Hitachi Capital (UK) PLC annual results
Hitachi Capital (UK) PLC today announces its latest set of financial results that demonstrates significant growth for the eleventh consecutive year.
Profits grew yet again in FY19/20, by 5.1% to £129.4m which, alongside a 2% growth in new business volume and 6% growth in net earning assets, has contributed to a compounded annual growth rate across the last 10 years of 21%.
Hitachi Capital (UK) PLC’s strong financial performance has facilitated investment across the business, including in people – highlighted by a 4% growth in workforce – and in new technology to enhance customer experiences and drive customer satisfaction.
Robert Gordon, CEO of Hitachi Capital (UK) PLC, commented: “I’m proud of our colleagues who have worked extremely hard to deliver consistent growth in a period of unprecedented challenges. This is a reflection of the agility, adaptability and dedication to customer service that is engrained in the culture of our business. These qualities, along with the sound financial foundation they have enabled us to build, will be crucial as we prepare for the challenging economic outlook ahead.
“The last quarter of the financial year was a real test for the Group. Lockdown required us to rapidly move from 5 operational centres to over 1,500 home offices, whilst experiencing an unprecedented demand for our services. During this time we haven’t furloughed a single employee or sought government support. Instead we were one of the first non-banks to be accredited by the British Business Bank to provide CBILS facilities for our customers, financing over £41m to UK businesses since the year end. And we have continued to invest in our business and our people, to improve efficiencies and meet increased demand for communication and assistance from our customers.
“There’s no doubt the next 12 months will be hard and the Pandemic has undoubtedly checked our growth in the last few months, but looking ahead I am confident that the improvements we’ve made will strengthen the business and help us to generate sustainable profitable growth in the post-Covid-19 economic landscape.”
Business unit performance
Hitachi Capital (UK) PLC has demonstrated growth across the group’s business units – Hitachi Capital Consumer Finance, Hitachi Capital Vehicle Solutions, Hitachi Capital European Vendor Solutions, Hitachi Capital Business Finance and Hitachi Capital Invoice Finance.
Hitachi Capital Consumer Finance, which provides retail point of sale, motor finance and personal loans, lent more than £2.61bn to over 1.4m customers in the last 12 months. Hitachi Capital Consumer Finance recorded a profit before tax of £76.0m, a slight decrease in profit from 2018/19 (£79.7m) due to additional bad debt provisions to account for the impact of Covid-19.
Retail point of sale continues to underpin Consumer Finance’s sustained growth, with the business unit securing a 20% market share in the retail point of sale sector in the UK. The division also saw significant growth in the direct personal loans business, lending over £1bn for the first time in a 12-month period, accounting for 38% of new business volume for the division.
Continuing to grow in a competitive market, Hitachi Capital Vehicle Solutions, which provides vehicle funding and fleet management services, achieved profit before tax of £25.7m and has seen a 19% year on year increase in net earning assets, operating 81,000 assets worth £1bn – increasing its ranking to seventh largest leasing company in the UK. In May 2019 the business won a £136m contract with Network Rail, one of the UK’s 10 largest fleets. The business is pioneering the transition to alternative fuel vehicles (AFVs), increasing the size of its electric vehicle (EV) fleet by 137% in the past 12 months and leading the green revolution. As at 31 March 2020, the EV fleet was 1% of Hitachi Capital Vehicle Solutions total funded fleet, significantly higher than the market.
Hitachi Capital Business Finance now makes up 22% of Hitachi Capital (UK) PLC’s business assets. Helping 30,000 SMEs to grow their business in the past year, HCBF paid out £1.2bn in new business, up 34% on last year’s £0.9bn. The business has continued to provide support to UK business during the Pandemic. They were the first asset lender to offer the Coronavirus Business Interruption Loan Scheme (CBILS) the day after its announcement on 23 March 2020, lending over £41m since year end.
HCBF has also been a key stakeholder in supporting broader Group activities – through its partnership with Gridserve Sustainable Energy Ltd, supporting the development of over 100 rapid charging electric vehicle forecourts across the UK over the next five years, through a multi-million-pound loan facility to deliver the charging infrastructure required to ensure widespread adoption of electric vehicles.
Building on last year’s launch of FLi, its innovative digital on-boarding platform, Hitachi Capital Invoice Finance has continued to provide businesses with efficient access to funds, supported by digital signature and improved data security. The implementation of AI technology saw the speed of pay out increase by 94%.
Hitachi Capital European Vendor Solutions, provides tailored funding for specialist assets to support a variety of Hitachi and Mitsubishi companies. The business transacted £235m in FY19/20 across 20 countries, including four new territories, increasing its cross-border lending capabilities. Focused on a strategic approach to capitalise on strong performance, a new branch was set up in the Republic of Ireland and the existing Netherlands branch incorporated into a separate subsidiary, to support future European expansion.
Covid-19 financial and business support
Hitachi Capital (UK) PLC has experienced an unprecedented need from customers for support, both financial and otherwise, across multiple areas of the business, due to the Covid pandemic.
Hitachi Capital Business Finance has worked closely with the British Business Bank to launch the Coronavirus Business Interruption Loan Scheme (CBILS) the day after its announcement on 23 March 2020, providing vital finance to existing SME customers during the coronavirus pandemic. The division was the first asset finance provider to join the scheme in order to help customers alleviate the impact of Covid-19 on their businesses and support the UK economy. So far, HCUK has agreed over £41m of funding over the last 12 weeks for over 300 UK businesses.