TIDMSUS
RNS Number : 6751A
S & U PLC
28 March 2017
28 March 2017
S&U PLC
("S&U" or "the Group")
PRELIMINARY RESULTS FOR THE YEARED 31 JANUARY 2017
S&U, the motor finance and specialist lender, today
announces its preliminary results for the year ended 31 January
2017:
17(th) successive year of record Advantage Motor Finance pre-tax
profits
Key Financials:
-- Profit before taxation from continuing operations up 29% at GBP25.2m (2016: GBP19.5m)
-- Basic earnings per share from continuing operations up 28% at 170.7p (2016: 133.6p)
-- Revenues up 34% at GBP60.5m (2016: GBP45.2m)
-- Proposed final dividend up 6p to 39p (2016: 33p); total
dividend in respect of the year increased to 91p (2016: 76p)
-- Strong balance sheet:
o Net receivables increased by 33% to GBP193.5m (2016:
GBP145.1m)
o Investment in motor finance increased yearend net borrowings
to GBP49.2m (2016: GBP11.9m)
o Committed funding facilities increased to GBP95m post yearend
giving significant headroom
Advantage Motor Finance Operational Highlights:
-- 17(th) successive year of record pre-tax profits which rose to GBP25.2m (2016: GBP20.4m)
-- Annual collections up 33% this year with live customers up 32% on prior year
-- Annual advances up 31% this year - buoyant but more competitive market
-- 20,042 new agreements from over 750,000 motor finance applications.
Anthony Coombs, Chairman of S&U plc commented:
"S&U continues to go from strength to strength with our
motor finance business delivering its 17(th) successive year of
record pre-tax profits. This excellent track record is testimony to
the dedication, expertise, drive and wisdom of our team at
Advantage. The road to sustained success is not made up of a giant
leap but of a thousand small steps, and this kind of approach will
continue to sustain and dynamise our business over the next
decade."
Enquiries:
Anthony Coombs S&U plc 0121 705 7777
Media and Investor Relations
Ged Brumby Smithfield 0207 360 4900
Financial Advisers, Sponsors and Brokers
Chris Hardie Arden Partners 0207 614 5900
A presentation for analysts will be held on 28th March 2017 at
9.15am for 9.30am at the offices of Smithfield, 10 Aldersgate
Street, London EC1A 4HJ
CHAIRMAN'S REVIEW
Brexit, Trump and another record set of results from S&U,
plus ca change... We live in interesting times, but for the eighth
consecutive year, I am very pleased to announce record profits for
S&U plc. Group profit before tax from continuing operations is
GBP25.2m, a near 30% increase on last year (2016: GBP19.5m). In a
buoyant, but more competitive market, revenue has increased by 34%
to GBP60.5m (2016: GBP45.2m).
Advantage Finance, our motor finance business, achieved a record
of over 20,000 new agreements, an increase of 32% on last year; net
receivables are now GBP193.5m, up 33% from GBP145.1m last year. The
car finance market remains robust with latest annual application
numbers at Advantage, nearly 53% more than a year ago.
Whilst impairment has increased slightly as the business
develops, it remains only slightly above the record quality range
of the last three years, and is reflected in collections of
GBP121.8m this year, a third higher than last.
Our new secured bridging finance operation, Aspen Bridging, is
now being piloted; funding has been arranged for both this and for
the continued growth of Advantage, into which we have invested an
additional GBP33.2m this year. Nevertheless, Group gearing is just
35% (2016: 9%) on Group net assets which are at a record GBP139.5m
(2016: GBP128.3m).
In sum, S&U has the ideal platform to continue its record
growth and profitability focussing on its proven fields in
specialist finance.
Financial Highlights from continuing operations
- P.B.T. at GBP25.2m (2016: GBP19.5m)
- E.P.S. = 170.7p (2016: 133.6p)
- Group net assets: GBP139.5m (2016: GBP128.3m)
- Group gearing at 35% (2016: 9%)
- Increase in funding facilities post yearend gives current
committed headroom of GBP37m
- Pilot launch of Aspen Bridging
- Full FCA consumer credit permission for Advantage Finance
- Dividend of 91p per ordinary share (2016: 76p) (+20%)
Highlights
Advantage Finance, our motor finance business based in Grimsby,
has produced a 17(th) successive year of record profits - an
achievement I suspect is unparalleled anywhere in the UK Finance
Industry. Profit before tax this year is GBP25.2m (2016: GBP20.4m)
an increase of 23% and, remarkably, over four times what it was
five years ago.
