, we confirmed

that the correspondence relaxed

the covenants until June 2027

and confirmed support until April

2028. We discussed the continuing

support and compliance with the

covenants with HSBC directly.

• We considered the directors’

assessment of the Group’s

main banking facilities for which

support from the bank has been

extended and confirmed through to

April 2028.

• We reviewed the adequacy and

completeness of the disclosure

included within the consolidated

financial statements in respect of

going concern.

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’s or the Company’s

ability to continue as a going concern

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Report of the Independent Auditor

continued

for a period of at least twelve months

from when the consolidated financial

statements are authorised for issue.

Our responsibilities and the

responsibilities of the directors with

respect to going concern are described

in the relevant sections of this report.

Our consideration of climate

change related risks

The financial impacts on the Group of

climate change and the transition to a

low-carbon economy (climate change)

were considered in our audit where they

have the potential to directly or indirectly

impact key judgements and estimates

within the financial statements.

The Group continues to develop its

assessment of the potential impacts of

climate change. Climate risks have the

potential to materially impact the key

judgements and estimates within the

financial report. Our audit considered

those risks that could be material to

the key judgements and estimates in

the assessment of the carrying value

of non-current assets and closure and

rehabilitation provisions.

The key judgements and estimates

included in the financial statements

incorporate actions and strategies, to

the extent they have been approved and

can be reliably estimated in accordance

with the Group’s accounting policies.

Accordingly, our key audit matters

address how we have assessed the

Group’s climate-related assumptions to

the extent they impact each key audit

matter.

Other information

The other information comprises the

information included in the Annual

Report other than the financial

statements and our Auditor’s report

thereon. The directors are responsible

for the other information. 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.

Our opinion on the

Remuneration report

Kreston Reeves Audit LLP has audited

the Remuneration report set out on

pages 28 to 41 of the Annual Report

for the financial year. The directors of

the Company are responsible for the

preparation and presentation of the

Remuneration report in accordance

with the Companies Act 2006. Kreston

Reeves Audit LLP’s responsibility is to

express an opinion on the Remuneration

report, based on our audit conducted

in accordance with International

Accounting Standards. In Kreston

Reeves’ opinion, the Remuneration

report of the Group for the period

complies with the requirements of the

Companies Act 2006.

Opinions on other matters

prescribed by the Companies

Act 2006

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.

Matters on which we

are required to report by

exception

In the light of our 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.

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 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.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Responsibilities of directors

As explained more fully in the directors’

responsibilities statement (set out on

page 46), 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 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 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.

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:

Capability of the audit in

detecting irregularities,

including fraud

Based on our understanding of the

Group and industry, and through

discussion with the directors and other

management (as required by auditing

standards), we identified that the

principal risks of non-compliance with

laws and regulations related to FCA

compliance, health and safety, and

employment law. We considered the

extent to which non-compliance might

have a material effect on the financial

statements. We also considered

those laws and regulations that have

a direct impact on the preparation of

the financial statements such as the

Companies Act 2006, and taxation

legislation. We communicated identified

laws and regulations throughout

our team and remained alert to any

indications of non-compliance

throughout the audit. We evaluated

management’s incentives and

opportunities for fraudulent manipulation

of the financial statements (including

the risk of override of controls), and

determined that the principal risks

were related to posting inappropriate

journal entries to enhance revenue

to manipulate financial performance

and management bias in accounting

estimates and judgemental areas of the

financial statements such as property

valuations and the defined benefit

pension scheme. Audit procedures

performed by the group engagement

team included:

• Discussions with management and

assessment of known or suspected

instances of non-compliance with

laws and regulations (including

health and safety and FCA) and

fraud, and review of the reports

made by management and internal

audit; and assessment of identified

fraud risk factors; and

• Assessment of identified fraud risk

factors; and

• Testing of internal controls

procedures relating to sales,

potentially more susceptible to fraud

and other irregularities; and

• Challenging assumptions and

judgements made by management

in its significant accounting

estimates; and

• Confirmation of related parties

with management, and review

of transactions throughout the

period to identify any previously

undisclosed transactions with

related parties outside the normal

course of business; and

• Performing analytical procedures

with automated data analytic

tools to identify any unusual or

unexpected relationships, including

related party transactions, that

may indicate risks or material

misstatement due to fraud; and

• Reading minutes of meetings of

those charged with governance,

reviewing internal audit reports

and reviewing correspondence

with relevant tax and regulatory

authorities; and

• Physical inspection of tangible fixed

assets; and

• Review of significant and unusual

transactions and evaluation of

the underlying financial rationale

supporting the transactions; and

• Identifying and testing journal

entries, in particular any manual

entries made at the year-end for

financial statement preparation.

Because of the inherent limitations of

an audit, there is a risk that we will not

detect all irregularities, including those

leading to a material misstatement

in the financial statements or non-

compliance with regulation. This risk

increases the more that compliance

with a law or regulation is removed from

the events and transactions reflected in

the financial statements, as we will be

less likely to become aware of instances

of non-compliance.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Report of the Independent Auditor

continued

As part of an audit in accordance with

ISAs (UK), we exercise professional

judgement and maintain professional

scepticism throughout the audit.

We also:

• Identify and assess the risks of

material misstatement of the

financial statements, whether due to

fraud or error, design and perform

audit procedures responsive

to those risks, and obtain audit

evidence that is sufficient and

appropriate to provide a basis for

our opinion. The risk of not detecting

a material misstatement resulting

from fraud is higher than for one

resulting from error, as fraud may

involve collusion, forgery, intentional

omissions, misrepresentations, or

the override of internal control.

• Obtain an understanding of internal

control relevant to the audit in order

to design audit procedures that are

appropriate in the circumstances,

but not for the purpose of

expressing an opinion on the

effectiveness of the Group’s internal

control.

• Evaluate the appropriateness of

accounting policies used and the

reasonableness of accounting

estimates and related disclosures

made by the directors.

• Conclude on the appropriateness

of the directors’ use of the going

concern basis of accounting and,

based on the audit evidence

obtained, whether a material

uncertainty exists related to

events or conditions that may cast

significant doubt on the Group’s

or the Parent Company’s ability to

continue as a going concern.

If we conclude that a material

uncertainty exists, we are required

to draw attention in our Auditor’s

report to the related disclosures in

the financial statements or, if such

disclosures are inadequate, to

modify our opinion. Our conclusions

are based on the audit evidence

obtained up to the date of our

Auditor’s report. However, future

events or conditions may cause

the Group or the Parent Company

to cease to continue as a going

concern.

• Evaluate the overall presentation,

structure and content of the

financial statements, including

the disclosures, and whether the

financial statements represent the

underlying transactions and events

in a manner that achieves fair

presentation.

• Obtain sufficient appropriate audit

evidence regarding the financial

information of the entities or

business activities within the Group

to express an opinion on the

consolidated financial statements.

We are responsible for the direction,

supervision and performance of

the Group audit. We remain solely

responsible for our audit opinion.

We communicate with those charged

with governance regarding, among

other matters, the planned scope

and timing of the audit and significant

audit findings, including any significant

deficiencies in internal control that we

identify during our audit.

Other matters which we are

required to address

We were appointed by the Audit &

Risk Committee in October 2025 to

audit the financial statements. Our total

uninterrupted period of engagement is

one period, covering the financial year

ended 31 March 2026.

Non-audit services prohibited by the

Financial Reporting Council’s Ethical

Standard were not provided to the Group

or the Parent Company and we remain

independent of the Group and the Parent

Company in conducting our audit.

Our audit opinion is consistent with the

additional report to the Audit & Risk

Committee.

Use of our Report

This report is made solely to the

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 company’s members

those matters we are required to state

to them in an Auditor 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 company and the company’s

members as a body, for our audit work,

for this report, or for the opinions we

have formed.

Anne Dwyer BSc(Hons) FCA

(Senior Statutory Auditor)

For and on behalf of

Kreston Reeves Audit LLP,

Statutory Auditor

London

18 June 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

Group and Company

Note

2026

£’000

2025

£’000

Revenue 2 270,661 275,464

Cost of sales (236,899) (240,774)

Gross profit 33,762 34,690

Operating expenses

Distribution costs (23,105) (21,572)

Administration expenses (9,772) (10,101)

Operating profit before other income 885 3,017

Other income 5 578 530

Operating profit 1,463 3,547

Operating profit before non-underlying items 1,478 3,498

Non-underlying items within operating profit 3 (15) 49

Operating profit 4 1,463 3,547

Finance expense 7 (2,965) (2,892)

Finance expense on pension scheme 8 (219) (409)

Net finance expense (3,184) (3,301)

(Loss)/profit before taxation (1,721) 246

(Loss)/profit before tax and non-underlying items (1,487) 606

Non-underlying items within operating profit 3 (15) 49

Non-underlying items within finance expense on pension scheme 3 (219) (409)

(Loss)/profit before taxation (1,721) 246

Taxation 9 435 (70)

(Loss)/profit for the year attributable to the owners of the parent (1,286) 176

(Losses)/earnings per share

Basic 10 (40.7)p 6.4p

Diluted 10 (40.7)p 6.4p

Underlying (losses)/earnings per share

Basic 10 (47.2)p 16.4p

Diluted 10 (47.2)p 16.4p

See accompanying notes to the financial statements.

