Last checked at 10 Aug 2011 07:00
10 August 2011
S&U PLC ("S&U" or "the Company")
Trading Update and Notice of Results
S&U, Britain's foremost niche home credit and motor finance provider, today announces a trading update for the six months to the 31 July 2011. The Company is pleased to announce that it is trading in line with market expectations and intends to issue its interim results on 22 September 2011.
Home Credit
Loansathome4u, our home credit business, has maintained its progress by increasing revenues by 3% in the period against last year. Collections remain satisfactory, increasing by 1% on slightly lower book debt. The three positive trends we reported in May have continued; the slight shortening of the loan profile, the improvement in impairment and the strong credit available to existing customers.
At a time of great economic uncertainty and faltering recovery, our customers are demonstrating the value that they place upon the service we provide.
Within the last fortnight we have been pleased to announce the opening of a new branch in Derby and are actively exploring ways to further expand our business.
Motor Finance
Advantage, our motor finance business, has maintained the impressive start it made to the financial year and the number of new advances in the period is up over 6% on a strong first half last year. Collection quality remains excellent as does the quality of new customers. The latter is reflected in an expected increase in the average net car advance which has increased from £4.5k to £5k. The results, driven in part by our state of the art underwriting system, lead the industry in terms of growth and quality. We see Advantage going from strength to strength.
Funding and Capital
Strong group collections have again had a beneficial impact upon our cash flow and S&U's financial position confirms this. During the period we have paid off £2m of loans and reduced borrowings and gearing to 40% against 51% last year. Further, we are pleased to have put in place a flexible bank funding facility to cover our core borrowing which will mature in April 2016. Our headroom for both organic expansion and acquisitions, as well as shareholder returns, has further increased.
AIM
At our AGM in May we announced that we were to consult Shareholders on a possible move from the Official List to the Alternative Investment Market. We have now completed these consultations and can announce that we will remain on the Official List where we have traded for the past 50 years. Our recent growth in Shareholder value, if not our liquidity, has merited a move from the fledgling to Small Cap Sector and we anticipate still further progress.
Outlook
At a time of great economic uncertainty and a faltering recovery, our home credit and motor finance customers are clearly demonstrating the value they place upon the convenient responsible and understanding service we provide.
Anthony Coombs, S&U's Chairman said, "By continually nurturing these relationships we anticipate sensibly and confidently, further progress throughout the year."
For further information, please contact:
S&U plc www.suplc.co.uk
Anthony Coombs, Chairman 0121 705 7777
Arden Partners plc
Adrian Trimmings / Jamie Cameron 020 7614 5900
Smithfield
Will Swan / Rebecca Whitehead 020 7360 4900