REG - S & U PLC - Preliminary Results
21/04/2026 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260421:nRSU2080Ba&default-theme=true
RNS Number : 2080B S & U PLC 21 April 2026
21 April 2026
S&U plc
("S&U", "the Group" or "the Company")
PRELIMINARY RESULTS FOR THE PERIOD ENDED 5 FEBRUARY 2026
S&U plc (LSE: SUS), the motor finance and specialist lender, today
announces its preliminary results for the period ended 5 February 2026.
Group Key Financials:
· Profit before tax ("PBT"): £31.8m (2025: £24.0m)
· Revenue at £107.4m (2025: £115.6m)
· Group net receivables at period end at £496.8m (31.1.25:
£435.8m)
· Group impairment charge of £13.0m (2025: £35.6m) reflecting
increased quality Advantage and Aspen loan books
· Group net finance costs at £14.3m (2025: £18.1m) reflecting
lower average borrowings
· Basic earnings per share: 195.2p (2025: 147.4p)
· Final dividend of 45p per ordinary share to be paid on 24 July
2026 (2025: 40p)
· Net assets at a record £249m (2025: £238m)
· Net borrowings at £241.8m (31.1.25: £192.3m) - gearing at 97.1%
(31.1.25: 80.8%)
Advantage Motor Finance Highlights:
· PBT: £23.4m (2025: £16.5m)
· Revenue: £83.0m (2025: £91.8m)
· Impairment charge: £12.8m (2025: £33.2m)
· Live monthly repayments at 90.5% of due (2025: 85.6%)
· Advances: £181.6m (2025: £109.4m)
· Net receivables at period end at £317.1m (31.1.25: £283.6m)
Aspen Bridging Highlights:
· PBT increased to a record £8.8m (2024: £7.2m)
· Record revenue increased to £24.4m (2025: £23.8m)
· Impairment charge: £0.2m (2025: £2.4m)
· Collection repayments and recoveries: £187.7m (2025: £157.0m)
· Advances: £212.3m (2025: £179.5m)
· Net receivables increased to £179.7m (31.1.25: £152.2m)
Anthony Coombs, Chairman of S&U plc stated:
"Just over 50 years ago, the then Leader of the Opposition, Margaret Thatcher,
assured the nation that "the way to recovery is through profits." In recent
times, British Governments of all colours, obsessed as they are with income
distribution over wealth creation, have forgotten this. At S&U, we have
not. In a competitive environment, profit is the most reliable bellwether of
our success in matching our products to our customers' needs and of our
efficiency in doing so. The current recovery shows we are on the right track,
but challenges and necessary improvements remain - alongside real
opportunities for growth. The foundations for this are continually being made.
With welcome stability from our political leaders and regulators, rewards will
surely follow."
For further information, please contact:
Anthony Coombs S&U plc c/o SEC Newgate Communications
Bob Huxford, Harry Handyside, Aqsa Ali SEC Newgate Communications 020 7653 9848
Andrew Buchanan, Rob Parker Peel Hunt LLP 020 7418 8900
James Felix, John Welch, Daniel Gee-Summons Berenberg 020 3207 7800
CHAIRMAN'S REVIEW
Introduction
I am pleased to confirm that the rebound in fortunes and profitability for
S&U plc predicted last year is now coming to pass. Group profit for
2025/26 was £31.8m (2025: £24.0m) an increase of 32%.
Both Advantage, our motor finance division, and Aspen, our property lending
business, have delivered strong results. Advantage has seen a significant
recovery following the regulatory, legal and fiscal onslaught of the previous
two years. Advances there are well ahead of last year, collection rates and
loan book quality have significantly improved and margins strengthened; all
this demonstrates a return to disciplined growth. Irrespective of recent
events in the Middle East and their impact on energy costs and potentially
interest rates, this trend fortunately continues. Indeed, at Advantage early
signs are that, maintaining our strict affordability criteria to ensure that
our customers only borrow what they can afford is actually reaping rewards as
demand for the lower cost vehicles we finance grows.
Aspen has achieved yet another record year with gross receivables and income
at historic highs. Like Advantage, this has been accompanied by good credit
quality and sustained yield discipline. For Aspen, the implications of the
Iranian conflict and its effect on the UK residential property market are more
uncertain. In the credit column, demand from overseas investors for "safe"
British assets is likely to continue. On the debit side, potentially higher
interest rates may, whatever the significant underlying demand for housing,
deter or delay development. Much depends on how long the war lasts.
In the meantime, S&U continues to plough its own furrow. The return to
growth has seen Group receivables rise to £496.8m (2025: £435.8m) whilst net
assets are up to just under £250m. Group gearing finished at 97.1% against
80.8% a year ago as a further £50m was invested and additional bank
facilities secured to match this. This revival in the Group's profitability
has taken place against a more positive environment in the markets which we
serve but since the end of S&U's financial year, the war in the Middle
East has had a significant impact on the cost of living, the trajectory of
interest rates, and consumer confidence. Thus, whilst in December the Finance
& Leasing Association (FLA) statistics showed the UK used car market up
annually by 5% in volume, by February used car volumes had fallen slightly,
although the market is still "resilient". Fortunately, demand is focused on
the more affordable vehicles, which are Advantage's bread and butter. The
proportion of used car purchases subject to finance continues to grow, an
appetite reflected in the record 3.1 million finance applications to Advantage
last year, an increase of 18% on the previous year. The result was an increase
in new agreements at Advantage of no less than 44% to 18,279 in 2025/26.
The impact on the residential property market served by Aspen has been more
immediate. After what the RICS called a "tentative recovery" at the start of
2026, demand from buyers spooked by the Middle East war fell by an annualised
13% in March, according to Zoopla. Government statistics showed residential
transactions down 6% year on year in February although this was actually the
highest monthly total since March 2025.
Both markets and policymakers are operating with limited visibility on the
potential outcomes of the conflict in the Middle East, inevitably fueling
uncertainty in the near future.
We are seeing greater stability and clarity in the regulatory environment,
which has reduced the level of management time required at Advantage compared
with the past two years. Most recently, the proposals by the Financial Conduct
Authority (FCA) regarding the structure and scope of its redress schemes on
motor finance commissions appear where applicable to Advantage, both
affordable and manageable.
