S & U Share Discussion Threads

[pugugly] 09/2/2010 08:15

It is always a pleasure to read S&U managment statements - Always clear and usually positive - 15p interim dividend in March. Yield 6.96% much better than a bank.

[cwa1] 09/2/2010 07:42

As robust as I've heard SUS being for a long time :-)



S&U, Britain's foremost niche home credit and motor finance provider, today issues a trading update for the period from 8th December 2009 to 31st January 2010. The company is pleased to announce that it is trading well and that results are in line with market expectations.



S&U will announce its results for the year ending 31st January 2010 on 24th March 2010.



Home Credit



Home credit sales, both loans and vouchers, exceeded expectations in December and trading and profitability for this period was very satisfactory. Although our much valued and personal weekly service to our customers was disrupted in some areas in the early part of January due to severe weather conditions, collections remained robust and any temporary rise in impairment levels has since recovered well. We have recently expanded our product range and have a strong platform to make further progress in the current financial year.



Motor Finance



Year on year sales at Advantage, our motor finance business which comprises around 30% of group revenues, were very buoyant in both December and January. Collection results from recent loan batches remain good, so that, although impairment levels have risen slightly during 2009, existing trends and high underwriting standards point to a return to historic impairment levels in 2010.



Advantage's extension of its product range into non-prime as well as sub-prime markets has been successful. Margins have been maintained and the initial net cash return is looking extremely promising. As a result we would anticipate a resumption in transaction growth next year as both the used car market and the economy returns to growth.



Funding and Treasury



S&U's balance sheet continues to strengthen. Group borrowings have reduced by £5m since the end of last year despite the seasonal funding required for the very successful sales in both home credit and motor finance over Christmas. Gearing is currently around 57% against 74% 2 years ago. As a result we have significant funds available to continue our policy of both organic and acquisitive expansion.



Dividend



In view of the Government's tax increases from April 2010, and our strong treasury position, the Board has approved payment of a second interim dividend of 15p per ordinary share on the 19th March to holders on the register on the 26th February. It is our intention, subject to unforeseen circumstances, to recommend paying a final dividend on 4th June 2010 of not less than 8p per ordinary share for the year ending 31st January 2010.



Commenting on the Group trading and outlook, Anthony Coombs, Chairman of S&U plc said:



"Despite the uncertain economic and political outlook, S&U's consistency of approach both strategically and in its relationship with its customers, bodes well for continued progress throughout the Group. Current trading in both our home credit and motor finance divisions reflects these promising trends. In addition, we are actively pursuing expansion within our existing markets this year through acquisitions. These efforts will be reflected in both S&U's profitability and in the returns we make to shareholders"

[jadeticl] 03/2/2010 19:41

I have an answer to my own question. Update due Feb 9th 2010. From previous info this financial year I am not expecting any bad news. It should be more of the same or more positive. Who disagrees?

[jadeticl] 02/2/2010 14:46

When is the next update due? Anyone know? It should be soon. I am expecting more solid growth.

[oniabsta] 09/1/2010 14:11

F.T.
The 2 analysts offering 12 month price targets for S and U (SUS:LSE) have a median target of 537.50, with a high estimate of 575.00 and a low estimate of 500.00. The median estimate represents a 18.13% increase from the last price of 455.00.

[taylor20] 09/12/2009 10:53

Last target price I had was £5 back in September ( the reduction in debt makes that even more conservative.

[pugugly] 09/12/2009 10:40

Back to sleap - No worries here Safer than any UK bank.

[cwa1] 09/12/2009 10:02

Do they have a target price?

[taylor20] 09/12/2009 09:44

No change from Charles Stanley:

"Good IMS, 7.3% yield
The leading provider of home credit ("HCC") and motor finance continues to
perform well. With more cautious underwriting and an emphasis on credit quality,
cash generation has been strong, while S&U is well placed for when economic
conditions improve. We reiterate our Buy recommendation."

[cwa1] 09/12/2009 07:34

Excellent stuff :-)))

Home Credit




Our well established home credit operations currently account for approximately two thirds of Group profits. As credit available within the economy has tightened, so the virtues of home credit, which offers flexibility, convenience and excellent service, have appealed to a growing customer base. As a result, trading in the second half thus far has been encouraging, with both revenues and profits in line with our expectations. Debt quality is improving, impairment levels have improved compared to last year, and the profile of our debt has led to increased levels of credit availability for our customers right across the business. As a result, levels of cash generation have remained very good, and we anticipate a successful Christmas period.




