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TWST: Can we begin with a brief historical sketch and overview of S&U (London: SUS.L)?

Mr. Coombs: S&U was founded in 1938 as a credit drapery store selling household goods door to door to customers throughout the United Kingdom. It became a public company 1960 on the London Stock Exchange and in the 1960s acquired a number of other companies, some of which were in retail and some of which were in manufacturing. In the 1970s, it divested itself of all these other companies, with the exception of a very small hosiery company, and concentrated its activities on turning from (credit) drapery, selling household goods to finance: small loans paid for weekly or monthly in people’s own homes, serviced by about 600 representatives throughout the United Kingdom. In 1998 to 1999, we started a motor finance division, and that is basically what we are at the moment: a consumer finance and motor finance company. We are looking at the possibility of expanding to other areas including possibly property finance, but that is our focus at the present time.

TWST: What does the regulatory environment look like in this space? Is it relatively benign?

Mr. Coombs: We think it’s benign for the well-run home collected consumer credit. Having said that, it is also a very busy regulatory environment. At the moment, the Consumer Credit Act, which was passed in 1974, is being revised by the government. There’s an (over-indebtedness} task force being put set up by the government, both of which the Consumer Credit Association is represented on. And also the European Commission is reviewing the consumer credit directive. Now, we think that, although these measures will have an impact on the home collected industry, for those companies like ourselves who take care in ensuring that their customers, both perspective and existing, can afford their loan repayments -- and we take steps to insure that they actually can -- then I don’t think there’ll be a problem from these legislative reforms at all.

TWST: What are some of the key goals on your business agenda for the next 12 to 18 months?

Mr. Coombs: In the home collected business. The key goal is to improve our productivity per representative. That is the key to higher profitability, particularly in a business environment that could be more challenging. As far as the motor finance is concerned, again we are very clearly productivity based. At the moment, we have around 40 sales managers operating throughout the UK and we want to ensure that they achieve minimum monthly sales targets, because if they do then the growth in profit is exponential provided that we maintain significant control over our bad debt. We think we can do that, certainly in the home collected side and also in the motor finance business, which should lead to significant improvements in profitability.

TWST: What are you thoughts on inorganic growth opportunities? Do you see any room there?

Mr. Coombs: We’re always looking for acquisitions in the home collected business and there are companies on the market who approach us, and we occasionally make acquisitions. We haven’t really made one of any particular size because, at least until now, people have had slightly unrealistic ideas as to the value of their businesses. But we are looking all the time. As far as the motor finance is concerned, we are not going to proceed so much by acquisition, but more by improving our alliances with various car dealers who are basically the introducers of business to us. We may support them financially, provided that they bring us a certain level and volume of good customers. As I said earlier on, we may look for acquisitions outside our immediate fields which would use the skills in underwriting, credit control and collection that we’ve got from the other two businesses. That could involve us in some of areas of property finance, but that’s something I’m looking at in the present time.