Notwithstanding best efforts of the nation's economic
forecasters, the used car market in the UK, which Advantage
services, remains strong. In the last year 750,000 applications
were made to Advantage for finance - an increase of no less than
53% on the year before. This, in turn, reflects a British used car
market up 7.3% to 8.2m vehicles in 2016. As a result, Advantage
wrote a record 20,000 new agreeements, at improved rates and across
a stable range of customers. Advantage's total book is now at
GBP193.5m of net receivables, up from GBP145.1m last year. This
represents a record 43,000 live customers (2016: 32,600) making
monthly repayments which are now nearly GBP9m, an increase of a
third on last year.
Advantage's mantra of "steady, sustainable growth" implies and
depends upon robust debt quality and excellent customer
relationships. Our customers require careful and consistent
under-writing; hence the introduction of an updated, but still
bespoke, credit scoring system this year. This continuous
refinement has under-pinned the quality of Advantage's loan book
throughout its history. The past three years have seen impairment
as a proportion of revenue in a historically low range of 16% to
20% against 25% to 37% in the previous three years when Advantage
still enjoyed very good profitability. Since 2015 the record growth
and an inevitable increase in competition at the higher quality end
of the Advantage product range has seen both a slight upturn in
impairment to just over 20% this year and some increase in
brokerage costs. These are mainly offset by improved interest rates
and so margins continue to be very healthy.
Since the sale of our Home Credit business in 2015, S&U has
prudently explored opportunities for diversifying its earnings.
After exhaustive research, we are now piloting Aspen Bridging which
will provide bridging finance for individuals and business owners,
secured on residential and commercial property. Although this
business is in its infancy, its infrastructure and service
capabilities provide a good foundation; we are therefore exploring
its ability to benefit from a bridging market where aggregated loan
balances are estimated to reach GBP8.8bn a year in the UK by
2020.
DIVIDS
Both S&U's prospects and current trading performance justify
the Board in recommending to shareholders a final dividend this
year of 39p per ordinary share (2016: 33p). This will be paid on
the 7(th) July 2017 to ordinary shareholders on the share register
at the 16(th) June 2017. As always, this payment is subject to
approval by shareholders at the AGM to be held on the 18(th) May
2017.
This final proposed dividend will mean that total dividends paid
this year are 91p per ordinary share - a near 20% increase on the
record 76p per share paid a year ago. Whilst rewarding shareholders
for the Group's continued success it also secures a slight
improvement in dividend cover, with the aim of achieving two times
cover in the near future.
ADVANTAGE FINANCE
Highlights:
- 17(th) successive record pre-tax profit of GBP25.2m (2016: GBP20.4m) a 23% increase
- New loan transactions at a record 20,000 up 32%
- Net receivables at a record GBP193.5m (2016: GBP145.1m)
- Customer numbers reached a record 43,000 (2016: 32,600)
- Monthly collections stable and for year increased by 32% -
monthly repayment cash collected now approaching GBP9m per
month
Advantage Finance, our motor finance business, has produced its
17(th) record set of pre-tax profits at GBP25.2m (2016: GBP20.4m).
Its first full decade saw profits rise to GBP4.2m in 2011. In the
following six years its reputation amongst introducers and
customers for efficient and fair service, its expertise and
refinement in under-writing credit risk responsibly and
consistently, and its ability to develop new products to match an
evolving car finance market, have been the foundations of
Advantages accelerated growth.
All have enabled Advantage to cement a leading position in a
growing non prime motor finance market and to maintain healthy
margins despite some increased competition over recent years.
Crucially this has been reflected in a second successive 32%
increase in customer numbers in 2016/17 (matched by a 33% increase
in net receivables) over the year and in excellent collections,
both in absolute terms and also as a percentage of monies due. A
small additional provision has been made this year for claims
resulting from the recent FCA announcement on Payment Protection
Insurance, which Advantage ceased selling eight years ago.
