S&U (SUS) must be doing something right. Half-year figures for the six months to July 2017 made it 17 consecutive years of increased profits from hire-purchase motor finance. The sub-prime brand Advantage signed a record 12,542 new agreements, but not at the expense of softer lending criteria. In fact, just 3 per cent of all the 440,000 applications were accepted.
Monthly collections reached a record £10m from nearly 49,000 customers in July, with an average loan size of £6,200. A report by the Financial Conduct Authority on the motor finance market is expected by next year, but this is likely to concentrate on the significant expansion in personal contract plans offered by car makers’ own finance arms, a market that S&U has never been involved in.
Impairments rose from 20.1 per cent to 22.7 per cent, reflecting a change in the customer mix, as more established customers qualified for prime loans. However, this was more than offset by increased revenue. The Aspen bridging finance pilot launched at the beginning of the year has made loans of £1.8m, although it will take time to establish relationships with intermediary brokers.
Analysts at Shore Capital are forecasting adjusted pre-tax profit for the year to January 2018 of £30.5m and EPS of 203p.
| S&U (SUS) | ||||
| ORD PRICE: | 2,031p | MARKET VALUE: | £244m | |
| TOUCH: | 1,991-2,064p | 12-MONTH HIGH: | 2,550p | LOW: 1,870p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 1,192p | NET DEBT: | 56% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 28.3 | 11.9 | 79.2 | 24 |
| 2017 | 37.6 | 14.3 | 96.0 | 28 |
| % change | +33 | +20 | +21 | +17 |
| Ex-div: | 19 Oct | |||
| Payment: | 10 Nov |
