Market Cap£265m

Last Close 2180p

S&U’s Advantage motor finance business lends on a simple HP basis to lower- and middle-income groups who may have impaired credit records restricting access to mainstream products. It has c 63,000 customers. The Aspen property bridging business has been developing since its launch in 2017.

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Investment summary

In S&U’s H123 total net receivables increased by 21% to £370m versus H122. Within this, Advantage motor finance receivables were up 13% to £280m and Aspen property bridging was up 56% to £90m. Revenue was £49.4m (+15%) and pre-tax profit increased by 5% to £20.9m; the smaller increase in profit reflected a lower-than-normal level of impairment charge at Advantage last year following previous exceptionally high pandemic-period charges. The group reported that credit quality remained strong and improving in terms of bad debt, default level and collections against due. Earnings per share increased by 6% to 140.7p and a first interim dividend of 35p (33p) was announced.

Y/E Jan
Revenue (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2021A 83.8 22.2 18.1 120.7 18.1 8.0
2022A 87.9 51.3 47.0 312.7 7.0 N/A
2023E 101.6 48.6 40.9 274.1 8.0 N/A
2024E 117.3 55.9 41.9 279.3 7.8 N/A
Industry outlook

While both businesses continue to perform well, S&U acknowledges the more challenging economic background with growing pressure on household incomes and the potential for a cooling in the housing market as rates rise. Advantage has adjusted its affordability criteria to reflect conditions, refined credit metrics and broadened its range of introducers supporting its ability to address opportunities in the market that offer attractive risk-adjusted yields. Aspen’s high net worth borrowers are showing resilience and it stands to benefit if some participants withdraw from the bridging market or act more cautiously.

Last updated on 30/11/2022
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Share price graph
Balance sheet
Forecast net cash (£m) 166
Forecast gearing ratio (%) N/A
Price performance
Actual 0.9 6.1 (20.7)
Relative* (5.5) 2.7 (22.9)
52-week high/low 2830.0p/1905.0p
*% relative to local index
Key management
Chris Redford FD
Anthony Coombs Executive Chairman of the Board