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5th February 2014
("S&U", "the Company" or "the Group")
YEAR END TRADING UPDATE
S&U, Britain's foremost home credit and motor finance provider, today issues a trading update for the period from its most recent IMS on 10th December 2013 to the Company's Year End on 31st January 2014. The Company is pleased to confirm that Group trading is in line with market expectations.
S&U will announce its results for the year ending 31st January 2014 on 25th March 2014.
As the economy shows gradual signs of recovery, so the confidence of our loyal customers, although still mixed with caution, appears to improve. The high level of service we provide and the strong relationships this encourages, have resulted in a very satisfactory Christmas trading period when advances were just under 10% above last year. Collections quality remains good and delinquency has slightly improved on last year.
We continue to purchase small but high quality home credit businesses and plan to expand our network of branches still further in the coming financial year.
Advantage, our motor finance business, celebrated another record year by achieving its best ever Christmas and January sales and collections. Customer numbers are almost a quarter up on last year at just over 18,000, while new products have attracted an additional array of introducer Brokers as well as consolidating existing loyalties; debt quality goes from strength to strength. Our ambitions for the future surpass even the achievements of the past.
Funding and Treasury
A growing business requires increased investment. We have therefore been pleased to invest another £12m this year primarily in our motor finance business. Despite its recent resurgence, our home credit business has financed £2m of this whilst additional medium term banking facilities of some £22m this year provide more than adequate cover for further expansion this year. We continue to review all financing operations as the Group grows, but remain steadfast to our conservative treasury policy which has seen gearing rise to just around 46% in the year (Jan 2013; 34%).
Our conservative approach to borrowing has been mirrored by the importance attached to a rewarding but sustainable dividend policy. This has meant an increase in dividend cover to just over two times in recent years. Therefore we feel it appropriate to approve the payment of a second interim dividend of 16p per ordinary share on the 11th April 2014 to holders on the share register on the 21st March 2014. This represents an increase of a total of 4p, on the first and second interim dividends of last year. It is also the Company's intention, subject to any unforeseen circumstances, to recommend the payment of a final dividend on the 11th July 2014 of at least 20p per ordinary share for the year ending the 31st January 2014 (final dividend paid 12th July 2013; 20p).
We are delighted to announce the appointment of Mrs. Manjeet Bhogal ACMA, CGMA to the post of S&U plc Company Secretary with effect from 3rd February 2014. Manjeet has been with the Group for 9 years and this appointment is a reflection of the fine contribution she has made to the Group during this time.
Commenting on the Group trading and outlook, Anthony Coombs, Chairman of S&U plc said:
"I am very pleased that our hard working and dedicated people throughout the Group have been able to mark our 75th anniversary year by levels of customer service that have achieved record results. As the employment market recovers, and consumer confidence returns, we view the future with enthusiasm and confidence."
For further information, please contact:
S&U plc www.suplc.co.uk
Anthony Coombs, Chairman 0121 705 7777
Financial Advisers, Sponsors and Brokers
Adrian Trimmings Arden Partners 0207 614 5917
Media and Investor Relations
Will Swan Smithfield 0207 360 4900
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