S&U says first quarter profitability ahead of last year and budget

(Alliance News) - S&U PLC shares rose on Wednesday as it said its turnaround "continues apace" with trading in the first quarter "healthily above budget".

The Solihull, England-based lender, which is focused on motor finance and property bridging, said group profitability for the quarter to the end of April is ahead of both last year and budget.

Shares in S&U were up 9.1% at 2,030.00 pence on Wednesday afternoon in London.

The firm noted that transaction growth slowed during the period, but said applications for finance at both Advantage and Aspen "remain strong".

At motor finance provider Advantage, averaging lending rates increased to 15.3%, with repayment rates averaging 92.4% against 89.1% last year.

"At Aspen, a recent upturn in applications, as traders returned to the market, portends a busier second quarter following a slow start to the financial year, as fears about the path of interest rates persist," S&U said.

S&U also noted that the "machinery of government and regulation" in the UK is operating in a "calmer and more pragmatic way".

"Although the FCA's redress proposals for motor finance commission are now subject to judicial review, and are administratively cumbersome, they are likely to have little or no bearing on Advantage's future profitability," the company said.

"Government is slowly realising that future fiscal golden eggs from the finance industry mean that the goose cannot be taken for granted."

Chair Anthony Coombs added: "At this stage in the year, it is usually unwise to attempt year end predictions, particularly in such a fluid political and economic climate. Suffice to say that confidence in our aims for double digits growth and return on equity is exemplified by the resources we plan to make available, and the abilities of our people in achieving them."

By Michael Hennessey, Alliance News reporter

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