Profits accelerate at specialist lender

Specialist lender S&U has seen its profits speed up while it expects this year to “see a full rebound to normal motor sales conditions”.

The Solihull-based group has revealed its financial performance for the year to January 2022 will be ahead of expectations when it reports its figures next month.

S&U chairman Anthony Coombs said he is “very confident” of the group’s prospects after strong performances from both its divisions, motor finance lender Advantage and property bridging company Aspen.

He said: “Although exceptional factors have benefited the Group’s profitability this year, in the years to come the ongoing quality of our customer lending, the strength of our finances and our investment in the growth of our routes to market will underpin S&U’s return to the levels and rates of profit growth experienced before the pandemic.”

Advantage expects pre-tax profits to be “more than double” last year’s £17.2m, helped by lower bad debts and voluntary terminations.

This will result in Advantage’s profit over the past two years of the pandemic being only slightly below its pre-Covid levels.

Aspen Bridging, which was launched in 2017, said it is “both a thriving UK property market and from the growing expertise and experience of its people”. The market conditions are also very favourable, with residential transaction levels in January being the highest since 2007.

S&U’s performance and prospects have resulted in a 44% increase in its interim dividend, to 36p.

Its share price reached an all-time high last August and although it has slipped a little since then, it remains around 30% higher than before the start of the pandemic. Its share price rose 5% in early trading this morning to 2850p, which values the group at £350m.

S&U was founded in Birmingham in 1938 by Clifford Coombs originally as a retailer. It went public in 1961 and in 1975 made the shift away from stores and manufacturing to concentrate on home credit loans.