Advantage continues to go from strength to strength. Its
sustainable growth is based upon a relentless quest for improvement
throughout the business and I again congratulate everybody working
there on a fine performance.
FUNDING REVIEW
The continuing growth of Advantage Finance and the piloting of
Aspen Bridging will require further investment by the Group this
year. Both the Group's conservative gearing and a funding market
with an appetite for our business at attractive rates, have allowed
us to increase total committed facilities after the year end to
GBP95m and further funds will be arranged should we require
them.
Beyond that, our expecation of a benign and stable
macro-economic future for the UK, a more certain bank lending
environment and our increased ability to access a broader range of
finance as the size of our loan books grow, all point to sensible
headroom being available for S&U's future expansion.
REGULATION, RISK AND GOVERNANCE
Advantage's good and long-standing relationship with the
Financial Conduct Authority, both directly and through the Finance
and Leasing Association, was confirmed in December by the grant of
full authorisation under the Regulator's new licencing regime. For
both commercial and ethical reasons, S&U takes these
responsibilities extremely seriously. In addition to scrutiny by
Deloitte, our statutory Auditors, the Group continues to work ever
more closely with RSM, our Internal Auditors, whose remit is to
provide assurance on our operations including our systems, customer
care, risk register and regulatory compliance. They, in turn,
report to the Group's Audit Committee.
Although it will initially operate in the un-regulated lending
field, the above arrangements have been replicated at Aspen
Bridging, where Brightstone Law, Fieldfisher and RSM provide
guidance and supervision.
Nevertheless, whatever our achievements and growth, the
loadstone of S&U's success has always been its "family" ethos
and the identity, and continuity, of interest its management has
with its stakeholders, whether customers, employees or
shareholders. This is not simply a matter of shareholding
structure, but of corporate culture. It leads to a conservative
approach to financing and a longer-term vision of the pace and
sustainability of the Group's growth.
It also means valuing relationships over the long term, which is
why I report with gratitude and some sadness, the retirement from
the Board of Keith Smith, our Senior Non-Executive Director, at the
forthcoming AGM in May. Keith has given us wise counsel and
constructive criticism for over eighteen years and his contribution
has been invaluable.
CURRENT TRADING AND OUTLOOK
Any markets exhibiting significant growth will inevitably
attract competition, and those for used car finance and property
bridging are no exception. The fact that Advantage has been able to
both prosper and to increase its market share, is testimony to the
dedication, expertise, drive and wisdom of our team there, and in
particular of its visionary M.D., Guy Thompson. I pay tribute to
them and indeed to all those who work for and with us.
The road to sustained success is not made up of a giant leap but
of a thousand small steps, and this kind of approach will continue
to sustain and dynamise our business over the next decade. Both
Advantage and Aspen operate in growing markets. These in turn exist
within a robust British economy, where the labour market is strong
and where the current focus on increasing productivity and reducing
regulation should underpin economic growth.
Our continued purpose is to take responsible and sustainable
advantage of this; I am confident we will.