Income Statement

for the year ended 31 March 2026

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Statement of Comprehensive Income

for the year ended 31 March 2026

Group and Company

Note

2026

£’000

2025

£’000

(Loss)/profit for the year (1,286) 176

Items that will not be reclassified subsequently to profit and loss:

Remeasurement of net defined benefit liability 24 2,015 1,707

Deferred tax on remeasurement 25 (504) (427)

Total other comprehensive income, net of taxation 1,511 1,280

Total comprehensive income for the year 225 1,456

See accompanying notes to the financial statements.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Statement of Financial Position

as at 31 March 2026

Note

Group

2026

£’000

Group

2025

£’000

Company

2026

£’000

Company

2025

£’000

Non-current assets

Right-of-use assets 12 1,820 2,200 1,820 2,200

Property, plant and equipment 13 37,183 38,080 37,183 38,080

Investment properties 14 2,457 2,513 2,457 2,513

Goodwill 16 286 286 286 286

Deferred tax asset 25 155 224 155 224

Investment in subsidiary undertakings 17 – – 250 250

41,901 43,303 42,151 43,553

Current assets

Inventories 18 52,362 44,425 52,362 44,425

Trade and other receivables 19 9,961 10,113 9,961 10,113

Interest in lease 15 – 65 – 65

Current tax recoverable – 39 – 39

Cash and cash equivalents 4,605 3,762 4,605 3,762

66,928 58,404 66,928 58,404

Total assets 108,829 101,707 109,079 101,957

Current liabilities

Interest-bearing bank overdrafts and loans 21 1,445 1,445 1,445 1,445

Trade and other payables 20 62,901 51,781 63,151 52,031

Lease liabilities 23 328 642 328 642

64,674 53,868 64,924 54,118

Net current assets 2,254 4,536 2,004 4,286

Non-current liabilities

Interest-bearing bank loans 21 10,418 10,863 10,418 10,863

Lease liabilities 23 1,630 1,720 1,630 1,720

Preference shares 26 812 812 812 812

Retirement benefit obligations 24 1,422 4,523 1,422 4,523

14,282 17,918 14,282 17,918

Total liabilities 78,956 71,786 79,206 72,036

Net assets 29,873 29,921 29,873 29,921

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 1,531 1,531 1,531

Retained earnings 25,924 25,972 25,924 25,972

Total equity attributable to shareholders 29,873 29,921 29,873 29,921

The financial statements were approved by the board of directors and authorised for issue on 18 June 2026 and were signed on

its behalf by:

S G M Caffyn J N Timperley

Chief Executive Officer Chief Financial Officer

See accompanying notes to the financial statements.

Company number: 105664.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Statement of Changes in Equity

for the year ended 31 March 2026

Group and Company

Note

capital

£’000

premium

£’000

Capital

redemption

reserve

£’000

Non-

distributable

reserve

£’000

Retained

earnings

£’000

Total

£’000

At 1 April 2025 1,439 272 707 1,531 25,972 29,921

Total comprehensive

income/(expense)

Loss for the year – – – – (1,286) (1,286)

Other comprehensive income – – – – 1,511 1,511

Total comprehensive

income for the year – – – – 225 225

Transactions with

owners:

Dividends 11 – – – – (273) (273)

At 31 March 2026 1,439 272 707 1,531 25,924 29,873

for the year ended 31 March 2025

Group and Company

Note

capital

£’000

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

Caffyns plc Annual Report 2026www.caffyns.co.uk

Cash Flow Statement

for the year ended 31 March 2026

Group and Company

Note

2026

£’000

2025

£’000

Net cash inflow/(outflow) from operating activities 28 2,532 (303)

Investing activities

Proceeds on disposal of investment property – 4,620

Proceeds on disposal of property, plant and equipment 183 93

Purchases of property, plant and equipment (827) (1,063)

Receipt from investment in lease 77 185

Net cash (outflow)/inflow from investing activities (567) 3,835

Financing activities

Revolving credit facility utilised 4,000 6,500

Revolving credit facility repaid (4,000) (6,500)

Secured loan received – 1,000

Secured loans repaid (375) (375)

Unsecured loan repaid (70) (70)

Issue of shares – SAYE scheme – 2

Dividends paid (273) (273)

Repayment of capital element of lease liabilities (404) (492)

Net cash outflow from financing activities (1,122) (208)

Net increase in cash and cash equivalents 843 3,324

Cash and cash equivalents at beginning of year 3,762 438

Cash and cash equivalents at end of year 4,605 3,762

See accompanying notes to the financial statements.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Material Accounting Policies

Basis of preparation and statement of compliance

The Group and Company financial statements have been prepared in accordance with UK-adopted International Accounting

Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set

out below. The preparation of financial statements in conformity with IFRSs requires the use of estimates and assumptions that

affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting year. Although these estimates are based upon management’s best knowledge of the

amount, events or actions, actual results may ultimately differ from those estimates.

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

There have been a number of amendments to existing standards, which are effective from 1 January 2025, but they do not have

material effect on the Group financial statements.

New/Revised International Financial Reporting Standards

Effective Date:

Annual periods

beginning on or after:

IAS 21 Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates 1 January 2025

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:

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 has undertaken an initial assessment of the effect of these new accounting standards and amendments and does

not expect these to have a material impact on the Group or the Company.

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.

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. HSBC has agreed to implement a new earnings covenant test solely for

the year ending 31 March 2027 that will require the Company to achieve certain minimum cumulative quarterly Senior EBITDA

hurdles.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Under the Company’s interest cover

covenant test, to be reapplied from

30 June 2027, 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 2027, 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 at each quarter-end do

not exceed 70% of the independently

assessed value of its charged freehold

properties. This covenant test will

remain in force in the coming year.

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.

The Group is reliant on the HSBC

borrowing facility of £14.2 million. Any

failure of a covenant test would render

the borrowing facilities from HSBC to

become repayable on demand, at the

option of the lender, and would put the

going concern assessment at risk.

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 higher energy costs,

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 £4.7 million

(2025: £5.1 million) and a revolving

credit facility of £6.0 million

(2025: £6.0 million) from HSBC, its

primary bankers, with both facilities

next scheduled for renewal during the

going concern period in April 2027.

The Company’s bankers recognise the

current difficulties being experienced

by the motor retail sector and remain

very supportive and, subsequent to

the end of the year, this review date

was extended by twelve months to

April 2028. HSBC also make available

a short-term overdraft facility of

£3.5 million (2025: £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 (2025: £4.0 million),

which is renewed annually each

October. 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 2026, the Company held

cash in hand balances of £4.6 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.

Basis of consolidation

The consolidated financial statements

incorporate the financial statements

of the Company and its subsidiaries

(“the Group”) made up to 31 March

each year. All subsidiaries are currently

dormant, so the income, expenses and

cash flows are the same for the Group

and the Company.

Where necessary, adjustments are

made to the financial statements of

subsidiaries to bring the accounting

policies used into line with those used

by the Group.

All intra-Group transactions, balances,

income and expenses are eliminated on

consolidation.

Goodwill

Goodwill represents the excess of the

cost of an acquisition over the fair value

of the net identifiable assets acquired and

is tested annually for impairment. Any

impairment is recognised immediately

in the income statement and is not

subsequently reversed. Gains and losses

on subsequent disposal of the assets

acquired include any related goodwill.

Goodwill arising on acquisitions before

the date of transition to IFRS has been

retained at the previous UK GAAP

amounts, subject to being tested for

impairment at that date, and annually

thereafter.

Revenue recognition

Revenue generated from a contract

for the sale of goods is recognised

on delivery when all promises to the

customer have been fulfilled, such as

the supply of a specific vehicle. If the

customer has added various accessory

products to their order, the Company’s

promise is fulfilled by supplying these

products onto the vehicle at the

time of its delivery. Certain vehicle

manufacturers that the Company

represents have transitioned their dealer

agreements to an agency arrangement

whereby the manufacturer and the

customer transact directly for the sale of

the car but the dealer is paid an agency

fee for facilitating delivery of the car to

the customer. In these circumstances,

where the Company acts as an agent

on behalf of a principal in relation to

the sale of a new car, the associated

income is recognised within revenue

in the period in which the product is

sold. The decision whether the car is

sold to the customer under a wholesale

or agency arrangement is made by

the vehicle manufacturer based on

the make and model of the related

car. Of the manufacturers that the

Company represents, Volvo operated

a full agency model in the year for all

new car sales whilst MG and Vauxhall

operated solely under a wholesale

arrangement in the year. Lotus and

the remaining Volkswagen Audi Group

franchises operated a mixed model

with manufacturers applying an agency

model to some new battery-electric

cars. Audi also operated an agency

sales model for cars sold through

certain leasing companies.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Finance commissions are earned from

the finance house that is providing a

finance arrangement to a consumer

buying the vehicle. In this regard, the

Company’s customer is considered to be

the finance house, rather than the end

user of the vehicle. Income derived from

such commissions is recognised within

revenue on completion of the arranging

of the various products (i.e. at the point

at which control passes to the customer).

