Preliminary Results

S & U PLC 19 April 2001 PRE-TAX PROFITS UP 27% AT £7.6M (£6.0M) ON TOTAL BUSINESS TRANSACTED 19% HIGHER AT £86.5M (£72.8M) EPS UP 23% AT 43.1p TOTAL DIVIDEND UP 12% AT 23.5p ALL PARTS OF HOME COLLECTED CREDIT BUSINESS REPORT IMPROVED SALES & PROFITS CAR HIRE-PURCHASE SUBSIDIARY ADVANTAGE FINANCE CONTRIBUTES PROFIT OF £907,000 IN ITS FIRST FULL YEAR FURTHER IMPROVEMENT IN GROUP'S PERFORMANCE EXPECTED IN THE CURRENT YEAR AS DEMAND FOR BOTH CONSUMER CREDIT & CAR FINANCE REMAINS STRONG Enquiries: Derek Coombs Anthony Coombs Executive Chairman Managing Director S&U PLC S&U PLC Tel: 020 7353 8906 Tel: 020 7353 8906 CHAIRMAN'S STATEMENT Results The operating profit for the year has increased to £8.4m from £6.2m for the previous year. Pre-tax trading profits for the year are £7.6m as against £6.0m. Earnings per share rose from 34.9p to 43.1p. Business transacted at £86.5m compares favourably with £72.8m for the comparable period. Credit charges and commissions' turnover is £31.9m, up from £26.5m. The Board is recommending a final dividend of 17.5p per ordinary share, making 23.5p per share for the year, compared to 21p last year, an increase for the year as a whole of 11.9% (last year was 5.0%). On this basis, at the average market price for March 2001 of 343.4p, the yield would be 6.84% with a cover of 1.8 times. Shareholders have enjoyed dividend growth in every year since before the company's 50th anniversary in 1988. Business Transacted and Turnover To most ordinary mortals this may mean the same thing; but not to accountants. We are advised that, now that Advantage forms a significant part of the group, it is more appropriate to state as our turnover line the credit charges and commission earned and not the full value of the sales or business transacted. We do however continue to show the fuller figure of business transacted for the sake of those, like me and many others, who consider this a highly relevant figure. The contracts of Advantage span some three years or so and therefore the business transacted to January 31st 2001 does not only benefit this year, but is also a store of future profits to an even greater extent than the home collected credit business. Home Collected Credit All geographical areas contributed to the improvement in sales and profits in the year. Much of this country's retail trade found last year difficult and, particularly against that backdrop, I believe that the hard work of the entire team deserves credit for an excellent performance. We believe the potential for steady growth continues and we will continue to invest in training, professionalism and getting the basic things right. Motor Car Finance Advantage Finance Limited The first full year of trading showed a profit before tax of £907,000 compared with the small start-up loss last year. We can take some satisfaction in that level of profit in a venture so young. It would have been easy to make the figure the round million, but the standards of quality underwriting are paramount in a lending business. The business is continuing to grow satisfactorily and we anticipate increasing profits. There is already £6.0m of revenue deferred to future periods in respect of advances already made. The Board There have been no changes in the board since the last annual general meeting. I am very pleased with the support I have from all the board; both executive and non-executive. Staff Every company is only as good as the quality and dedication of its staff. S&U is a very labour intensive operation and therefore even more so dependent on its staff. We have a superb team and I must take this opportunity to thank them on your behalf for their contribution during the year. Looking Forward There are only four quoted companies in our field, Provident, Cattles, London & Scottish and S&U. At the time of writing the price earnings ratios of the three other quoted companies in our consumer finance field are almost double that of S&U. Although our profits and market capitalisation are admittedly smaller than theirs, S&U's recent performance and growth potential are at least comparable. I would therefore hope to see that recognised in a further convergence of S&U's price earnings ratio and that of the sector generally in the year ahead. The Group's financial position continues to go from strength to strength and the profits grow. The business has defensive qualities at a time when the global economic scene is uncertain. It also has sound finances, clear and proven strategy, good management and committed staff. We plan to continue the successful expansion in the market for Home Collected Credit. Demand for credit from both existing and new customers remains strong, as they continue to value the convenient, quick and straightforward service in their homes. The provision of motor car hire purchase finance by Advantage through carefully targeted underwriting gives a growing opportunity for expansion and profit. The Board is confident that the company can meet all the challenges of the new financial year and can continue to improve its performance. Derek Coombs Executive Chairman CONSOLIDATED PROFIT & LOSS ACCOUNT Year ended 31st January 2001 2001 2000 £000 £000 (restated as per note 3) BUSINESS TRANSACTED 86,482 72,810 ====== ====== TURNOVER 31,892 26,479 Cost of sales (3,962) (3,214) ------ ------ Gross profit 27,930 