Anthony Coombs
Anthony Coombs
Chairman
27 March 2017
CONSOLIDATED INCOME STATEMENT
Year ended 31 January 2017
Note 2017 2016
GBP000 GBP000
Continuing Operations
Revenue 3 60,521 45,182
Cost of sales 4 (25,065) (16,591)
Gross profit 35,456 28,591
Administrative expenses (8,585) (7,340)
Operating profit 26,871 21,251
Finance costs (net) 5 (1,668) (1,782)
Profit before taxation 3 25,203 19,469
Taxation (4,861) (3,583)
-------- --------
Profit for the year from continuing
operations 3 20,342 15,886
Profit for the year from discontinued
operations 6 - 53,299
--------
Profit for the year attributable to
equity holders 20,342 69,185
======== ========
From continuing operations
Earnings per share basic 7 170.7p 133.6p
Earnings per share diluted 7 169.1p 132.4p
From continuing and discontinued operations
Earnings per share basic 7 170.7p 581.9p
Earnings per share diluted 7 169.1p 576.5p
======== ========
Dividends per share
* Proposed Final Dividend 39.0p 33.0p
* Interim dividends in respect of the year 52.0p 43.0p
* Total dividend in respect of the year 91.0p 76.0p
* Exceptional additional dividend - 125.0p
* Paid in the year 80.0p 194.0p
======== ========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2017 2016
GBP000 GBP000
Profit for the year attributable
to equity holders 20,342 69,185
Actuarial loss on defined benefit
pension scheme (18) (34)
Total Comprehensive Income for
the year 20,324 69,151
-------- --------
Items above will not be reclassified subsequently to the Income
Statement
CONSOLIDATED BALANCE SHEET
31 January 2017
Note 2017 2016
GBP000 GBP000
ASSETS
Non current assets
Property, plant and equipment 1,190 1,149
Amounts receivable from customers 8 136,373 102,069
Deferred tax assets 441 435
138,004 103,653
-------- --------
Current Assets
Amounts receivable from customers 8 57,156 43,072
Trade and other receivables 603 580
Cash and cash equivalents 4 18,251
-------- --------
57,763 61,903
Total Assets 195,767 165,556
-------- --------
LIABILITIES
Current liabilities
Bank overdrafts and loans (11,171) (152)
Trade and other payables (2,009) (1,632)
Tax Liabilities (3,104) (3,046)
Accruals and deferred income (1,566) (2,020)
(17,850) (6,850)
-------- --------
Non current liabilities
Bank loans (38,000) (30,000)
Financial liabilities (450) (450)
(38,450) (30,450)
-------- --------
Total liabilities (56,300) (37,300)
NET ASSETS 139,467 128,256
======== ========
Equity
Called up share capital 1,695 1,691
Share premium account 2,281 2,264
Profit and loss account 135,491 124,301
Total equity 139,467 128,256
======== ========
STATEMENT OF CHANGES IN EQUITY
Year ended 31 January 2017
Called Share premium Profit Total equity
up share account and loss GBP000
capital GBP000 account
GBP000 GBP000
At 1 February 2015 1,685 2,215 77,564 81,464
Profit for year - - 69,185 69,185
Other comprehensive income for
year - - (34) (34)
Total comprehensive income for
year - - 69,151 69,151
Issue of new shares in year 6 49 - 55
Cost of future share based payments - - 681 681
Tax credit on equity items - - (5) (5)
Dividends - - (23,090) (23,090)
At 31 January 2016 1,691 2,264 124,301 128,256
Profit for year - - 20,342 20,342
Other comprehensive income for
year - - (18) (18)
Total comprehensive income for
year - - 20,324 20,324
Issue of new shares in year 4 17 - 21
Cost of future share based payments - - 409 409
Tax charge on equity items - - 5 5
Dividends - - (9,548) (9,548)
At 31 January 2017 1,695 2,281 135,491 139,467
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 January 2017
Note 2017 2016
GBP000 GBP000
Net cash used in operating activities 9 (27,431) (16,017)
Cash flows (used in)/from investing activities
Proceeds on disposal of property, plant
and equipment 53 1,685
Purchases of property, plant and equipment (361) (869)
Net proceeds on sale of subsidiary - 79,900
Net cash (used in)/from investing activities (308) 80,716
-------- --------
Cash flows (used in)/from financing activities
Dividends paid (9,548) (23,090)
Issue of new shares 21 55
Receipt of new borrowings 18,000 4,500
Repayment of borrowings - (29,000)
Net (decrease)/increase in overdraft 1,019 152
Net cash from/(used in) financing activities 9,492 (47,383)
-------- --------
Net (decrease)/increase in cash and cash
equivalents (18,247) 17,316
Cash and cash equivalents at the beginning
of year 18,251 935
-------- --------
Cash and cash equivalents at the end
of year 4 18,251
-------- --------
Cash and cash equivalents comprise
Cash and cash in bank 4 18,251
======== ========
There are no cash and cash equivalent balances which are not
available for use by the Group (2016: GBPnil).
