Credit provider S&U boosted by strong motor finance division
SOLIHULL-based niche home credit and motor finance provider S&U has said trading remains in line with expectations thanks to a strong showing from its motor finance division.
In a statement ahead of its AGM, the firm said: “Group trading remains in line with overall expectations with the cash generative Home Credit division helping to finance the very strong progress of the Motor Finance business.”
It said that in terms of both capital employed and profit generation, Advantage Finance, its motor finance business, was now the largest part of the company. Its performance was said to remain “outstanding” and it has exceeded the levels of growth and collection of 2012. Receivables are up 29% on last year while customer numbers are at a record level.
Loansathome4U, its home credit division, was said to have performed solidly against a background of restrained customer confidence and incomes. Advances and receivables are 3%, and collections 2% lower than Q1 last year. Year-on-year, Home Credit profitability is slightly down, but cash generation was said to be good and has considerably exceeded Q1 2012.
Recent weeks have seen an improving sales trend. New products have just been introduced, including an industry leading pre-paid debit card and a new concept in consumer finance and so the company said it was hopeful these initiatives would help to grow customer numbers at good margins.
The strength of its balance sheet and funding facilities, together with its cash generative home credit business has allowed the company to invest further in the growth of Advantage Finance. Gearing is still low and responsible at just over 35% reflecting group borrowings of just over £4m above last year at £22.5m.
It said that following the AGM it expected to appoint a new independent non-executive director, specifically responsible for Corporate Governance matters.
Commenting on group trading and outlook, Anthony Coombs, S&U chairman, said: “The continuing success and growth of Advantage and the potential for renewed growth in home credit more than counter balance a generally sluggish and unpredictable economic recovery. Maintaining and improving the service we give to every one of our customers justifies our confidence in the year ahead.”