Furthermore, Advantage successfully concluded its engagement with the FCA
which began in 2023 in April 2025. Customer relations and repayment rates have
returned to their customary levels and latest Trustpilot ratings remain at a
record 4.9 out of 5.0. Equally important are signs of a more consistent and
predictable approach by both the FCA and its statutory offspring, the
Financial Ombudsman Service. Whilst properly concerned with their obligations
to consumers, especially those deemed to be vulnerable, regulators
increasingly appear to recognise their obligation to maintain an efficiently
functioning finance market which attracts and provides finance for up to
17million citizens throughout the UK.
Although by no means guaranteed, this change in emphasis by the regulators
should be confirmed by their forthcoming response to the House of Lords Report
133 of the 17th of June 2025 entitled "Growing Pains - clarity & cultural
change required".
The report's 77 recommendations included the removal of ten key barriers to
growth and international competitiveness. Many of these paralleled earlier
proposals from the Government as part of the Leeds reforms, which argued that
financial services regulations had gone too far in attempting to eliminate
risk. The FCA will be reporting to the Select Committee on progress in these
areas. This may herald a change in attitudes towards risk control and thereby
reduce the risk premium which has deterred investment into UK financial
services over the past decade. Certainly, a meeting I attended in January with
senior FCA officials regarding such investment flows elicited a distinct unity
of purpose and sense of cooperation, which was encouraging.
Advantage Finance ("Advantage")
A rise of more than 41% in pre-tax profits to £23.4m (2025: £16.5m) was both
well above budget and just one highlight of a very good year at Advantage, as
it throws off the shackles of the regulatory intervention of recent times. Net
receivables were up 12% at £317.1m (2025: £283.6m), the result of new loan
deals at 18,279, an increase of 44% on the previous year. Furthermore, average
loan size and margins increased throughout the year as Advantage welcomed back
a slightly higher proportion of its traditional credit customers as well as
adding a significant number in the stable self-employed sector.
Added to this, Advantage produced significant improvements in collection rates
and credit quality, thus customer adherence to contracted repayments averaged
90.5% in the year (2025: 85.6%) ending at 93.1%. Customer arrears fell by just
over 20% in the year. This contributed to a reduction in impairment which fell
to £12.8m against £33.2m in 2025.
As important for our relations with our loyal customers, Advantage's success
in dealing with people experiencing financial difficulties was evidenced in
the now record 82% of successful outcomes on revised repayment arrangements
throughout the year. In the last resort of repossession, car resale values
recently reached 83% of trade.
A further highlight of Advantage's year saw the sign off from the FCA's s166
investigation which began in 2023. As expected, given Advantage's successful
26-year trading record and its excellent debt quality, the changes resulting
from this protracted and detailed process were more evidential than
substantive. The downside of the process was the requirement to write to
around 25,000 former customers; the vast majority of whom had been happy with
our service and sought no redress whatsoever for it. Advantage carried out
this process entirely inhouse, a tribute to the excellent pride in their work
of all in the business.
Progress at Advantage has been much deeper and more long-lasting than ever
before. Foundations for future growth have included a refinement of the credit
scorecard and the introduction of new credit risk technology. Introduced in
Q3, these helped to produce a record 6,800 new loan deals, providing proof of
the Advantage's potential for significant growth.
To reinforce Advantage's growing debt quality, underwriting teams are
constantly reviewing affordability calculations and repayment patterns to
ensure that our credit criteria match our customers' repayment capabilities.
The year also saw the significant benefits anticipated from the use of
Artificial Intelligence coming to fruition. Early projects involved
collections, efficiency, call recording and greater customer advisor
productivity. AI should also offer new routes to markets through dealers and
better integration with aggregators. AI is already allowing Advantage to more
clearly focus on those customers who may require our guidance and help through
their repayment journey.
Finally, the year ended with a flourish through a very successful debt sale
involving £53m of aged and written-off book debt. Such sales enhance profit
and also clear the decks for even higher levels of customer service in future.
Aspen Bridging
Aspen Bridging finance, our property lender, has delivered another set of
record results. Profit before tax is £8.8m (2025: £7.2m), a 22% increase in
a market for residential letting and development which has remained sluggish
throughout the year. House price growth by year end has slowed to an annual
0.6%, leading Nationwide to describe the market as merely "resilient". Stamp
duty changes led to a spike in transactions in March, although over the year
as whole they saw a slight decline.
The lettings market which the government apparently see as a path to
affordable homes was deflated by tax changes to rental income in April, and
then by the Rental Rights Act which makes rent increases and repossessions
more difficult.
Aspen's balance sheet nevertheless grew by nearly 33% in the year with net
assets at just over £17m; receivables growth reached 18% to a record
£179.7m. Borrowing required an additional £25m of funding to £162.2m at
year end. ROCE remained at 11.2% for the year with yield on the loan book
increasing slightly to 13.6%.
The year saw an excellent 40% increase in new loan deals from both the
shorter-term bridging book and in a trebling of new loan deals in the newer
and longer-term buy and bridge-to-let, 2 and 3-year products. By value
advances rose by 18% as borrowers became more cautious as to loan size for
Aspen's bridging products.
Aspen plans for substantial growth and is putting in place flexible funding
arrangements to reflect this. This is despite the war in the Middle East
creating uncertainty around interest rates and mortgage availability making
market predictions difficult. The emphasis in the year ahead will also be on
Aspen's productivity, efficiency and as usual, flexible reaction to a changing
market.
In the meantime, the quality of Aspen's book remains very good. At year end,
less than 10% of its 245 live loans were beyond term, well under budget. Total
collection receipts were 20% up on last year and nearly 70% of loan deals
settled within term - a record.
Aspen's staff continued to grow in number and ability. At present, nearly half
of our employees have qualified as Certified Practitioners in Specialist
Property Finance (CPSP) or achieved the Royal Institute of Chartered Surveyors
Valuation (RICS) qualification. One member is taking a Masters in Real Estate,
a higher level of qualification which we encourage.
During the year we welcomed to the Aspen Board Richard Coombs, Wayne Hicklin
and Ian Miller-Hawes. This deserved recognition will allow the next generation
of the company's leadership to make its presence felt even in a more
challenging economic climate.
