Motor finance and bridging lender S&U has published its trading update for the period 1 February 2019 to 22 May 2019.
Advantage Finance, S&U’s motor finance business, saw profits increase year-on-year with customer numbers exceeding 60,000. Current collections for Advantage were up 6% year-on-year, while net receivables increased 3% to £263m.
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Applications for finance at the firm are averaging over 108,000 each month, representing improvements in recent transaction volumes and quality in a tightened under-writing environment.
Group borrowing has increased from £108m to nearly £114m, remaining within the company’s recently increased £160m medium term facilities – providing the firm with ample headroom for anticipated growth.
“Recent trends in our business are encouraging, particularly in transaction growth, debt and new customer quality,” said Anthony Coombs, S&U chairman. “Together with our tried and tested traditional emphasis on continuous process refinements and improvements for our customers, these give us confidence of further steady and sustainable growth and a successful year ahead.”
The announcement follows S&U’s annual financial results for the year ended 31 January 2019, which revealed a 15% increase in profit before tax to £34.6m. Profits for Advantage were up from £30.2m to £33.6m in 2019, while the company also enjoyed a more than 15% return on capital employed for an eighth successive year.
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By GlobalDataCoombs said: “In my statement a year ago I referred to a slowing economy and lower levels of consumer confidence, partly induced by relentless pessimism in much of the media about life after Brexit. For Advantage I anticipated that this might necessitate “sensible gear changes, steering tweaks and an easing of the accelerator.”
“So it has proved this year. As the economy and the motor sector has slowed, prudently tightened underwriting and some increased competition have seen group advances moderate to £152m against £165m in 2018.”
