Finance group enjoys record trade as consumer confidence remains robust
Speculation on a slowdown in the UK car market may be premature, motor finance and specialist lender, S&U has said.
In a trading update covering the period from its AGM statement on May 18 to July 31, the Solihull-based company said its motor finance arm, Advantage, had continued to trade at record levels.
“Despite recent speculation as to the strength of the economy and its possible effect on the car finance market, Advantage has seen a steady increase in the number of quality applications it receives,” it said.
“Trading at Advantage continues at record levels. New loan transactions are up by 20% and monthly collections are 27% higher than a year ago.
“Monthly collections hit a record £10m from nearly 49,000 customers in July and debt quality continues to be good.”
The firm said another factor in its optimism was due to Advantage not being involved in the PCP market, which has recently come under public scrutiny.
Advantage’s average loan size is just £6,200 so should changes in the PCP market have a knock-on effect upon car residual values generally, this would have only a marginal effect upon S&U’s business, it said.
Elsewhere in the business, it said Aspen Bridging was proceeding cautiously and was gradually establishing itself in the bridging market.
Committed medium term funding facilities have been increased to £95m since the end of the last financial year. S&U said this offered sufficient headroom for anticipated growth and would be reviewed again as the businesses develop.
Anthony Coombs, S&U chairman said: “S&U’s performance and prospects remain healthy despite the current sentiment regarding the British consumer and motor finance sector. Our robust and well established under-writing processes, and impeccable 17-year track record at Advantage position us to trade well through any foreseeable macro-economic weakness, whilst allowing us to take advantage of the clear opportunities for steady and sustainable growth which we see at present.”
It will announce half year results on September 26.