Hitachi Capital Business Finance (HCBF), a division of Hitachi Capital (UK) Plc, has posted a 19% rise in full-year profits to £24.6m. 

In its annual results for 2019/2020, ending 31 March, the lessor said its total asset portfolio grew by 7% to £1.3bn.

Hitachi Capital Business Finance

The business division also paid out £1.2bn in new business, up 34% on last year’s £900m. The division supported 30,000 UK SMEs in this period. 

HCBF makes up 22% of Hitachi Capital (UK) Plc’s business assets and the division was a key driver in the broader growth of the Group, with Hitachi Capital (UK) Plc registering significant growth for the eleventh consecutive year.

Profits at Hitachi Capital (UK) Plc grew by 5.1% to £129.4m which, alongside a 2% growth in new business volume and 6% growth in net earning assets, has contributed to a compounded annual growth rate across the last 10 years of 21%.

Covid-19

HCBF was accredited by the British Business Bank (BBB) to launch the Coronavirus Business Interruption Loan Scheme (CBILS) the day after its announcement on 23 March 2020 to provide emergency funding for SMEs during the coronavirus pandemic. 

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By GlobalData

The division was the first asset finance provider to join the scheme and has lent over £41m to SMEs since year-end.

Gavin Wraith-Carter, managing director of HCBF, 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 BBB, financing £11.7m of assets for businesses that may not otherwise have secured finance for their development and growth.

Motor finance

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.

Hitachi Capital Vehicle Solutions

Continuing to grow in a competitive market, Hitachi Capital Vehicle Solutions, which provides vehicle funding and fleet management services, achieved a profit before tax of £25.7m and has seen a 19% year-on-year increase in net earning assets, operating 81,000 assets worth £1bn, increasing its ranking to the seventh-largest leasing company in the UK.

In May 2019 the business won a £136m contract with Network Rail, one of the UK’s 10 largest fleets.

The business is pioneering the transition to Alternative Fuel Vehicles (AFVs), increasing the size of its Electric Vehicle (EV) fleet by 137% in the past 12 months and leading the Green Revolution.

As of 31 March 2020, the EV fleet was 1% of Hitachi Capital Vehicle Solutions total funded fleet, significantly higher than the market.

Robert Gordon, chief executive of Hitachi Capital (UK) Plc, said: “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 five 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 BBB 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 the 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.”

Hitachi Capital (UK) Plc 

Hitachi Capital (UK) Plc is a wholly-owned subsidiary of Hitachi Capital Corporation, one of Japan’s largest non-bank financial institutions and an affiliate of both Hitachi Ltd and Mitsubishi UFJ Financial Group Inc.