Governance and Regulation
Recent decades have sadly seen an erosion of belief in the free enterprise
system, a system which has led to unparalleled levels of prosperity and
well-being into the 21st century. This has led to continual state intervention
raising the share of gross national product the government controls, the level
of regulations it uses and the taxation it demands to pay for this.
"Governance" is shorthand for this process of intervention designed to reduce
risk but instead simply reducing commercial returns. Thus 40 years ago,
Britain regularly enjoyed between 2% and 3% annual growth and the rise in
living standards this allowed. But over the past 20 years both in relative and
absolute terms, UK growth rates have varied between feeble and non-existent
thus over the same period, average living standards have actually declined. As
a result, capital flows to the UK particularly to the previously dominant
financial services sector, have gone into reverse.
Sadly, continual regulation often overseen by those who even the current Prime
Minister has dubbed the army of "blockers and checkers" must accept their
share of the blame. Reversing this and restoring the incentives for growth and
the prosperity it brings is not best achieved through state initiatives,
detailed directives or well-meaning ESG requirements. More effective by far is
a climate of robust competition where consumers dominate through their
transparent and flexible choice, conditioned only where necessary by state
intervention. As the House of Lords Select Committee observed last year, the
deeply embedded culture of risk aversion and high cost of compliance in the UK
financial services industry has suffocated its growth.
Evidence is within S&U's own financial report. 40 years ago, it comprised
20 pages. This years' report will be 91 pages. The financial results of
concern to the vast majority of our shareholders used to appear on page 8,
they are now relegated to page 57, behind realms of well-meaning text
purporting to prove community and consumer benefit. The latter plays little
part in investment decisions or in attracting capital and hence little
benefits the market for 17 million Britons we serve.
As the FCA's s166 process confirmed, S&U and Advantage in particular, have
nearly 90 years' experience of offering service and care to their customers.
Why? First, because for an organisation with a family and Christian ethos, it
is right to do so. Second, because contented customers are the life blood of
our sustainable commercial success. That ethos is exemplified by our own
board. This year we are delighted to welcome two new members. Chris Freckelton
has proved a success as Chief Financial Officer and becomes Group Finance
Director. Finally, we welcome Karl Werner Chief Executive at Advantage
Finance, who has steered the company through a tempestuous time emerging
stronger, more focussed and energised than before. Both appointments are
richly deserved.
Dividends
Although the company's share value has increased substantially over the past
financial year, S&U can more directly and certainly reward shareholders
through its dividend policy. In recent years, S&U has maintained a
dividend cover ratio of between 1.3 and 2.3. This year, both the annual
results and prospective trading suggest a final dividend of 45p per ordinary
share (2025: 40p). Total dividends for the year will therefore be £1.15 per
share (2025: £1.00 per share). As usual, subject to shareholders approval at
our AGM on 24th June, this will be paid on 24th July to shareholders on the
register on 3rd July.
Treasury and Funding
The year ended with Group borrowing at £241.8m, an increase of just under
£50m on 2025. Gearing rose to 97.1% from 80.8% last year. Comfortable
headroom was maintained by securing an additional £50m of funding earlier
this year. The year was characterised by greater cash demands from Advantage,
as its book grew especially in H2. Aspen saw slower sales in H2 following
excellent collections in H1 thus requiring an additional £25m of funding.
We see potential for additional investment this year of around £100m. The
Group is therefore engaged in a refinancing exercise using securitised
facilities which is anticipated to be finalised in Q2. This process has been
well received by potential funders and should deliver more funding at better
rates for the Group.
Current Trading and Outlook
Just over 50 years ago, the then Leader of the Opposition, Margaret Thatcher,
assured the nation that "the way to recovery is through profits." In recent
times, British Governments of all colours, obsessed as they are with income
distribution over wealth creation, have forgotten this. At S&U, we have
not.
In a competitive environment, profit is the most reliable bellwether of our
success in matching our products to our customers' needs and of our efficiency
in doing so. The current recovery shows we are on the right track, but
challenges and necessary improvements remain - alongside tremendous
opportunities for growth. The foundations for this are continually being made.
With welcome stability from our political leaders and regulators, rewards will
surely follow.
Anthony Coombs
Chairman
20 April 2026
CONSOLIDATED INCOME STATEMENT
Period ended 5 February 2026 Note
5.2.26 31.1.25
£'000 £'000
Revenue 3 107,431 115,611
Cost of Sales 4 (23,552) (16,384)
Impairment charge 5 (13,032) (35,571)
Gross Profit 70,847 63,656
Administrative expenses 6 (24,683) (18,826)
Operating profit 46,164 44,830
Finance costs 7 (14,348) (18,118)
Profit before taxation before exceptional items 31,816 26,712
Exceptional Items 8 - (2,736)
Profit before taxation 31,816 23,976
Taxation (8,103) (6,063)
Profit for the year attributable to equity holders 23,713 17,913
Earnings per share basic 10 195.2p 147.4p
Earnings per share diluted 10 195.2p 147.4p
Dividends per share
- Proposed Final Dividend 45.0p 40.0p
- Interim dividends in respect of the year 70.0p 60.0p
- Total dividend in respect of the year 115.0p 100.0p
- Paid in the year 105.0p 115.0p
All activities derive from continuing operations
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2025 2024
£'000 £'000
Profit for the year attributable to equity holders 23,713 17,913
Actuarial loss on defined benefit pension scheme (43) (33)
Total Comprehensive Income for the year 23,670 17,880
Items above will not be reclassified subsequently to the Income Statement
CONSOLIDATED BALANCE SHEET
5 February 2026 Note
5.2.26 31.1.25
£'000 £'000
ASSETS
Non current assets
Property, plant and equipment including right of use assets 2,885 2,527
Investments - -
Amounts receivable from customers 9 271,586 203,516
Other receivables and prepayments - -
Deferred tax assets 25 40
274,496 206,083
Current Assets
Amounts receivable from customers 9 225,196 232,330
Trade and other receivables 1,525 1,427
Cash and cash equivalents - 5,216
226,721 238,973
Total Assets 501,217 445,056
LIABILITIES
Current liabilities
Bank overdrafts and loans (296) -
Trade and other payables (4,832) (3,295)
Current Tax Liabilities (483) (1,695)
