Motor finance and property bridging lender S&U said on Thursday that full-year pre-tax profits were now set to exceed current consensus expectations.
S&U stated that although both political and economic uncertainty still “clouds the horizon” for the UK consumer, and supply shortages still inhibited the used car market, it “confidently” expects 2022 to gradually see a full rebound to normal motor sales conditions.
In its motor finance division, annualised live collection rates between 9 December and 31 January were 93% of due, above budget and 9% ahead of last year, with lower bad debts and voluntary terminations than anticipated meaning the firm now expects “a much lower than normal” impairment charge this year.
“This will see profit before tax more than double last year’s £17.2m, when the Covid-related impairment charge was much higher than normal (prior year impairment charges: £36.0m for the year ended 31 January 2021 and £16.5m for the year ended 31 January 2020),” said S&U.
S&U added that both current trading and its “positive view” of prospects for sustainable growth, led the board to recommend a second interim dividend of 36.0p per ordinary share, up from 2021’s payout of 25.0p.
As of 0945 GMT, S&U shares were up 3.68% at 2,820.0p.
