S&U confident after strong year with profits up 10%

HOME and auto credit firm S&U has seen a 10% increase in pre-tax profits with revenues rising 5%, suggesting more people are buying cars.

The Solihull based firm saw pre-tax profits climb to £9.9m in the year to January 31, 2011 (2010: £9m), while revenues came in at £48m (2010: £45.8m).

Earnings per share grew 9% to 60p (2010: 55.2p) and the proposed final dividend is 16p (2010: 10p).

The firm said its balance sheet remained strong with a 7% increase in net assets to £50.1m (2010: £46.8m), while £6m in medium term borrowing was repaid, reducing net borrowings to £21.7m by the year end.

Across its divisions, the group said Motor Finance pre-tax profit was up 35% to £4.2m (2010: £3.1m), while volumes of new loans were up 17% on record application numbers.

Home Credit profits came in at £5.6m (2010: £5.9m), while gross loan sales were up 2% with signs of cash generation again this year.

The group’s Motor Finance division saw record profits of £4.2m (2010: £3.1m) – the 11th successive annual rise. Much of this was attributed to a broadened product range which had attracted new near-prime customers. The division also saw collections exceed £2m per month – another record.

Annual group collections were up over £5m on the prior year, while there were increased customer numbers in both Home Credit and Motor Finance, leading the company to predict opportunities for sensible expansion in both businesses.
 
Anthony Coombs, S&U chairman, said: “Once again I am pleased to announce a strong set of results. I am confident that our uniquely close customer relationships, constant search for growth and a prudent approach to funding, will ensure further good performance for the group in future.”