Credit firm S&U on target to meet expectations

SOLIHULL-based home credit and motor finance provider S&U has said it continues to trade in line with expectations despite the recessionary climate.

In a trading update ahead of its interims results, the firm said that LoansatHome4U S&U, its Home Credit, had maintained its recent progress despite the tough trading conditions. Customer numbers are up just under 3%, revenue growth has exceeded that for last year and, while impairment charges are higher than a good first half year in 2011, it said debt quality continued to be strong.
 
Therefore, on similar book debt to last year, credit availability is significantly greater and collections are up over 7%. He firm said this bode well for the second half of the year.

The period to July 31, 2012 saw the opening of new branches in Rotherham and Swindon and the firm said both were trading well.

In the meantime, the company said it continued to search for suitable acquisitions, provided these were sensibly priced and offered opportunities to develop the firm’s range of products.

Advantage Finance, S&U’s Motor Finance business, was said to have continued its record development.  Since the company’s IMS in May, Advantage has continued to grow every sphere of its business – collections, gross receivables, transaction numbers, margins and impairment.  As a result advances are up 23% on last year and impairment is down.
 
The firm said the operation was also attracting a wider range of customers, mainly due to the range of new and evolving products.  Advantage’s under-writing system is currently being refined to make it a more sophisticated service.

S&U said while it continued to invest in the Advantage Motor Finance book, the group’s strong cash generation had seen gearing fall again to under 35% against 38% last year.  

In outlook, Anthony Coombs, S&U chairman, said: “Against the current economic backdrop, S&U’s continuing progress is driven by our commitment and attention to the demands and needs of every customer.  This defines S&U and underpins our confidence in the company’s future progress.”

S&U will publish its interim results on September 26, 2012.