Hitachi Capital Finance Records Significant Jump in Profits

Hitachi Capital Business Finance, a division of Hitachi Capital (UK) PLC, has today announced its annual results for FY19/20, delivering record rises in profits and new business during the previous 12 months.

Despite challenging business conditions – particularly towards the end of the financial year – Hitachi Capital Business Finance has reported a 19% rise in profits to £24.6m, whilst growing its total asset portfolio by 7% to £1.3bn. The business division also paid out £1.2bn in new business, up 34% on last year’s £0.9bn.

The business unit’s impressive financial performance was a key driver in the broader growth of the Group, with Hitachi Capital (UK) PLC registering significant growth for the eleventh consecutive year.

Hitachi Capital Business Finance has supported 30,000 UK SMEs, allowing them to grow and diversify their businesses, and has been providing extensive support to customers – both financial and advisory – in navigating unprecedented challenges that have arisen due to COVID-19.

Hitachi Capital Business Finance 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 and has lent over £41m to SMEs since year end.

Gavin Wraith-Carter, Managing Director of Hitachi Capital Business Finance, said: “Our financial performance has been driven by significant growth in key markets combined with our ability to provide innovative solutions which are unique in the market, including our new smart funding flexible payment plan, demonstrating the trust that SMEs and our intermediary partners continue to place in us.

“We’re acutely aware that there will be incredibly challenging times ahead, particularly for the UK’s SME community as we emerge from the Pandemic. Our focus in the next 12 months will be ensuring businesses are equipped to survive and can map out a return to growth.”

A key mechanism for HCBF in supporting SME growth during the previous 12 months was via the Enterprise Finance Guarantee (EFG) scheme from the British Business Bank (BBB), financing £11.7m of assets for businesses that may not otherwise have secured finance for their development and growth.

HCBF also launched a smart funding flexible payment plan to help thousands of small business owners secure growth funding without disrupting their cash flow. The product allows SMEs to create their own bespoke repayment schedule that reflects their cash flow forecast and the seasonality of their business, with one in four online applications now take advantage of this offering.

The business division also capitalised on the launch of last year’s motor inventory finance proposition, which helped to deliver a £100m portfolio with a presence in three key markets – Motor, Agriculture and Leisure.

HCBF has also been a key stakeholder in supporting broader Group activities, through its partnership with Gridserve Sustainable Energy Ltd, supporting the development of 100 rapid charging electric vehicle forecourts across the UK over the next five years.  The multi-million-pound loan facility will deliver the charging infrastructure required to ensure widespread consumer electric vehicle adoption using sustainable energy sources.

Exceptional customer service has also continued to underpin HCBF’s performance, with the business unit winning a host of industry awards including Alternative SME Lender of the Year (£250,000+) from Credit Strategy and Lessor of the Year, Broker Champion and Top Supply Chain Funder at the Leasing World Awards 2019.

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.”