7th Dec 2018 11:07
LONDON (Alliance News) - S&U PLC said Friday it expects 2019 financial year results to be "broadly" in line with expectations based on recent trading and despite "economic and political uncertainty".
The finance provider said "recent economic climate trends" has made it more cash generative, with current committed facilities of GBP135 million, providing the company "ample and sensible" headroom for its expected growth.
In the year ended January 31, S&U recorded pretax profit of GBP30.2 million on revenue of GBP79.8 million.
S&U's Motor Finance division has seen a "less marked" slowdown compared to that of the wider motor industry.
The Motor Finance division, Advantage Finance, has seen new loan agreements in the year to date of 18,710, which is 7% lower than last year for the same period. S&U said this reflects the division's "prudently tightened under-writing".
Advantage Finance's customer base and current net receivables continue to grow, said S&U. The division now has 59,000 customer with GBP267 million net receivables - both are records for Advantage Finance, but S&U noted that customer and receivables volumes have been growing at a slower pace than previously anticipated.
Year-to-date monthly collections are up 18% on the year before at "just under" GBP115 million. S&U said this is "evidence" in the "improvement in new customer quality".
S&U's Property Bridging Finance division, Aspen Bridging, has made "good progress" and has moved to its pilot stage. Its loan book has reach GBP18 million of net receivables, up from GBP9 million last year.
S&U said Aspen Bridging continues to maintain its margins in a competitive market. In particular, the division's stepped products have "proved both popular and profitable".
In a competitive market it continues to maintain margins and refine its flexible and bespoke bridging products. In particular, its stepped products have proved both popular and profitable and this has been reflected in Aspen's good repayments profile.
S&U expects to increase its total investment in Aspen to about GBP30 million in 2019, with further funding dependent on the divisions requirements and performance.
Chairman Anthony Coombs said: "At a time of considerable political and economic uncertainty in the UK, I am pleased to say that S&U retains a very strong financial base, growing expertise and experience and a prudent business philosophy which will enable us to make the most of the opportunities presented by the motor and property markets as 2019 unfolds."
"In a fast changing world these enormous strengths underpin our ability to continue to provide steady, sustainable growth for our shareholders."
Shares in S&U were down 1.5% Friday at 2,118.60 pence each.
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