Pressure on real income has led some S&U (SUS) customers to take out loans elsewhere to maintain standards of living, says chief executive Anthony Coombs. That led to a rise in impairments equivalent to 24.6 per cent of revenue, from 20 per cent the previous year. In response, the motor finance group has tweaked its affordability standards, resulting in a slight reduction in the proportion of applicants accepted for loans from 30 per cent to between 25 and 27 per cent.
However, the early signs are that the changes have had a beneficial impact on the quality of new customers and early repayment performance. The pace of applications did not slow, with Advantage Finance receiving a record 860,000 and underwriting just 3 per cent. Nevertheless, motor customer numbers were up more than a quarter, standing at a total of 54,000. That boosted net motor loans and collections by more a proportion, the latter to a record £153m.
In its maiden year, bridging finance business Aspen grew its loan book to £11m. The business provides loans averaging around £350,000 for property refurbishment.
Analysts at Peel Hunt expect adjusted pre-tax profits of £35.7m during the year to January 2019, giving adjusted EPS of 241p (from £30.2m and 204p in 2018).
| S&U (SUS) | ||||
| ORD PRICE: | 2,380p | MARKET VALUE: | £286m | |
| TOUCH: | 2,300-2,380p | 12-MONTH HIGH: | 2,444p | LOW: 1,870p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 1273p | NET DEBT: | 69% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2018 | 79.8 | 30.2 | 204 | 105 |
| % change | +32 | +20 | +19 | +15 |
| Ex-div: | 14 Jun | |||
| Payment: | 6 Jul | |||
