Upbeat car market boosts finance provider S & U

THE strong new car market in the UK has helped to boost performance for Solihull-based home credit and motor finance provider, S & U.

UK consumers, supported by PPI payouts, are leading a recovery for the new car sector with registrations increasing on a monthly basis.

This is having a welcome knock-on effect for support companies such as finance providers.

S & U said interim revenue was up 7% to £28.6m (H1 2012: £26.8m), with pre-tax profit up 20% to £8.8m (H1 2012: £7.3m). Basic earnings per share rose 20% to 56.6p (H1 2012: 47.1p) and the interim dividend increased by 17% to 14p (2012: 12p).

Its motor finance arm, Advantage Finance, saw a 50% increase in motor finance advances with record collections.

Advantage Finance recorded a pre-tax profit of £5.6m (H1 2012: £3.8m), while revenue is 25% above last year with record customer numbers of nearly 23,000.

Advantage’s loan repayments also stand at a record level, partly due to the extension of its product range and also from other refinements to its under-writing techniques, which allows Advantage to more accurately predict repayment patterns within its traditional customer range.

This has resulted in monthly collections rising by 23% on last year and consistently setting new records.

“Given the quality of this business and of the people driving it, we have had no hesitation in adding £7m to investment in Advantage in the half year,” said S & U chairman Anthony Coombs.

The Loansathome4U, its Home Credit business was said to have produced solid rather than spectacular results.  Pre-tax profit was £3.2m against £3.6m for the half year last year.

“As the economy gradually recovers these results reflect the very significant opportunities emerging in the specialist markets we serve.  By maintaining our focus, drive and dedication to our customers, we look to the future with great confidence,” added Coombs.