S&U PLC (LSE:SUS) provided an upbeat assessment of prospects as the specialist lender reported a strong start to its new financial year, with both its car finance and property lending divisions delivering encouraging performance.
Chairman Anthony Coombs said the group’s optimism at the time of its annual results in April is now being borne out.
Group profits for the current half-year are trending ahead of last year, driven by rising sales, stronger collections and a gradual decline in one-off regulatory costs tied to a lengthy Financial Conduct Authority (FCA) review of its Advantage motor lending arm.
At Advantage, customer lending volumes have jumped 50% year-on-year, helping bring profits close to budget.
Efforts to improve collections and customer service appear to be paying off, with payment adherence at its highest since October and the number of long-term nonpayers down by over a third since the start of the year.
Meanwhile, Aspen, which lends to property investors and developers, reported record quarterly profit and a 46% rise in new loan agreements.
Receivables are up 7% on the same period last year, despite borrowers repaying over £57 million in loans; evidence, the group says, of the strength and appeal of its products.
S&U also flagged that it has cut net debt to £180 million from nearly £240 million a year ago, giving it more room to support future growth. The group’s chairman added that, assuming stable conditions, S&U is now firmly back on a growth path.