Last checked at 18 Jun 2008 08:00
Interim Management Statement - June 2008
S&U is one of Britain's foremost niche home credit and motor finance provider and it provides a reliable, flexible and high quality service to 135,000 customers throughout the United Kingdom. As required by the Listing Authority Disclosure and Transparency rules, the Board is pleased to present our interim management statement for the period from 1st February to 18th June 2008.
Home Credit
Our prediction in February that economic conditions and falling consumer confidence would both impose limits on, and offer opportunities for, growth has proved accurate, particularly in home credit which accounts for approximately 70% of our revenues. Across this market, debt quality has continued to improve in all subsidiaries on sales slightly lower as we have shortened our debt profile. Further industry consolidation may also offer opportunities for growth. We remain optimistic for the full year.
Motor Finance
Advantage, our motor finance business which accounts for approximately 30% of revenue, continues to trade well and to budget. Sales for the period are 14% ahead of last year with collections to match. Customer quality, and average deal size, is improving as we take advantage of lower volumes written by non-prime competitors. We anticipate further good progress in the second half of the financial year.
Funding and Capital
S&U's financial position remains strong, Group borrowing as a proportion of book debt is almost identical to last year, as investment in the motor finance business continues to be financed by our home credit business. The Group continues to operate comfortably within existing bank facilities.
Outlook
Despite the gloomy and somewhat feverish economic climate, S&U is confident in being able to continue to produce stable and satisfactory earnings again this year.
Commenting on the Results Mr Anthony Coombs, its Chairman, said "In uncertain macroeconomic conditions the Group continues to perform well. Although we will be cautious going forward, the Group remains robust and well placed to deliver a good performance for 2008 and beyond".