REG - S & U PLC - Trading Statement

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RNS Number : 9865E  S & U PLC  20 May 2026

20(th) May 2026

 

S&U plc

    ("S&U" or "the Group")

 

 TRADING STATEMENT

 

S&U PLC, the specialist motor and property financier, today issues its
trading update for the period 6(th) February 2026 to 30(th) April 2026.

 

As was seen in our latest annual report published on May the 13(th), the
turnaround in our fortunes which began last year continues apace. Trading in
the first quarter of 2026/27 remains healthily above budget. This despite
Trump's misadventures in the Middle East and Starmer's in the UK.

 

By contrast, S&U is building on success. Group profitability for the
period is ahead of both last year and budget. Although transaction growth at
both businesses has slowed during the period, unsurprisingly given consumer
confidence and economic growth forecasts, applications for finance at both
Advantage and Aspen, our motor and property finance businesses remain strong.

 

In turn this has meant improved net interest margins, especially at Advantage
where this quarter, average lending rates are up by almost a fifth on Q1 last
year to 15.3%. This trend has been matched by a very good performance on
credit quality with repayment rates at Advantage averaging 92.4% against 89.1%
last year. Collections received at Advantage in the quarter were £43.1m.

 

At Aspen, a recent upturn in applications, as traders returned to the market,
portends a busier second quarter following a slow start to the financial year,
as fears about the path of interest rates persist. Equally significant is the
high quality of Aspen's loan book and the fact that capital receivables are
now at £191m against £162m last year. This is characterised by a slightly
longer-term profile, at higher blended margins.

 

Finally, the political antics mentioned above apart, the machinery of
government and regulation in the UK appears to be operating in a calmer and
more pragmatic way. Although the FCA's redress proposals for motor finance
commission are now subject to judicial review, and are administratively
cumbersome, they are likely to have little or no bearing on Advantage's future
profitability. Government is slowly realising that future fiscal golden eggs
from the finance industry mean that the goose cannot be taken for granted.

 

Advantage Finance
 

Advantage continues a powerful recovery in sales volumes with transactions
this quarter up 63% on Q1 last year, despite recent downgrades to UK projected
GDP. This should allow Advantage to slightly increase its current 10% share of
the UK used-car finance market and reach its targeted 20% net receivables
growth rate this year. These capital receivables are currently £392m against
£348m last year. The 57,666 accounts thus financed are proving their worth in
terms of affordability, reliable repayment and customer satisfaction. So far
this year, bad debt write-offs have fallen by nearly 41%, as our excellent
customer relations teams rediscover their poise after the regulatory
interventions of the last two years. Customer repayments are 8% up on last
year and Trustpilot customer satisfaction scores remain at 4.9 out of 5.

 

This welcome progress has been enabled by introducing a new credit scorecard
which allows more detailed lending criteria to promote both growth and
improved quality. The AI now embedded in

 

 

 

customer relations is improving productivity and maintaining responsible
compliance with Consumer Duty.

 

Finally, the loyalty and expertise of our people at Advantage has been
recognised by a plethora of nominations at the forthcoming credit industry
awards. That our people have been nominated in no less than eight categories,
is just recognition of Advantage's splendid workforce.

 
Aspen Bridging
 

Given the becalmed UK residential market and the constant attacks on the UK
rental market by a supposedly growth focused government, Aspen has produced
credible results for the first quarter. Profit before tax is on budget and
equal to last year's. In addition, recent weeks have seen a distinct upturn in
both applications and deal numbers. Moreover, the quality of Aspen's book and
of its customary underwriting is now coming into its own. Thus, the quality of
Aspen's £190m of capital receivables is evidenced by only 15 of its 246 live
accounts being beyond term. On this firm footing, we anticipate another record
year from Aspen.

 

Given the growing proportion of two- and three-year loans offered by Aspen
which appeal to ambitious landlords and property refurbishers, the quality of
monthly repayments is crucial. Hence it is extremely promising that these
Bridge-to-let collections and fees have reached £1m in the first quarter.

 
Funding

 

Borrowing for the Group for the first quarter ended at £252m, comfortably
within current facilities of £330m. However, projected net receivables growth
of 20% for each of the next three years may require an additional c£300m over
that period. As a result, S&U's securitisation project is now being
concluded. This will deliver medium-term funding at lower rates and equal
flexibility. Terms have now been agreed, and we are about to commence the
legal process with our selected financial partners. The details will be
announced shortly.

 

 Commenting on the Group's performance and outlook, S&U Chairman, Anthony
Coombs, said:

"At this stage in the year, it is usually unwise to attempt year end
predictions, particularly in such a fluid political and economic climate.
Suffice to say that confidence in our aims for double digits growth and return
on equity is exemplified by the resources we plan to make available, and the
abilities of our people in achieving them."

 

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, Harry Handyside, Aqsa Ali
 Broker                                        Peel Hunt LLP  020 7418 8900

 Andrew Buchanan, Rob Parker
 Broker                                        Berenberg      020 3207 7800

 James Felix, John Welch, Daniel Gee-Summons

 

 

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