Strong home credit and motor finance boosts first half for S&U
SOLIHULL-based consumer credit group S&U has seen an 8% rise in half-year revenue with pre-tax profits rising 14% following strong performances in its home credit and motor finance operations.
For the six months to the end of July, revenue grew to £26.8m (2011: £24.8m) with pre-tax profit at £7.3m (2011: £6.4m). Earnings per share were up 18% to 47.1p (2011: 39.9p) and the group opted to increase its interim dividend by 9% to 12p (2011: 11p).
The period saw a 5% growth in Home Credit revenue compared to 2011, boosted by good collections and historically high customer credit availability. The group said this positioned it well for second half year.
In Motor Finance revenue was up 14% versus the same period last year with a 23% increase in advances in the six months to July 2012. The period saw the highest ever levels of loan transactions, collections and pre-tax profits.
On current trading and outlook the group said Home Credit was maintaining good cash generative returns, while Motor Finance experienced good collections and profitability looked likely to continue.
Anthony Coombs, chairman of S&U, said: “S&U continues to prosper as a result of close customer relationships and an ability to react to their needs and circumstances. We remain confident for the future.”
Mr Coombs said the results had been achieved against a sombre back drop of a difficult economy and a “Coalition Government seemingly in office but not in power”.
He said the main drive behind the group’s increased profitability had again been Advantage, its Motor Finance business.
“Profits there are up an impressive 29% on the first half last year, whilst our cash generative and longstanding home credit division has produced stable profits on higher turnover, good collections but slightly higher debt provisioning than the very low levels in the first half of last year. For the group as a whole, collections are up 8%, receivables are up 6% and impairment charges reduced by 1%,” he said.