1. SHAREHOLDER INFORMATION
1.1 Preliminary Announcement
The figures shown for the year ended 31 January 2017 are not
statutory accounts within the meaning of section 435 of the
Companies Act 2006. The statutory accounts for the year ended 31
January 2017 on which the auditors have given an unqualified audit
report and did not contain an adverse statement under section
498(2) or 498(3) of the Companies Act 2006 will be delivered to the
Registrar of Companies after the Annual General Meeting. The
figures shown for the year ended 31 January 2016 are not statutory
accounts. A copy of the statutory accounts has been delivered to
the Registrar of Companies, contained an unqualified audit report
and did not contain an adverse statement under section 498(2) or
498(3) of the Companies Act 2006. This announcement has been agreed
with the Company's auditors for release. A copy of this preliminary
announcement will be published on the website www.suplc.co.uk. The
Directors are responsible for the maintenance and integrity of the
Company website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements differ from
legislation in other jurisdictions.
1.2 Annual General Meeting
The Annual General Meeting will be held at 12 noon on 18 May
2017 at the Nuthurst Grange Country House Hotel, Hockley Heath,
Warwickshire B94 5NL.
1.3 Dividend
If approved at the Annual General Meeting a final dividend of
39p per Ordinary Share is proposed, payable on 7 July 2017 with a
record date of 16 June 2017.
1.4 Annual Report
The 2017 Annual Report and Financial Statements and AGM notice
will be displayed in full on our website www.suplc.co.uk in due
course and also posted to those Shareholders who have still opted
to receive a hardcopy. Copies of this announcement are available
from the Company Secretary, S & U plc, 6 The Quadrangle,
Cranmore Avenue, Solihull B90 4LE.
2. KEY ACCOUNTING POLICIES
The 2017 financial statements have been prepared in accordance
with applicable accounting standards and accounting policies -
these key accounting policies are a subset of the full accounting
policies.
2.1 Basis of preparation
As a listed Company we are required to prepare our consolidated
financial statements in accordance with International Financial
Reporting Standards (IFRS) adopted by the European Union and
therefore the Group financial statements comply with Article 4 of
the EU IAS Regulation. The financial information included in this
preliminary announcement does not include all the disclosures
required for IFRS or the Companies Act 2006.
Both the consolidated financial statements and the financial
information included in this preliminary announcement have been
prepared under the historical cost convention as modified by the
revaluation of derivative financial instruments to fair value.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out above. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are set out in
the preliminary announcement along with the Group's objectives,
policies and processes for managing its capital. The details of the
Group's financial risk management objectives and its exposures to
credit risk, market risk and liquidity risk are set out in detail
within the audited financial statements. The directors believe that
the Group is well placed and has sufficient financial resources to
manage its business risks successfully despite the current
uncertain economic outlook.
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
preliminary announcement.
2.2 Revenue recognition
Interest income is recognised in the income statement for all
loans and receivables measured at amortised cost using the
effective interest rate method (EIR). The EIR is the rate that
exactly discounts estimated future cash flows of the loan back to
the present value of the advance. Acceptance fees charged to
customers and any direct transaction costs are included in the
calculation of the EIR. Under IAS 39 credit charges on loan
products continue to accrue at the EIR on all impaired capital
balances throughout the life of the agreement irrespective of the
terms of the loan and whether the customer is actually being
charged arrears interest. This is referred to as the gross up
adjustment to revenue and is offset by a corresponding gross up
adjustment to the loan loss provisioning charge to reflect the fact
that this additional revenue is not collectable.
Commission received from third party insurers for brokering the
sale of motor finance insurance products, for which the Group does
not bear any underlying insurance risk was recognised and credited
to the income statement when the brokerage service was provided,
after taking into account expected refunds payable on customer
early settlements and policy cancellations. The sale of all such
insurance products was discontinued in 2015.
2.3 Amounts receivable from customers
All customer receivables are initially recognised at the amount
loaned to the customer plus direct transaction costs. After initial
recognition the amounts receivable from customers are subsequently
measured at amortised cost.
