- Hitachi Capital (UK) PLC reports profit before tax (PBT) of £104m for FY20/21
- £3.3bn of new business generated in previous 12 months across five business divisions
- £78.6m of new funding for sustainable energy projects and issuance of first Green Bond
- 233 new permanent employees recruited with no staff furloughed
- Business well placed for future growth through investment in digital servicing and tackling climate change
9 June 2021 – Hitachi Capital (UK) PLC today announces strong full year financial results, in a year marked by the heightened uncertainty and unprecedented impact of COVID-19 leading to supressed consumer lending.
With a well-diversified business across commercial and consumer sectors, Hitachi Capital (UK) PLC reports profit before tax (PBT) of £104m for the 2020/21 financial year.
Despite a decline of almost 10% in GDP, Hitachi Capital (UK) PLC generated £3.3bn of new business, with a strong recovery in the second half of the year maintaining Hitachi Capital UK’s level of Net Earning Assets at £5.9bn.
New business volume in the first six months of financial year 2020/21 recovered to 69% of 2019/20 levels and in the second half of the year, new business volume was at 99.7% of the previous year, despite two further lockdowns.
Key Financial Results
Profit before tax (PBT)
New Business Volume
New Earning Assets
Pre-tax Return on Net Earnings Assets
Bad Debt Ratio
Cost / Income ratio
Effective tax rate
Post-tax return on equity
During 2020/21, Hitachi Capital (UK) plc provided funding worth £78.6m to support sustainable energy projects and purchased a 19.63% equity holding in GRIDSERVE to partner in the delivery of electric vehicle charging infrastructure, including completion of the UK’s first electric vehicle forecourt in Braintree, Essex. The Group also issued a $40m Green Bond, underlying its continued support from global markets and commitment to support the United Nations Sustainable Development Goals (SDGs).
Despite adverse market conditions, Hitachi Capital (UK) PLC increased in size and expanded its European network. 233 new permanent employees joined the business which now employs a total of 1,550 staff in the UK and Europe. Further expansion via the Group’s Netherlands subsidiary has seen the business operate profitably across 22 European countries during 2020/21, providing a base for further expansion.
Robert Gordon, CEO of Hitachi Capital (UK) PLC, said: “The extraordinary resilience, determination and agility of everyone in our business to adapt quickly to the environment has delivered outstanding results during an extremely challenging year.
“Our continued success and recovery, particularly over the second half of the year, has been achieved by adjusting to the pandemic conditions, accelerating our digital capabilities in line with evolving customer expectations and consistently providing outstanding service to businesses and individuals through the range of financial products we offer.
“Underpinned by our continued access to funding in financial markets reflecting our reputation and portfolio quality, the business has remained well capitalised throughout the pandemic and gained market share, outperforming competitors in key industry sectors.
“Amid the backdrop of heightened uncertainty, we have continued to invest in our business and our people; during the past year, we’ve implemented technological improvements to drive operational efficiencies as well as providing funding to support sustainable energy projects addressing climate change. The business experienced significant increased demand for communication and support from our customers over the past 12 months. In turn, we’ve increased our headcount and did not participate in furlough programmes during the COVID-19 crisis.
“We’ve seen continued momentum in new business volumes during the first quarter of 2021/22 aligned to an upturn in consumer confidence and pent up demand. Hitachi Capital (UK) PLC is well-diversified across commercial and consumer sectors with an expanding portfolio to tackle climate change. With a high level of liquidity, our business is well placed to grow in this financial year as the economy gathers pace in the months ahead.”
Business unit performance – outperforming competitors across key market sectors
Hitachi Capital (UK) PLC has demonstrated resilience in challenging markets during the pandemic to achieve strong results across the group’s business units - Hitachi Capital Consumer Finance, Hitachi Capital Vehicle Solutions, Hitachi Capital Business Finance, Hitachi Capital Invoice Finance and Hitachi Capital European Vendor Solutions.
As one of the UK’s leading retail point of sale finance providers, Hitachi Capital Consumer Finance lent more than £1.1bn to 3,200 UK high street and online retail partners. Over the last 12 months, Hitachi Capital Consumer Finance delivered an 87% increase in lending volumes via retail e-commerce channels as the business quickly responded to increased demand for retail point of sale products in digital channels during lockdown. Hitachi Consumer Finance also grew market share within its direct loans business despite supressed lending, achieving £648m in new business.
Operating over 95,000 assets, Hitachi Capital Vehicle Solutions maintained its standing as the 7th largest UK leasing company with a fleet valued at £1.2bn, up 24% year on last year. Recording the largest percentage growth of the Fleet News FN50 top 10 providers, the business increased its overall fleet by 17% despite the sharpest decline in new car registrations Since 1992.
Hitachi Capital Vehicle Solutions has also led the charge on electric vehicle (EV) adoption in the past 12 months, funding £137m for Electric Vehicles (EVs) and increasing its EV fleet by 368%. The business has also been a key stakeholder in supporting broader Group activities – Hitachi Capital Vehicle Solutions is providing an electric vehicle leasing proposition for GRIDSERVE customers. The division’s success was underpinned by notable business wins, including DEFRA (Department for Environment, Food & Rural Affairs) to manage its fleet of 4,500 cars. The business has also provided a leading role in keeping mission critical fleets on the road during the pandemic.
Hitachi Capital Business Finance, which provides business asset finance to SMEs and larger corporations across the UK, achieved asset portfolio growth of 13% to £1.4bn. The business outperformed the sector to achieve £758m in new business, up 6% year on year despite a 23% contraction in the overall market.
From July 2020, new business volumes gained momentum, culminating in a 30% year on year increase in funding by March 2021. During this time Hitachi Capital Business Finance increased its market share from 1.9% to 2.4%.
Supporting the Group’s multiple sustainable energy projects, Hitachi Capital Business Finance funded over £47m to help deliver solar farms and completion of the first electric vehicle forecourt in Braintree, Essex.
The creation of the UK Government Bounce Back Loan Schemes (BBLS) supressed new business lending volumes across the invoice finance industry. However, Hitachi Capital Invoice Finance achieved record new business volumes in the fourth quarter as the business diversified to provide funding for larger corporate customers.
Hitachi Capital European Vendor Solutions provides tailored funding for specialist assets to support a variety of Hitachi and Mitsubishi companies in 22 countries. The business increased cross-border lending within two new territories – Czech Republic and Lithuania as it continues to lead the expansion of the Group internationally.
From 1st April 2021 Hitachi Capital (UK) PLC became a wholly owned subsidiary of Mitsubishi HC Capital Inc. strengthening our relationship with one of the world's largest and most diversified financial groups.
Hitachi Capital (UK) PLC’s full annual report for FY20/21 can be found at: https://www.hitachicapital.co.uk/media/4849/hcuk-group-annual-report-and-financial-statements-year-ended-31st-march-2021.pdf
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