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10 Dec 2008 07:00
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10Β December 2008
S&U plc
("S&U" or "the Company")
Interim Management Statement
S&U,Β Britain's foremost niche home credit and motor finance provider, today issues an interim management statement for the period fromΒ 1stΒ August 2008Β toΒ 9thΒ December 2008.Β
Home Credit
HomeΒ CreditΒ operationsΒ account for about 70% of group revenues and these operationsΒ have benefittedΒ fromΒ ourΒ new marketing and internet initiativesΒ and from more restricted creditΒ conditionsΒ elsewhere.Β HomeΒ credit revenuesΒ are aheadΒ by Β£0.4m (5%)Β whilstΒ impairment has risen by Β£0.2mΒ compared toΒ the same periodΒ last year.Β Β Cash generation during the period was positive and stable and we continue to benefit from the hard work of our representatives who are rewarded on collections.Β Β WeΒ have further tightened our credit control and continue to lend overΒ slightly shorter terms.Β We, therefore,Β anticipateΒ lower salesΒ growth in the last quarterΒ butΒ are well placed to maintainΒ the robust quality of ourΒ collections going forward.Β
Motor Finance
Advantage, our motor finance businessΒ which accounts for approximately 30% of revenue, continues to trade well and to budget.Β Β AdvancesΒ areΒ up 7% year to dateΒ from applications up 29%;Β early settlementsΒ areΒ down 19%Β as customers trade their cars on less often. Collection and impairment levels continue to be stable as we approach the key Christmas collection period andΒ over 70% ofΒ AdvantageΒ customers are up to dateΒ in lineΒ with our expectations.Β Β In order to maintain thisΒ level ofΒ collection performanceΒ in a slowing economyΒ weΒ continue to be more selective in ourΒ underwritingΒ andΒ have reduced our maximum termΒ and loan size onΒ newΒ deals.
Funding
S&U'sΒ balance sheetΒ remains strongΒ and total borrowings are similar to the level reported at the half year endedΒ 31 July 2008.Β The recent fall in interest rates is expected to benefit our results next year, althoughΒ we will incur higher hedging costs this year.Β
Commenting on theΒ IMS,Β Anthony Coombs,Β ChairmanΒ ofΒ S&U plc,Β said:
"DespiteΒ the current macro economicΒ instability,Β underlyingΒ trading remains stable and resilient. Although we will be cautious going forward, the CompanyΒ remains robust and well placedΒ to deliver a good performance for 2008 and beyond."
For further information, please contact:
S&U plc www.suplc.co.ukΒ
Anthony Coombs, Chairman 0121 705 7777
Charles Stanley Securities
Mark Taylor / Freddy Crossley 020 7149 6000
Smithfield
Reg HoareΒ /Β Katie HuntΒ 020 7360 4900
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