Lease Liabilities (90) (109)
Provisions for liabilities and charges 11 (2,602) (2,272)
Accruals and deferred income (1,871) (1,473)
(10,174) (8,844)
Non current liabilities
Borrowings (241,500) (197,500)
Lease Liabilities (92) (183)
Financial Liabilities (450) (450)
(242,042) (198,133)
Total liabilities (252,216) (206,977)
NET ASSETS 249,001 238,079
Equity
Called up share capital 1,719 1,719
Share premium account 2,301 2,301
Profit and loss account 244,981 234,059
Total equity 249,001 238,079
STATEMENT OF CHANGES IN EQUITY
Period ended 5 February 2026
Called up Share Profit
share premium and loss Total
capital account account equity
£'000 £'000 £'000 £'000
At 1 February 2024 1,719 2,301 230,142 234,162
Profit for year - - 17,913 17,913
Other comprehensive income for year - - (33) (33)
Total comprehensive income for year - - 17,880 17,880
Dividends - - (13,963) (13,963)
At 31 January 2025 1,719 2,301 234,059 238,079
Profit for year - - 23,713 23,713
Other comprehensive income for year - - (43) (43)
Total comprehensive income for year - - 23,670 23,670
Dividends - - (12,748) (12,748)
At 5 February 2026 1,719 2,301 244,981 249,001
CONSOLIDATED CASH FLOW STATEMENT
Period ended 5 February 2026
Note
5.2.26 31.1.25
£'000 £'000
Net cash (used in)/generated from operating activities 12 (21,502) 64,991
Cash flows used in investing activities
Proceeds on disposal of property, plant and equipment 44 41
Purchases of property, plant and equipment (883) (726)
Net cash used in investing activities (839) (685)
Cash flows generated by/(used in) financing activities
Dividends paid (12,748) (13,963)
Finance cost paid (14,311) (18,118)
Receipt of new borrowings 105,500 70,000
Repayment of borrowings (61,500) (96,000)
Decrease in lease liabilities (112) (129)
Net (repayment)/increase in overdraft 296 (881)
Net cash generated by/(used in) financing activities 17,125 (59,091)
Net (decrease)/increase in cash and cash equivalents (5,216) 5,215
Cash and cash equivalents at the beginning of year 5,216 1
Cash and cash equivalents at the end of year - 5,216
Cash and cash equivalents comprise
Cash and cash in bank - 5,216
There are no cash and cash equivalent balances which are not available for use
by the Group (2025: £nil).
1. SHAREHOLDER INFORMATION
1.1 Preliminary Announcement
The figures shown for the period ended 5 February 2026 are not statutory
accounts within the meaning of section 435 of the Companies Act 2006. The
statutory accounts for the period ended 5 February 2026 on which the auditors
have given an unqualified audit report and did not contain an adverse
statement under section 498(2) or 498(3) of the Companies Act 2006 will be
delivered to the Registrar of Companies after the Annual General Meeting. The
figures shown for the year ended 31 January 2025 are not statutory accounts. A
copy of the statutory accounts has been delivered to the Registrar of
Companies, contained an unqualified audit report and did not contain an
adverse statement under section 498(2) or 498(3) of the Companies Act 2006.
This announcement has been agreed with the Company's auditors for release. A
copy of this preliminary announcement will be published on the website
www.suplc.co.uk. The Directors are responsible for the maintenance and
integrity of the Company website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements differ
from legislation in other jurisdictions.
1.2 Annual General Meeting
The Annual General Meeting will be held on 24 June 2026 and further details of
arrangements will be published in the AGM notice.
1.3 Dividend
If approved at the Annual General Meeting a final dividend of 45p per Ordinary
Share is proposed, payable on 24 July 2026 with a record date of 3 July 2026.
1.4 Annual Report
The 2026 Annual Report and Financial Statements and AGM notice will be
displayed in full on our website www.suplc.co.uk in due course and also posted
to those Shareholders who have still opted to receive a hardcopy. Copies of
this announcement are available from the Company Secretary, S & U plc, 2
Stratford Court, Cranmore Boulevard, Solihull B90 4QT.
2. KEY ACCOUNTING POLICIES
The 2026 financial statements have been prepared in accordance with applicable
accounting standards and accounting policies - these key accounting policies
are a subset of the full accounting policies.
2.1 Basis of preparation
As a listed Group we are required to prepare our consolidated financial
statements in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and UK-adopted international
accounting standards. We have also prepared our S&U plc Company financial
statements in in conformity with the requirements of the Companies Act 2006
and UK-adopted international accounting standards. Under S404 of the Companies
Act 2006, the parent company S&U plc has taken exemption from reporting
its own profit and loss. These financial statements have been prepared under
the historical cost convention.
The same accounting policies, presentation and methods of computation are
followed in the financial statements as applied in the prior year, except for
a change in reporting date and the movement in borrowings in the cashflow
statement.
Historically the Group's subsidiary Advantage Finance has prepared accounts up
to the 5th to consider the successful recovery of missed payments from
customers at month-end, afforded to it under Section 390(3) of the Companies
Act. Previously the Company and its subsidiary Aspen Bridging reported to the
31st and no adjustments were made to align these dates across the Group. For
the current period the reporting date has been changed to the 5th February to
capture all transactions up until this date across the Group, no change has
been made to the accounting reference date. The prior period comparatives for
the twelve-month period ended 31 January 2025 have not been adjusted because
the amounts presented remain comparable.
In regards to the cashflow statement, following a reassessment of IAS 7 the
movements are now shown on a gross rather than net basis, where the receipts
and repayments are shown as two separate line items rather than combined.
Additionally for the company-only cashflow statement finance income received
is now included within operating activities rather than financing activities.
Comparative figures for the prior periods have been represented to reflect
these changes and they have no impact on cash and cash equivalents or the
Group's financial position.
The consolidated financial statements incorporate the financial statements of
the Company and all its subsidiaries for the period ended 5 February 2026.
Having considered the Group's forecasts, capital and liquidity, the current
economic climate and operational challenges the directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the annual report and accounts of at least 12
months from the date of the approval of the financial statements, in line with
the Group's financial projections as approved in April 2026.
There are no new standards which have been adopted by the group this year
which have a material impact on the financial statements of the Group.
