annual report cover

Financial results year ended 31 March 2016

Hitachi Capital (UK) PLC

Financial results for the year ended 31 March 2016

Strong returns on equity and growth in profits and loan book

Hitachi Capital, a leading financial services company with over 30 years’ experience in providing innovative finance solutions that enable consumers and businesses to grow and prosper, issues its financial results for the year ended 31 March 2016.

Financial highlights

2016

2015

Change (%)

Profit before tax

£96.1m

£84.1m

14.3

Loan and leasing transactions

£2.5bn

£2.4bn

6.3

Net earning assets

£3.8bn

£3.3bn

15.2

Pre-tax return on net earning assets

2.6%

2.6%

-

Post tax return on equity

25.6%

28.3%

-2.7

Bad debt ratio

0.4%

0.4%

-

Bad debt and impairments*

£16.2m

£14.8m

9.5

Number of Employees

1,138

1,051

8.3

 

*Bad debt and impairments reflect growth, a maturing portfolio, and refined risk management processes whilst management’s long term expectations remains at 0.7% of assets

Robert Gordon, Chief Executive Officer, said:

“Our strategy of offering value added financial products and superior customer service in our chosen markets has produced excellent progress across a diversified financial services portfolio. Looking to the future, we expect this trend to continue and we remain confident we can continue to build our business and develop exciting new opportunities.

“Following another strong year for the business in which we achieved post tax returns on equity of over 25%, we have elected not to pay a dividend in the interests of reducing the Company’s debt to equity multiple from 12x to c.8x. This will strengthen our balance sheet, benefiting our external credit rating potential.”

Divisional highlights

  • Consumer Finance recorded an award-winning year in which Personal Finance business volumes grew by 19% contributing to the growth in overall Net Earning Assets to £2.1bn on the back of continued diversification
  • Vehicle Solutions and Hitachi Capital Polska grew new net earning assets by 20% to £611m with business volumes up 7%, particularly in commercial vehicles supporting SMEs, utilising the broker market to drive volumes and retention of key strategic partners.
  • Business Finance grew new business to £500m with strong growth in Block Discounting and Hitachi group businesses, contributing to the growth in overall Net Earning Assets to £855m as the business developed its commercial offering with on-line proposal input and improved credit auto-decisioning, enabling the Company to extend its leading position in the sector.
  • Invoice Finance focused on improving the client experience and product innovation, such as the ‘Inspired Payroll’ product for the recruitment industry, which has already seen significant sales and been shortlisted for Innovation of the Year in the Business Money Facts 2016 awards.

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