S & U PLC Trading Statement (9871H)
09 Diciembre 2020 - 01:00AM
UK Regulatory
TIDMSUS
RNS Number : 9871H
S & U PLC
09 December 2020
9 December 2020
S&U plc
("S&U" or "the Group")
TRADING STATEME NT
S&U, the specialist motor finance and property bridging
lender, announces its trading update for the period from the 1st
August 2020 to the 8th December 2020. This period has seen a
rebound in Group trading and profitability, despite a slowdown in
November resulting from the renewed Covid-19 lockdown and
uncertainties relating to its planned aftermath. We have continued
to focus on quality at both Advantage and Aspen and demand for
motor and bridging loans over the period has been healthy.
The business is resilient and financially strong and,
notwithstanding constantly changing Government guidance on Covid-19
restrictions, we are confident of a resumption of our usual rates
of growth in the first half of next year.
MOTOR FINANCE
The demand for good quality used cars and their auction values
has recovered well during the period. Overall used car transactions
rose by 4.4% in the UK in the third quarter, at 2,160,000 vehicles.
Indeed, recent FLA figures showed the strongest used car price
growth in a decade. At Advantage, our motor finance subsidiary,
this was reflected in an improved rate of transactions in the
period. However, Advantage's temporary withdrawal from the
self-employed and lower tier sectors of the market, means that
despite the recent market improvement, current net receivables are
at GBP253 million (GBP280 million: 2019) and current live customer
numbers are at 63,000, slightly less than last year's 63,500.
Undoubtedly the Covid-19 epidemic is prompting an unease about
public transport and a general desire for the security and
convenience of a wholly-owned (and unshared) vehicle. Further,
considerations of value in uncertain times favour the smaller used
car sector in which Advantage specialises.
These trends have been reflected in Advantage's robust
receivables quality. Despite imposition by the Financial Conduct
Authority of further and extended customer repayment "holidays" in
the period, monthly collections remain within 7% of last year's and
are improving as customers return to normal payment. Thus, the
third quarter saw collection rates at 87.5% of due (2019: 94%)
against 74.1% in the second quarter. Whilst 12,900 customers were
still on payment "holiday" at the end of July, this has fallen to
below 5,000 currently. New customer quality and early repayments
are performing very well.
Advantage are using the Covid-19 hiatus to prepare for recovery
and to embed long term operational improvements. Current examples
include developing affinity partnerships, still closer systems
integration with our introducer partners to improve transaction
rates, and further customer service and affordability analysis
which will drive Advantage's already excellent Trustpilot customer
satisfaction ratings even higher.
Aspen Bridging Finance
Aspen Bridging has in the period achieved the landmark GBP100
million of lending since it was founded. Whilst prudently viewing
the residential market with their customary caution, Aspen has seen
transactions improve considerably over the period. Hence current
net receivables stand at GBP29.6 million against just GBP18.5
million at half-year.
Loan quality has strengthened too. A sustained focus on overdue
and extended customers has seen their number successfully reduce in
the period, meaning that in the current live book only two accounts
are just past due with no defaults remaining. This improvement in
quality has seen an improvement in profitability and provides a
firm base for future growth.
Funding
Significant cash generation at Advantage, offset by net
investment in Aspen of GBP10.6 million since half year and payment
to shareholders of our first interim dividend, means current Group
borrowings are at GBP103 million against just GBP108 million in
July. With Group facilities at over GBP130 million and gearing at
only 58%, this gives S&U its habitually firm base for the
accelerated growth we anticipate may be appropriate next year.
Outlook
Commenting on the Group's performance and outlook, Anthony
Coombs, S&U chairman, said:
"Despite the persistent drag anchor that is Covid-19 and the
possibly inevitable zigzagging in Government policy to deal with
it, S&U is in fine fettle. Aside from our traditional strengths
- experience, conservative financial policies and sustainable
growth - most of all I pay tribute to the dedication and sensible
ambition of our people. To paraphrase Liverpool FC's Jurgen Klopp,
whatever Covid-19 brings "we deal with it, recover, prepare and go
again". Hence our great confidence in the future."
For further information, please contact:
S&U
Anthony Coombs, Chairman 0121 705 7777
Newgate Communications
Bob Huxford, Megan Kovak, Tom Carnegie 020 7653 9848
Peel Hunt
Adrian Trimmings, Andrew Buchanan, Rishi Shah 020 7418 8900
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