All companies within the Group are 100% owned and consolidated and the assets,
liabilities, costs and revenues are fully consolidated. All intercompany
balances and transactions are eliminated on consolidation.
At the date of authorisation of these financial statements the directors
anticipate that the adoption in future periods of any other Standards and
interpretations which are in issue but not yet effective, will have no
material impact on the financial statements of the Group.
IFRS18 Presentation and Disclosure in Financial Statements will first
mandatorily apply to S&U for the year ended 5 February 2028 - at point of
implementation there should be no material impact on S&U as the changed
reporting requirements under IFRS18 are presentational, although the full
impact of this upcoming standard is still being assessed ahead of the
effective date.
2.2 Revenue recognition
For motor finance, interest income is recognised in the income statement for
all loans and receivables measured at amortised cost using the constant
periodic rate of return on the net investment in the loans, which is akin to
an effective interest rate (EIR) method. The EIR is the rate that exactly
discounts estimated future cash flows of the loan back to the present value of
the advance and hire purchase interest income is then recognised using the
EIR. Acceptance fees charged to customers and any direct transaction costs are
included in the calculation of the EIR. Option fees for arranging the transfer
of ownership of the vehicle to customers at the end of the agreement are
recognised and credited to the income statement when the service has been
provided. For hire purchase agreements in Advantage Finance which are
classified as credit impaired (i.e. stage 3 assets under IFRS 9), the group
recognises revenue 'net' of the impairment provision to align the accounting
treatment under IFRS 16 with the requirements of IFRS 9 and also with the
treatment adopted for similar assets in Aspen. Revenue starts to be recognised
from the date of completion of the loan - after completion hire purchase
customers have a 14-day cooling off period during which they can cancel their
loan.
For property bridging finance, interest income is recognised in the income
statement for all loans and receivables measured at amortised cost using the
effective interest rate method (EIR) as per the requirements in IFRS 9. The
EIR is the rate that exactly discounts estimated future cash flows of the loan
back to the present value of the advance. Acceptance fees charged to customers
and any direct transaction costs are included in the calculation of the EIR.
Commission received from third party insurers for brokering the sale of title
insurance products, for which the Company does not bear any underlying
insurance risk, are recognised and credited to the income statement when the
brokerage service has been provided. For loans which are classified as credit
impaired (i.e. stage 3 assets under IFRS 9), Aspen recognises revenue 'net' of
the impairment provision as required by IFRS 9.
2.3 Impairment and measurement of amounts receivable from customers
All customer receivables are initially recognised as the amount loaned to the
customer plus direct transaction costs. After initial recognition the amounts
receivable from customers are subsequently measured at amortised cost.
Amortised cost includes a deduction for loan loss impairment provisions for
expected credit losses ("ECL") assessed by the directors in accordance with
the requirements of IFRS9.
There are 3 classification stages under IFRS9 for the impairment of amounts
receivable from customers:
Stage 1: Not credit impaired and no significant increase in credit risk since
initial recognition
Stage 2: Not credit impaired and a significant increase in credit risk since
initial recognition
Stage 3: Credit impaired
The directors assess whether there is objective evidence that a loan asset or
group of loan assets is credit impaired and should be classified as stage 3. A
loan asset or a group of loan assets is credit impaired only if there is
objective evidence of credit impairment as a result of one or more events that
occurred after the initial recognition of the loan. Objective evidence may
include evidence that a borrower or group of borrowers is experiencing
financial difficulty or delinquency in repayments. Impairment is then
calculated by estimating the future cash flows for such impaired loans,
discounting the flows to a present value using the original EIR and comparing
this figure with the balance sheet carrying value. All such impairments are
charged to the income statement. Under IFRS 9 for all stage 1 accounts which
are not credit impaired, a further collective provision for expected credit
losses in the next 12 months is calculated and charged to the income
statement.
Key assumptions in ascertaining whether a loan asset or group of loan assets
is credit impaired include information regarding the probability of any
account going into default (PD) and information regarding the likely eventual
loss including recoveries (LGD). These assumptions and assumptions for
estimating future cash flows are based upon observed historical data and
updated to reflect current and future conditions. As required under IFRS9, all
assumptions are reviewed regularly to take account of differences between
previously estimated cash flows on impaired debt and the eventual losses.
For all loans in stages 2 and 3 a provision equal to the lifetime expected
credit loss is taken. In addition, in accordance with the provisions of IFRS9
a collective provision for 12 months expected credit losses ("ECL") is
recognised for the remainder of the loan book which is Stage 1. 12-month ECL
is the portion of lifetime ECL that results from default events on a financial
asset that are possible within 12 months after the reporting date.
In our Motor Finance business, all loans 1 month or more in contractual
arrears are deemed credit impaired and are therefore included in IFRS9 stage
3. This results in more of our net receivables being in stage 3 and the
associated stage 3 loan loss provisions being higher than if we adopted a more
prime customer receivables approach of 3 months or more in arrears. Our
approach of 1 month or more in contractual arrears is based on our historical
observation of subsequent loan performance after our customers fall 1 month or
more in contractual arrears within our non-prime motor finance customer
receivables book. The expected credit loss ("ECL") is the probability weighted
estimate of credit losses.
A PD/LGD model was developed by our Motor Finance business, Advantage Finance,
to calculate the expected loss impairment provisions in accordance with IFRS9.
Stage 1 expected losses are recognised on inception/initial recognition of a
loan based on the probability of a customer defaulting in the next 12 months.
This is determined with reference to historical data updated for current and
future conditions. If a motor finance loan falls one month or more in
contractual arrears, then this is deemed credit impaired and included in IFRS9
Stage 3. There are some motor finance loans which are up to date with payments
but the customer is in some form of forbearance and we deem this to be a
significant increase in credit risk and so these loans are included in Stage
2.
