27th Sep 2016 08:49
LONDON (Alliance News) - Motor finance lender S&U PLC said Tuesday it had seen the benefits of a buoyant UK car market in the first half of its financial year, as it also released plans for a pilot launch of a property bridging finance business.
For the six months to the end of July, S&U made a pretax profit of GBP11.9 million, up by 35% year on year from GBP8.8 million. Revenue grew by 39% to GBP28.3 million compared to GBP20.4 million the year prior.
S&U hiked its interim dividend to 24 pence from 20p on the back of the results.
Profit was driven by the Grimsby-based motor finance operation Advantage Finance which made GBP11.9 million in profit, up by 22% from GBP9.7 million the year prior. S%U said the business has seen record new motor advances, up by 54% to over 10,000 new customers in the half. However the company's rolling 12-month impairment-to-revenue ratio did increase to 17.7% at July 31 from 16.9% at the same period in 2015.
S&U said it had invested GBP23.3 million more in Advantage Finance, with company borrowing for the half year at GBP38.0 million. S&U's gearing ratio at the half year stood at 29%, down from 45% in 2015.
"Current trading and debt quality remain excellent and, aligned to our robust treasury position, provide a firm springboard for future growth. This will in the main be spearheaded by Advantage Finance; nevertheless preparations are being made for the measured launch of a pilot secured bridging finance business. Whilst we see significant potential in this specialist sector, we will of course pilot bridging finance with our usual caution and exacting standards" said Chairman Anthony Coombs.
Shares in S&U were up 2.7% at 2,501.00 pence Tuesday.
By Adam Clark; [email protected]
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