A series of initiatives focused on innovation and expansion across the five business units of Hitachi Capital (UK) have generated record profits and delivered a decade of growth.
Pre-tax profits at the AF50 top 10 company reached a record level of £123.1 million in its latest results for 2018/19, a 5.8% rise on the same period last year.
For the first time, Hitachi Capital (UK) ended the year with net earning assets of more than £5 billion (£5.6 billion, a 16% rise compared to the previous financial year.)
There was growth across its business units, covering Hitachi Capital Consumer Finance, Hitachi Capital Vehicle Solutions, Hitachi Capital European Vendor Solutions, Hitachi Capital Business Finance and Hitachi Capital Invoice Finance.
Hitachi Capital Business Finance increased its total asset portfolio by 23% to £1.3 billion during the year, with pre-tax profits rising 6.4% to £21.5 million.
Growth has been primarily driven by new business and acquisition. Last year, following the launch of its Motor Inventory Finance service, the business secured a contract with Pendragon, the second largest car dealer group in the UK.
The business finance division also acquired specialist finance provider Franchise Finance to target growth in the franchising industry.
Gavin Wraith-Carter, managing director of Hitachi Capital Business Finance, said: “In the last 12 months, we’ve diversified and strengthened our proposition within franchise financing, motor inventory and agriculture, which has led to major new funding contracts.”
Hitachi Capital Vehicle Solutions grew profit to £24.8m during the year, as its fleet reached 68,200 vehicles. The business unit now operates more than 68,200 assets totalling £822 million.
It recently announced a £136 million contract to manage Network Rail’s owned and leased road vehicle fleet, one of the largest fleets in the UK.
Hitachi Capital Vehicle Solutions will also play a key role in Optimise Prime, the world’s biggest trial of commercial electric vehicles.
Jon Lawes, managing director of Hitachi Capital Vehicle Solutions, said: “In a challenging and rapidly changing landscape for the automotive industry, driven by changes to legislation, growth of registrations for alternatively-fuelled vehicles and ongoing Brexit uncertainty, we have worked closely with our customers to deliver market-leading solutions.”
Innovation has transformed customer service at Hitachi Capital Invoice Finance, which achieved 17% growth in its client base in a static market. Growth was driven by the launch of FLi, a digital on-boarding platform that can fund approvals within 24 hours, compared to as much as 40 days for competitors.
Hitachi Capital Consumer Finance, which provides retail point of sale, motor finance and personal loans, lent more than £2.47 billion to 640,000 customers, with personal loans growth of 8.8% to £876 million.
Hitachi Capital European Vendor Solutions was established as a full subsidiary of Hitachi Capital (UK) earlier this year, as part of the group’s strategy to expand European operations alongside growth in UK activity. During the year, it reported a business volume figure of £287 million and opened a branch office in Dublin.
Robert Gordon (pictured), chief executive officer of Hitachi Capital (UK), said: “These outstanding results are the culmination of 10 years of sustainable growth, where Hitachi Capital (UK) has consistently outperformed the average growth of many of the leading companies in the UK.
“Despite the challenging financial climate of the last year, we’ve continued to grow both profits and new business in our core UK market, while also expanding our footprint in Europe. We now operate in 17 countries, writing over £300m of new business outside of the UK.
“In a hugely competitive marketplace, we continue to invest in new technology, creating customer-facing platforms that make it easier and faster to do business.”
Hitachi Capital (UK) has more than 1.4 million customers across its five business units. It is a subsidiary of Hitachi Capital Corporation, one of Japan’s largest non-bank financial institutions.