As required under IFRS9 the expected impact of movements in the macroeconomy
is also reflected in the expected loss model calculations. For motor finance,
assessments are made to identify the correlation of the level of impairment
provision with forward looking external data regarding forecast future levels
of employment, inflation, interest rates and used car values which may affect
the customers' future propensity to repay their loan. The macroeconomic
overlay assessments for 5 February 2026 reflect that further to considering
such external macroeconomic forecast data, management have judged that, whilst
less than at 31 January 2025, there is currently still a heightened risk of an
adverse economic environment for our customers. To factor in such
uncertainties, management has included an overlay for certain groups of assets
to reflect this macroeconomic outlook, based on estimated unemployment levels
in future periods. As at 5 February 2026 we have not included inflation levels
in our overlay as inflation has now stabilised and has not demonstrated a
strong correlation with our recent loan book performance. As at 5 February
2026, we have not included an overlay for used vehicle prices as we assume
that used vehicle prices will now remain stable - this is the same assumption
as at 31 January 2025.
Other than the changes to the approach mentioned above, there were no
significant changes to estimation techniques applied to the calculations used
at 5 February 2026.
PD/LGD calculations for expected loss impairment provisions were also
developed for our Property Bridging business Aspen Bridging in accordance with
IFRS9. Stage 1 expected losses are recognised on inception/initial recognition
of a loan based on the probability of a customer becoming impaired in the next
12 months. The Bridging product has a single repayment scheduled for the end
of the loan term and if a bridging loan is not granted an extension and is
still outstanding beyond the end of the loan term then this is deemed credit
impaired and included in IFRS9 Stage 3. The Buy-to-Let and second phase of the
Bridge-to-Let product is serviced by customers monthly, and these accounts are
deemed credit impaired and included in IFRS9 Stage 3 at 90 days past due. Due
mainly to the high values of property security attached to bridging loans, the
bridging sector typically has lower credit risk and lower impairment than
other credit sectors.
Assets in both our secured loan businesses are written off once the asset has
been repossessed and sold and there is no prospect of further legal or other
debt recovery action. Where enforcement action is still taking place, loans
are not written off. In motor finance where the asset is no longer present
then another indicator used to determine whether the loan should be written
off is the lack of any receipt for 12 months from that customer.
2.4 Performance Measurements
i) Return on average capital employed before cost of funds (ROCE) is
calculated as the Operating Profit divided by the average capital employed
(unaudited) being total equity plus Bank Overdrafts plus Borrowings less cash
and cash equivalents. For 25/26 Advantage ROCE is calculated as
£31,847/£286,500 = 11.1%. For 24/25 Advantage ROCE is calculated as
£28,442/£317,937 = 9.0%. For 25/26 Aspen ROCE is calculated as
£17,711/£158,196 = 11.2%. For 24/25 Aspen ROCE is calculated as
£16,477/£143,406 = 11.5%.
ii) Group gearing is calculated as the sum of Bank Loans and Overdrafts less
cash and cash equivalents divided by total equity. At 5 February 2026 group
gearing is therefore calculated as £241,500+296 = £241,796/£249,001 =
97.1%. At 31 January 2025 group gearing is calculated as £197,500-£5,216 =
£192,284/£238,079 = 80.8%.
2.5 Critical accounting judgements and key sources of estimation uncertainty
In preparing these financial statements, the Company has made judgements,
estimates and assumptions which affect the reported amounts within the current
and next financial year. Actual results may differ from these estimates.
Estimates and judgements are regularly reviewed based on past experience,
expectations of future events and other factors.
Critical accounting judgements
The following are the critical accounting judgements, apart from those
involving estimations (which are dealt with separately below), that the
Directors have made in the process of applying the Company's accounting
policies and that have the most significant effect on the amounts recognised
in the financial statements.
Significant increase in credit risk for classification in Stage 2
The Company's transfer criteria determine what constitutes a significant
increase in credit risk, which results in a customer being moved from Stage 1
to Stage 2. Stage 2 currently includes customers who have a good payment
record but have been identified as vulnerable by trained staff. Vulnerability
can be driven by factors including health, life events, resilience or
capability. All customer facing staff are trained to help recognise
characteristics of vulnerability.
Key sources of estimation uncertainty
The directors consider that the sources of estimation uncertainty which have
the most significant effect on the amounts recognised in the financial
statements are those inherent in the consumer credit markets in which we
operate relating to impairment as outlined above. In particular, the Group's
impairment provision is dependent on estimation uncertainty in forward-looking
assumptions on areas such as employment rates, inflation rates and used car
and property prices.
The Group implemented IFRS 9 from 1 February 2018 by developing models to
calculate expected credit losses in a range of economic scenarios. These
models involve setting modelling assumptions, weighting of economic scenarios,
the criteria of determining significant deterioration in credit quality and
the application of adjustments to model outputs. We have outlined assumptions
in our expected credit loss model in the current year. Reasonable movement in
these assumptions might have a material impact on the impairment provision
value.
Macroeconomic overlay for our motor finance business
For this overlay, the Group considers four probability-weighted scenarios in
relation to unemployment rate: base, upside, downside and severe scenarios as
follows:
Base Upside Downside Severe Weighted
(5% decrease) (5% increase)
Weighting 50% 15% 25% 10%
Q1 2026 5.20% 3.64% 6.76% 7.80% 5.62%
Q1 2027 5.30% 3.71% 6.89% 7.95% 5.72%
Q1 2028 5.10% 3.57% 6.63% 7.65% 5.51%
Q1 2029 4.90% 3.43% 6.37% 7.35% 5.29%
An increase by 0.5% in the weighted average unemployment rate would result in
an increase in loan loss provisions by £927,613. A decrease by 0.5% would
result in a decrease in loan loss provisions by £927,613.
Used vehicle price sensitivity for our motor finance business
At the period ended 5 February 2026 and at the year ended 31 January 2025, we
have assumed that used vehicle prices will remain stable after a period when
used vehicle prices increased during years ended 31 January 2022 and 31
January 2023 and then decreased during year ended 31 January 2024. This
assumption as at 5 February 2026 has been made after considering market trends
and expectations but is uncertain. If used car prices were assumed to fall by
5% instead, then this would result in an increase in loan loss provisions of
£1,456,083. If used vehicle prices were assumed to increase by 5% instead,
then this would result in a decrease in loan loss provisions of £1,456,083.
Other accounting judgements
Expected loss sensitivity for our property bridging business
The PD/LGD expected loss impairment provision model calculations developed for
our Aspen bridging business have been based on extrapolating an inherently low
volume sample of historic defaults and losses to reflect the current
receivables and current market conditions. If the probability of default were
assessed to be 10% higher than these calculations, then this would result in
an increase in loan loss provisions of £81,521. If the probability of default
were assessed to be 10% lower than these calculations, then this would result
in a decrease in loan loss provisions of £81,521.
