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S & U sets new record for monthly collections in January

Last updated: 07:50 06 Feb 2019 EST, First published: 02:26 06 Feb 2019 EST

Pound coins
Group borrowing reduced to £108mln from £118mln in fiscal 2019

Advantage Finance, the motor finance arm of lender S & U PLC (LON:SUS), is still producing record profits despite tougher market conditions.

The group said that trading in the year to the end of January had been satisfactory and in line with market expectations.

READ: S & U well-placed to benefit from upturn in the used car market

The company said the number of new Advantage finance agreements for the financial year just ended are still at their second-highest ever level and applications for motor finance remain strong.

Debt quality is consistent with, and beginning to respond to, the underwriting changes made by S & U earlier in the year and monthly collections in January exceeded £12mln for the first time.

S & U said the seasonal slowdown in the motor finance was more pronounced in the year just ended but nevertheless net motor finance receivables at the year-end were up on the year before by around 4% while total "live" accounts were up 9% on last year at just over 59,000.

Aspen making progress

Aspen, the company nascent property bridging operation, continues to make good progress, S & U said.

Aspen bridging loan net receivables currently stand at just over £18.0mln against £11.2mln last year, while the division’s repayment record is also credible, with 43 repayments so far from the 97 loan facilities underwritten to date.

S & U said the division is expected to make a useful contribution to group profits this year and justify the investment planned for it.

The board has recommended the payment of a second interim dividend of 35p, up from 32p the year before.

"Over the past 25 years, S & U has consistently demonstrated its ability to adapt to the kinds of economic and political uncertainty we all currently face. I am therefore confident that this sound experience, our strong financial base and the skills of those who work for us will serve to underpin the group's success in the future," said Anthony Coombs, the chairman of S & U.

In early afternoon trading, shares in S&U were 3.8% higher at 2,190p.

In a note to clients, analysts at Shore Capital said: “Overall a steady performance which is unlikely to catalyse material changes to forecasts, in our view. We currently have a neutral stance and fair value of 2,350p (11% upside).”

 -- Adds share price, analyst comment --

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on 09/29/2016