Strong full year results for home credit and motor finance provider

HOME credit and motor insurance provider, S&U, has announced strong annual results with pre-tax profits rising 34%.

The Solihull company said pre-tax profit for the year ended January 31, 2015 came in at £23.2m (2014: 317.3m), with revenues up 22% at £74.4m (2014: 60.8m). Earnings per share also benefited, rising 38% to 156p (2014: 113.2p).

The board is recommending a final dividend of 30p (2014: 24p); total dividend for the year increased to 66p (2014: 54p).

“Whilst Advantage Finance, our Motor Finance subsidiary has produced yet another record performance, this year has also seen sterling outcomes at our Home Credit operations, trading as Loansathome4U.  Both divisions have benefitted from rising consumer confidence and, latterly, a perceptible increase in disposable real incomes,” it said.
 
Advantage Finance produced a record pre-tax profit of £16.7m (2014: £11.5m), an increase of 46% and more than double the profits of just two years ago.  This partly reflects a 48% increase in advances and, more importantly, a 40% increase in collections, said the company. Collections reached on average £4.7m a month against just £3.3m per month in 2013/14.  As a result, debt quality is at its highest level ever.
 
The Home Credit division grasped opportunities for expansion by posting profits of £6.5m (2014: £5.8m) – an 11% increase.  Profits increased in both the North and South businesses and robust debt quality was evidenced by customer collections rising by 12% on net receivables up 2%.  Customer household numbers rose by just over 7% throughout the year accompanied by a similar increase in our representative force.”

Anthony Coombs, chairman of S&U, said: “This year group profit has risen by 34% and substantial growth has been seen across all of our companies. Although the new Regulatory Regime, signs of emerging competition and the forthcoming General Election create the usual uncertainties, our expertise, the commitment of our people and the loyalty of our customers and introducers give us great confidence for the future.”

Optimism for the current year is based on a strong balance sheet that shows net assets increasing by 17% to £81.5m (2014: £69.4m), with £30m of additional longer term borrowing facilities already arranged.