03 February 2017
By Maynard Paton
Today I’m reviewing my latest new investment.
The company concerned is S & U (SUS), the shares of which I purchased at an average price of 2,070p (including all costs) during January 2017. The bid price is currently 2,045p and the position now represents between 4% and 5% of my portfolio.
I have to confess that SUS may not be everyone’s idea of a great business. The group was for years best known as a doorstep moneylender, but these days it solely provides hire-purchase finance to buyers of used cars.
A lot could go wrong here. SUS’s customers generally have patchy credit histories, while its loans attract 29% interest and are secured on depreciating assets. A deep recession may well cause substantial problems.
However, some impressive under-writing has delivered an illustrious record of expansion. Notably, bad debts have been controlled carefully — even during the difficult banking-crash years. Recent trading appears upbeat, too, with many potential borrowers actually being turned away.
All told, I’m trusting a family executive team that extols the virtues of “steady, sustainable growth” — and has at least £103m riding on the share price — can ensure the business stays out of trouble and instead continues to prosper and grow.
Read moreS & U: Why I’m Backing These Moneylenders And Their £103m Family Fortune