23 September 2010 – interim results

The consumer and motor finance group S & U has announced very solid interim results for the six months to 31 July, revealing increases in revenues, profits and earnings per share.  Revenue for the period rose to £23.6m (2009: £22.1m) whilst pre-tax profit increased by 8% to £5.4m (2009: £5.0m).  Earnings per share were 9% higher at 33.2p (2009: 30.5p) and the first interim dividend was raised to 10p (2009: 9p).

The Home Credit business reported slightly higher revenue as customer numbers rose by 3%, whilst Advantage Finance, the motor finance business saw a 17% increase in revenues as customer numbers rose by 18%.  Despite this increase in the level of business, strong cash flow has allowed gearing to drop to just 51% giving the group scope to expand either organically or by acquisition.  We have raised our pre-tax profit forecasts for the full year to £9.7m for earnings per share of 59.5p.  With the prospect of a juicy 36p total dividend, the shares also yield almost 6.8%.  BUY.