Car finance specialist boosted by improving consumer confidence post-election

Car finance specialist S&U said this morning that it has seen trading conditions improve as consumer confidence starts to gain momentum following the General Election.

The Solihull-based listed lender issued a trading update for the period from its trading statement of 10 December 2019 to the group’s year end on 31 January 2020, in which it said it has seen an improvement in transactions in both businesses – Advantage Finance and Aspen Bridging.

It said Advantage has seen a record number of applications and over 23,300 new agreements this financial year (up 11% on last year).  This means that customer numbers are now at a record 64,200 and net receivables stand at around £280m, up about 8% on last year.

Aspen Bridging, its property bridging operation, continues to make progress, the company said.

“Although, following the General Election, the uncertainty and low levels of activity in the residential property market have begun to dissipate, time lags in bridging have seen this reflected more in recent illustrations rather than in deals.

“Whilst some borrower exits are still slower than anticipated, the level of repayments including late stage repayments has improved recently, resulting in £15m being repaid during the final quarter.  Taken together, these trends reinforce our confidence in Aspen’s growth prospects in a healthier property market, and therefore our confidence for further investment in the year ahead.”

Meanwhile, group borrowings have fallen from £132m to just under £118m during the period, which S&U said demonstrates both of its businesses’ cash generative potential and the “significant headroom for further expansion”.

Anthony Coombs, S&U chairman, said: “Although the UK may not yet have reached the sunlit uplands of renewed growth and consumer confidence which the General Election result makes possible, S&U’s prospects for the year ahead are good.

“From a sound financial base, S&U is very well placed to take advantage of this in our habitually responsible and sustainable way.”

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