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

Company-wide 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.

Borrowing costs

All borrowing costs are recognised in

the Income Statement in the period

in which they are incurred unless the

borrowing costs are directly attributable

to the acquisition, construction or

production of a qualifying asset, in

which case they are capitalised.

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.

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.

Taxation

The tax expense represents the sum of

the tax currently payable and deferred

tax. Tax balances are not discounted.

The tax currently payable is based

on taxable profit for the year. Taxable

profit differs from net profit as reported

in the Income Statement because it

excludes items of income or expense

that are taxable or deductible in other

years and it further excludes items that

are never taxable or deductible. The

liability for current tax is calculated using

tax rates that have been enacted, or

substantively enacted, by the year-end

accounting date.

Deferred tax is the tax expected to be

payable or recoverable on differences

between the carrying amounts of

assets and liabilities in the financial

statements and the corresponding

tax bases used in the computation

of taxable profit and is accounted for

using the liability method. Deferred tax

liabilities are, generally, recognised for

all taxable temporary differences and

deferred tax assets are recognised to

the extent that it is probable that taxable

profits will be available against which

Material Accounting Policies

continued

Caffyns plc Annual Report 2026www.caffyns.co.uk

deductible temporary differences can

be utilised. Such assets and liabilities

are not recognised if the temporary

difference arises from goodwill or from

the initial recognition (other than in a

business combination) of other assets

and liabilities in a transaction that affects

neither the tax profit nor the accounting

profit.

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

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.

Depreciation is charged so as to write

off the cost less residual values of

assets, other than land and properties

under construction, over their estimated

useful lives using the straight-line

method, on the following basis:

Freehold buildings – 50 years

Freehold land – not depreciated

Leasehold buildings – period of lease

Plant and machinery,

fixtures and fittings – 3 to 10 years

The residual value of all assets,

depreciation methods and useful

economic lives, if significant, are

assessed annually.

Investment property

Investment property, which is

property held to earn rentals and/

or capital appreciation, is stated at

cost less accumulated depreciation

and impairment. Rental income from

investment property is recognised on a

straight-line basis over the term of the

lease. Depreciation is charged to write

off the cost, excluding the assessed

value of the freehold land, less residual

values of investment properties over

their estimated useful lives using the

straight-line method over 50 years.

Any transfers from property, plant

and equipment are made at cost less

accumulated depreciation.

Leases

The Company recognises a right-of-

use asset and a lease liability at the

commencement date of the lease. The

right-of-use asset is initially measured

at cost and, subsequently, at cost

less accumulated depreciation and

impairment losses and is then adjusted

for certain remeasurements of the lease

liability. Depreciation is recognised on a

straight-line basis over the period of the

lease the right-of-use asset is expected

to be utilised.

The lease liability is initially measured

at the present value of lease payments

that are not paid at the commencement

date, discounted by the Company’s

incremental borrowing rate. The lease

liability is, subsequently, increased by

the interest cost on the lease liability

and reduced by payments made. It is

remeasured when there is a change in

future lease payments arising from a

change of index or rate, a variation in

amounts payable following contractual

rent reviews and changes in the

assessment of whether an extension/

termination option is reasonably certain

to be exercised.

Where lease contracts include renewal

and termination options, judgement

is applied to determine the lease

term. The assessment of whether

the Company is reasonably certain to

exercise such options impacts the lease

term and the subsequent recognition of

the lease liability and right-of-use asset.

Where the Company acts as a lessor,

receipts of lease payments are

recognised in the income statement on

a straight-line basis over the period of

the lease unless it is deemed that the

risks and rewards of ownership have

been substantially transferred to the

Company’s lessee. If it is deemed that

the risks and rewards of ownership have

been substantially transferred, then the

Company will, rather than recognise

a right-of-use asset, recognise an

investment in the lease, this being the

present value of future lease receipts

discounted at the interest rate implicit

in the lease or, if this is not specified, at

the Company’s incremental borrowing

rate. The finance lease receivable will be

increased by the interest receivable less

payments made by the lessee.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Impairment

a. Impairment of goodwill: Goodwill

is tested annually for impairment. If

an impairment provision is made, it

cannot subsequently be reversed.

b. Impairment of property, plant and

equipment, investment properties

and right-of-use assets: At each

financial year-end date, the

Company reviews the carrying

amounts of its property, plant and

equipment, investment properties

and right-of-use assets in order

to determine whether there is any

indication that those assets have

suffered an impairment loss. If such

indication exists, the recoverable

amount of the asset is estimated

to determine the extent of the

impairment loss (if any). Where

the asset does not generate cash

inflows that are independent

from other assets, the Company

estimates the recoverable amount of

the CGU to which it belongs.

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.

An impairment loss is recognised as

an expense immediately, unless the

relevant asset is carried at a revalued

amount, in which case the impairment

loss is treated as a revaluation

decrease.

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.

Inventories

Inventories are stated at the lower of

cost and net realisable value. Cost

represents the purchase price plus any

additional costs incurred.

Vehicle inventories include owned

vehicles used for demonstration

purposes and as courtesy cars for

service customers. Consignment vehicle

inventories are regarded as effectively

under the control of the Company and

are included within inventories on the

balance sheet where the Company

has the ability to direct the use of,

and obtain substantially all of the

remaining benefits from, the asset.

Control includes the ability to prevent

other entities from directing the use

of, and obtaining the benefits from, an

asset even though legal title has not

yet passed. The corresponding liability

is included within trade and other

payables. Each vehicle is recognised

in inventory at its individual purchase

price plus any specific additional costs

incurred. Demonstration vehicles are

subject to regular review and written

down to their estimated net realisable

value to recognise the use and age of

the vehicle.

Parts inventories are valued at cost,

based on latest manufacturer cost, and

are written down to net realisable value,

in accordance with normal industry

practice, by providing for obsolescence

on a time-in-stock basis. Net realisable

value represents the estimated selling

price less all estimated costs to

completion and costs to be incurred in

marketing and selling.

Cash and cash equivalents

Cash and cash equivalents comprise

cash in hand and on demand deposits.

The Company recognises as cash and

cash equivalents amounts received from

customers and suppliers on confirmed

initiation of the transaction by the

transferor rather than the settlement

date. In the Cash Flow Statement,

cash and cash equivalents exclude the

Company’s Cash Overdraft facility from

Volkswagen Bank, as this facility has the

properties of a revolving-credit facility.

This facility is shown within interest-

bearing borrowings in current liabilities

on the Statement of Financial Position.

Investments in subsidiary

undertakings

Investments in subsidiary undertakings

are included at cost less amounts

written off if the investment is

determined to have been impaired and

are included in the Parent Company’s

separate financial statements.

Interest-bearing borrowings

Interest-bearing bank loans and

revolving credit facilities are recorded

at their fair value on initial recognition

(normally the proceeds received less

transaction costs that are directly

attributable to the financial liability) and,

subsequently, at amortised cost under

the effective interest method. Finance

charges, including premiums payable

on settlement or redemption and direct

issue costs, are accounted for on an

accruals basis to profit or loss using the

effective interest method, and are added

to the carrying amount of the instrument

to the extent that they are not settled in

the period in which they arise.

Trade and other payables

Trade payables are not interest-bearing

and are stated at their fair value on

initial recognition and are, subsequently,

carried at amortised cost.

Other payables include obligations

relating to consignment stock and

vehicle stocking loans.

Obligations relating to consignment

stock relate to new cars supplied by

manufacturers on consignment terms

and the full purchase price can be

funded.

Material Accounting Policies

continued

Caffyns plc Annual Report 2026www.caffyns.co.uk

Vehicle stocking loans relates to

creditors in relation to used vehicles and

is funded up to a level generally 80%

of market value of the used car based

on independent market guides. The

utilisation is recorded at fair value with

associated interest charged to profit

or loss. Cash flows relating to these

arrangements are included in operating

cash flows.

Equity

Ordinary shares are classified as equity.

Incremental costs directly attributable

to the issue of new shares are shown in

equity as a deduction, net of tax, from

the proceeds.

Share premium includes any premium

received on the sale of shares. Any

transaction costs associated with the

issuing of shares are deducted from

share premium, net of any corporation

tax benefits.

The capital redemption reserve

comprises the nominal value of ordinary

and preference share capital purchased

by the Company in prior years and

cancelled. The non-distributable reserve

within equity is a revaluation reserve,

which comprises gains and losses due

to the revaluation of property, plant

and equipment prior to 1995. Retained

earnings includes all current and prior

period retained profits.

Where any company in the Group

purchases the Company’s equity

share capital (treasury shares), the

consideration paid, including any directly

attributable incremental costs (net of

tax), is deducted from equity attributable

to the Company’s equity holders until

the shares are cancelled, reissued or

disposed of. Where such shares are,

subsequently, sold or reissued, any

consideration received, net of any directly

attributable incremental transactions

costs and the related tax effects, is

included in equity attributable to the

Company’s equity holders.

