TIDMSUS
RNS Number : 3588P
S & U PLC
09 February 2023
9th February 2023
S&U plc
("S&U" or "the Group")
TRADING STATEME NT AND NOTICE OF RESULTS
S&U plc, the specialist motor and property finance lender,
today issues its trading update for the period f rom its trading
statement of 8 December 2022 to the Group's year end on 31 January
2023. S&U's full year results will be announced on 28 March
2023.
Our last trading update of 8 December recorded our expectation
that the "very good" trading and receivable quality we reported
then would be carried over for the rest of the financial year. So
it has happily proved. Current trading in both businesses,
Advantage , our motor finance lender , and Aspen , our property
bridging lender, remains excellent. This will be reflected in the
full year's results which are expected to both meet expectations
and exceed budget.
These results are the more meritorious for being achieved
against a background of "political and economic uncertainty" as we
reported in December. Despite a slight uptick recently in UK
consumer confidence, UK business confidence is reported by the
ICAEW to be a thirteen year low whilst a potential recession and
rising interest rates continue to pose challenges.
Nevertheless, S&U continues to grow and perform well.
Despite the period seeing prudent adjustments to underwriting and
the scorecard, and some rate increases to protect net interest
margins as both operational and financial costs grow, group net
receivables have now reached cGBP420m against GBP370m at the half
year. Th at ultimate measure of quality - collections - remains
good in both businesses.
Motor Finance
The used car market, in which Advantage operates, remains active
with pricing remaining strong. As new car sales recover to January
2020 levels, used car prices have increased on average over 20% in
the past eighteen months. Used car sales volumes consistently stood
at 250,000 vehicles per month over the same eighteen month
period.
Advantage's experience reflects these trends. Transaction levels
are likely to reach nearly 24,000 this year, an increase of 21% on
2021/2022. Transaction numbers in the period were near record
levels. Th is y e ar the usual sales lull of December did not
occur. Tightened credit criteria has led to a shift towards a
nearer prime customer so that average loan size rose by just over
9% to GBP7,800 per deal.
High receivable s quality was demonstrated by collections
against due finishing above budget for the year at an impressive
94%. Both bad debts and voluntary terminations continue to remain
below budget and monthly live collections exceeded GBP14m for the
first time in January 2023.
Net receivable s at Advantage were cGBP306m, 18% up on last
year. This growth was driven by transaction numbers, an increase in
deal size and marginally longer terms for higher scoring customers.
Whilst interest rates, on average, were marginally lower in the
period to attract a higher quality customer profile, this higher
initial quality will help further underpin our collections and
profit during the potentially more uncertain economic times ahead.
Customer numbers have reached 65,000 for the first time.
Aspen Bridging
Aspen, our property finance business, continues to make
progress, albeit at a slower pace commensurate with recent trends
in the UK housing market. House prices have now been reported to
have fallen for five consecutive months, whilst mortgage approvals
and transaction activity have been restricted by rising interest
rates and cost of living pressures.
These trends are expected to continue during 2023. Prudence has
therefore dictated further rises in Aspen's own interest rate and
tightening of its already conservative loan-to-value requirements.
Nevertheless, such is Aspen's credibility with its introducer
partners and its reputation for bespok e and flexible lending, that
its net receivables have risen slightly from GBP108m to GBP114m in
the period.
Repayment quality remains good . Of 141 loans on the books,
Aspen currently has only one case in repossession and just four
customers are more than 60 days overdue. Although the re-mortgage
market has slowed, both in size and transactions, the overall
quality of Aspen's loan book means that profits exceed budget.
Funding
Recent growth at Advantage has seen Grou p net borrowings for
the period rise from GBP180m to GBP192m. Whilst the pace of this
expansion is likely to abate , in order to support growth and
following the increase in our facilities in September, it is likely
we will add further to our current GBP210m committed facilities
during H1 23. Although Group gearing is therefore expected to
increase from its traditionally modest level, currently c86%, th is
will remain moderate and, as always, carefully monitored.
Dividend
Irrespective of the fluctuations and recent volatility of the
stock market, S&U's policy is to ensure that its commercial
success is reflected in its shareholders' income. We have therefore
sought to maintain, on average, a twice covered dividend policy
even in the roller coaster years of COVID. This year we therefore
propose a second interim dividend of 38p per ordinary share (2022:
36p), payable on 10 March to shareholders on the register on 17
February.
Commenting on the Group's performance and outlook, Anthony
Coombs, S&U Chairman, said : "Whilst the uncertainties of
forecasting and fly casting have much in common, 2023 is likely to
see constrained levels of consumer confidence and spending in the
UK. Nevertheless, historically this has and, I believe, will
continue to present good, responsible, lending opportunities for
S&U. We will take advantage of these with the same agility,
prudence and imagination which has served S&U so well for so
long."
For further information, please contact:
Enquiries S&U plc c/o SEC Newgate
Anthony Coombs
Financial Public Relations
Bob Huxford, Molly Gretton, Harry
Handyside SEC Newgate 020 7653 9848
--------------- ----------------
Broker
Andrew Buchanan, Adrian Trimmings,
Sam Milford Peel Hunt LLP 020 7418 8900
--------------- ----------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCUPUGCPUPWGQR
(END) Dow Jones Newswires
February 09, 2023 02:00 ET (07:00 GMT)
S and U (AQSE:SUS.GB)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
S and U (AQSE:SUS.GB)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024
