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RNS
S & U PLC  -  SUS   

Half-year Report

Released 07:00 26-Sep-2017

RNS Number : 7665R
S & U PLC
26 September 2017
 

                                                                                                                                             26 September 2017

S&U PLC

("S&U" or the "Group")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2017

17 consecutive years of increasing profits in motor finance  

S&U, the specialist motor finance and bridging lender, today announces its interim results for the six months ending 31 July 2017.  They reflect a 17th consecutive year of increasing profits in hire purchase motor finance and maintain its record of strong and sustainable growth.

 

Financial Highlights

·      Profit before tax: £14.3m - up 20% on last year (H1 16: £11.9m)

·      Earnings per share: 96p (H1 16: 79.2p) - up 21%

·      Revenue increased by 33% to £37.6m on receivables up 31% to £228.6m

·      Gearing at July 17 is 56% (July 2016: 29%) as £32m invested since year end

·      First interim dividend increased to 28p per share (2016: 24p per share)

 

Operational Highlights

·      Record Advantage motor finance new agreements in first half at 12,542 (up 21%) with initial quality score up on last year

·      A conservative transaction rate of 3% of over 440,000 applications

·      Increase in 12 month rolling impairment to 22.7% from 20.1% at year end, primarily due to overall portfolio product mix

·      Record monthly Advantage collections of £10m achieved in July

·      Aspen Bridging pilot now launched - gaining traction and credibility

·      Post half year, committed funding facilities increased to £115m from £95m

 

Anthony Coombs, Chairman of S&U, commented:

"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.  In uncertain times we are very confident of our prospects for further steady and sustainable growth."

 

Enquiries:

S&U plc - Anthony Coombs                                                                           07767 687150

                                                                                                                         0121 705 7777      

Peel Hunt LLP

Adrian Trimmings / Rishi Shah                                                                       020 7418 8900

Smithfield

Ged Brumby                                                                                                     020 3047 2527

 

 

 

Chairman's Statement

I am pleased to announce that the past six months have yet again seen the kind of steady and sustainable growth at S&U, which investors should recognise as our trademark.  After no less than 17 years of consistent profits growth in Advantage, our motor finance business, and over the past decade throughout the Group, (the past 3 years  at a rate of over 20% per annum), S&U has clearly and unequivocally demonstrated its ability to weather recessions, a huge financial crisis and significant political instability.  These results continue that record.

Motor Finance

Although recent Society of Motor Manufacturers & Traders ("SMMT") figures indicate a slow-down in the new and used car markets this year, this trend is from near record levels of 8 million annual transactions in 2016.  Indeed, the Finance and Leasing Association recently reported an annual increase of 7% in used car finance transactions for the year to July 2017.  We estimate that Advantage has just 1% of this huge market.  It is therefore unsurprising that we have seen our excellent and continuously improving standards of speed and customer service rewarded by a record number of both applications and transactions in the half year.  Both were up around 20% on a year ago, at a record 440,000 and 12,542 respectively.

Doubtless, this also reflects the robust state of the labour market, with unemployment at 4.4% the lowest for 42 years.  In addition, according to the Recruitment and Employment Confederation, job vacancies are at a two year high, which appears to be exerting a gradual and beneficial influence on recent real wage trends.  We therefore remain confident of future demand in our sector.

Our relations with the regulatory authorities continue to be good. Whilst the Financial Conduct Authority expects to scope its report on the motor finance market by next year, we expect this to concentrate upon the recent significant expansion in the personal contract plan (PCP) market, in which Advantage has never been involved.  We also concur with the recent conclusion by the Guardian newspaper which said "figures suggesting the used car market is cooling could alleviate concerns over [any] credit bubble in motor finance." - The Guardian 16 August 2017.