Dividends

Final dividends proposed by the board

and unpaid at the balance sheet date

are not recognised in the financial

statements until they have been

approved by shareholders at the Annual

General Meeting.

Interim dividends are recognised once

paid to shareholders.

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.

Financial instruments

Recognition, initial

measurement and

re-recognition

Financial assets and financial liabilities

are recognised when the Company

becomes a party to the contractual

provisions of the financial instrument

and are measured initially at fair value

adjusted for transaction costs, except

for those carried at fair value through

profit and loss, which are measured

initially at fair value. Subsequent

measurement of financial assets and

financial liabilities is described below.

Financial assets are derecognised when

the contractual rights to the cash flows

from the financial asset expire, or when

the financial asset and substantially all

the risks and rewards are transferred.

The only types of financial assets held

by the Group are financial assets at

amortised cost.

Financial liabilities are derecognised

when the obligation specified in the

contract is discharged, cancelled or

expires.

Financial assets at

amortised cost

Trade receivables do not carry any

interest and are stated at their fair

value on initial recognition as reduced

by appropriate allowances for

estimated irrecoverable amounts and

subsequently carried at amortised cost.

The Group applies the IFRS 9 simplified

approach to measuring expected credit

losses, which uses a lifetime expected

loss allowance for all receivables. The

expected loss rates are based on the

payment profile of sales over 36 months

before the year-end date, or the first day

of the accounting period under review,

respectively, and the corresponding

historical losses expected in the

period. The Company also considers

future expected credit losses due to

circumstances in addition to historical

loss rates.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Notes to the Financial Statements

for the year ended 31 March 2026

1. Critical accounting judgements and estimates when applying the Company’s accounting

policies

Judgements and estimates are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances.

Certain critical accounting estimates in applying the Company’s accounting policies are listed below.

Retirement benefit obligation

The Company has a defined benefit pension scheme. The obligations under this scheme are recognised in the balance sheet

and represent the present value of the obligation calculated by independent actuaries, with input from management. These

actuarial valuations include assumptions such as discount rates, return on assets and mortality rates. These assumptions

vary from time to time, depending on prevailing economic conditions. Details of the assumptions used are provided in

note 24. At 31 March 2026, the net liability of the scheme included in the Statement of Financial Position was £1.4 million

(2025: £4.5 million).

The assessment of the potential impact of the Virgin Media ruling, and the application of the Pension Schemes Act 2026,

requires significant judgement. This includes determining whether relevant historic amendments were made without required

actuarial confirmation; assessing whether such amendments fall within the scope of the statutory remediation framework; and

forming a view, with input from the scheme actuary, as to whether retrospective actuarial confirmation can be supported.

The directors have exercised judgement in concluding that no liability adjustment is required at this stage. This conclusion is

based on advice received and the existence of a legislative remedy but remains subject to uncertainty pending completion of the

scheme’s review.

Impairment

The carrying value of property, plant and equipment and goodwill are tested annually for impairment as described in notes

12, 13, 14 and 16. For the purposes of the annual impairment testing, the directors recognise Cash Generating Units (CGUs)

to be those assets attributable to an individual dealership, which represents the smallest group of assets that generate cash

inflows that are independent from other assets or CGUs. The recoverable amount of each CGU is based on the higher of its fair

value less costs to sell and its value in use. The fair value less costs to sell of each CGU is based upon the market value of any

property contained within it and is determined by an independent valuer, and its value in use is determined through discounting

future cash inflows (as described in detail in note 16). As a result of this review, the directors considered that no impairments

were required to the carrying value of its property assets (2025: no impairments) (see notes 12, 13, 14 and 16).

Inventory provisions

The Company carries significant inventories of new and used cars, as well as operating its own fleet of sales demonstrators and

courtesy cars for service customers. These cars are valued at the lower of cost and net realisable value by reference to trade

valuation guides, after adjusting for the mileage and condition of the cars. At the year-end, the Company held a provision against

the cost of its used inventory of £0.4 million (2025: £0.3 million). The directors considered that this provision was sufficient to

ensure that inventories were shown at the lower of cost and net realisable value.

Taxation

The Company has significant deferred tax assets with a carrying value of £2.4 million (2025: £2.5 million). These primarily relate

to carried forward corporation tax losses, Advanced Corporation Tax and carried forward Corporate Interest Restriction and are

detailed in note 25 to these financial statements. Management have assessed the recoverability of these amounts based on the

future forecast financial performance and results as the recoverability of these amounts is dependent on future taxable profits.

The directors considered that no impairments were required to the carrying value of these deferred tax assets

(2025: no impairments required).

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 Meads Road, Eastbourne, East Sussex BN20 7DR. 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:

2026

£’000

2025

£’000

Sale of goods 251,079 256,995

Rendering of services and agency sales commission income 19,582 18,469

Total revenue 270,661 275,464

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 are immaterial.

Transaction price allocation to remaining performance obligations

The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining

performance obligations that have original expected durations of one year or less.

Segmental reporting

Based upon the management information reported to the chief operating decision maker, the Chief Executive, in the opinion

of the directors, the Company has one reportable segment. The Company physically operates and is managed from individual

dealership sites, although strategic and investment decisions are made based on dealership groupings or market territories.

The Company’s individual dealerships represent a range of manufacturers, but are considered to have similar economic

characteristics, such as margin structures, and offer similar products and services to a similar customer base. As such, the

results of each dealership have been aggregated to form one reportable segment. There are no major customers amounting to

10% or more of revenue. All revenue and non-current assets derive from, or are based in, the United Kingdom.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

3. Non-underlying items

2026

£’000

2025

£’000

Net gain on disposal of freehold property – 64

Other income, net – 64

Within operating expenses:

Service cost on pension scheme (15) (15)

(15) (15)

Non-underlying items within operating profit (15) 49

Net finance expense on pension scheme (219) (409)

Non-underlying items within net finance expense (219) (409)

Total non-underlying items before taxation (234) (360)

Taxation credit on non-underlying items 58 90

Total non-underlying items after taxation (176) (270)

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):

2026

£’000

2025

£’000

Employee benefit expense 20,167 19,045

Depreciation of property, plant, equipment and investment property

– owned assets

– right-of-use assets

1,747

380

1,753

388

Net gain on disposal of property, plant and equipment (151) (64)

Short-term lease rentals payable – land and buildings 86 68

Rental income (267) (328)

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.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

Operating profit has been arrived at after charging:

2026

£’000

2025

£’000

Auditor’s remuneration

Fees payable to the Company’s Auditor for the audit of the Company’s annual accounts 90 115

Fees payable to the Company’s Auditor and its associates for other services:

– pursuant to legislation being review of interim financial statements 15 23

105 124

The Company’s Statutory Auditor in the current year is Kreston Reeves Audit LLP and for the previous year was 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 and 24 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:

2026

£’000

2025

£’000

(Loss)/profit for the year (1,286) 176

Tax (credit)/charge (note 9) (435) 70

(Loss)/profit before tax (1,721) 246

Net finance expense (notes 7 and 8) 3,184 3,301

Non-underlying items within operating profit (note 3) 15 (49)

Depreciation charged on property, plant and equipment, right-of-use assets and

investment properties (notes 12, 13 and 14) 2,127 2,141

Underlying earnings before interest, tax, depreciation and amortisation (“EBITDA”) 3,605 5,639

5. Other income

2026

£’000

2025

£’000

Rent receivable 267 328

Gain on sale of personalised number plate 160 138

Gain on disposal of tangible fixed assets 151 64

Other income 578 530

6. Employee benefit expense

The average number of people (full-time equivalents) employed in the following areas was:

Group and Company

2026

Number

2025

Number

Sales 127 136

Aftersales 208 201

Administration 79 78

Average number of full-time equivalents employees 414 415

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

6. Employee benefit expense continued

Employee benefit expense, including directors, during the year amounted to:

Group and Company

2026

£’000

2025

£’000

Wages and salaries 17,484 16,892

Social security costs 2,214 1,745

Contributions to defined contribution plans 454 393

Other pension costs (see note 24) 234 424

Employee benefit expense 20,386 19,454

Directors’ emoluments were:

2026

£’000

2025

£’000

Salaries and other short-term employee benefits 732 708

Details of the directors’ remuneration are provided in the Directors’ Remuneration Report on pages 28 to 41.

Key management compensation:

2026

£’000

2025

£’000

Salaries and other short-term employee benefits 1,487 1,480

Key management personnel includes the directors and other key operational employees. During the year, one member of key

management personnel purchased a car from the Company on normal commercial terms for a sum of £36,000

(2025: no members of key management personnel purchased any cars).

