Syscap results buck asset finance slowdown

Syscap claims to have bucked a declining asset finance market by posting improved 2013 financial results.

For the 12 months to 31 March, the finance provider saw EBITDA grow 16 per cent to £1.7m, origination income swell 10 per cent to £5.4m and new business volume clamber three per cent to £125m – even as the wider market faltered.

According to the Finance & Leasing Association (FLA), the UK asset finance market declined one per cent to £21.1bn during the same period.

Syscap chief executive Philip White said: "Operating in a market where bank lending is still constrained, where asset finance has declined and where the investment appetite in the public sector remains extremely subdued, Syscap has produced another strong set of results."

Market conditions remain subdued within Syscap's Commercial division, which focuses on providing IT vendor finance. Here, the firm's focus has been on improving lease penetration across its major vendors.

Although Syscap's Public Sector business continues to be hit by the climate of austerity, White said he was pleased with the development of its Professions arm – which offers finance to legal and accountancy firms.

According to the FLA, car finance remains by far the largest asset finance sector in the UK, with business volumes swelling six per cent to £7bn in the year to 31 March.

IT equipment finance was one of the market's best performers, growing 13 per cent to £1.35bn, but in size the sector is still dwarfed by not only car finance but also both commercial vehicle finance (down two per cent to £4.5bn) and plant and machinery finance (up four per cent to £4.2bn).

Syscap argued that the leverage of the group is now within acceptable market levels after repaying its senior debt position with the Royal Bank of Scotland to £4.5m during the year. That represents 2.6 times EBITDA.

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