The division's trading profit for the year of £33.9 million was £2.6m lower than in the previous year after excluding the contribution to the previous year’s result of Superior Acceptance Corporation which was sold in September 1997. The Division’s two largest businesses are General Guarantee Finance and Highway Vehicle Management.

General Guarantee

This business provides asset finance, primarily for the purchase of cars and commercial vehicles, for consumers and small to medium sized businesses. Total loans outstanding at 31 March 1999 exceeded £1.1 billion with new advances of £799m being made in the year: up by 7% on 1998. Its trading profit of £21.8m was £0.9m below the previous year. In line with trends in its industry, higher bad debt provisions were necessary although bad debts as a percentage of the loan book remain below the industry average.

General Guarantee has strong relationships with both franchised and independent dealers and provides local service from its well established national network of more than 50 branches. It has continued to commit resources to the development of its I.T. systems. These enable motor dealers, if they wish, to obtain automatic credit acceptance of their customers’ finance needs by means of in-showroom data processing systems which can also produce all necessary documentation. As a result, the company can now offer a powerful combination of local service backed by technology.

The company’s commercial vehicle financing arm is set to benefit from its appointment on 1 January 1999 as the recommended finance house of the Road Haulage Association.

Highway Vehicle Management

Contract hire continues to be a growth market as more corporate customers recognise the benefits of outsourcing their fleets and associated services. The number of vehicles in Highway’s fleet grew by 5% during the year but its profit declined by £0.9m because of the fall in second-hand car values during the year. As a result, the residual value of cars returned at the end of their contract hire period was significantly lower than in the previous year.