7. Finance expense

2026

£’000

2025

£’000

Interest payable on bank borrowings 819 955

Interest payable on inventory stocking loans (see note 20) 1,874 1,612

Interest on lease liabilities 143 150

Finance costs amortised 66 124

Preference dividends (see note 11) 72 72

Other miscellaneous interest 3 5

Finance income on interest in lease (12) (26)

Finance expense 2,965 2,892

8. Finance expense on pension scheme

2026

£’000

2025

£’000

Defined benefit pension scheme net finance expense (see note 24) 219 409

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

9. Tax

2026

£’000

2025

£’000

Current tax

UK corporation tax – –

Adjustments recognised in the period for current tax of prior periods – 152

Total charge/(credit) – 152

Deferred tax (see note 25)

Origination and reversal of temporary differences (343) (33)

Adjustments recognised in the period for deferred tax of prior periods (92) (49)

Total credit (435) (82)

Tax charged/(credited) in the Income Statement (435) 70

2026

£’000

2025

£’000

(Loss)/profit before tax (1,721) 246

Tax at the UK corporation tax rate of 25% (2025: 25%) (430) 62

Tax effect of expenses that are not deductible in determining taxable profit 197 326

Movement in rolled over and held over gains (110) (490)

Other differences

–

Adjustment to tax charge in respect of prior periods

(92)

103

Tax charge/(credit) for the year (435) 70

The current year total tax credit was impacted by the effect of non-deductible expenses, which includes non-qualifying depreciation.

The total tax (credit)/charge for the year is made up as follows:

2026

£’000

2025

£’000

Total current tax charge/(credit) – 152

Deferred tax charge/(credit)

Credited in the Income Statement (435) (82)

Charged/(credited) against other comprehensive expense 504 427

Total deferred tax charge/(credit) 69 345

Total tax charge/(credit) for the year 69 497

Factors affecting future tax charges

The Company has unrelieved trading losses of £4.0 million (2025: £0.7 million) and a Corporate Interest Restriction of

£1.3 million (2025: £1.1 million), both of which will be available for offset against profits made in future periods.

A deferred tax asset totalling £1.3 million (2025: £0.4 million) has been accounted for in deferred tax (see note 25).

The Company also has unrelieved advance corporation tax of £0.3 million (2025: £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).

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

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.

Underlying Basic

2026

£’000

2025

£’000

2026

£’000

2025

£’000

(Loss)/profit before tax (1,721) 246 (1,721) 246

Adjustments:

Non-underlying items (note 3) 234 360 – –

(Loss)/profit before tax (1,487) 606 (1,721) 246

Tax (note 9) 377 (160) 435 (70)

(Loss)/profit after tax (1,110) 446 (1,286) 176

(Losses)/earnings per share (pence) (40.7)p 16.4p (47.2)p 6.4p

Diluted (losses)/earnings per share (pence) (40.7)p 16.4p (47.2)p 6.4p

2026

£’000

2025

£’000

Underlying (loss)/earnings after tax (1,110) 446

Underlying (losses)/earnings per share (pence) (40.7) 16.4

Underlying diluted (losses)/earnings per share (pence) (40.7) 16.4

Non-underlying losses after tax (176) (270)

Losses per share (pence) (6.5) (10.0)

Diluted losses per share (pence) (6.5) (10.0)

Total (losses)/earnings (1,286) 176

(Losses)/earnings per share (pence) (47.2)p 6.4p

Diluted (losses)/earnings per share (pence) (47.2)p 6.4p

The number of fully paid Ordinary shares in circulation at the year-end was 2,726,811 (2025: 2,726,811). The weighted average

number of shares in issue for the purposes of the earnings per share calculation was 2,726,811 (2025: 2,726,797). 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 2,726,811 (2025: 2,726,959).

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

11. Dividends

2026

£’000

2025

£’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) 136 136

Final dividend paid of 5.0 pence per Ordinary share in respect of the

March 2024 year-end (2023: 15.0 pence) 137 137

273 273

The board is declaring a final dividend of 5.0 pence per Ordinary share in respect of the year ended 31 March 2026.

12. Right-of-use assets

Group and Company £’000

Deemed cost

At 1 April 2024 4,024

Additions 245

At 31 March 2025 4,269

Deemed cost

At 1 April 2025 and 31 March 2026 4,269

Accumulated depreciation

At 1 April 2024 1,681

Depreciation for the year 388

At 31 March 2025 2,069

Accumulated depreciation

At 1 April 2025 2,069

Depreciation for the year 380

At 31 March 2026 2,449

Net book value

At 31 March 2026 1,820

At 31 March 2025 2,200

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.

Depreciation charges of £380,000 (2025: £388,000) 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 £143,000 (2025: £150,000) is disclosed in note 7. Payments made in

the year on the above leases were £470,000 (2025: £456,000), representing repayments of both capital and interest.

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 £86,000 (2025: £68,000) are disclosed in note 4.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

13. Property, plant and equipment

Group and Company

Freehold

property

£’000

Leasehold

improvements

£’000

Fixtures &

fittings

£’000

Plant &

machinery

£’000

Total

£’000

Cost or deemed cost

At 1 April 2024 43,250 1,995 5,735 4,741 55,721

Additions at cost 388 10 398 269 1,065

Disposals (27) – (225) (67) (319)

At 31 March 2025 43,611 2,005 5,908 4,943 56,467

Cost or deemed cost

At 1 April 2025 43,611 2,005 5,908 4,943 56,467

Additions at cost – 15 612 200 827

Disposals – – (250) (193) (443)

At 31 March 2026 43,611 2,020 6,270 4,950 56,851

Accumulated depreciation

At 1 April 2024 8,500 753 4,400 3,354 17,007

Depreciation charge

for the year 718 85 453 415 1,671

Disposals – – (224) (67) (291)

At 31 March 2025 9,218 838 4,629 3,702 18,387

Accumulated depreciation

At 1 April 2025 9,218 838 4,629 3,702 18,387

Depreciation charge

for the year 760 86 469 376 1,691

Disposals – – (247) (163) (410)

At 31 March 2026 9,978 924 4,851 3,915 19,668

Net book value

31 March 2026 33,633 1,096 1,419 1,035 37,183

31 March 2025 34,393 1,167 1,279 1,241 38,080

31 March 2024 34,750 1,242 1,335 1,387 38,714

Short-term leasehold improvements for both the Company and the Group comprises net book value of £1,096,000 (2025:

£1,167,000) in the Statement of Financial Position.

Depreciation charges of £1,691,000 (2025: £1,671,000) in respect of property, plant and equipment 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.

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 2026. 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 2026, of those sites was £10.7 million (2025: £11.2 million). In accordance with

the Company’s accounting policies, this surplus has not been incorporated into these financial statements.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

14. Investment properties

Group and Company

2026

£’000

2025

£’000

Cost

At 1 April 3,385 9,650

Reclassified to Held for Sale Asset – (6,265)

At 31 March 3,385 3,385

Accumulated depreciation

At 1 April 872 2,434

Depreciation charge for the year 56 82

Reclassified to Held for Sale Asset – (1,644)

At 31 March 928 872

Net book value

At 31 March 2,457 2,513

Depreciation charges of £56,000 (2025: £82,000) 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.

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 CGU comprises

two freehold properties leased to third parties and the following are the key assumptions on which the directors based their

determination of fair value less costs of disposal in respect of that CGU:

Property 1 Property 2

Market value of buildings per square foot: £283 Market value of buildings per square foot: £145

Market value of site per acre: Between £7.35 million Market value of site per acre: Between £2.41 million

Initial and reversionary yields: 6.9% and 8.5%, respectively Initial and reversionary yields: 7.9% and 6.0%, respectively

Costs of disposal: Between 6.0% Costs of disposal: Between 6.2%

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 2026 was £10.7 million (2025: £11.2 million). Investment properties accounted for £0.6 million (2025: £0.6 million) of

this surplus.

Group and Company

2026

£’000

2025

£’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)

In the prior year, a transfer of £193,000 as a result of the disposal was made from the revaluation reserve to retained earnings.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

15. Net investment in lease

Group and Company

2026

£’000

2025

£’000

Due after more than one year – –

Due within one year – 65

At 31 March – 65

The premises shown above were sub-let to a third party under a lease, which had the same terms and duration as the

Company’s own lease. The lease ended in the year.

16. Goodwill

Group and Company

2026

£’000

2025

£’000

Cost

At 1 April and 31 March 481 481

Provision for impairment

At 1 April and 31 March 195 195

Carrying amounts allocated to CGUs

Volkswagen, Brighton 200 200

Audi, Eastbourne 86 86

At 31 March 286 286

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 2025 and 2026.

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 2026 to 31 March 2031. 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 2027. 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 £0.2 million growing by 106% over a

four-year period to reach £0.5 million by 2031. 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 £3.2 million

(2025: £1.5 million) before an impairment would be necessary.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 2026 to 31 March 2031. 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 2027. 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 £0.4 million growing by 11% over a four-

year period to reach £0.5 million by 2031. 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 £1.6 million

(2025: £0.3 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 11.4% (2025: 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% (2025: 0.5%). Terminal growth rates are based on management’s estimate

of future, long-term average growth rates.

Conclusion

At 31 March 2026, no impairment charge in respect of goodwill was identified (2025: 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

Fasthaven Limited, all of which are dormant. The amount at which the investments are stated is equivalent to the net assets

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.

