24th Sep 2014 07:41
LONDON (Alliance News) - S&U PLC Wednesday reported a 28% increase in first-half pretax profit, as the group increased its lending in order to meet higher demand for finance in both its motor and home credit divisions amid the recovering UK economy.
In a statement, the home credit and motor finance provider said it made an GBP11.3 million pretax profit in the six months ended July 31, compared with GBP8.8 million in the corresponding period last year, driven by increases in both of its divisions. Revenue increased to GBP34.7 million from GBP28.6 million, while administrative expenses increased to GBP12.5 million from GBP11.0 million. Net finance costs more than doubled to GBP705,000.
"The gradual recovery in the economy has seen a distinct improvement in consumer confidence which has justified the significant investment we have made in both our motor finance and home credit divisions. By continuing to keep our customers at the centre of everything that we do, we are seeing that investment bears fruit. With hard work and attention to detail we are confident that it will continue to do so," Chairman Anthony Coombs said in a statement.
However, the group's increased lending, and the investment of a net of GBP19.0 million in the first half in doing so, meant that gearing rose to 70% from 39% a year ago.
"A further GBP30.0 million of medium-term facilities has been negotiated during this period and, subject to our own pre-determined gearing limits, further funding will be negotiated as required," Coombs said.
In the longer-term, S&U is seeking to obtain a deposit-taking licence, and said active discussions are in progress with the relevant authorities.
S&U increased its first interim dividend to 17.0 pence from 14.0p.
"As usual, we plan to augment this with our usual two further dividends in April and July next year," Coombs said.
S&U shares were Wednesday quoted up 3.6% at 1,934.50p.
By Samuel Agini; [email protected]; @samuelagini
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