8th Aug 2019 11:37
(Alliance News) - S&U PLC on Thursday said it expects its motor finance business to drive annual growth after achieving a "record" number of clients in the first half.
The motor finance & bridge lender said both of its Advantage Finance and Aspen divisions continued to trade well and in line with expectations in the period from May 23 to the end of July.
In contrast with the current low levels of consumer confidence in the UK, demand for Advantage Finance's motor finance is healthy and transactions are ahead of last year, the company said. The division now receives over 110,000 applications per month, S&U said, with customer numbers as at July 31 standing at a "record" 62,000, up 7% on last year.
Following its tightening of underwriting last year, S&U said collections for the six months to the end of July were up by 7% on the same period last year, and early repayment indicators on new business continued to show improvement.
Looking forward, S&U said, despite a recent downturn in the new car market, the used car market remains robust and is likely to continue to do so, even assuming a no-deal Brexit.
Turning to property bridging, S&U said, whilst activity in the housing market remains subdued, valuations continue to be steady and profitable growth at Aspen continued, albeit at a slightly slower pace than anticipated.
Property bridging involves making short-term loans to provide funding while property sales take place.
Aspen therefore continued to gradually build its bridging book, and net amounts receivable at the half-year stage stood at over GBP24 million, S&U said, compared to GBP16.3 million a year prior.
"Trading in the first half of the year reflects continued and consistent growth in profitability which has been the S&U hallmark over the past 10 years," said Chair Anthony Coombs.
"Transaction volumes and quality improvement, particularly in our motor finance business, are expected to be reflected in the pace of profits growth over the full year," added Coombs.
The company will publish its half-year results on September 24.
S&U shares were 0.5% higher in London on Thursday at 2,110.00 pence each.
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