S&u Plc · LSE:SUS
S&u — FY2015 Earnings Presentation
22 slides from S&u's earnings presentation, April 2015
Slide 1: S&U plc Full Year Results 31 January 2015
S&U plc The Credit You Deserve Serving the U.K.’s non-standard finance market FULL YEAR RESULTS 31 JANUARY 2015
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS YEAR TO 31 JANUARY 2015 Revenue up 22% to £74.4m (2014: £60.8m) Profit before tax up 34% to £23.2m (2014: £17.3m) Earnings per share up 38% to 156.0p (2014: 113.2p) Strong cash generation – Group total annual collections up over £28m on last year Gearing increased at 65.8% (2014
Slide 3: Group Income Statement
GROUP INCOME STATEMENT YEAR TO JANUARY 2015 Revenue increase of 22% reflects growth of motor finance £m Jan 15 Jan 14 Change % book and increase in home credit turnover Revenue 74.4 60.8 +22% Relatively small growth (11%) in Cost of Sales -9.2 -6.9 +35% impairment reflects continuing Impairment -14.
Slide 4: Motor Finance: Year to January 15
MOTOR FINANCE: YEAR TO JANUARY 15 38% growth in revenue as book £m Jan 15 Jan 14 Change increases taking advantage of % good broker relationships and fewer lenders in the nonprime Revenue 36.1 26.2 +38% market Cost of Sales -6.7 -4.8 +39% Impairment charge lower on bigger book as ongoing credit qual
Slide 5: Home Credit: Year to January 15
HOME CREDIT: YEAR TO JANUARY 15 Revenue growth reflects good H1 £m Jan 15 Jan 14 Change % sales growth Revenue 38.3 34.7 +10% Quality and impairment stable – basic collections up 12% providing Cost of Sales -2.5 -2.1 platform for continued growth in Impairment -8.4 -7.8 +8% 2015/16 Admin expenses in
Slide 6: Group Balance Sheet
GROUP BALANCE SHEET 31 JANUARY 15 £m Jan 15 Jan 14 Change Comment % Fixed Assets 2.4 1.9 Building purchase £0.4m Amounts Receivable Consumer Credit 34.6 34.0 +2% advances up 11% shorter term Amounts Receivable Motor Finance 106.4 73.0 +46% Continued book growth Other Assets 2.0 1.1 Includes £0.9m ca
Slide 7: Group Cash Flow
GROUP CASH FLOW 12 MONTHS TO JANUARY 15 Group borrowing and gearing increases reflecting ongoing £m Jan 15 Jan 14 growth in motor finance advances Balance b/f -32.4 -20.6 Strong cash generation - Group Total Collections 154.8 126.4 collections in the year up over £28m on last year with record Advanc
Slide 8: Cash Flow by Division
CASH FLOW: 12 MONTHS TO 31 JANUARY BY DIVISION Home Credit Motor Finance Advances up 11% for year including small Advances value for year up 48% - competition acquisitions more active in H2 Collections up 12% year on year with stable quality Slight increase in early redemptions but still at and slig
Slide 9: Impairment Graph
IMPAIRMENT GRAPH Rolling 12 months percentage impairment to revenue 45.0% 40.0% 35.0% 30.0% 25.0% home credit 20.0% motor finance 15.0% 10.0% 5.0% 0.0% 8
Slide 10: Motor Finance Collection Graph
MOTOR FINANCE COLLECTION GRAPH Motor Finance Collections by Year of Advance as at 31.1.15 (% shows % of gross advances collected) 23% Jan-15 66% Jan-14 108% Jan-13 108% Year of Advance 141% Jan-12 112% 151% Jan-11 113% 151% Jan-10 110% 143% Jan-09 105% 128% Jan-08 95% 0.0 10.0 20.0 30.0 40.0 50.0 60
Slide 11: Motor Finance Status of Book Debts
MOTOR FINANCE STATUS OF BOOK DEBTS Position at end January 2015 Position at end January 2014 Account Arrears Status Percentage of Live Percentage of Live Volume of Accounts Volume of Accounts Receivable Receivable Up to Date 22193 92.00% 16207 91.71% 0.01 – 1 1269 4.68% 1053 4.57% 1.01 – 2 458 1.56%
Slide 12: Credit and Risk Management
CREDIT AND RISK MANAGEMENT Motor Finance - approval rate approximately 25% of applications, of which about 15% is converted Motor Finance - Automated decision from bespoke scorecard system returned within 10 seconds on 95% of all applications received. Remaining applications manually assessed by a t
Slide 13: Treasury & Funding
Treasury & Funding Additional £30m longer-term facility arranged in year Medium-term facilities £40m maturity 2018 Gearing 66% (2014: 47%) Longer-term deposit taking licence application to PRA / FCA anticipated H1 2015 12
Slide 14: Market - Opportunities for Growth
MARKET - Opportunities for growth 34% of UK full-time employed adults are in danger of failing a mainstream lender’s credit score Motor Finance Market - average age of vehicles on the road in the UK is at a 25 year high of 7.4 years. Demand for good used cars remains buoyant. 55% (4m) of used car sa
Slide 15: Regulation – Operating in the New Regime
REGULATION – Operating in the new regime Both Loansathome4u and Advantage finance currently operate under interim permission from the FCA Windows for application for applying for full permission; Loansathome4u – April 15 to June 15 Advantage Finance December 15 to February 16 Preparations for loanst
Slide 16: Outlook
OUTLOOK Economy – rising consumer confidence with perceptible increase in disposable real incomes Motor Finance - further organic growth opportunity in Motor Finance market but will also continue to focus on the loan book quality which has driven excellent results in recent years Home Credit – good
Slide 17: Appendices
APPENDICES 16
Slide 18: Our Businesses
OUR BUSINESSES Motor Finance Advantage Finance – used car finance on hire purchase – 85% sourced through brokers – 5% refinances for previous customers – 10% direct from dealers c1100 deals per month underwritten and collected centrally Customers typically borrow only once – loan of about £6,000 adv
Slide 19: Motor Finance Example Customers
MOTOR FINANCE EXAMPLE CUSTOMERS Example 1 (from H2 2014) • 55 year old married man • 15 years at address as home owner • 5 years working as a stores supervisor • Earns £1600 net a month giving around £800 “headroom” • Mortgage from 2004 up to date but showing a late payment about 12 months ago. No o
Slide 20: Motor Finance Example Customers
MOTOR FINANCE EXAMPLE CUSTOMERS Example 2 (H2 2014) • 52 year old male • 3.5 years as a homeowner • Full time social work manager • Earns £2600 net a month giving around £1000 “headroom” • 3 bank defaults from 2009 all satisfied. Current credit showing up to date, active, well managed with low balan
Slide 21: Home Credit Typical Customers
HOME CREDIT TYPICAL CUSTOMERS • 45 year old female – partner plus 2 teenagers • Council house with 5 years at address • Part-time cleaning work with local school • Partner of 10 years – warehouseman at £18k per annum • 1CCJ in 2011 for communications bill - £50 • Borrows for holidays, Christmas and
Slide 22: Disclaimer
DISCLAIMER This document and its contents do not constitute or form part of a prospectus or any offer or invitation to sell or to issue, or any solicitation of any offer to buy or subscribe for any ordinary shares in the Company nor shall it or any part of it or the fact of its distribution form the