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S&U says used car market strong as profits hit new record

Unlike new cars, where sales have tailed off recently, demand for used cars rose by 6% in volume terms and by 12% by value in 2017

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Used car agreements jumped by 22%

Healthy demand for second-hand car finance enabled S&U PLC (LON:SUS) to post another record year.

Anthony Coombs, chairman, said that unlike new cars, where sales have tailed off recently, demand for used cars rose by 6% in volume terms and by 12% by value in 2017.

WATCH: New car wobble should help Advantage car loan business, says S&U’s Coombs

Advantage, S &U’s car finance arm, posted a 20% rise in profits to £30.2mln on revenues which were 32% higher at £79.8mln.

New agreements reached a record 24,500, up over 22%, though impairments also rose, to £19.4mln or 24.6% of revenue.

This was below the ten-year average for bad debts, said Coombs.

Advantage accounted for nearly all of revenues and profits for the year to January 2018 with property bridging loan start-up Aspen still in its formative stages and a loan book of £11mln.

Group borrowings rose to £105mln, while receivables rose above £250mln for the first time to £262mln.

“Whatever the wider political or economic headwinds, the markets in which we operate remain strong," Coombs said, adding he had quiet but real confidence about the year ahead.

The annual dividend rises by 15% to 105p.

Quick facts: S & U PLC

Price: 1800 GBX

LSE:SUS
Market: LSE
Market Cap: £218.41 m
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