S & U PLC (LSE:SUS) upped its first interim dividend as first-half profits increased at both its specialist motor lending and property bridging finance arms.
Current trading in both businesses is “very encouraging”, said chairman Anthony Coombs, though he noted that rarely in the group’s 84-year history “has the strength of our current trading and first-half performance contrasted so starkly with the current frenzy of pessimism and gloom surrounding the UK's economic, energy and political prospects”.
Profit before tax came in at £20.9mln for the six months to 31 July 2022, up 5% on a year earlier, on revenue that rose 15% to £49.4mln.
Advantage Finance, the motor finance business, grew profit to a record £19mln as revenue rose 13% to £43.6mln following a 22% increase in new deals transacted in the half.
Aspen, the bridging and property finance business, grew profit to a record £2mln from £1.5mln on revenue up 35% to £5.7mln resulting from a 10% rise in new deal transactions, higher interest and larger-than-anticipated loan advances.
Net group receivables stood at £370.1mln at the half-year stage, up from £306.4mln a year ago.
Bank borrowings stood at £154.4mln, with the current £180mln medium-term facilities extended with a further £30mln facility agreed with banks to “accommodate expected future growth in both our businesses in a timely way”.
A 35p first interim dividend was declared, a 6% increase on that from the year before, to be paid in November and due to be followed by further payments to shareholders in March and July 2023.
While the macroeconomic situation presents challenges, Coombs said it also provided “opportunities to grasp”, while quoting Franklin D. Roosevelt’s words at the outset of a deep recession 90 years ago that “all we have to fear is fear itself”.
“Whilst rightly more cautious in a less promising economic climate, S&U is equipped with the ambition, experience and determination to prosper,” he said.