S & U PLC Trading Statement and Notice of Results (1685P)
February 06 2019 - 1:00AM
UK Regulatory
TIDMSUS
RNS Number : 1685P
S & U PLC
06 February 2019
6 February 2019
S&U plc
("S&U" or "the Group")
TRADING STATEMENT AND NOTICE OF RESULTS
S&U plc, the specialist motor finance and property bridging
lender, today issues a trading update for the period from its
trading statement of 7 December 2018 to the Group's year end on 31
January 2019.
Trading remains satisfactory and full year results are in line
with consensus expectations, despite current political and consumer
uncertainties.
S&U's final results will be announced on the 26 March
2019.
Motor Finance
Advantage Finance, our motor finance subsidiary continues to
produce record profits despite greater competitive conditions and
the seasonal slowdown in the motor finance market being more
pronounced than usual this year. The number of new Advantage
finance agreements for the financial year are still at their second
highest ever level and applications for motor finance remain
strong. Debt quality is consistent with, and beginning to respond
to, the underwriting changes made earlier in the year and monthly
collections in January exceeded GBP12m for the first time.
Following the slower recent transaction levels, net motor finance
receivables at year end were c.4% up on last year whilst total
"live" accounts are up 9% on last year at just over 59,000.
Used car values and volumes, including those of modern diesel
vehicles, continue to outperform the new market both in the
franchise dealer and independent retailer sectors. This, coupled
with further investment in Advantage products and distribution
systems, should provide a firm base of demand for renewed growth in
transactions for Advantage in the coming year.
Aspen Bridging
Aspen, our new Solihull based property bridging operation,
continues to make good progress. Aspen bridging loan net
receivables currently stand at just over GBP18.0m against GBP11.2m
last year, and the current flow of illustrations is very
encouraging. Equally as important, an updated suite of products and
resulting payment profile have seen new agreement gross margins
slightly higher than budget, without any impact on LTVs. Aspen's
repayment record is also creditable with 43 repayments so far from
the 97 loan facilities underwritten to date.
As a result, Aspen is expected to make a useful contribution to
Group profits this year and justify the investment planned for
it.
Funding
The pause in the previously rapid rate of growth at Advantage
combined with budgeted expansion at Aspen has seen Group borrowing
reduce from GBP118m to GBP108m during this period, compared to
GBP105m last year. S&U's current facilities of GBP135m provide
sensible headroom for expected growth and additional facilities
will be put in place as required.
Dividend
The Group's consistent profit record and a prudent view of the
future have led the Board to approve a second interim dividend this
year of 35p per ordinary share (2017:32p). This will be payable on
the 15 March 2019 to shareholders on the share register on 22
February 2019. Including the 32p per share paid in November, our
first two dividends of the year will therefore total 67p against
60p last year and 36p four years ago. This steady and sustainable
approach to rewarding shareholders is underpinned by an anticipated
return to twice dividend cover for the full year.
Commenting on the Group's performance and outlook, Anthony
Coombs, S&U Chairman, said:
"Over the past 25 years, S&U has consistently demonstrated
its ability to adapt to the kinds of economic and political
uncertainty we all currently face. I am therefore confident that
this sound experience, our strong financial base and the skills of
those who work for us will serve to underpin the Group's success in
the future."
For further information, please contact:
S&U
Anthony Coombs, Chairman 0121 705 7777
Newgate Communications
Bob Huxford, Imogen Humphreys, Tom Carnegie 020 7653 9848
Peel Hunt
Adrian Trimmings, Andrew Buchanan, Rishi Shah 020 7418 8900
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END
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