Sub-prime lender S&U (SUS) delivered an impressive half-year performance, reflecting further robust growth at the vehicle finance unit and modest progress in home credit loans. None of this growth, however, has come at the expense of credit quality - the group's loan loss provisioning charge actually fell marginally year on year to £5.76m, representing 7 per cent of customer receivables. Yet, despite a decent run, the shares still don't do justice to that growth profile.
Advantage, S&U's motor finance business, grew pre-tax profits 29 per cent year on year to £3.8m, with customer numbers there having risen 12.5 per cent to nearly 14,000. Crucially, transaction numbers, debt quality, collections and cash flow all beat budgeted targets. And Loansathome4U, the group's home collected consumer finance arm, grew pre-tax profits from last year's £3.5m to £3.6m - despite having maintained strict lending criteria. Customer numbers there grew 3.5 per cent, helped by new office openings in Rotherham and Swindon.
Broker Arden Partners expects full-year adjusted pre-tax profit of £13.5m, giving EPS of 86.1p (from £12.2m and 76.1p at end-January 2012).
| S&U (SUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 854p | MARKET VALUE: | £100m | |
| TOUCH: | 851-870p | 12-MONTH HIGH: | 895p | LOW: 598p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 487p | NET DEBT: | 33% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 24.8 | 6.43 | 39.9 | 11.0 |
| 2012 | 26.8 | 7.32 | 47.1 | 12.0 |
| % change | +8 | +14 | +18 | +9 |
Ex-div: 17 Oct Payment: 16 Nov | ||||
