S & U PLC (LSE:SUS) said trading is “very good” and that positive trends at its motor finance and property lending arms are expected to continue for at least the remainder of the financial year.
Highlighting the quality of its customer relationships and the receivables derived from them, the specialist lender said these receivables have this week risen to roughly a net £404mln from £370mln at the 31 July half-year point.
This also reflected “continued good collections and profitability” during the period, trends that the London-listed company expects to continue.
Advantage Finance, the motor finance business, had £296mln of receivables and collections up almost 5% year-over-year to £72.8mln as live accounts rose 3.5% to 64,500.
Profitability was said to be “good and in line with expectations”, as increased revenue was partly offset by higher funding costs and increased customer servicing and collection costs.
Property lender Aspen Bridging has made “excellent progress” despite a slowing of the residential property market the company said was only “slight”, with profit before tax at a record high and net receivables rising to around £108mln from £90mln at the half-year.
The pipeline of new business was reported to be above budget, with Aspen seeing "good" demand for finance in its bespoke higher-quality end of the sector, even as loan rate increases have been made to protect its margins amid the higher bank rate and interest costs.
Credit quality was said to be strong, although the company acknowledged that refinance arrangements and legal processes are taking longer than usual and "only seven technically defaulted accounts as customer repayments during the period have been good".
On the outlook, chairman Anthony Coombs said: “Current pessimism about the UK's economic prospects, standard of living and consumer confidence may have been overdone. However, S&U's 80 years plus of experience makes it wise to tread carefully in managing its growth.
“Whilst more optimistic than many, we will continue to do so until greater stability returns, and the economic skies brighten.”