S&U, the Birmingham credit company specialising in lending money to people that banks and other mainstream lenders avoid, is planning to branch out into a new area of business.
Asked if he was considering a move into "sub-prime" mortgages, Anthony Coombs, S&U's managing director, was guarded. "we believe in sticking to our last," he said. "However, we are looking for a third leg to our business.
"Obviously sub-prime mortgages is one of the possibilities. We are doing some very serious research. The results are going to be looked at by the board in the very near future.
"Any new business venture would be financed entirely from our own resources."
S&U's six-year-old motor finance start-up Advantage contributed more than £2 million of the £9.8 million profit for the year to January - up nine per cent on the year.
Overall, business transacted rose to £95.1 million from £89.3 million.
S&U set aside £5.5 million against doubtful debts, 11.4 per cent more than the year before. This reflected the increasing importance of Advantage, because its loans are larger than in S&U's main home-collected credit operation.
A 22p final dividend gives shareholders a 6.9 per cent increased on the year and gives the shares a yield of 5.2 per cent after they had risen 71/2p yesterday to 595p, 10.5 times the year's earnings.
S&U's has now raised its dividend every year since 1988. "We hope to continue this trend," he said.
