Credit provider S & U looks to new trading year with confidence after record Christmas

SOLIHULL-based credit and finance provider, S & U, has said growing consumer confidence is supplying a boost to its business.

In a trading update covering the period from December 10 to year-end on January 31, 2014 the company said trading had been in line with market expectations.

In its Home Credit division it said that as the economy showed gradual signs of recovery, so the confidence of its customers appeared to be improving.

It said the Christmas period had been strong with advances almost 10% above last year.  Collections quality remains good and payment defaults improved on last year, it added.

It said it continued to purchase small but high quality home credit businesses and planned to expand its branch network in the coming financial year.

Advantage, its Motor Finance division, has also seen strong trading, buoyed by the positive impact of the UK car market. The Christmas and January period were both record trading periods for the business with customer numbers up almost a quarter up on last year at just over 18,000.

It said new products were also helping the business and the aim now was to build on, and exceed these achievements.

To help towards this it has invested £12m during the year to improve the motor finance business.  It said despite its recent resurgence, the home credit business had financed £2m of this, while additional medium term banking facilities of some £22m provided more than adequate cover for further expansion this year.
 
It said it continued to review all financing operations as the group grows, but would remain steadfast to its conservative treasury policy which has seen gearing rise to around 46% in the year (Jan 2013: 34%).

The company has said it also intends paying a second interim dividend of 16p per ordinary share. The payment will be made on April 11, 2014 to shareholders on the register on March 21.

This represents an increase of 4p on the first and second interim dividends of last year.  It is also the company’s intention to recommend the payment of a final dividend on July 11, 2014 of at least 20p per ordinary share for the year ending January 31, 2014 (final dividend paid July 12, 2013: 20p).  

Commenting, Anthony Coombs, chairman, said: “I am very pleased that our hard working and dedicated people throughout the group have been able to mark our 75th anniversary year by levels of customer service that have achieved record results.  As the employment market recovers, and consumer confidence returns, we view the future with enthusiasm and confidence.”
 
S & U will announce its results for the year ending January 31, 2014 on March 25.