Company £’000

Cost

At 1 April 2025 and 31 March 2026 476

Provision

At 1 April 2025 and 31 March 2026 226

Net book value

At 31 March 2026 250

At 31 March 2025 250

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

18. Inventories

Group and Company

2026

£’000

2025

£’000

Vehicles 30,560 29,420

Vehicles on consignment 20,452 13,792

Oil, spare parts, materials and work in progress 1,350 1,213

At 31 March 52,362 44,425

Group and Company

2026

£’000

2025

£’000

Inventories recognised as an expense during the year 233,795 237,494

Inventories stated at net realisable value 1,216 1,072

Carrying value of inventories subject to retention of title clauses 34,167 27,092

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, with the exception of vehicles allocated by the manufacturer

to the Company but physically held in manufacturer-controlled central compounds and which can be called down by any

dealer. At 31 March 2026 such vehicles not recognised on the Company’s balance sheet amounted to £832,000 (2025: £Nil).

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, £21,000 (2025: £20,000) 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

2026

£’000

2025

£’000

Trade receivables 8,616 9,033

Allowance for doubtful debts (9) (16)

8,607 9,017

Prepayments 264 402

Other receivables 1,090 694

At 31 March 9,961 10,113

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 2026, trade

receivables were shown net of an allowance for impairment of £9,000 (2025: £16,000). The charge recognised during the year

was £3,000 (2025: £16,000).

Trade receivables have been classified at amortised cost under IFRS 9 Financial Instruments.

Group and Company

2026

£’000

2025

£’000

Not impaired:

Neither past due nor impaired 8,542 8,892

Past due up to three months but not impaired 65 125

At 31 March 8,607 9,017

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

Group and Company

2026

£’000

2025

£’000

The movement in the allowance for impairment during the year was:

At 1 April 16 8

Impairment recognised in the Income Statement 3 16

Utilisation

(10)

(8)

At 31 March

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.

The Company’s credit risk is primarily attributable to its trade receivables that are due on the earlier of the presentation of the

invoice or the expiry of a credit term. The amounts presented in the Statement of Financial Position are net of allowances

for doubtful receivables, estimated by the Company’s management based on prior experience and their assessment of the

current economic environment. Consequently, the directors consider that the carrying amount of trade and other receivables

approximates to their fair value.

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

2026

£’000

2025

£’000

Trade payable 28,506 23,727

Obligations relating to consignment stock 20,452 13,792

Vehicle stocking loans 9,531 8,623

Social security and other taxes 1,522 1,769

Accruals 2,244 2,444

Deferred income 403 411

Other creditors 243 1,015

Group total 62,901 51,781

Amounts owed to Group undertakings 250 250

Company total 63,151 52,031

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 34 days (2025: 28 days).

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

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 2026 were £1,874,000 (2025: £1,612,000).

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:

2026

£’000

2025

£’000

At 1 April 411 452

Utilisation of deferred income in the year (943) (1,015)

Income received and deferred in the year 935 974

At 31 March 403 411

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

Group and Company

2026

£’000

2025

£’000

Current liabilities:

Secured bank loans and overdrafts 1,375 1,375

Unsecured other loan 70 70

1,445 1,445

Non-current liabilities:

Secured bank loans 10,313 10,688

Unsecured other loan 105 175

10,418 10,863

At 31 March 11,863 12,308

Cash balances held at 31 March 2026 were £4.6 million (2025: £3.8 million) so that net bank borrowings at year-end were

£7.3 million (2025: £8.5 million).

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

£18.3 million (2025: £18.8 million) are secured by a general debenture and fixed charges over certain freehold properties.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

22. Financial instruments

The Group utilises financial instruments such as bank loans and overdrafts and new and used vehicle stocking loans to finance

its operations and to manage the interest rate and liquidity risks that arise from those operations and from its sources of finance.

The disclosures below apply to the Group and the Company unless otherwise noted.

Group and Company

2026

carrying

value

£’000

2025

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 (10,313) (10,688)

Long-term other loan (note 21) Financial liability measured at amortised cost (105) (175)

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 (60,976) (49,490)

Lease liabilities (note 23) (1,958) (2,362)

Trade and other receivables (note 19) Financial asset at amortised cost 9,697 9,711

Cash and cash equivalents Financial asset at amortised cost 4,605 3,762

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 (61,196) (49,650)

The carrying values of financial assets and liabilities in the table above approximate their value due to their nature and term.

Financial risk management

The Group is exposed to the following risks from its use of financial instruments:

a) Funding and liquidity risk – the risk that the Group will not be able to meet its obligations as they fall due;

b) Credit risk – the risk of financial loss to the Group on the failure of a customer or counterparty to meet their obligations as

they fall due; and

c) Market risk – the risk that changes in market prices, such as interest rates, have on the Group’s financial performance.

The Group manages credit and liquidity risk by particularly focusing on working capital management. The Group’s quantitative

exposure to these risks is explained throughout these financial statements whilst the Group’s objectives and management of

these risks is set out below.

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 (2025: £29.9 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 24% at 31 March 2026 (2025: 29%). 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

22. Financial instruments continued

The underlying pre-tax return as a proportion of equity for the year was a negative return of 5.0% (2025: positive 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.

Funding and liquidity risk management

The Group finances its operations through a mixture of retained profits and borrowings from bank, vehicle stocking credit

lines and operating cash flow. The Group’s policy is to maintain a balance between committed and uncommitted facilities and

between term loans and overdrafts. Facilities are maintained at levels in excess of planned requirements. At 31 March 2026,

the Group held cash in hand balances of £4.6 million (2025: £3.8 million) and had undrawn floating rate borrowing facilities of

£6.5 million (2025: £6.5 million) represented by overdrafts and revolving credit facilities, which would be repayable on demand, in

respect of which all conditions precedent had been met. The Group is not directly exposed to foreign currency risk.

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 £168,000 (2025: £172,000) 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

2026

carrying

value &

fair value

£’000

2025

carrying

value &

fair value

£’000

Bank balances and cash equivalents 4,605 3,762

The net bank borrowings of the Company at 31 March 2026 were £7.3 million (2025: £8.5 million).

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

2026

£’000

2025

£’000

Interest-bearing overdrafts and loans due within one year 1,445 1,445

Interest-bearing bank loans due after more than one year 10,418 10,862

Less: Cash and cash equivalents (4,605) (3,762)

At 31 March 7,258 8,545

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 2026

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 (60,751) Amortised cost – –

Carrying value

& fair value Classification

Interest

classification

Interest rate

range

Not repayable within one year

Term loan 4,313 Amortised cost Floating SONIA** + 2.75%

Revolving credit facility 6,000 Amortised cost Floating SONIA** + 2.75%

Other loan 105 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

2026

£’000

2025

£’000

2026

£’000

2025

£’000

2026

£’000

2025

£’000

2026

£’000

2025

£’000

Between one and two years 10,383 10,758 378 336 – – 10,761 11,094

Between two and five years 35 105 462 738 – – 497 843

Over five years – – 790 646 812 812 1,602 1,458

At 31 March 10,418 10,863 1,630 1,720 812 812 12,860 13,395

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 that continues until April 2027. The Company’s bankers recognise the

current difficulties being experienced by the motor retail sector and remain very supportive and, subsequent to the end of the

year, this review date was extended by twelve months to April 2028. The maturities of the bank borrowings represent the final

payment dates for those drawn facilities as at 31 March 2026. 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.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

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

2026

£’000

2025

£’000

2026

£’000

2025

£’000

2026

£’000

2025

£’000

2026

£’000

2025

£’000

Within one year 2,245 2,273 451 547 60 60 2,756 2,880

Between one and two years 10,447 10,824 448 451 60 60 10,955 11,335

Between two and three years 35 71 347 448 60 60 442 579

Between three and four years – 35 154 347 60 60 214 442

Between four and five years – – 113 154 60 60 173 214

Over five years – – 1,107 1,108 512 512 1,619 1,620

Contractual cash flows within

five years of the balance sheet

date 12,727 13,203 2,620 3,055 812 812 16,159 17,070

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 had a current term to next expire in April 2027 and is repayable over 20 years. Subsequent

to the end of the year, this review date was extended by twelve months to April 2028. The balance outstanding on this term

loan at 31 March 2026 was £4.7 million (2025: £5.1 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

current term to next expire in April 2027. Subsequent to the end of the year, this review date was extended by twelve months

to April 2028. The balance drawn as at 31 March 2026 was £6.0 million (2025: £6.0 million). These facilities are subject to

covenants which, for the current year, were tested with respect to debt/freehold property values and Senior EBITDA levels. The

covenant tests for the quarters ended 30 September and 31 December were waived by HSBC but the remaining covenant tests

were passed in the year ended 31 March 2026. The failure of a covenant test would render these facilities repayable on demand

at the option of the lender.

For the coming year ending 31 March 2027, HSBC have agreed to amend the interest cover covenant test to four cumulative

Senior EBITDA hurdles, which the board is satisfied will be achieved. The previous interest cover covenant test will then be

reapplied from 30 June 2027 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 2027, 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 does

not exceed 70% of the independently assessed value of its charged freehold properties.

Once reapplied on 30 June 2027, 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 2027.

