GROWING Hitachi Capital reports £96m pre-tax profit as it announces multi-million investments in technology for its Vehicle Solutions division that is concentrating on its core markets of SME and personal leasing, corporate fleets and bespoke vehicles.
Hitachi Capital Vehicle Solutions MD Jon Lawes said that personal contract hire had outnumbered business contract hire and spoke of future strategy as the company announced pre-tax profits up 14.3% to £96.1m for the year ended 31 March 2016 but with no dividend pay-outs as it cuts its debt to equity ratio.
His Vehicle Solutions and Hitachi Capital Polska division 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.
Mr Lawes commented: “At Hitachi Capital Vehicle Solutions we have made substantial changes to take into account the increasing pressure on margins that we are seeing across large corporate accounts.
“We have made these changes with a view to taking advantage of the growth in the SME and Personal Leasing markets. We have restructured our business to concentrate specialist teams in our core markets – SME and personal leasing, corporate fleets and bespoke vehicles.
“Furthermore, we are making a multi-million pound investment in technology to deliver a faster and more cost effective end-to-end solution for customers.
“We are also seeing significant growth in personal contract hire with PCH outnumbering BCH last year; this is a market we’re actively investing in.”
On the overall picture Hitachi Capital’s chief executive officer Robert Gordon 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 circa 8x. This will strengthen our balance sheet, benefiting our external credit rating potential.”