FCA consultation on motor finance commission
The FCA has consulted on an industry-wide scheme to compensate motor finance
customers who were treated unfairly, this covers motor finance agreements
taken out between 6 April 2007 and 1 November 2024 where commission was
payable by the lender to the broker. The FCA published its final rules on 30
March 2026 has stated unfairness is where there is discretionary commission,
high commission (where the commission is equal to or greater than 39% of the
total cost of credit and 10% of the loan) or there was a tied arrangement with
the broker. As previously stated our own subsidiary company Advantage Finance
which offers motor finance, has never entered into any discretionary
commission arrangements and has never operated 'first right of refusal'
arrangements with brokers. Therefore, we are only captured by high commission
cases. For such cases the FCA expects consumers to be compensated the average
of what the FCA estimates the consumer has overpaid, or lost, and the
commission paid, plus interest.
Significant challenge has been provided during the consultation phase and
further judicial review cannot be ruled out; therefore, several scenarios have
been included in the provision calculation and these have been probability
weighted to determine an appropriate provision to be recognised. The estimated
provision represents management's best estimate of the potential redress based
on current information available and using a range of potential scenarios. The
provision assessment also excludes any potential costs in relation to FOS
referrals. At this stage it is not possible to reliably determine the number
of customers that would go to FOS or the approach FOS will take in applying
their fees.
3. SEGMENTAL ANALYSIS
Analyses by class of business of revenue and profit before taxation from
continuing operations
are stated below:
Revenue Profit before taxation
Period Year Period Year
ended ended ended ended
5.2.26 31.1.25 5.2.26 31.1.25
Operating segments £'000 £'000 £'000 £'000
Motor finance 83,049 91,823 23,391 16,542
Property Bridging finance 24,382 23,788 8,826 7,207
Central costs net of central - - (401) 227
finance income
107,431 115,611 31,816 23,976
Analyses by class of business of assets and liabilities are stated below:
Assets Liabilities
Period Year Period Year
ended ended ended ended
5.2.26 31.1.25 5.2.26 31.1.25
Operating segments £'000 £'000 £'000 £'000
Motor finance 320,779 286,813 (163,372) (135,862)
Property Bridging finance 180,053 155,085 (162,985) (142,215)
Central 385 3,158 74,141 71,100
501,217 445,056 (252,216) (206,977)
Depreciation of assets for motor finance was £368,000 (31.1.25: £375,000),
for property bridging finance was £16,000 (31.1.25: £16,000) and for central
was £97,000 (31.1.25: £91,000). Fixed asset additions for motor finance were
£821,000 (31.1.25: £705,000), for property bridging finance were £15,000
(31.1.25: £19,000) and for central were £47,000 (31.1.25: £2,000).
The net finance credit for central costs was £2,993,000 (31.1.25:
£2,992,000), for motor finance was a cost of £8,456,000 (31.1.25:
£11,901,000) and for property bridging finance was a cost of £8,885,000
(31.1.25: £9,209,000). The tax credit for central costs was £61,000
(31.1.25: £99,000 charge), for motor finance was a tax charge of £5,934,000
(31.1.25: £4,150,000) and for property bridging finance was a tax charge of
£2,229,000 (31.1.25: £1,814,000).
The significant products in motor finance are car and other vehicle loans
secured under hire purchase agreements. The significant products in property
bridging finance are bridging loans secured on property.
The assets and liabilities of the Parent Company are classified as Central. No
geographical analysis is presented because all operations are situated in the
United Kingdom.
