Niche lender S & U Plc (LON:SUS) has reported another strong half year for its car finance arm Advantage and expects demand to remain strong despite the Bank of England's fears that a credit bubble might be forming. Anthony Coombs, chairman, said: "In contrast to the reported hiatus in both the used car market and in economic growth generally, S&U continues to experience robust and good quality demand and our current trading is in line with our expectations.
READ: S&U motors higher as car finance subsidiary continues to trade at record levels
He said S&U is not involved in the personal car plan market which is expected to be the focus of an upcoming report on the motor finance market by the Financial Conduct Authority.
Optimistic about outlook
Advantage has a 1% share of the used car market, it added, and has seen no signs yet of a slowdown reported recently by trade body the Society of Motor Manufacturers & Traders. Applications and transactions in the half year to July were both up around 20% on a year ago, at a record 440,000 and 12,542 respectively, though there was an uptick in the bad debt ratio. Interim revenues rose by a third to £37.6mln on a 31% increase in the receivables to £229mln while pre-tax profits were 20% higher at £14.3mln. The interim dividend rises by 17% to 28p. “In uncertain times we are very confident of our prospects for further steady and sustainable growth," said Coombs.