The directors assess on an ongoing basis whether there is
objective evidence that a loan asset or group of loan assets is
impaired and requires a deduction for impairment. A loan asset or a
group of loan assets is impaired only if there is objective
evidence of impairment as a result of one or more events that
occurred after the initial recognition of the loan. Objective
evidence may include evidence that a borrower or group of borrowers
is experiencing financial difficulty, default or delinquency in
repayments. Impairment is then calculated by estimating the future
cash flows for such impaired loans, discounting the flows to a
present value using the original EIR and comparing this figure with
the balance sheet carrying value. All such impairments are charged
to the income statement. For all accounts which are not impaired, a
further incurred but not reported provision (IBNR) is calculated
and charged to the income statement based on management's estimates
of the propensity of these accounts to default from conditions
which existed at the balance sheet date.
Key assumptions in ascertaining whether a loan asset or group of
loan assets is impaired include information regarding the
probability of any account going into default and information
regarding the likely eventual loss including recoveries. These
assumptions and assumptions for estimating future cash flows are
based upon observed historical data and updated as management
considers appropriate to reflect current and future conditions. All
assumptions are reviewed regularly to take account of differences
between previously estimated cash flows on impaired debt and the
eventual losses.
3. SEGMENTAL ANALYSIS
Analyses by class of business of revenue and profit before
taxation from continuing operations are stated below:
-- 3/4 3/4 3/4 Revenue -- Profit before
3/4 3/4 3/4 (R) taxation(R)
Class of business Year ended Year Year ended Year
31.1.17 Ended 31.1.17 ended
GBP000 31.1.17 GBP000 31.1.16
GBP000 GBP000
Motor finance 60,521 45,182 25,186 20,400
Central costs net
of central finance
income - - 17 (931)
60,521 45,182 25,203 19,469
Analyses by class of business of assets and liabilities are
stated below:
-- 3/4 3/4 3/4 Assets -- 3/4 3/4 3/4 Liabilities
3/4 3/4 3/4 (R) 3/4 3/4 (R)
Class of business Year ended Year ended Year ended Year ended
31.1.17 31.1.16 31.1.17 31.1.16
GBP000 GBP000 GBP000 GBP000
Motor finance 195,330 146,930 (136,257) (102,252)
Central 437 18,626 79,957 64,952
195,767 165,556 (56,300) (37,300)
Depreciation of assets for motor finance was GBP217,000 (2016:
GBP179,000) and for central was GBP30,000 (2016: GBP30,000).
Depreciation for discontinued home credit operations was GBPnil
(2016: GBP225,000). Fixed asset additions for motor finance were
GBP286,000 (2016: GBP422,000) and for central were GBP75,000 (2016:
GBP55,000). Fixed asset additions for discontinued home credit
operations were GBPnil (2016: GBP392,000).
The net finance credit for central costs was GBP2,662,000 (2016:
GBP1,461,000) and for motor finance was a cost of GBP4,330,000
(2016: GBP3,243,000). The tax credit for central costs was
GBP151,000 (2016: GBP497,000) and for motor finance was a tax
charge of GBP5,012,000 (2016: GBP4,080,000). The tax charge for
discontinued home credit operations was GBPnil (2016:
GBP932,000).
The significant products in motor finance are car loans secured
under hire purchase agreements.
The assets and liabilities of the Parent Company are classified
as central costs net of central finance income.
No geographical analysis is presented because all operations are
situated in the United Kingdom.
4. COST OF SALES
2017 2016
Continuing Operations GBP000 GBP000
Loan loss provisioning charge - motor finance 12,194 7,611
Other cost of sales - motor finance 12,871 8,980
Total cost of sales 25,065 16,591
5. FINANCE COSTS (NET)
2017 2016
GBP000 GBP000
31.5% cumulative preference dividend 142 142
Bank loan and overdraft 1,561 1,770
Other interest payable 1 1
Interest payable and similar charges 1,703 1,913
Interest receivable (35) (131)
1,668 1,782
======= =======
6. PROFIT FOR THE PERIOD FROM DISCONTINUED OPERATIONS (LAST YEAR ONLY)
On 31 July 2015 all of the Loansathome4u home credit business
was transferred to the subsidiary company SD Taylor Limited and
that company was then sold. The disposal gives the Group an
opportunity for further and faster expansion in Advantage motor
finance business as well as an opportunity to explore other higher
growth areas of specialist finance. The disposal was completed on 4
August 2015.
