11th Feb 2025 11:23
(Alliance News) - S&U PLC on Tuesday said the "pro-growth national agenda" provides a platform for the company to return to growth, as it declared a lower interim dividend.
The Solihull, England-based lender focused on motor finance and property bridging said despite trading challenges at motor finance subsidiary Advantage, the outlook for the group is positive.
S&U proposed a second interim dividend of 30.00 pence per share, down 14% from 35.00 pence in the previous year.
The firm said the recent government movement towards a "deregulatory and growth-focused agenda" suggests it may benefit from a "stable and pragmatic framework for financial services".
The company said there have been a number of representations from itself, UK Finance and the Financing & Leasing Association to the government in the past two months "to ensure a robust and predictable regulatory framework".
There are "cautiously encouraging" signs of a "common-sense" approach at the Supreme Court regarding the upcoming review of October's Court of Appeal decision on motor finance commissions, the company said.
In April, the Supreme Court is due to hear an appeal brought by car loan providers challenging a ruling from the Court of Appeal that sided with consumers who complained about "secret" commissions on car loans.
"My view is that even should the Supreme Court uphold the lower courts' decision in principle, any 'harm' found to have been suffered by consumers will be so marginal as to make demands for redress minimal," the company said.
It noted that headwinds at Advantage will be reflected in second-half profits, but it anticipates a recovery in the next financial year.
S&U said its property finance lender Aspen reported record net receivables which grew 17% to GBP152 million from GBP130 million in the previous year.
It said profits "are likely" to rise by 50% compared to last year.
"With demand for residential properties up 13% on a year ago according to Zoopla and with interest rates falling slowly, the stage is set for another very good year," the company said.
Chair Anthony Coombs said: "Over the past year, macroeconomic and regulatory pressures on the business have severely tested S&U's historic experience, expertise and resilience. Despite these, we maintain our faith and confidence in the service we are proud to give to our loyal customers.
"As a more pro-growth national agenda develops and the regulatory frenzy eases, then this provides a solid base for a return to more normal levels of profitability, growth and returns for our shareholders."
S&U shares were down 3.7% to 1,569.75 pence in London on Tuesday morning.
By Michael Hennessey, Alliance News reporter
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