Moreover, these positive trends are reflected in our debt quality which continues to be good and in July Advantage collections hit a record level of £10m.  Although a return, for competition reasons, to Advantage's traditional customer mix has seen an increase in impairment to revenue, risk adjusted yield has been protected by good interest rates.  Indeed, current levels of impairment are significantly below those experienced just five years ago following the financial crisis, when the business continued to increase profits and maintained very good returns on capital employed.  The rigour and accuracy of our under-writing has always been at the heart of Advantage's success.  Over the past half year, a refined Delphi 10 based scorecard system has been introduced, whilst collections have been still further strengthened by the successful introduction of a new online customer arrears payment initiative.

Bridging Finance

After a cautious start, Aspen Bridging our property bridging pilot, has begun to earn recognition and credibility amongst the broker community.  Gross assets are currently just under £2m; start-up costs are in line with budget and the current deals pipeline promises to meet budget, albeit later in the year than originally planned.  Proof of the success, or otherwise, of the £20m pilot will therefore become evident later next year.

Funding

Although our growing businesses require prudent funding, throughout its history S&U has always benefitted from a conservative treasury approach, particularly on gearing.  Thus, although £32m has been invested in growth and dividends since the year-end, gearing is still just 56% against 29% last year.  Further, since the half-year end we have further extended our medium-term banking facilities by £20m which now total £115m and leave substantial headroom for sensible growth.

Dividend

Steady and sustainable expansion should be reflected in the returns made available to our Shareholders.  Our current dividend cover of 1.9 is close to our normal guidance of roughly 50% of distributed earnings.  We therefore propose a first interim dividend of 28p per ordinary share (2016: 24p).  This will be paid on 10 November 2017 to ordinary shareholders on the register on 20 October 2017.  Our second and final dividends will be paid on 16 March 2018 and the 6 July 2018 respectively.

Current Trading and Outlook

Our current trading, strong financial position and proven track record over the last two decades, are clear evidence for the financial community of S&U's ability to provide steady and sustainable growth.  That remains true now and for the foreseeable future.

Anthony Coombs, Chairman

 

 

INTERIM MANAGEMENT REPORT

This interim management report has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to S&U plc and its subsidiaries when viewed as a whole.

ACTIVITIES

The principal activity of the S&U plc Group (the "Group") continues to be that of specialist finance and in particular secured hire purchase motor finance throughout England, Wales and Scotland. The principal activity of S&U plc Company (the "Company") is as holding company of the Group.

BUSINESS REVIEW, RESULTS AND DIVIDENDS

A review of developments during the six months together with key performance indicators and future prospects is detailed in the Chairman's Statement.

There are no significant post balance sheet events to report other than the September 2017 increase in committed funding facilities from £95m to £115m as reported in the Chairman's Statement.

The Group's profit on ordinary activities after taxation from continuing operations was £11,492,000 (H1 2016: £9,453,000). Dividends of £8,028,000 (H1 2016: £6,693,000) were paid during the period.

The Directors recommend a first interim dividend of 28.0p per share (2015: 24.0p). The dividend will be paid on 10 November 2017 to shareholders on the register on 20 October 2017. 

 

RELATED PARTY TRANSACTIONS

Related party transactions are disclosed in note 10 of these financial statements.

 

SHARE OPTION SCHEMES

During the six months, under the S&U Plc 2010 Long-Term Incentive Plan ("LTIP"), no options were awarded or lapsed. 15,667 options were exercised during the six months. 159,001 share options are still held under this plan as at 31 July 2017 (31 July 2016: 187,668 options and 31 January 2017: 174,668 options).

During the six months no options lapsed and no options were awarded under the S&U Plc 2008 Discretionary Share Option Plan ("DSOP"). No share options were exercised during the six months resulting in 1,050 share options still held under this plan as at 31 July 2017 (31 July 2016: 1,050 options and 31 January 2017: 1,050 options).

In the six months to 31 July 2017 the charge for these future share-based payments was £159,000 (2016: £204,000).

 

CHANGES IN ACCOUNTING POLICIES

There have been no changes in accounting policies in either the current or previous financial periods shown.

