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S&U shrugs off weak car market and subdued housing market to deliver strong trading

"Trading in the first half of the year reflects continued and consistent growth in profitability which has been the S&U hallmark over the past 10 years," said S&U chairman Anthony Coombs

S & U PLC -
Transactions in the motor finance arm grew

Motor finance and property bridging firm S & U PLC (LON:SUS) said it continues to trade well and in line with expectations despite a tough car market and a subdued housing market.

In a trading update for the first half, the company said demand for its motor finance arm Advantage was “healthy” with transactions ahead of last year.

Advantage customer numbers rose by 7% year-on-year to 62,000 over the period with the division now receiving more than 110,000 applications a month.

Collections increased 7% and early repayment indicators on new business continued to show improvement following a tightening of underwriting last year.

“Despite a recent downturn in the new car market, the used car market remains robust and is likely to continue to do so, even assuming a no-deal Brexit,“ the group said.

The property bridging business, Aspen, has delivered profitable growth, although at a slightly weaker pace than expected amid a slowdown in the housing market.

S&U said Aspen has been gradually building its bridging book and net amounts receivable at the half-year stood at more than £24mln, compared with £16.3mln last year.

The firm expects bridging receivables to continue to rise in the second half on the back of recent improvements to loan offerings, a wider product range and a closer alignment of its IT platform with large introducers.

At the end of the period, borrowing stood at just over £125mln, within the company’s medium-term facilities of £160mln.

S&U chairman, Anthony Coombs, said:  "Trading in the first half of the year reflects continued and consistent growth in profitability which has been the S&U hallmark over the past 10 years. 

"Transaction volumes and quality improvement, particularly in our motor finance business, are expected to be reflected in the pace of profits growth over the full year."

Quick facts: S & U PLC

Price: 1595 GBX

LSE:SUS
Market: LSE
Market Cap: £193.32 m
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