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S & U completes Loansathome4u sale

05 August 2015 07:41

S & U Plc completed the sale of Loansathome4u, its home-credit division, yesterday. Net proceeds of the sale will firstly be reinvested into the accelerated growth of Advantage Finance.

The Loansathome4u disposal will generate around £80 million net of fees and tax. "Whilst retaining our revolving credit facilities of £40 million with our banking partners, these will be paid down temporarily pending further use of the funds," S & U said.

"Our longer term loan facility of £30m will remain fully drawn. This means that the Group will have cash balances of around £50 million for investment and returns to shareholders."

Net proceeds will also finance the development of a new Advantage SME vehicle lending product and allow an exceptional distribution to shareholders; further announcements will follow in due course.

Although temporarily and inevitably earnings dilutive, the disposal will significantly enhance the Group's net asset position and enable it to focus on higher growth areas of specialist finance.

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