The Group also had £7.5 million of combined annual overdraft and revolving credit facilities (2025: £7.5 million) from HSBC

and Volkswagen Bank United Kingdom Branch and these facilities are next due for renewal in August and October 2026,

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 Group has granted security to HSBC and Volkswagen Bank United Kingdom Branch by way of a general debenture over

its assets and a fixed charge over certain freehold property. The Company has five freehold properties that are not subject to a

security charge with a value at 31 March 2026 of £5.1 million (2025: £5.3 million). The total value of assets subject to a charge

at 31 March 2026 in the Statement of Financial Position was £71.6 million (2025: £72.1 million). The Group has also granted

security to its defined benefit pension scheme by way of certain fixed first and second charges over certain freehold properties.

The second charges rank in priority behind those charges granted to HSBC and Volkswagen Bank United Kingdom Branch.

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.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

23. Lease liabilities

Group and Company

2026

£’000

2025

£’000

Deemed liability

At 1 April 2,362 2,607

Additions in the year – 245

Interest charge for the year 143 151

Lease payments (547) (641)

At 31 March 1,958 2,362

Due in less than one year 328 642

Due after more than one year 1,630 1,720

At 31 March 1,958 2,362

24. Retirement benefit scheme

Group and Company

2026

£’000

2025

£’000

Fair value of scheme assets 57,752 55,880

Present value of the defined benefit pension obligation (59,174) (60,403)

Scheme deficit at 31 March (1,422) (4,523)

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 Scheme is run by a board of trustees who 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. A new actuarial valuation will be completed as at 31 March 2026 and will be submitted to the

Pensions Regulator on or before 30 June 2027.

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 prior year, £0.5 million in the current year, and then £0.5 million in the following year and £0.1 million in the year

ending 31 March 2028. In the year to 31 March 2026, the Company contributed £1.3 million (2025: £4.2 million) to fund the

existing deficit. During the prior 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.

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.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

24. Retirement benefit scheme continued

Over the year to 31 March 2027, 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 10 years. Expected benefit payments in

the year to 31 March 2027 are £4.8 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 2026 are invested by two appointed fiduciary management companies,

SEI Investments (Europe) and Towers Watson Limited. The Company is in the process of completing the transition of 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; and

• 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 2026 by Willis Towers Watson, independent

qualified actuaries, for the requirements of IAS 19. Details of the actuarial assumptions are as follows:

2026 2025

Mortality tables used: females 104% of SAPS series 3 104% of SAPS series 3

Mortality tables used: males 109% of SAPS series 3 109% of SAPS series 3

Future improvements in mortality CMI 2025 + 1.25% CMI 2023 + 1.25%

Discount rate 6.00% 5.65%

Inflation (CPI) 3.05% 2.80%

Pension increase for in-payment benefits (CPI max 5%) 3.00% 2.80%

The discount rate adopted is based upon the yields of high-quality corporate bonds of appropriate duration.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

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% +/- £2.2 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

2026

£’000

2025

£’000

LDI fund 21,780 19,591

Growth fund 34,630 35,649

Equity instruments 1,342 640

At 31 March 57,752 55,880

Two fiduciary managers, Towers Watson Limited and SEI Investments (Europe) Limited operated in the year with the role of

fiduciary manager continuing to 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 2026 were invested 38% (2025: 35%) in LDI funds,

60% (2025: 64%) in return enhancing growth funds and 2% (2025: 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 6.0% and not the return on the underlying portfolio of investments. Consequently, the charge to the Income

Statement for the year ending 31 March 2027 is expected to be approximately £61,000.

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):

2026

Male

2026

Female

2025

Male

2025

Female

Member currently aged 65 21.3 23.9 20.8 23.7

Member currently aged 45 22.5 25.3 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

2026

£’000

2025

£’000

At 1 April (4,523) (10,036)

Expense recognised in the Income Statement (234) (424)

Contributions paid by the Company 1,320 4,230

Net remeasurement recognised in other comprehensive income 2,015 1,707

At 31 March (1,422) (4,523)

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

24. Retirement benefit scheme continued

Total expense recognised in the Income Statement

2026

£’000

2025

£’000

Interest cost 3,294 3,195

Interest income on Scheme assets (3,075) (2,786)

Interest – net (see note 8) 219 409

Current service cost 15 15

234 424

Changes in the present value of the defined benefit pension obligation

2026

£’000

2025

£’000

At 1 April 60,403 68,805

Service cost 15 15

Interest cost 3,294 3,195

Actuarial (gains)/losses – experience 243 (920)

Actuarial (gains)/losses – demographic assumptions

637

(156)

Actuarial gains – financial assumptions

(1,189)

(6,054)

Benefits paid (4,229) (4,482)

At 31 March 59,174 60,403

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 Group has considered the implications of the High Court and Court of Appeal judgements in Virgin Media Ltd v NTL

Pension Trustees II Ltd (the “Virgin Media ruling”), which raised questions regarding the validity of certain historical amendments

to contracted-out defined benefit pension schemes where required actuarial confirmation under section 37 of the Pension

Schemes Act 1993 may not have been obtained.

In April 2026, the UK Government enacted the Pension Schemes Act 2026, which provides a statutory mechanism to

retrospectively validate affected amendments through actuarial confirmation. The Group’s pension scheme is currently

undertaking a review, with support from legal and actuarial advisors, to determine whether any amendments fall within the scope

of this legislation and whether retrospective validation can be obtained.

Based on work performed to date, the Group is continuing its assessment. Given the availability of the statutory remediation

framework and the stage of the review, no adjustment has been recognised in these financial statements.

Movement in the fair value of scheme assets

2026

£’000

2025

£’000

At 1 April 55,880 58,769

Interest income 3,075 2,786

Actuarial losses – financial assumptions 1,706 (5,423)

Contributions paid by the Company 1,320 4,230

Benefits paid (4,229) (4,482)

At 31 March 57,752 55,880

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

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 2024 (1,124) (1,465) 2,509 (21) 326 343 568

Change in tax rates and

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

At 1 April 2025 (1,324) (975) 1,130 601 449 343 224

Prior year

adjustments (4) – – – 96 – 92

Arising from origination

and reversal of

temporary differences (72) 108 (272) (202) 781 – 343

Recognised in other

comprehensive income – – (504) – – – (504)

At 31 March 2026 (1,400) (867) 354 399 1,326 343 155

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 ended 31 March 2025 of £4.2 million to the defined-

benefit Caffyns Pension Scheme, as required under tax legislation.

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 2025, there was Shadow ACT outstanding of £203,000. 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 2026 was £343,000 (2025: £343,000). Shadow ACT carried forward at

31 March 2026 was £271,000 (2025: £203,000).

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

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:

2026

£’000

2025

£’000

Deferred tax liabilities (2,267) (2,299)

Deferred tax assets 2,422 2,523

At 31 March 155 224

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 £5.3 million (2025: £1.8 million).

Based on forecasts prepared, the directors conclude that these losses will reverse against future profitability.

26. Called-up share capital

2026

£’000

2025

£’000

Authorised

500,000 7% Cumulative First Preference shares of £1 each 500 500

1,250,000 11% Cumulative Preference shares of £1 each 1,250 1,250

3,000,000 6% Cumulative Second Preference shares of 10 pence each 300 300

4,000,000 Ordinary shares of 50 pence each 2,000 2,000

At 31 March 4,050 4,050

Allotted, called up and fully paid

170,732 7% Cumulative First Preference shares of £1 each 171 171

441,401 11% Cumulative Preference shares of £1 each 441 441

2,000,000 6% Cumulative Second Preference shares of 10 pence each 200 200

Total preference shares recognised as a financial liability (see note below) 812 812

2,879,298 Ordinary shares of 50 pence each 1,439 1,439

At 31 March 2,251 2,251

At 1 April 2025, the Company held 2,726,811 Ordinary shares with 152,487 shares held in treasury. During the year, none of

these treasury shares were utilised so shares held in treasury at 31 March 2026 remained at 152,487. In the prior year, 505

treasury shares were utilised under the 2020 SAYE scheme. The remaining treasury shares are held to fulfil the requirements of

any future Company SAYE schemes for eligible employees. The market value of these shares at 31 March 2026 was £0.6 million

(2025: £0.7 million). Dividend income from, and voting rights on, the shares held in treasury have been waived.

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.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

27. Share-based payments

Year of grant

Exercise

price

Exercise

date

Number at

1 April

2024 Issued Cancelled

Number at

31 March

2025

2020 £3.06 February 2024 505 (505) – –

Year of grant

Exercise

price

Exercise

date

Number at

1 April

2025 Issued Lapsed

Number at

31 March

2026

2020 £3.06 February 2024 – – – –

All grants made under the Company’s Save As You Earn (“SAYE”) schemes were 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 either the year nor the prior year so the total expense included within operating

profit relating to share-based payments was £Nil (2025: £Nil).

