S&u Plc · LSE:SUS
S&u — FY2013 Earnings Presentation
19 slides from S&u's earnings presentation, Mar 26, 2013
Slide 1: S&U plc Full Year Results to 31st January 2013
“We have provided motor finance for over 50,000 customers in the UK.” S&U plc The Credit You Deserve Serving the U.K.’s non--standard finance market non “Customers have enjoyed our valued home credit service since 1938” FULL YEAR RESULTS TO 31ST JANUARY 2013 “We have over 30 branches and provide wor
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue up 6% to £55.0m (2012: £51.9m) PBT up 16% to £14.2m (2012: £12.2m) EPS up 22% to 92.6p (2012: 76.1p) Strong cash generation - Group annual collections up over £7m on last year Gearing stable at 33.7% (2012: 34.3%) including 35% year on year increase in motor advances Net
Slide 3: Group Income Statement
GROUP INCOME STATEMENT YEAR TO JANUARY 2013 Revenue increase of 6% - slower £m Jan 13 Jan 12 Change % H2 in home credit offset by further growth in motor finance Revenue 55.0 51.9 +6% revenue Cost of Sales -5.4 -5.1 +7% Improvement in motor finance Impairment -13.0 -12.8 +2% impairment offset by inc
Slide 4: Group Balance Sheet January 2013
GROUP BALANCE SHEET 31 JANUARY 2013 £m Jan 13 Jan 12 Change Comment % Fixed Assets 1.8 1.6 Amounts Receivable Consumer Credit 33.8 35.2 -4% Lower sales Dec 12 v Dec 11 Amounts Receivable Motor Finance 52.5 42.3 +24% Continued book growth Other Assets 0.6 0.6 Total Assets 88.7 79.7 +11% Current Bank
Slide 5: Group Cash Flow
GROUP CASH FLOW 12 MONTHS TO JANUARY 2013 Group borrowing from £18.8m to £m Jan 13 Jan 12 £20.6m Balance b/f -18.8 -21.7 Stable and cash generative Home Cash outflow/inflow -1.8 +2.9 Credit Balance c/f -20.6 -18.8 Increased advances, good collections and low early Analysis redemptions in Motor Finan
Slide 6: Impairment Graphs
IMPAIRMENT GRAPHS Annualised 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% Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 6
Slide 7: Home Credit: 12 Months to January 2013
HOME CREDIT: 12 MONTHS TO JANUARY 2013 Slower H2 but overall revenue £m Jan 13 Jan 12 Change 52 53 % stable - customer caution making weeks weeks growth more challenging Revenue 34.2 34.1 +0% Impairment charge increased by Cost of Sales -1.9 -2.3 £0.7m on good year last year - stable collections up
Slide 8: Motor Finance: 12 Months to January 2013
MOTOR FINANCE: 12 MONTHS TO JANUARY 2013 17% growth in revenue as book £m Jan 13 Jan 12 Change increases taking advantage of % good broker relationships and fewer lenders in the nonprime Revenue 20.8 17.8 +17% market Cost of Sales -3.5 -2.8 +28% Impairment charge lower on bigger book as credit quali
Slide 9: Cash Flow: 12 Months to 31 January by Division
CASH FLOW: 12 MONTHS TO 31 JANUARY BY DIVISION Home Credit Motor Finance Collections up 2% for year in one less week Advances up 35% - strong growth in Q4 Advances also up 2% for year - Q4 slower with Early redemptions and debt recovery income Christmas advances down 2% on good Christmas still at hi
Slide 10: Motor Finance Collection Graph
MOTOR FINANCE COLLECTION GRAPH Motor Finance Collections by Year of Advance as at 31.1.13 Jan-13 Jan-12 Jan-11 Year of Advance Jan-10 Jan-09 Jan-08 Jan-07 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 £ millions Collected to date £m Collected after average 30 months £m Advances for year including cost
Slide 11: Environment
ENVIRONMENT Economy – although the “misery index” has improved in the last year, UK economy continues to be slow with growth prospects uncertain Customer incomes and household budgets may come under pressure from universal credit and room tax changes - customer and lender behaviour likely to remain
Slide 12: Outlook
OUTLOOK Home Credit stable current trading - H1 growth will be challenging. New products planned for H2 Motor Finance very good current trading - record new lending volumes and initial collection quality Further organic growth opportunity in Motor Finance market Firm base and medium term finance fac
Slide 13: Appendices
APPENDICES 13
Slide 14: Our Businesses
OUR BUSINESSES Home Credit 520 Agents, lending and receiving payments in the home Agents attend branches twice weekly for scrutiny and review with managers who also go out on dual visits to help develop customer relationships Customers typically borrow two or three unsecured weekly repayment loans p
Slide 15: 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 16: Motor Finance Example Customers: Example 1
MOTOR FINANCE EXAMPLE CUSTOMERS Example 1 • 41 year old male • 10 years at address as home owner • 3 years as delivery driver • Earns £2000 net a month giving around £1000 “headroom” • Historic £400 CCJ from 2008, previously settled hp account that ran perfectly for 4 years (not with us), usual cred
Slide 17: Motor Finance Example Customers: Example 2
MOTOR FINANCE EXAMPLE CUSTOMERS Example 2 • 41 year old female • 14 years in private healthcare as SRN sister • 3.5 years into hire purchase agreement with another lender looking to part exchange • Earns £2000 net a month giving around £1000 “headroom” • No defaults or CCJs, usual credit, odd missed
Slide 18: Credit and Risk Management
CREDIT AND RISK MANAGEMENT All underwriting in Home Credit sanctioned by independent credit controllers Audit letter/statement system operated and controlled from Head Office Regular physical security checks required and monitored for all customer rounds Minimum income and maximum repayment requirem
Slide 19: 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