Niche lender S&U (SUS) has its pedal to the metal. Its motor financing subsidiary Advantage Finance reported pre-tax profits of £16.7m - up an impressive 46 per cent - as rising employment and wages have encouraged consumers to take out a line on a new set of wheels. Crucially, the improving economy boosted not just demand for credit but also repayments: at £4.7m a month, debt collections were 40 per cent higher year-on-year.
In home credit, new branches in Bridgend, Greenock and Liverpool helped S&U's Loansathome4U business grow its customer numbers by 7 per cent. Pre-tax profits here were up more than a tenth at £6.5m.
But backseat shareholders urging further acceleration will be disappointed. This year the lender is focused on consolidating its gains, with chairman Anthony Coombs comparing it with an army that needs to reinforce its progress. "You want to make sure you are not stretching your supply lines," he says. The company also faces key regulatory deadlines to get sign-off for its credit licences, and is applying to join the realm of the challenger banks by securing permission to take deposits.
Broker Arden Partners expects pre-tax profits of £26.4m for the year to January 2016, giving EPS of 175p (from £23.2m and 156p last year).
| S&U (SUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,180p | MARKET VALUE: | £259m | |
| TOUCH: | 2,199-2,210p | 12-MONTH HIGH: | 2,180p | LOW: 1,700p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 685p | NET DEBT: | 66% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 48.0 | 9.9 | 60.0 | 36 |
| 2012 | 51.9 | 12.2 | 76.1 | 41 |
| 2013 | 55.0 | 14.2 | 92.6 | 46 |
| 2014 | 60.8 | 17.3 | 113.2 | 54 |
| 2015 | 74.4 | 23.2 | 156.0 | 66 |
| % change | +22 | +34 | +38 | +22 |
Ex-div: 18 Jun Payment: 10 Jul | ||||