 

CHANGES IN CONTINGENCIES

There have been no significant changes in contingent assets or liabilities since 31 January 2017.

 

 

STATEMENT OF GOING CONCERN

After making enquiries and considering the principal risks and uncertainties set out below, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

 

PRINCIPAL RISKS AND UNCERTAINTIES

The Group is involved in the provision of consumer credit, and it is considered that the key material risk to which the Group is exposed is the credit risk inherent in amounts receivable from customers. This risk is principally controlled through our credit control policies supported by ongoing reviews for impairment. The value of amounts receivable from customers may also be subject to the risk of a severe downturn in the UK economy which might affect customers' ability to repay. The Group is primarily exposed to the non-prime motor finance sector and within that to the values of used vehicles which are used as security in hire purchase arrangements. These economic and concentration risks are principally controlled through our credit control policies including loan to value limits for the security and through ongoing monitoring and evaluation.

These well tried and tested methods will be equally important in limiting risk at Aspen Bridging. Historically impairment rates in this market are extremely low, principally because loan to value calculations are conservative, interest is retained upfront, and loan periods are unlikely to last beyond a year. In addition, Aspen has introduced a variety of controls to further limit risk in a heavily under supplied housing market.

 

Funding risk relates to the availability of sufficient borrowing facilities for the Group to meet its liabilities as they fall due. This risk is managed by ensuring that the Group has a variety of funding sources, and by managing the maturity of borrowing facilities such that sufficient funding is available for the medium term. Compliance with banking covenants is monitored closely so that facilities remain available at all times. The Group's activities expose it to the financial risks of changes in interest rates and where appropriate the Group considers the use of interest rate derivative contracts to hedge these exposures in bank borrowings - no such interest rate derivative contracts are currently held.

In terms of legal risk, the Group is subject to legislation including consumer credit legislation which contains very detailed and highly technical requirements. The Group has procedures in place and employs dedicated compliance resource and specialist legal advisers to ensure compliance with this legislation. As required, as part of the standard FCA full permission regime, Advantage Finance Limited applied for and received renewed authorisation in 2016.   Regulatory Risk is addressed by the constant review and monitoring of Advantage's internal controls and processes.  This constant review and monitoring process is buttressed by specific advice from Trade and other organisations and by the independent work of our internal auditors.

 

The Group is also exposed to conduct risk in that it could fail to deliver fair outcomes to its customers which in turn could impact the reputation and financial performance of the Group. The Group principally manages this risk through Group staff training and motivation (Advantage is an Investor in People) and through detailed monthly monitoring of customer outcomes for compliance and treating customers fairly.

 

The Group is also exposed to cyber security risk and this risk is managed by the Group with guidance and review from external cyber security consultants - the process is overseen by the audit committee.

 

Other operational risks are endemic to any finance business.  Rigorous procedures, detailed recovery plans and, above all, sound experience and commercial common sense provide Advantage and the Group with appropriate protection.

 

 

Anthony Coombs, Chairman

 

RESPONSIBILITY STATEMENT

 

We confirm that to the best of our knowledge:

a)     the condensed set of financial statements has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit of S&U plc as required by DTR 4.2.4R;

b)    the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c)     the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

 

 

Chris Redford, Company Secretary

 

INDEPENDENT REVIEW REPORT TO S & U PLC

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2017 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the cash flow statement and related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

Deloitte LLP

Birmingham, UK

 

S&U PLC GROUP

CONSOLIDATED INCOME STATEMENT

Six months ended 31 July 2017

 

 

 

 

 

 

Note

 

 

UnauditedSix months ended 31.7.17

£'000

 

 

 

Unaudited Six months ended 31.7.16

£'000

 

 

 

Audited

Financial

year ended 31.1.17

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

2

37,556

 

28,283

 

60,521

 

 

 

 

 

 

 

Cost of sales

3

(17,226)

 

(11,588)

 

(25,065)

 

 

 

 

 

 

 

Gross profit

 

20,330

 

16,695

 

35,456

 

 

