19 April 2020
By Maynard Paton
Results summary for S & U (SUS):
- Another set of record annual figures that showed steady progress — albeit overshadowed entirely by the potential impact of Covid-19.
- The boardroom’s confidence is encouraging. The final dividend was reduced only slightly and no staff have been furloughed.
- Some £302m has been loaned to customers with patchy credit histories, and recouping that money has become vital. Management says collections are “very good”.
- Net debt of £118m and a 26% net-interest margin lead to respectable returns on capital, but the borrowings will not prove ideal if defaults increase and profits fall.
- Current-year earnings have become anyone’s guess, and a bargain-basement P/E may be rather less than the current 10x trailing multiple. I continue to hold.