REG - S & U PLC - AGM Statement and Trading Update

S&UAnnouncement

18/06/2025 07:00

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RNS Number : 2442N  S & U PLC  18 June 2025

18 June 2025

S&U plc

("S&U" or "the Group")

AGM Statement and Trading Update

S&U PLC (LSE: SUS), the specialist motor and property finance lender,
issues a trading statement from 15th April 2025 to 18(th) June 2025, prior to
its AGM today.

My optimism in our annual results report in April is gradually and clearly
being justified by the Group's recent performance, particularly over the past
two months. Corporate tankers turn slowly, particularly after the regulatory
attentions of the past 18 months amidst a fragile economic climate, but the
S&U tanker surely is.

Aspen, our property lender, continues to power ahead with record profit for
the first quarter and receivables up 7% on last year - despite
higher-than-expected repayments of over £57m.

At Advantage, following the challenges associated with a lengthy FCA s166
process, customer receivables are trending above budget, as lending volumes
rose by 50% during the first quarter.  Hence Advantage profit for the quarter
is almost on budget and is on course to move ahead by half year.

Overall, Group profitability is trending to be ahead of 2024 at half year and
accelerating from there. This pattern is driven by improving sales numbers,
stronger collections at Advantage and the tapering of additional professional
and regulatory costs associated with the s166 and its remedial aftermath.

The outcome of the upcoming Supreme Court judgment, expected in the next few
weeks, remains difficult to predict. In my view, however, a clear and
pragmatic decision would provide much-needed clarity to the motor finance
sector. This would support the broader credit market, contribute to economic
growth, and help enable the government's objective of improving access to
credit across the UK.

Advantage Finance

 

Advantage continues its recovery by making immediate improvements which will
also sustain it in the longer term. Thus, customer relations and collections
have been strengthened by reorganisation, closer monitoring of activity and by
new performance targets. A new telephony system has been installed to
facilitate this. The resulting improvements in collections due, and in credit
quality generally, have seen cumulative improvement to date to 89.4% against
87.3% a year ago. The number of longer-term nonpayers has reduced by 35% since
year-end, and current adherence to contracted payments is the best since
October 2023.

 

These reforms benefit our customers by identifying any early repayment
difficulties and potential vulnerability, thereby protecting customers' credit
ratings and their future access to credit. Recent research has confirmed that
our customers' experience of Advantage Finance has led to an improvement in
their credit scores and hence their access to competitively priced credit in
the future.

 

Although, for reasons outlined in our annual report, net receivables at
Advantage at the quarter end are £273 million (2024: £337m); this is above
budget. Broker relations remain excellent and affordability refinements, a new
customer scorecard, as well as on boarding improvements, are

correcting what was arguably an excessive restriction on sales, in response to
the FCA's s166 intervention.

 

Finally, it was very encouraging to see the recent House of Lords report,
"Growing pains: clarity and cultural change required", echo many of the
concerns we have previously raised regarding the 'risk averse' regulatory
framework for UK financial services. We hope the report prompts constructive
action from both Government and regulators reflecting their Lordships'
recommendation.

 

 

Aspen Bridging

 

It was good to see 10 members of the Aspen team up on stage in June at the
annual Bridging and Commercial industry awards. Their reward for new product
of the year exemplifies the dynamism, flexibility and imagination that have
made Aspen such a success. As a result, customer receivables at the quarter
end are £151.6m and advances over the quarter are 16% ahead of last year. New
agreement numbers are up by a very encouraging 46% on last year, showing the
breadth of appeal of Aspen's product range for property investors requiring
loans from £250k to £15m. This range has been expanded over the past year
with the new Bridge-to-Let products proving very popular.

 

The relevance of Aspen's loan offer is clear from the quality of its book.
Repayments over the quarter are a remarkable £19m up on 2024 at £57m in the
period; evidence of the width of appeal of Aspen's product range for both
property investors and small and medium sized builders.

 

Even in a slightly slowing residential Property market where transactions are
being affected by stubbornly high real interest rates and the inefficiency of
HM Land Registry, loans in default or over term remain stable and within our
control.

 

Aspen's strong performance is ultimately reflected in its profitability, which
is 33% up on the equivalent quarter last year.

 

Treasury

 

As Aspen collections remain very strong and Advantage sales gradually recover,
the Group has been cash generative to date with current borrowings at £180.4m
(2024: £239.8m). This compares with bank facilities of £280m, giving
considerable headroom for our recovery plans this year and our Group growth
expectations in the medium term.

 

Commenting on S&U's trading outlook, Anthony Coombs, S&U Chairman,
said:

"Happily, the consolidation and retrenchment of the past two years is now
behind us and S&U is on track for a return to growth. Throughout our
history, S&U's people have skilfully adapted to new market conditions and
opportunities. This is evident now at both Advantage and Aspen and has happily
continued in May.

Assuming a stable and supportive environment from policymakers, regulators,
and the Courts, we believe these efforts will translate into improved
profitability this year and in the future."

 

For further information, please contact:

 Enquiries                                     S&U plc        c/o SEC Newgate

 Anthony Coombs
 Financial Public Relations                    SEC Newgate    020 7653 9848

 Bob Huxford, Molly Gretton, Harry Handyside
 Broker                                        Peel Hunt LLP  020 7418 8900

 Andrew Buchanan, Oliver Jackson

 

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