With its disposal of its home credit business to Non-Standard Finance (NSF), S&U (SUS) went 'all in' on motor finance. "We had been in [home credit] for a long time, it was very management intensive and we didn't think the growth potential was anything near what the motor finance is," says chief executive Anthony Coombs. Last year this core business certainly lived up to its promise, as Advantage Finance generated its 16th successive record pre-tax profit. The sale of Loansathome4u also resulted in the group paying a 125p special dividend last November.
The group gains around 85-90 per cent of its business via brokers. Last year Advantage Finance's live customers grew a third to 32,600, with new transactions up by just over a quarter. As a result the group's loan book reached £145m in net receivables, up £39m. However, with the group having captured around 5-15 per cent of the UK motor finance market, Mr Coombs reckons there is plenty more room to grow.
Analysts at Arden Partners expect adjusted pre-tax profit of £25m and EPS of 166p for the year to January 2017, up from £19.5m and 134p in FY2016.
S&U (SUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,292p | MARKET VALUE: | £273m | |
| TOUCH: | 2,225-2,299p | 12-MONTH HIGH: | 2,495p | LOW: 1,869p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 1,078p | NET DEBT: | 9% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
|---|---|---|---|---|
| 2012 | 51.9 | 12.2 | 76.1 | 41 |
| 2013 | 55.0 | 14.2 | 92.6 | 46 |
| 2014 | 60.8 | 17.3 | 113 | 54 |
| 2015 (restated) | 36.1 | 14.8 | 100 | 66 |
| 2016* | 45.2 | 19.5 | 134 | 76 |
| % change | +25 | +32 | +33 | +15 |
Ex-div: 16 Jun Payment: 8 Jul *Excludes special dividend of 125p paid in November 2015 | ||||
