S&U, the motor finance and property bridging lender reports that group trading has strengthened.
Customer numbers for S&U’s motor finance business Advantage Finance have reached 54,000 against 43,000 a year ago and new transactions exceeded last year by 22% at 24,500, reflecting strong demand.
Advantage's Dealflo system, fully rolled out in the period, has led to a significant improvement in transaction-to-approval rates. The company expects this in turn to lead to further growth in high quality business, margin improvement and a gradual reversal in the recent impairment-to-revenue.
Aspen Bridging, the company’s property bridging pilot launched last year has issued over £10m of loans, many into the buoyant residential refurbishment market for starter family housing.
Costs have been controlled and lending margins and LTVs maintained to budget. We have already seen a number of repayments come through and we are increasingly confident in the long-term viability and prospects for this business.
Group borrowings are now at £105m and, although this rate of investment is expected to slow next year, the board expects further funding facilities to be concluded shortly which will bring total committed facilities to £135m. This will, according to the board, provide sensible headroom for growth whilst maintaining gearing at S&U's historically conservative levels.
The board has approved a second interim dividend this year of 32p per ordinary share (2016: 28p). This means that the first two dividends this year, including the 28p per share paid in November, will total 60p against 52p a year ago, 43p in 2016 and 36p three years ago.
Commenting on trading and outlook, Anthony Coombs, Chairman of S&U said: "Whilst the political and economic uncertainties inherent in both the Brexit negotiations and a slowing economy remain, S&U continues to demonstrate its historic ability to produce excellent results and strong, sustainable growth. We are confident that will continue."