 

 

 

 

 

Administrative expenses

 

(4,903)

 

(4,116)

 

(8,585)

 

 

 

 

 

 

 

Operating profit

 

15,427

 

12,579

 

26,871

 

 

 

 

 

 

 

Finance costs (net)

 

(1,152)

 

(726)

 

(1,668)

 

 

 

 

 

 

 

Profit before taxation

2

14,275

 

11,853

 

25,203

 

 

 

 

 

 

 

Taxation

4

(2,783)

 

(2,400)

 

(4,861)

 

 

 

 

 

 

 

Profit for the period

 

11,492

 

9,453

 

20,342

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

5

96.0p

 

79.2p

 

170.7p

 

 

 

 

 

 

 

Diluted

5

95.3p

 

78.5p

 

169.1p

 

 

 

 

 

 

 

 

All activities and earnings per share derive from continuing operations.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

Unaudited

Six months ended 31.7.17

£000

Unaudited

Six months ended

31.7.16

£000

Audited

Financial

year ended 31.1.17

£000

 

 

 

 

 

Profit for the period

 

11,492

9,453

20,342

Other comprehensive income:

 

 

 

 

Actuarial loss on defined benefit pension scheme

 

-

-

(18)

 

 

 

 

 

 

 

 

 

 

Total Comprehensive Income for the period

 

11,492

9,453

20,324

 

 

 

 

 

 

Items above will not be reclassified subsequently to the Income Statement.

 

  

 

 

CONSOLIDATED BALANCE SHEET

 As at 31 July 2017                                      

 

           

 

 

Note

Unaudited31.7.17

£'000

 

Unaudited31.7.16

£'000

 

Audited

31.1.17

£'000

ASSETS

 

 

 

 

 

 

Non current assets

 

 

 

 

 

 

Property, plant and equipment

 

           1,866

 

           1,150

 

           1,190

Amounts receivable from customers

7

161,891

 

122,697

 

136,373

Deferred tax assets

 

441

 

435

 

441

 

 

 

 

 

 

 

 

 

164,198

 

124,282

 

138,004

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Amounts receivable from customers

7

66,714

 

51,218

 

57,156

Trade and other receivables

 

723

 

692

 

603

Cash and cash equivalents

 

3

 

1

 

4

 

 

 

 

 

 

 

 

 

67,440

 

51,911

 

57,763

 

 

 

 

 

 

 

Total assets

 

231,638

 

176,193

 

195,767

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Bank overdrafts and loans

 

(676)

 

(1,955)

 

(11,171)

Trade and other payables

 

(2,336)

 

(2,166)

 

(2,009)

Current tax liabilities

 

(3,374)

 

(2,997)

 

(3,104)

Accruals and deferred income

 

(1,710)

 

(1,385)

 

(1,566)

 

 

 

 

 

 

 

 

 

(8,096)

 

(8,503)

 

(17,850)

 

 

 

 

 

 

 

Non current liabilities

 

 

 

 

 

 

Borrowings

 

(80,000)

 

(36,000)

 

(38,000)

Financial liabilities

 

(450)

 

(450)

 

(450)

 

 

 

 

 

 

 

 

 

(80,450)

 

(36,450)

 

(38,450)

 

 

 

 

 

 

 

Total liabilities

 

(88,546)

 

(44,953)

 

(56,300)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

143,092

 

131,240

 

139,467

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Called up share capital

 

1,697

 

1,694

 

1,695

Share premium account

 

2,281

 

2,281

 

2,281

Profit and loss account

 

139,114

 

127,265

 

135,491

 

 

 

 

 

 

 

TOTAL EQUITY

 

143,092

 

131,240

 

139,467

 

 

 

 

 

 

 

 

 

These interim condensed financial statements were approved on behalf of the Board of Directors.

