Interim Management Statement

RNS Number : 4911F

S & U PLC

24 May 2013

 



24 May 2013

S&U plc ("S&U" or "the Group")

Interim Management Statement

S&U, Britain's foremost niche home credit and motor finance provider, issues an IMS for the period from the 1 February 2013 to 24 May 2013 ahead of its Annual General Meeting being held later today.

Group trading remains in line with overall expectations with the cash generative Home Credit division helping to finance the very strong progress of the Motor Finance business.

Home Credit

For Loansathome4U, our home credit division, this year marks its 75^th trading anniversary. It maintains a solid performance against a background of restrained customer confidence and real incomes and uncertainties regarding state benefit changes.  Advances and receivables are 3%, and collections 2% lower than a good first quarter last year. Home Credit year on year profitability is slightly down, but cash generation is good and has considerably exceeded the first quarter of last year.

Recent weeks have seen an improving sales trend. New products have just been introduced, including an industry leading pre-paid debit card and a new concept in consumer finance. We are hopeful that these initiatives will help to grow customer numbers at good margins.

Motor Finance

Both in terms of capital employed and profit generation, Advantage Finance, our motor finance business, is now the larger part of S&U.  Its performance remains outstanding and even exceeds the levels of growth and collection quality of 2012.  Receivables are no less than 29% up on last year while customer numbers are at a record leveland collections quality is better than ever. 

Funding and Capital

The strength of our balance sheet and funding facilities, together with our cash generative home credit business has allowed us to invest further in the growth of Advantage Finance.  Gearing is still low and responsible at just over 35% reflecting Group borrowings of just over £4m above last year at £22.5m. 

Corporate Governance

S&U will implement any changes required by reforms of the Corporate Governance Code expected to be announced later this year.  In the meantime a new independent Non-Executive Director, specifically responsible for Corporate Governance matters, will be appointed immediately following the Annual General Meeting.

Commenting on Group trading and outlook, Anthony Coombs, S&U Chairman, said:

"The continuing success and growth of Advantage and the potential for renewed growth in home credit more than counter balance a generally sluggish and unpredictable economic recovery.  Maintaining and improving the service we give to every one of our customers justifies our confidence in the year ahead."

For further information, please contact:

S&U plc www.suplc.co.uk

Anthony Coombs, Chairman                               0121 705 7777

Financial Advisers, Sponsors and Brokers      Arden Partners

Adrian Trimmings / Jamie Cameron                     020 7614 5920

Media and Investor Relations                          Smithfield

Will Swan / Rebecca Hunt                                  020 7360 4900

 

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