There may be concerns that the party could soon be over for providers of consumer credit, but S&U (SUS) chairman Anthony Coombs remains confident that the motor finance provider will continue to grow its customer numbers. However, he concedes that keeping up this pace may be difficult.
During the 12 months to the end of January, customer numbers for its sub-prime motor finance brand, Advantage, reached a record 43,000, up from 32,600 a year earlier. This helped push net receivables up a third to £194m. However, increased competition has pushed S&U to write a greater proportion of lower-quality business. As a result, impairments increased to just over 20 per cent, slightly above the three-year historic range of between 16 per cent and 20 per cent.
Aspen Bridging Finance has been operational for around a month. It has not made any loans yet, although there are deals on the table, Mr Coombs says. He says the majority of income from loans made will be gained around eight months into a typical 10-month loan.
Analysts at Shore Capital expect adjusted pre-tax profits of £31.4m during the 12 months to January 2018, giving EPS of 210p (from £25.2m and 169p in 2017).
S&U (SUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,110p | MARKET VALUE: | £253m | |
| TOUCH: | 2,090-2,148p | 12-MONTH HIGH: | 2,612p | LOW: 1,950p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 1,162p | NET DEBT: | 35% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
|---|---|---|---|---|
| 2013 | 55.0 | 14.2 | 92.6 | 46 |
| 2014 | 60.8 | 17.3 | 113 | 54 |
| 2015 | 36.1 | 14.8 | 100 | 66 |
| 2016 | 45.2 | 19.5 | 134 | 76 |
| 2017 | 60.5 | 25.2 | 171 | 91 |
| % change | +34 | +29 | +28 | +20 |
Ex-div: 15 Jun Payment: 7 Jul *Excludes a special dividend of 125p paid in November 2015 | ||||