The results of the discontinued operations, which have been
included in the consolidated income statement, were as follows;
2016 2016
GBP000 GBP000
Revenue - 17,191
Loan loss provision for consumer credit - (3,646)
Other cost of sales - (113)
Administrative Expenses - (9,340)
Finance costs (net) - -
Profit before taxation - 4,092
Attributable taxation - (852)
Profit after taxation - 3,240
Profit on disposal of discontinued operations - 50,139
Attributable taxation - (80)
Profit for the period from discontinued operations - 53,299
As shown above a profit of GBP50.1m arose on the disposal being
the difference between the disposal proceeds of GBP82.4m and the
carrying value of the disposed home credit assets less transaction
costs.
The net assets at the date of disposal of Loansathome4u were as
follows;
GBP000
Property plant and equipment 1,628
Amounts receivable from customers 29,854
Other assets 235
Creditors and accrued expenses (1,531)
Corporation tax and deferred tax liabilities (425)
Net assets at disposal 29,761
Transaction costs 2,507
Gain on disposal 50,139
Total consideration (satisfied in cash) 82,407
During the six months last year up to the date of disposal
Loansathome4u contributed GBP7.8m to the group's operating cash
flows.
7. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share from continuing
operations is based on profit after tax of GBP20,342,000 (2016:
GBP15,886,000). The calculation of earnings per ordinary share from
continuing and discontinued operations is based on profit after tax
of GBP20,342,000 (2015: GBP69,185,000).
The number of shares used in the basic eps calculation is the
average number of shares in issue during the year of 11,918,610
(2016: 11,888,591). There are a total of 176,618 dilutive share
options in issue (2016: 208,885). The number of shares used in the
diluted eps calculation is 12,095,313 (2016: 12,000,152).
8. AMOUNTS RECEIVABLE FROM CUSTOMERS
2017 2016
GBP000 GBP000
Motor Finance hire purchase 224,283 169,420
Less: Loan loss provision car
finance (30,754) (24,279)
Amounts receivable from customers 193,529 145,141
======== ========
Analysis of Security
Loans secured on vehicles under
hire purchase agreements 191,316 143,844
Other loans not secured 2,213 1,297
Amounts receivable from customers 193,529 145,141
======== ========
Analysis of Overdue
Not impaired
Neither past due nor impaired 170,683 132,789
Past due up to 3 months but - -
not impaired
Past due over 3 months but - -
not impaired
Impaired
Past due up to 3 months 17,254 9,176
Past due up to 6 months 2,182 1,244
Past due over 6 months or
default 3,410 1,932
Amounts receivable from customers 193,529 145,141
======== ========
The credit risk inherent in amounts receivable from customers is
reviewed as per note 2.3 and under this review the credit quality
of assets which are neither past due nor impaired was considered to
be good. The above analysis of when loans are due is based upon
original contract terms which are not rescheduled - the carrying
amount of amounts receivable from customers whose terms have been
renegotiated that would otherwise be past due or impaired is
therefore GBPnil (2016: GBPnil).
9. RECONCILIATION OF OPERATING PROFIT TO NET CASH FROM OPERATING
ACTIVITIES
2017 2016
GBP000 GBP000
Operating Profit (see footnote) 26,871 25,343
Finance costs paid (1,703) (1,913)
Finance income received 35 131
Tax paid (4,804) (4,927)
Depreciation on plant, property and equipment 253 426
Loss on disposal of plant, property and
equipment 14 15
Increase in amounts receivable from customers (48,388) (4,132)
Decrease in inventories - 59
(Increase)/decrease in trade and other
receivables (23) 65
Increase/(decrease) in trade and other
payables 377 (1,052)
Decrease in accruals and deferred income (454) (938)
Increase in cost of future share based
payments 409 681
Movement in retirement benefit asset/obligations (18) (14)
Disposal of subsidiary assets - (29,761)
Net cash used in operating activities (27,431) (16,017)
======== =========
Operating profit includes profit before tax on discontinued
operations - note 6
This information is provided by RNS
The company news service from the London Stock Exchange
END
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