Signed on behalf of the Board of Directors 

 

Anthony Coombs                                                           Chris Redford                                     Directors

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 Six months ended 31 July 2017

 

 

 

 

 

 

Called up share capital

 

Share premium account

 

Profit and loss account

 

 

Total equity

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

At 1 February 2016

1,691

2,264

124,301

128,256

 

 

 

 

 

Profit for six month period

-

-

9,453

9,453

Other comprehensive income for period

-

-

-

-

 

 

 

 

 

           Total comprehensive income for period

-

-

9,453

9,453

Issue of new shares

3

17

-

20

Cost of future share based payments

-

-

204

204

Tax charge on equity items

-

-

-

-

Dividends

-

-

(6,693)

(6,693)

 

 

 

 

 

At 31 July 2016

1,694

2,281

127,265

131,240

 

 

 

 

 

Profit for six month period

-

-

10,889

10,889

Other comprehensive income for period

-

-

(18)

(18)

 

 

 

 

 

           Total comprehensive income for period

-

-

10,871

10,871

Issue of new shares

1

-

-

1

Cost of future share based payments

-

-

205

205

Tax credit on equity items

-

-

5

5

Dividends

-

-

(2,855)

(2,855)

 

 

 

 

 

At 31 January 2017

1,695

2,281

135,491

139,467

 

 

 

 

 

Profit for six month period

-

-

11,492

11,492

Other comprehensive income for period

-

-

-

-

 

 

 

 

 

           Total comprehensive income for period

-

-

11,492

11,492

Issue of new shares

2

-

-

2

Cost of future share based payments

-

-

159

159

Tax charge on equity items

-

-

-

-

Dividends

-

-

(8,028)

(8,028)

 

 

 

 

 

At 31 July 2017

1,697

2,281

139,114

143,092

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT

 Six months ended 31 July 2017

 

 

 

 

 

Note

UnauditedSix months ended 31.7.17

£'000

 

UnauditedSix months ended 31.7.16

£'000

 

Audited

Financial

 Year ended

31.1.17

£'000

 

 

 

 

 

 

 

Net cash used in operating activities

8

(22,671)

 

(19,257)

 

(27,431)

 

 

 

 

 

 

 

Cash flows used in investing activities

 

 

 

 

 

 

Proceeds on disposal of property, plant and equipment

 

22

 

31

 

53

Purchases of property, plant and equipment

 

(831)

 

(154)

 

(361)

 

 

 

 

 

 

 

Net cash used in investing activities

 

(809)

 

(123)

 

(308)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Dividends paid

 

(8,028)

 

(6,693)

 

(9,548)

Issue of new shares

 

2

 

20

 

21

Receipt of new borrowings

 

32,000

 

6,000

 

18,000

Repayment of borrowings

 

-

 

-

 

-

(Decrease)/increase in overdraft

 

(495)

 

1,803

 

1,019

 

 

 

 

 

 

 

Net cash from financing activities

 

23,479

 

1,130

 

9,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(1)

 

(18,250)

 

(18,247)

 

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the period

 

4

 

18,251

 

18,251

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

3

 

1

 

4

 

 

 

 

 

 

 

Cash and cash equivalents comprise

 

 

 

 

 

 

Cash and cash in bank

 

3

 

1

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE INTERIM STATEMENTS

 Six months ended 31 July 2017

1.         ACCOUNTING POLICIES

1.1 General Information

S&U plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given in note 12 which is also the Group's principal business address. All operations are situated in the United Kingdom.

 

1.2 Basis of preparation and accounting policies

These financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

The same accounting policies, presentation and methods of computation are followed in the financial statements as applied in the Group's latest annual audited financial statements. The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries for the six months ended 31 July 2017.

 

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

 

New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date (or date of early adoption).  There were no standards and interpretations which were effective for the first time during the six months ended 31 July 2017 and which would materially affect these interim financial statements. At the date of authorisation of these financial statements the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective:

IFRS2 - Share-based payment

IFRS9 - Financial Instruments

IFRS15 - Revenue from contracts with customers

IFRS16 - Leases

The directors anticipate that the adoption of these Standards and interpretations in future periods will have no

material impact on the financial statements of the Group other than the adoption of IFRS9 which may have a material impact on the financial assets reported by the Group. Preparation work for adoption of IFRS9 is ongoing but it is not yet practical to provide a reasonable estimate of the impact of the effect of IFRS9 which will start to take effect next financial year.

