In its year-end update, S & U (LON:SUS) confirmed FY17 finished strongly and in line with market expectations. Advantage motor finance recorded a 32% increase in customer numbers and the impairment ratio is running in line with expectations. Funding remains in place for further growth at Advantage and the bridging finance pilot, which is now open for business.
Strong finish to year
Advantage has continued to grow strongly with the number of live customers reaching 43,000: the second year of growth of over 30%. Customer transactions at 20,000 grew at a similar rate. In its January trading update Provident Financial reported a quieter Q4 for its Moneybarn business but S&U has sustained growth through this period helped by a focus on service and within its non-prime sweet spot in the credit risk spectrum. While impairments increased in FY17, this reflected a move to a slightly higher risk-reward profile on loans, and is in line with management expectations. Our estimates are unchanged from our last note published in December.
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