23,265 Administrative expenses (14,989) (13,893) Provision for doubtful debt (4,492) (3,184) ------ ------ OPERATING PROFIT 8,449 6,188 Profit on sale of fixed assets 113 - Net interest payable (942) (181) ------ ------ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 7,620 6,007 Tax on profit on ordinary activities (2,405) (1,758) ----- ------ PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION BEING PROFIT FOR THE FINANCIAL YEAR 5,215 4,249 Dividends paid and proposed including amounts in respect of non equity shares (2,912) (2,619) ------ ------ RETAINED PROFIT FOR THE FINANCIAL YEAR 2,303 1,630 ====== ====== Earnings per Ordinary share 43.1p 34.9p ===== ===== Dividends per Ordinary share 23.5p 21.0p ===== ===== There have been no recognised gains or losses other than the profit for the current and preceding years. All activities derive from continuing operations. SUMMARY CONSOLIDATED BALANCE SHEET 31st January 2001 2001 2000 £000 £000 FIXED ASSETS Tangible assets 2,873 2,980 ------ ------ CURRENT ASSETS Amounts receivable from customers (including £9,737,000 falling due after one year (2000: £3,788,000)) 49,574 38,471 Other current assets 1,456 1,581 ------ ------ 51,030 40,052 CREDITORS: amounts falling due within one year (13,797) (15,229) ------ ------ NET CURRENT ASSETS 37,233 24,823 CREDITORS: amounts falling due after more than one year (10,000) - ------ ------ TOTAL NET ASSETS 30,106 27,803 ====== ====== CAPITAL AND RESERVES 30,106 27,803 ====== ====== STATISTICS 31-Jan-01 31-Jan-00 Operating Profit/Business Transacted 9.8% 8.5% Operating Profit/Net Assets 25.3% 21.6% Net Borrowing/Shareholders Funds 59.1% 35.8% CONSOLIDATED CASH FLOW STATEMENT Year ended 31st January 2001 2001 2000 £000 £000 £000 £000 Cash flow from operating activities (1,633) (956) Returns on investments and servicing of finance Interest received 4 55 Interest paid (902) (236) Preference dividends paid (230) (77) ------ ------ Net cash outflow from returns on investments and servicing of finance (1,128) (258) Taxation (2,054) (965) Capital expenditure and financial investment Purchase of tangible fixed assets (692) (760) Proceeds of sale of fixed assets 226 58 ------ ------ Net cash outflow for capital expenditure and financial investment (466) (702) Equity dividends paid (2,583) (2,339) ------- ------- Cash outflow before financing (7,864) (5,220) FINANCING Increase in loans from banks 10,000 - ------- ------- Increase/(Decrease) in cash in the year 2,136 (5,220) ======= ======= NOTES TO THE PRELIMINARY ANNOUNCEMENT Year ended 31st January 2001 1. This summary of results are not statutory accounts within the meaning of section 240 of the Companies Act 1985. The statutory accounts for the year ended 31 January 2001 on which the auditors have given an unqualified report and did not contain an adverse statement under section 237(2) or 237(3) of the Companies Act 1985 will be delivered to the Registrar of Companies after the Annual General Meeting. 2. A final dividend of 17.5p per Ordinary Share is proposed, payable on 2 July 2001, with a record date of 6 June 2001. 3. The financial information within this report has been prepared in accordance with applicable accounting standards. Since the preparation of the previous year's financial statements, the group has adopted the recommendations set out in Financial Reporting Standard ('FRS') 15 and FRS 16. There is no effect on the current and prior periods from adopting these new accounting standards, fixed assets that have been previously revalued will be frozen at modified historic cost. On advice regarding the most appropriate accounting policy in the light of industry practice and the guidance contained in Financial Reporting Standard 18, the directors have restated turnover on the home collected instalment credit agreements as being credit charges received or receivable. In previous periods, turnover was based on the total amount repayable less deferred income which also included the principal sum advanced. Cost of sales has been restated accordingly. There has been no impact on the profit for the year in the current or previous accounting period. Turnover and cost of sales have reduced by £44,457,000 (2000: £42,056,000) as a result of this restatement. In order to provide further comparative information, the directors have included a memorandum figure at the top of the profit and loss account, Business Transacted'. This represents the total amount that the customer has contracted to pay subject to the deferral of revenue attributable to a later period and VAT. 4. The number of shares used in the calculation of earnings per share is the average number of shares in issue during the year of 11,737,228 (1999: 11,737,228). There are no dilutive shares. 5. The figures shown for the year ended 31 January 2000 are not statutory accounts. A copy of the statutory accounts has been delivered to the Registrar of Companies, contained an unqualified audit report and did not contain an adverse statement under section 237 (2) or 237 (3) of the Companies Act 1985. 6. The 2001 Annual Report and Financial Statements will be posted to shareholders in due course. Copies of this announcement are available from the Company Secretary, S&U plc, Royal House, Prince's Gate, Homer Road, Solihull, West Midlands, B91 3QQ.

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