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S & U says current trading remains strong

Published: 11:11 12 Feb 2016 GMT

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S & U provides motor finance options...

Lender S & U's (LON:SUS) motor finance business continues to grow, with customer numbers now up over 32% compared to the same time last year.

The business has seen £27mln of investment over the last financial year and it has improved its underwriting systems.

"As a result an expanded book of excellent quality is reflected in monthly collections which are now approaching £7m," the firm said in an update, covering December 10 to January 31,  adding that  current trading remains strong and in line with market expectations.

S & U sold its Loansathome4u home credit division for £82.5mln last summer, which the company part re-invested in Advantage, while using some of the cash to pay a £1.25 per share special dividend.

Current strong trading and a robust position mean it will pay a second interim dividend of 23p per share (2015:19p) on March 18 this year. The first and second dividends paid this year will therefore total 43p compared to 36p last year -  an increase of 19%.

The group also continues to consider potential acquisition and start up opportunities and with net borrowings of just £12mln covered by committed facilities of £70mln it has leaving significant headroom for the right opportunity.

"The recent reverses in stock market values have confirmed our impression of unrealistic pricing last year and may lead to better value in the coming months," it told investors.

Anthony Coombs, SUS chairman, said: "Although the slight rise in real incomes in Britain over the past year has led to greater consumer confidence, particularly in the car market, current economic uncertainties will place a premium on those finance companies possessing the best underwriting systems and highest debt quality.

"Coupled with a more stable political and regulatory environment, that will continue to reward the business methods and customer focus for which Advantage Finance is rightly admired".

The firm is due to report final results on March 22.

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