S & U PLC Trading Update and Notice of Results (0641I)
10 Agosto 2021 - 1:00AM
UK Regulatory
TIDMSUS
RNS Number : 0641I
S & U PLC
10 August 2021
10 August 2021
S&U plc
("S&U" or "the Group")
Trading Update and Notice of Results
S&U plc, the motor and property finance specialist, today
issues its trading update for the period from its AGM Statement of
the 20th May to the 31st July. It will announce half year results
on the 28th September 2021.
Trading
S&U continues to trade well, ahead of expectations in terms
of profitability, collections and book debt quality. Despite recent
inconsistency and incoherence in the Government's path out of Covid
lockdown, particularly in the travel sector, consumer appetite and
business confidence is gradually returning, amid expectations of a
7% UK growth rate in GDP for the year.
At S&U, this has been reflected in strong Advantage motor
finance applications and for Aspen in the strength of the
residential property market- although both slightly constrained by
a present lack of supply of both used vehicles and homes for sale.
This lack of supply will gradually be corrected as the economic
recovery gathers pace. Coupled with very strong cash collections,
rigorous and realistic underwriting and the Group's habitual
financial strength, S&U's return to sustainable and robust
growth promises a successful performance this year.
Advantage Finance
The period has seen Advantage enjoy a profitable, controlled and
cash generative recovery as it continues to gradually increase,
month by month, to nearer normal levels of new business. Whilst
continued sensibly cautious underwriting, and a lack of supply,
have seen transaction numbers slightly under an ambitious budget,
this has been more than offset by a superb collections performance
with related bad debt attrition and impairment more benign than
anticipated. As a result, net receivables are stable versus the
previous year-end, risk adjusted yield is ahead of budget, and
operational cost is well within budget.
The result will be a significant increase in Advantage's half
year profit, comfortably beating budget, and a gradual return
towards its habitual levels of ROCE.
This return will be buttressed by the continuous stream of
improvements that our excellent team in Grimsby and its Chief
Executive, Graham Wheeler, are making to the business. More detail
will be provided at half year and these include refinements to the
scope and range of its customer offering; new simple access for
customers to make online payments; new arrangements with industry
partners to boost our dealership capability, and improvements to
make our social media marketing more effective.
In addition, Advantage continues to prepare for what will be a
significant opportunity in the financing of hybrid and electric
used cars. Whilst Covid, initial pricing and the currently
inadequate charging network have so far restrained growth,
ultimately this new market will provide benefits for our customers,
protection for the environment and profitable growth for
S&U.
Aspen
Over the past two months, Aspen, our property bridging business,
has continued the encouraging trends reported in May. Net
receivables are now at just under GBP58 million against GBP18.5
million a year ago, and book quality and repayments continue to be
very good.
Much of this net receivables growth has been due to Aspen's
successful offer of Government backed CBILS loans to larger and
more established developer customers. Whilst the original CBILS
scheme is being wound down, the additional contacts Aspen have made
has boosted its market credibility and introducer reach. To
consolidate this, Aspen has sharpened its product offering, and its
competitive loan to value offer, and, at the same time,
strengthened its underwriting team to ensure a speedy and bespoke
service to all areas of the property bridging market.
The result is a good half year's performance and a sound basis
for further progress.
Treasury
Following the increase in overall Group funding facilities in
the first quarter to GBP180m, current borrowings levels of GBP116m
(up from GBP110m in the period) give substantial headroom for
growth.
Commenting on S&U's trading outlook, Anthony Coombs, S&U
chairman, said:
"As Britain gradually emerges from the effects of Covid, S&U
is demonstrating by its debt quality, collections performance,
customer service and product improvements, the inherent strength
and potential future profitability of the Group. The challenge now
is to grasp these opportunities for new growth. I am confident that
we will do so."
Enquiries S&U plc c/o SEC Newgate
Anthony Coombs
Financial Public Relations
Bob Huxford, Tom Carnegie, Megan
Kovach SEC Newgate 020 7653 9848
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Broker
Adrian Trimmings, Andrew Buchanan,
Rishi Shah Peel Hunt LLP 020 7418 8900
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