 

 

2.        ANALYSES OF REVENUE AND PROFIT BEFORE TAXATION

All revenue is generated in the United Kingdom. Analyses by class of business of revenue and profit before taxation are stated below:

 

 

Revenue

 

 

 

 

Six months ended 31.7.17

£'000

 

Six months ended 31.7.16

£'000

 

Financial

year ended 31.1.17

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

Motor finance

 

37,470

 

28,283

 

60,521

Other - property bridging finance

 

86

 

-

 

-

 

 

 

 

 

 

 

Revenue

 

37,556

 

28,283

 

60,521

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE INTERIM STATEMENTS

 Six months ended 31 July 2017

 

2.        ANALYSES OF REVENUE AND PROFIT BEFORE TAXATION (CONTINUED)

 

 

Profit before taxation 

 

 

 

 

Six months ended 31.7.17

£'000

 

Six months ended 31.7.16

£'000

 

Financial

year ended 31.1.15

£'000

 

 

 

 

 

 

Motor finance

 

14,417

 

11,852

 

25,186

Central costs/income includes property bridging

 

(142)

 

1

 

17

 

 

 

 

 

 

 

Profit before taxation

 

14,275

 

11,853

 

25,203

 

 

 

 

 

 

 

 

3.         COST OF SALES

 

Six months ended 31.7.17

Six months ended 31.7.16

Financial

year ended 31.1.17

 

£'000

£'000

£'000

 

 

 

 

Loan loss provisioning charge

8,591

4,959

12,194

Other cost of sales

8,635

6,629

12,871

 

 

 

 

Cost of sales

17,226

11,588

25,065

 

 

 

 

4.         TAXATION

             The tax charge for the period has been calculated by applying the estimated effective tax rate for the year of 19.5% (31 July 2016: 20.25% and 31 January 2017: 20.0%) to the profit before taxation for the six months.

 

5.         EARNINGS PER ORDINARY SHARE

The calculation of earnings per ordinary share is based on profit for the period from continuing operations of £11,492,000 (period ended 31 July 2016: £9,453,000 and year ended 31 January 2017: £20,342,000).

The number of shares used in the basic calculation is the average number of ordinary shares in issue during the period of 11,971,363 (period ended 31 July 2016: 11,939,415 and year ended 31 January 2017:  11,918,610).

For diluted earnings per share the average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares relating to our share option scheme awards.

 

6.         DIVIDENDS

A second interim dividend of 28.0p per ordinary share and a final dividend of 39.0p per ordinary share for the financial year ended 31 January 2017 were paid during the six month period to 31 July 2017 (total of 67.0p per ordinary share). This compares to a second interim dividend of 23.0p per ordinary share and a final dividend of 33.0p per ordinary share for the financial year ended 31 January 2016 which were paid during the 6 months period to 31 July 2016 (total of 56.0p per ordinary share). During the twelve months to 31 January 2017 total dividends of 80.0p per ordinary share were paid. These distributions are shown in the consolidated statement of changes in equity in this interim financial information.

The directors have also declared a first interim dividend of 28.0p per share (2016: 24.0p per share). The first interim dividend, which amounts to approximately £3,360,000 (2016: £2,870,000), will be paid on 10 November 2017 to shareholders on the register at 20 October 2017.  The shares will be quoted ex dividend on 19 October 2017. The interim financial information does not include this proposed dividend as it was declared after the balance sheet date.

 

NOTES TO THE INTERIM STATEMENTS

 Six months ended 31 July 2017

7.         ANALYSIS OF AMOUNTS RECEIVABLE FROM CUSTOMERS

All operations are situated in the United Kingdom. 

