- S&U
- 12 August 2024 11:44:20
Source: Sharecast
The London-listed company said its motor finance division, Advantage Finance, was undergoing a period of consolidation and retrenchment.
It put the slowdown down to ongoing restrictions related to a Financial Conduct Authority (FCA) section 166 notice, which impacted its collections capabilities.
As a result, the value of advances for the year to date was down 10% compared to the first half of last year.
However, S&U was optimistic that once the restrictions were lifted - anticipated later in the year - Advantage would resume its usual profitable trajectory.
Despite the challenges, customer repayment rates had only slightly decreased, and the company expected a recovery in the second half.
In contrast, Aspen Bridging - S&U's property lending division - was still delivering robust growth.
The division recorded record profits in June, more than doubling those of the prior year, with strong performance continuing into July.
Aspen's loan book had grown to around £149m, up £19m year-on-year.
The division's credit quality remained strong, with late payments comprising less than 8% of the total loan book.
S&U said it anticipated further steady growth in Aspen Bridging as the residential property sector firmed up and interest rates declined.
Group borrowings stood at around £240m - well within the current committed facilities of £280m.
“Although current trends at our Advantage, our motor finance business, are undoubtedly challenging, we thrive on challenges and work for a significant rebound in the second half,” said chairman Anthony Coombs.
“By contrast, Aspen continues to trade sensibly and at record levels.
“We remain confident and determined for the year ahead.”
S&U said it would announce its half-year results on 8 October.
At 0856 BST, shares in S&U were up 0.53% at 1,895p.
Reporting by Josh White for Sharecast.com.