S&U continues growth trajectory as it prepares Aspen launch

8th Dec 2016 16:46

(ShareCast News) - Motor finance and specialist lender S&U announced its trading update for the period from 1 August to 7 December on Thursday, with its Grimsby based specialist car finance provider Advantage Finance continuing to grow to record levels of profitability and customer volume.The London-listed firm said applications were at near record levels, which its board said was testament both to a robust labour market and to increasingly close interaction with its broker introducers.Live customer numbers were up 34% on last year, and were now approaching 42,000.Net receivables at Advantage were now over £189m, with transaction numbers showing a 16% increase on the comparative period last year.Monthly collections were at record levels, the board said, and now exceeded £8m per month.Although the company's rolling 12 months impairment to revenue ratio increased from 17.7% to 18.5% during the period, that was still in line both with the same ratio measured over the last five years of 19.1%, and with the board's own expectations.As part of its strategy for long term sustainable growth, Advantage continued to develop its underwriting systems as well as the speed and flexibility of its customer service systems with its broker partners.Following the introduction of the new FCA Licensing Regime, Advantage was recently granted its full Consumer Credit Permission.With regard to funding, having obtained a further £15m of bank facilities during the period, the group now had facilities of £85m, sufficient for the growth the board anticipated at Advantage Finance over the next year, and for the launch in January of pilot bridging finance business Aspen Finance.The board said it anticipated concluding further loan facilities as its businesses require."The current dearth of supply in the housing market and long term unmet residential demand, provide secure and profitable opportunities for property backed bridging lending," the board said of the launch of Aspen Finance."The UK bridging market grew from around £2bn in 2012 to £5bn now, and is forecast to reach nearly £10bn by 2020."The board said it continued to believe that this presented a very good opportunity for S&U to diversify its revenue streams, and preparations for the launch of its previously announced and "rigorous" pilot, Aspen Bridging Finance, were now well advanced."Despite widespread assumptions of 'post Brexit gloom', consumer appetite for credit, partially reflecting a robust labour market, continues unabated," said S&U chairman Anthony Coombs."This apparent contradiction has been recently reflected, for both S&U and for others in the speciality finance sector, in what I view as an unjustified decoupling of S&U's performance and prospects and our stock market valuation."I am confident that our ambition and constant striving for the highest standards of service for our customers will be reflected in the growth, performance and value of the group."