Advantage Finance, the motor finance subsidiary of S&U, has published its trading update for the period from 1 August to 9 December 2019.
The statement showed new deal advances were up 11% at over £127m to date this year. S&U said new business at Advantage has benefitted from planned additional investment in cost of sales since the start of the financial year.
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The company now has a record 63,500 customers (21 July 19: 62,000), and over £280m of net receivables (31 July 19: £273.8m).
Advantage has also seen a gradual increase in book quality. Rolling 12-month risk adjusted yield is now around 25.2% of average monthly receivables (July 19: 24.9%). This recent improvement in risk adjusted yield in the period was slightly lower than anticipated, according to S&U, due to some additional impairment charges from legacy quality issues and lower used car auction values for our recovered vehicles this year. Overall year to date monthly collections are up 7% on last year on 5% higher receivables.
Graham Wheeler has also been named as chief executive at Advantage. Wheeler takes over from founding managing director, Guy Thompson.
A statement from the company read: “Advantage’s success has always been underpinned by our investment in analytics and information technology. In addition to continuous refinement of our underwriting, which has helped improve new loan quality, this period has seen closer integration of CRM systems with our broker partners as well as significant enhancements to Advantage’s website.
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By GlobalData“We therefore remain confident that, despite the somewhat downbeat prognosis for British consumer spending, Advantage will be able to continue the profitable growth which has been its hallmark for over 20 years.”
Anthony Coombs, S&U chairman, added: “Political vacillation in the UK and slowing economic growth have inevitably been reflected in the motor and property markets in which S&U operates. The country now faces an almost existential choice at the General Election. Whatever the outcome of the current political situation, we expect S&U to continue to exhibit its customary resilience, stability and sensible ambition to the benefit of our shareholders.”