4. COST OF SALES
Period ended 5.2.26 Year ended 31.1.25
£'000 £'000
Cost of sales - motor finance 20,795 14,063
Cost of sales - property bridging finance 2,757 2,321
Total cost of sales 23,552 16,384
5. IMPAIRMENT CHARGE
Period ended 5.2.26 Year ended 31.1.25
£'000 £'000
Loan loss provisioning charge
Loan loss provisioning charge - motor finance 12,755 33,191
Loan loss provisioning charge - property bridging finance 277 2,380
Total impairment charge 13,032 35,571
6. ADMINISTRATIVE EXPENSES
Period ended 5.2.26 Year ended 31.1.25
£'000 £'000
Administrative expenses - motor finance 17,653 13,391
Administrative expenses - property bridging 3,636 2,670
Administrative expenses - central 3,394 2,765
Total administrative expenses 24,683 18,826
7. FINANCE COSTS
Period ended 5.2.26 Year ended 31.1.25
£'000 £'000
31.5% cumulative preference dividend 141 141
Lease liabilities interest 15 20
Bank loan and overdraft interest payable 14,192 17,957
Total finance costs 14,348 18,118
8. EXCEPTIONAL ITEM
Motor Finance Forbearance Outcomes Review
Our motor finance subsidiary Advantage was included in the FCA's multi-firm
Cost of Living Forbearance Outcomes review in 2023 and as a result the FCA
concluded that enhancements were required to Advantage's approach to arrears
management and the application of forbearance. We provided for anticipated
total associated exceptional potential customer remediation costs and external
support costs totalling £2.736m as an exceptional item during the year ended
31 January 2025.
9. AMOUNTS RECEIVABLE FROM CUSTOMERS
5.2.26 31.1.25
£'000 £'000
Motor finance hire purchase 424,411 401,792
Less: Loan loss provision motor finance (107,282) (118,166)
Amounts receivable from customers motor finance 317,129 283,626
Property bridging finance loans 182,303 155,083
Less: Loan loss provision property bridging finance (2,650) (2,863)
Amounts receivable from customers property bridging finance 179,653 152,220
Amounts receivable from customers 496,782 435,846
Analysis of future due date due
- Due within one year 225,196 232,330
- Due in more than one year 271,586 203,516
Amounts receivable from customers 496,782 435,846
Analysis of Security
Loans secured on vehicles under hire purchase agreements 311,248 277,831
Loans secured on property 179,653 152,220
Other loans not secured - motor finance where security no longer present 5,881 5,795
Amounts receivable from customers 496,782 435,846
9. AMOUNTS RECEIVABLE FROM CUSTOMERS (CONTINUED)
Analysis of loan loss provision and amounts receivable from customers
(capital)
Not credit Not credit Credit
Impaired Impaired Impaired
Stage 1: Stage 2: Stage 3:
Subject to Subject to Subject to
12 months lifetime lifetime Total
As at 5 February 2026 ECL ECL ECL
£'000 £'000 £'000 £'000
Amounts receivable (capital)
Motor finance 257,649 16,208 150,554 424,411
Property bridging finance 165,766 - 16,537 182,303
Total 423,415 16,208 167,091 606,714
Loan loss provisions
Motor finance (13,071) (4,867) (89,344) (107,282)
Property bridging finance (751) - (1,899) (2,650)
Total (13,822) (4,867) (91,243) (109,932)
Amounts receivable (net)
Motor finance 244,578 11,341 61,210 317,129
Property bridging finance 165,015 - 14,638 179,653
Total 409,593 11,341 75,848 496,782
Stage 1: Stage 2: Stage 3:
Subject to Subject to Subject to
12 months lifetime lifetime Total
As at 31 January 2025 ECL ECL ECL
£'000 £'000 £'000 £'000
Amounts receivable (capital)
Motor finance 221,442 9,811 170,539 401,792
Property bridging finance 141,476 - 13,607 155,083
Total 362,918 9,811 184,146 556,875
Loan loss provisions
Motor finance (13,258) (2,904) (102,004) (118,166)
Property bridging finance (1,001) - (1,862) (2,863)
Total (14,259) (2,904) (103,866) (121,029)
Amounts receivable (net)
Motor finance 208,184 6,907 68,535 283,626
Property bridging finance 140,475 - 11,745 152,220
Total 348,659 6,907 80,280 435,846
9. AMOUNTS RECEIVABLE FROM CUSTOMERS (CONTINUED)
Analysis of loan loss provision and amounts receivable from customers
(capital)
Stage 1: Stage 2: Stage 3:
Subject to Subject to Subject to Total
12 months lifetime lifetime Provision
Analysis of Loan loss provisions ECL ECL ECL
£'000 £'000 £'000 £'000
At 1 February 2024 22,229 1,323 83,437 106,989
Net transfers and changes in credit risk (11,286) 1,434 26,699 16,847
New loans originated 5,204 642 12,878 18,724
Total impairment charge to income statement (6,082) 2,076 39,577 35,571
Amount netted off revenue for stage 3 assets - - 15,614 15,614
Utilised provision on write-offs (1,888) (495) (34,762) (37,145)
At 31 January 2025 14,259 2,904 103,866 121,029
Net transfers and changes in credit risk (5,854) 1,236 (915) (5,533)
New loans originated 7,463 1,687 11,949 21,099
Debt sale - - (2,534) (2,534)
Total impairment charge to income statement 1,609 2,923 8,500 13,032
Amount netted off revenue for stage 3 assets - - 14,676 14,676
Utilised provision on write-offs (2,046) (960) (39,204) (42,210)
Debt sale proceeds - - 3,405 3,405
At 5 February 2026 13,822 4,867 91,243 109,932
10. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share ("EPS") from continuing
operations is based on profit after tax of £23,713,000 (31.1.25:
£17,913,000).
The number of shares used in the Basic EPS calculation is the weighted average
number of shares in issue during the year of 12,150,760 (31.1.25: 12,150,760).
There is a total of nil dilutive share options in issue (31.1.25: nil) and
considering the appropriate proportion of these dilutive options the number of
shares used in the Diluted EPS calculation is 12,150,760 (31.1.25:
12,150,760).
11. PROVISIONS FOR LIABILITIES AND CHARGES
Group
5.2.26 31.1.25
Warranties Commission Forbearance Forbearance
£000 £000 £000 £000
At 1 February 2025 - - 2,272 -
Charge/(release) to income statement 596 1,794 (221) 2,736
Utilised - - (1,839) (464)
At 5 February 2026 596 1,794 212 2,272
Our motor finance subsidiary Advantage was included in the FCA's multi-firm
Cost of Living Forbearance Outcomes review in 2023 and as a result the FCA
concluded that enhancements were required to Advantage's approach to arrears
management and the application of forbearance. We provided for anticipated
associated exceptional potential customer remediation costs and external
support costs totalling £2.736m (see also note 11) of which £2.30m has so
far been incurred and £0.22m released leaving a provision of £0.21m carried
forward at 5 February 2026.
In addition, Advantage has recognised a provision of £1.79m related to the
FCA's final scheme rules on motor finance commissions, which was announced on
30 March 2026. The provision is determined by probability weighting several
scenarios and includes the costs of running the proposed scheme.
Finally during the period Advantage executed a debt sale of old written-off or
heavily provisioned customer agreements to an external third party. As part of
the agreement, as is customary, is a requirement to repurchase ineligible
accounts that were sold. Advantage has recognised a provision of £0.60m to
account for this risk.
There are no provisions for liabilities and charges at a company-only level.
12. RECONCILIATION OF OPERATING PROFIT TO NET CASH FROM OPERATING ACTIVITIES
5.2.26 31.1.25
£'000 £'000
Operating Profit 46,164 44,830
Tax paid (9,335) (4,817)
Exceptional Item - (2,736)
Depreciation on plant, property and equipment 481 482
Profit on disposal of plant, property and equipment - (14)
(Increase)/decrease in amounts receivable from customers (60,936) 27,092
(Increase)/decrease in trade and other receivables (98) 15
Increase/(decrease) in trade and other payables 1,537 (1,602)
Increase/(decrease) in accruals 398 (498)
Increase in provisions for other liabilities and charges 330 2,272
Movement in retirement benefit asset/obligations (43) (33)
Net cash (used in)/generated by operating activities (21,502) 64,991
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END PREEANLEADEKEFA
Copyright 2019 Regulatory News Service, all rights reservedRecent news on S&U
See all newsREG - S & U PLC - Preliminary Results
AnnouncementREG - S & U PLC - Notice of Results and Presentations
AnnouncementREG - S & U PLC - FCA Redress Proposals
AnnouncementREG - S & U PLC - Trading Statement and Notice of Results
AnnouncementREG - S & U PLC - Trading Statement
Announcement