28. Notes to the cash flow statement

Group and Company

2026

£’000

2025

£’000

(Loss)/profit before tax for the year (1,721) 246

Adjustments for net finance expense 3,184 3,301

1,463 3,547

Adjustments for:

Depreciation and impairments of property, plant and equipment, investment

properties and right-of-use assets 2,129 2,141

Cash payments into the defined benefit pension scheme (1,320) (4,230)

Profit on disposal of property, plant and equipment (151) (64)

Operating cash flows before movements in working capital 2,121 1,394

Increase in inventories (7,938) (2,173)

Decrease/(increase) in receivables 154 (2,802)

Increase in payables 11,133 6,194

Cash generated by operations 5,470 2,613

Tax received, net of payments 39 –

Interest paid (2,977) (2,916)

Net cash generated from/(absorbed) by operating activities 2,532 (303)

All interest payments are treated as operating cash movements as they arise from movements in working capital.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

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

£’000

Liabilities

arising from

financing

activities

£’000

Bank

and cash

balances

£’000

Net

debt

£’000

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

At 1 April 2025 5,308 7,000 2,362 812 15,482 (3,762) 11,720

Cash movement (445) – (547) – (992) (843) (1,835)

Non-cash movement – – 143 – 143 – 143

At 31 March 2026 4,863 7,000 1,958 812 14,633 (4,605) 10,028

Current liabilities 445 1,000 328 – 1,773 (4,605) (2,832)

Non-current liabilities 4,418 6,000 1,630 812 12,860 – 12,860

At 31 March 2026 4,863 7,000 1,958 812 14,633 (4,605) 10,028

Non-cash movements in lease liabilities relate to an extension in the year of an existing lease and interest charges.

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

29. Related parties

The remuneration of directors is set out in note 6 and in the Directors’ Remuneration Report for each of the categories specified

in IAS 24 Related Party Disclosures. Further information about the remuneration of individual directors is provided in the

Directors’ Remuneration Report on pages 28 to 41.

The 2,000,000 6% Cumulative Second Preference shares have full voting rights along with the Ordinary shares, 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. These Cumulative Second Preference shares are beneficially owned by Caffyn Family Holdings Limited

(“Holdings”). Mr S G M Caffyn and Ms S J Caffyn are directors of Holdings. The whole of the issued share capital of Holdings is

held by close relatives of those directors. Holdings controls directly 42.3% (2025: 42.3%) of the voting rights of Caffyns plc. The

directors and shareholders of Holdings are also beneficial holders of 496,816 (2025: 496,816) Ordinary shares in Caffyns plc

representing a further 10.5% (2025: 10.5%) of the voting rights. It is, therefore, considered that the Caffyn family is the ultimate

controlling party. As required under the Stock Exchange Listing Rules, the Company entered into a Relationship Agreement

with Holdings on 6 November 2014, whereby Holdings undertakes to the Company that it shall exercise its voting rights and

shall exercise all its powers to ensure, so far as it is properly able to do so, that its associates shall exercise their respective

voting rights and exercise all their respective powers to ensure, to the extent that they are able by the exercise of such rights to

procure, that:

a) transactions and arrangements between any member of the Company and Holdings (and/or any of its associates) will be

conducted at arm’s length and on normal commercial terms;

b) neither Holdings nor any of its associates will take any action that would have the effect of preventing the Company from

complying with its obligations under the Listing Rules; and

c) neither Holdings nor any of its associates will propose or procure the proposal of a shareholder resolution, which is intended,

or appears to be intended, to circumvent the proper application of the Listing Rules.

Directors of the Company and their immediate relatives control 14.7% (2025: 15.0%) of the issued Ordinary share capital of the

Company. Dividends of £15,000 were paid to directors in the year (2025: £15,000).

Caffyns Pension Scheme

Details of contributions are disclosed in note 24.

The Caffyns Pension Scheme held the following investments in the Company:

Fair value

2026

£’000

2025

£’000

Shares held:

125,570 (2025: 125,570) Ordinary shares of 50 pence each 502 565

12,862 (2025: 12,862) 11% Cumulative Preference shares of £1 each 20 20

At 31 March 522 585

During the year to 31 March 2026, the Company paid management fees of £283,000 (2025: £336,000) on behalf of the

Caffyns Pension Scheme. These costs comprised the Pension Protection Fund levy, actuarial advisory fees and external

administration fees.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

30. Leases as a lessor

The Group as a lessor – finance leases

At 31 March 2026, the Company had an interest in a single lease. The total future minimum lease receipts payable are:

Group and Company

2026

£’000

2025

£’000

Within one year – 77

In two to three years – –

In three to four years – –

In four to five years – –

Beyond five years – –

– 77

Finance income on the net investment in the lease was £12,000 (2025: £26,000).

Group and Company

2026

£’000

2025

£’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 two (2025: three) investment

properties owned by the Group was £267,000 (2025: £328,000). No contingent rents were recognised in income (2025: £Nil).

At 31 March 2026, there were contracts for land and buildings with tenants for the following lease rentals receivable:

Group and Company

2026

£’000

2025

£’000

Within one year 263 263

In two to three years 263 263

In three to four years 241 241

In four to five years 241 241

Beyond five years 650 891

1,658 1,899

Notes to the Financial Statements continued

for the year ended 31 March 2026

Caffyns plc Annual Report 2026www.caffyns.co.uk

31. Capital commitments

Purchase of fixed assets

The Group and the Company had capital commitments at 31 March 2026 of £0.1 million (2025: £0.2 million).

32. Contingent liability

Regulatory investigation into discretionary commission arrangements

In October 2024, the High Court ruled that lenders and credit brokers are liable to customers where the disclosure of

commission was insufficient to obtain the customer’s informed consent and that a fiduciary duty was held to exist between the

credit broker (motor retailer) and the customer. The outcome of the case was unexpected and caused stakeholders considerable

unease and concern around historic finance commission in the sector. As a result, the Company moved to full disclosure to

customers of any applicable finance commission and there was no noticeable change in consumer behaviour. In April 2025, the

Supreme Court heard an appeal against this High Court ruling and in July 2025 overturned two of the three cases, ruling that no

fiduciary duty was owed to the customer. In one case the Supreme Court ruled that some customers had been mis-sold their

finance product. The Financial Conduct Authority (“FCA”) launched an investigation and has determined that some customers

were mis-sold finance and are entitled to compensation. They have announced a redress scheme to cover finance agreements

made between 2007 and 2024 with payouts capped in around one in three cases to ensure customers are not put in a better

position than had they been treated fairly. Payouts are expected to commence later in 2026, subject to any further legal action

being commenced by impacted parties. The cost of compensating customers is expected to fall solely on the lender and not on

the contracting dealer.

As the implementation of the redress scheme is ongoing, the Company does not have sufficient certainty over the nature, timing

or value of any potential financial impact to be able to estimate the liability, if any, that may arise for the Company. As a result, no

liability has been recognised at 31 March 2026 in respect of this investigation.

Caffyns plc Annual Report 2026

Stock code CFYN

Governance Other informationConsolidated

Financials

Our Business

Five-Year Review

(unaudited)

2022

£’000

2023

£’000

2024

£’000

2025

£’000

2026

£’000

Income Statement

Revenue 223,928 251,426 262,084 275,464 270,661

Underlying operating profit 5,690 4,827 2,114 3,498 1,478

Finance expense (1,116) (1,687) (2,680) (2,892) (2,965)

Underlying profit/(loss) before tax 4,574 3,140 (566) 606 (1,487)

Non-underlying items (189) (50) (979) (360) (234)

Profit/(loss) before tax 4,385 3,090 (1,545) 246 (1,721)

Profit/(loss) after tax 2,999 2,524 (1,204) 176 (1,286)

EBITDA 7,712 6,955 4,212 5,439 3,607

Basic earnings/(loss) per Ordinary share 111.3p 93.6p (44.3)p 6.4p (47.2)p

Underlying earnings/(loss) per Ordinary share 117.0p 95.1p (17.3)p 16.4p 140.7p

Dividend per Ordinary share payable in respect of the year 22.50p 22.50p 10.00p 10.00p 10.00p

2022

£’000

2023

£’000

2024

£’000

2025

£’000

2026

£’000

As at year-end

Shareholders’ funds 34,731 31,662 28,736 29,921 29,873

Property, plant and equipment* 46,621 45,676 45,930 40,593 39,640

Bank overdrafts and loans (net) 10,428 8,086 11,315 8,545 7,258

Bank overdrafts and loans/shareholders’ funds (gearing) 30% 26% 39% 29% 24%

Retirement benefit liability 2,797 8,799 10,036 4,523 1,422

* Represents property, plant and equipment and investment properties.

Caffyns plc Annual Report 2026www.caffyns.co.uk

Our Dealerships

Caffyns plc Annual Report 2026

Stock code CFYN

GovernanceOur Business Other informationConsolidated

Financials

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)

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: Monument Way, Orbital Park, Ashford TN24 0HB (01233 504630)

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:

Monument Way, Orbital Park, Ashford TN24 0HB (01233 504624)

HEAD OFFICE

EASTBOURNE: Meads Road, Eastbourne BN20 7DR (01323 730201)

Caffyns plc Annual Report 2026

Caffyns plc

Meads Road

Eastbourne

East Sussex

BN20 7DR