Motor Finance




Advantage, our motor finance business, has sensibly adapted to a more challenging non standard market by raising underwriting hurdles and improving the quality of its debt. Its trading performance is in line with budget, reflecting a 5% increase in Live accounts compared to last year. Despite lower levels of customer early redemption, collection rates are driving strong monthly cash generation and impairment levels are stable.




Funding and Treasury




S&U's balance sheet continues to strengthen and net borrowing has been reduced by £6 million to approximately £27 million as at 8 December 2009 (2008: £33 million) reflecting the Group's strong cash generation. The company has significant headroom within existing facilities for both organic expansion and acquisitions.






Commenting on Group trading and outlook, Anthony Coombs, Chairman of S&U plc said:

"The Group is trading in line with market expectations for the year as whole and, as a result of continued prudent management, it is in good shape to exploit the opportunities made available by recent industry consolidation. Whilst we take nothing for granted, we are confident of being able to deliver a sustainable improvement in trading performance both in the current year and early in the new decade."




We will update shareholders on trading in the important Christmas period in a year end trading update at the beginning of February 2010.

[this_is_me] 09/12/2009 07:14

Thus morning's statement was just what we wanted.

[tomking2] 30/11/2009 15:14

'A small cap stock to buy'. The original article is at:

[the big fella] 16/11/2009 12:52

Interesting to see if they can get through 5 quid this time.

[cwa1] 16/11/2009 12:46

Nice stuff and I can certainly see room for more to come. Anyone seen any obvious reason for the recent, relative, outperformance?

[philjeans] 16/11/2009 12:08

Chart looking nice and perky.

Much more to come from this solid cashpoint machine.

[cwa1] 13/11/2009 13:02

Blimey. Might need to go for a lie down if this keeps up :-)

Wonder who splashed out to buy 4,500? Too much to ask that it might be a PDMR?

[philjeans] 12/11/2009 15:40

Odd that they didn't state a purchase price; but I guess it'll be earnings enhancing from day 1 plus the cross selling opps - car finance etc.

Good move.

[jeffian] 12/11/2009 11:45

Yes, I liked the "earnings enhancing" bit too! SUS has been a good solid performer and dividend payer but it needed to do something to get eps moving forward again.

[cwa1] 12/11/2009 10:54

Acquisition

S&U, the main market listed home credit and motor finance lender, today announces the acquisition of J&C Smith, a Teesside based home credit company with gross assets at date of acquisition of approximately £0.75m. The acquisition has been financed out of S&U's existing facilities. S&U continues to seek home credit acquisitions in line with its strategy of investing in organic growth and careful acquisitions.

Mike Mullins, home credit Managing Director, said:

"We continue to expand our home credit operations through acquisition and organic growth. Smith's is an excellent quality business, will be immediately earnings enhancing and will form the basis of a new branch in Teesside that we will open in January".

Lovely :-)

[taylor20] 18/10/2009 10:17

Could be significant:

[taylor20] 01/10/2009 10:56

CS Target was 500p, see flash note here:

Which is fair, happy to have a steady yield around 6-7%

[this_is_me] 30/9/2009 14:54

The company has had eps of above 50p for goodness knows how many years and have not paid out a dividend of more than 32p so I don't get why you think the numbers are getting worse. If interest rates go up you charge more interest.

[cwa1] 29/9/2009 22:08

Excellent. Thanks for that taylor20

[taylor20] 29/9/2009 20:31

From UK-Analyst:

Daniel Stewart initiated its coverage of home credit provider S&U (SUS) with a 'buy' stance and a target price of 575p which equates to a target multiple of 10.5x 2010 EPS. The broker said one of the key attractions of S&U is its attractive dividend payout. On DS forecasts the group will yield 6.6% in 2010 rising to 6.8% in 2011. "We view this payout as secure and underpinned by the Group's stability of earnings," commented the broker. "S&U is well-placed to prudently grow its loan book at the most attractive stage in the cycle and the withdrawal from new lending of key competitors provides an additional tailwind," it added. Shares in the company climbed by 12.5p to 500p.