Interim Management Statement

RNS Number : 5161H

S & U PLC

20 May 2014

 



20^th May 2014

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 2014 to 19 May 2014, ahead of its Annual General Meeting being held later today.

Group trading continues in line with expectations.  Advantage Finance our motor finance division, continues to grow strongly whilst Loansathome4U, our home credit division, is also experiencing renewed growth.

Motor Finance

Advantage Finance continues to set new records for growth, collections quality and profit.  Net receivables have grown by 49% versus the same period last year, as our products have been well received by Advantage's growing band of broker introducers, and margins have been maintained.  Collections are regularly now over £4m per month and debt quality is at its best ever.

Home Credit

Trading in our long standing and cyclically robust home credit business has been very promising as sales and collections exceed budget.  Three new branches in Bridgend, Liverpool and Greenock have been established and are all trading satisfactorily.  Customer numbers are over 6,000 up on last year, particularly in the north of England and Scotland as the Group takes advantage of consolidation elsewhere in the home credit industry.

Although this expansion has seen a rise in costs, the influx of new customers has led to record credit availability throughout the business.

Funding and Capital

Investment in accelerated growth at Advantage and the renewed expansion of Loansathome4U has required an additional £12m investment since the year end.  We are pleased to report that our strong balance sheet and trading record, has attracted M&G Investments as a new long-term non-bank funder to augment our existing banking facilities.  This, together with gearing at a sensible 58%, gives the Group adequate headroom for further growth.

In addition we continue to actively explore a deposit taking licence with the relevant authorities.

Regulatory Environment

From April 1^st this year, the Financial Conduct Authority assumed responsibility for the regulation of both our motor finance and home credit businesses.  Interim authorisation has been received and the new full authorisation process will begin in April next year.  Treating customers fairly has always been at the heart of our business.  We anticipate that the new FCA regime will be rigorous but proportionate.  We therefore are setting in train arrangements throughout the Group to meet these requirements.  We expect these will benefit both the efficiency of our operations and the quality of service we offer every one of our customers.

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

"Recovering consumer confidence and an improving economy provide a firm platform for the expansion of our business.  This is reflected in our trading during the first quarter and we are confident of further progress throughout the year."

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                                            020 7614 5920

Media and Investor Relations                      Smithfield

Will Swan/Rachel Kellett-Clarke                     020 7360 4900

 

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