 

 

Amounts Receivable 

 

 

 

 

Six months ended 31.7.17

£'000

 

Six months ended 31.7.16

£'000

 

Financial

year ended 31.1.17

£'000

Amounts receivable from customers (capital)

 

263,367

 

200,501

 

224,283

Less: Loan loss provision for motor finance

 

(36,560)

 

(26,586)

 

(30,754)

 

 

 

 

 

 

 

Motor Finance net amounts receivable from customers

 

226,807

 

173,915

 

193,529

 

 

 

 

 

 

 

Property Bridging net amounts receivable from customers

 

1,798

 

-

 

-

 

 

 

 

 

 

 

Total net amounts receivable from customers

 

228,605

 

173,915

 

193,529

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysed as:- due within one year

66,714

 

51,218

 

57,156

                    - due in more than one year

 

161,891

 

122,697

 

136,373

 

 

 

 

 

 

 

Amounts receivable from customers (net)

 

228,605

 

173,915

 

193,529

 

 

 

 

 

 

 

 

8.         RECONCILIATION OF PROFIT BEFORE TAX TO CASH FLOW USED IN OPERATING ACTIVITIES

 

 

 

 

 

Six

months

ended

31.7.17

£'000

Six months ended 31.7.16

£'000

 

 

Financial

year ended

 31.1.17

£'000

 

Operating Profit

Finance costs paid

 

 

15,427

(1,152)

 

12,579

(760)

 

 

26,871

(1,703)

Finance income received

 

-

34

 

35

Tax paid

 

(2,513)

(2,449)

 

(4,804)

      Depreciation on plant, property and equipment

 

133

119

 

253

Loss on disposal on plant, property and equipment

 

-

3

 

14

Increase in amounts receivable from customers

 

(35,076)

(28,774)

 

(48,388)

Increase in trade and other receivables

 

(120)

(112)

 

(23)

Increase in trade and other payables

 

327

534

 

377

Increase/(decrease) in accruals and deferred income

 

144

(635)

 

(454)

Increase in cost of future share based payments

 

159

204

 

409

Decrease in retirement benefit obligations

 

-

-

 

(18)

 

 

 

 

 

 

Cash flow used in operating activities

 

(22,671)

(19,257)

 

(27,431)

 

 

 

 

 

 

               

 

9.         BORROWINGS          

Movements in our loans and overdrafts for the respective periods are shown in the consolidated cash flow statement. As expected, cash used in operating activities was higher in the six months to 31 July 2017 than in the same period last year reflecting a 21% increase in motor finance advances in the first 6 months of this year. The period end borrowings were £80.7m and committed borrowing facilities were £95m at 31 July 2017 and the Group has since increased its committed borrowing facilities after the period end to £115m plus the existing £5m in overdraft facilities.

 

10.       RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties have been eliminated on consolidation and are not disclosed in this report. During the six months the Group made charitable donations amounting to £42,000 (6 months to July 2016: £25,000; year to January 2017: £52,000) via the Keith Coombs Trust which is a related party because Messrs GDC Coombs, AMV Coombs, D Markou and CH Redford are trustees.  The amount owed to the Keith Coombs Trust at the half year end was £nil (July 2016: £nil; January 2017 £nil). During the six months the Group obtained supplies amounting to £5,580 (6 months to July 2016: £9,841; year to January 2017: £9,841) from Grevayne Properties Limited, a company which is a related party because Messrs GDC and AMV Coombs are directors and shareholders.  The amount owed to Grevayne Properties Limited at the half year end was £nil (July 2016: £nil; January 2017 £nil). All related party transactions were settled in full.

11.       INTERIM REPORT

The information for the year ended 31 January 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.  The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006. A copy of this Interim Report will be made available to all our shareholders and to the public on our website at www.suplc.co.uk and at the Company's registered office at 6 The Quadrangle, Cranmore Avenue, Solihull B90 4LE.


This information is provided by RNS
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Half-year Report - RNS