A slowing economy and weaker consumer confidence led S&U (SUS) to tighten underwriting standards last year, which, together with increased competition in the used car market, meant customer advances dipped for the non-prime motor finance provider. Advantage wrote 21,000 new deals, down 14 per cent on the prior year, although management expects this figure to start rising again this year.
Collections were up almost a fifth to £182m, which pushed up pre-tax profits. However, a rise in high-cost credit use by customers resulted in less consistent repayments to Advantage than management had expected, resulting in a rise in impairments. That meant the risk-adjusted yield dipped to 24.6 per cent of average monthly receivables, from 26.7 per cent.
Aspen Bridging – which provides property bridging loans to small-scale developers – turned a maiden pre-tax profit of £0.84m in its second year of operating. The business almost doubled the amount of deals it had written to 62, growing the loan book almost two-thirds to £18m.
Analysts at house broker Peel Hunt expect adjusted pre-tax profits of £37m and EPS of 253p for the year to 31 January 2020, from £34.6m and 233p, respectively, in the prior year.
| S&U (SUS) | ||||
| ORD PRICE: | 2,000p | MARKET VALUE: | £240m | |
| TOUCH: | 1,965-2,040p | 12-MONTH HIGH: | 2,790p | LOW: 1,725p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 1,378p | NET DEBT: | 65% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2019 | 89.2 | 34.6 | 233 | 118 |
| % change | +12 | +15 | +14 | +12 |
| Ex-div: | 20 Jun | |||
| Payment: | 12 Jul |
