S & U Plc

Collins Stewart initiates S&U as buy.

Collins Stewart initiates S&U as buy.

Share Tip: Investors Chronicle - Buy - BULL POINTS Attractive dividend yield - Strict lending criteria - Bad debts steady - Steady fall in... read more

Share Tip: Investors Chronicle - Buy - BULL POINTS Attractive dividend yield - Strict lending criteria - Bad debts steady - Steady fall in borrowings BEAR POINTS Customers facing financial squeeze - Shares difficult to deal

23.09.10 :-12.5, (530) S&U PLC posted an 8% rise in pretax profit for the first half and said there is significant scope for "sensible... read more

23.09.10 :-12.5, (530) S&U PLC posted an 8% rise in pretax profit for the first half and said there is significant scope for "sensible growth" in its markets despite a mixed economic outlook. Chairman Anthony Coombs, said "despite a febrile and wavering economy and some customer caution, S&U?s business proposition of responsible lending to carefully selected customers with whom we have close relationships continues to bear fruit." Whilst remaining constantly vigilant, S&U is confident of further improvement in shareholder returns and value, Coombs added. The company increased its interim dividend by 11.1% to 10 pence, from 9 pence a year earlier. S&U recorded pretax profit of GBP5.4 million for the six months ended July 31, compared with GBP5 million a year earlier, on revenue of GBP23.6 million and GBP22.1 million respectively, prompting one analyst to issue forecasts for the full year. Arden Partners analysts Peter Lenardos and Michelle Riches forecast pretax profit for the fiscal year ending January 2011 of GBP9.8 million, compared with GBP9 million a year earlier, on sales of GBP45.8 million and GBP48.4 million respectively. Arden Partners also expects dividend per share to increase to 36 pence in fiscal 2011 and to 38 pence in fiscal 2012. Lenardos and Riches recommend a ?buy? rating on the stock and a price target of 620 pence. S&U said group gearing has fallen to 51% from 65% last July, and that it has repaid existing bank loans of GBP4 million in the period and repaid a further GBP2 million since the period end, retaining significant headroom in the company?s total bank facilities for growth and acquisitions.

23.09.10 :-12.5, (530) Arden Partners initiates coverage of S&U with a buy recommendation and a price target of 620p. The brokerage says... read more

23.09.10 :-12.5, (530) Arden Partners initiates coverage of S&U with a buy recommendation and a price target of 620p. The brokerage says S&U demonstrates a superior performance and a more attractive valuation to its main listed rival - Provident Financial. Arden also sees further opportunity for growth, with profitability in each division, sufficient to become a takeover target.