Strong car market drives H1 growth for finance firm S&U

A STRONG new car market has helped Solihull motor finance provider S&U see a record first half.

Latest interims from the firm show that for the six months ending July 31, 2016, revenue rose 39% to £28.3m (H1 15: £20.4m), with pre-tax profit up 35% to £11.9m (H1 15: £8.8m).

Basic earnings per share rose 36% to 79.2p (H1 15: 58.3p) and the board has recommended a first interim dividend up 20% to 24.0p per share (2015: 20.0p).

The six-month period saw a record performance by the firm’s motor finance arm, with advances at Advantage Finance up 54% on the same period last year.

Motor finance collections and debt quality also continue at near historical highs, said the firm.

In the period since the end of July, funding facilities increased to £85m which together with 29% group gearing (2015: 45%) give the firm significant headroom for organic expansion and new initiatives.

Anthony Coombs, chairman of S&U, said: “A further half-year’s successful trading and a robust financial position, provide a solid springboard for sustained growth in the year ahead.”

The group’s strong treasury position has enabled it to invest a further £23.3m in Advantage, where capital receivables from customers have reached £200m for the first time.  

The firm said it had also been pleased that the doom-mongers foretelling Brexit as an economic disaster had not been realised.

“Fortunately the real world appears to have had other ideas.  Recent figures on the manufacturing and service sectors, economic growth generally and consumer confidence provide grounds for optimism,” said Mr Coombs.

“In particular, a buoyant new car market reflects a robust labour market and has resulted in excellent levels of demand for used vehicles.  Advantage has seen this evidenced by a record level of applications which are 58% up on last year.  Indeed, August saw Advantage achieve the remarkable milestone of 100,000 finance deals throughout its history.”