Consumer confidence continues to boost credit provider S & U

SOLHILL-based motor finance and home credit provider, S & U, has said it continues to expect full year trading to be in line with expectations, boosted by a strong performance from its trading divisions.

In the six months to July 31, 2014, it said Advantage Finance, its motor finance subsidiary, had continued to trade at record levels.  Advances are over £18m above last year for the period and credit quality is the best ever.  Both result from continued refinements in under-writing and marketing and fully justify the additional £20m of investment made since the year end.  This includes the purchase of expanded premises in Grimsby.

Improved consumer confidence and a greater market share have boosted the home credit business in the first half.  Three new branches have been opened, the number of representatives has grown by 10% and this has been more than matched by increases in both advances and collections.  Debt quality continues to improve and the business remains cash generative.

It said transition to regulation by the Financial Conduct Authority was going smoothly and compliance reviewed; full authorisation is expected to be approved on schedule in the middle of next year.

Additional investment in both the motor finance and home credit businesses has seen gearing rise to around 70% from 39% a year ago.  To accommodate this, and to maintain headroom, the firm said long-standing banking arrangements had been augmented by longer-term facilities from new funders at AIB and M&G Investments.  In addition, it said constructive discussions continued with regulators regarding the acquisition of a deposit-taking licence.

Anthony Coombs, S&U chairman, said: “Current performance and future prospects in both our businesses are very encouraging.  Our constant attention to the service we give every customer justifies our confidence in the future.”