S&U (LSE: SUS)

Last close As at 19/04/2024

GBP18.50

−12.50 (−0.67%)

Market capitalisation

GBP225m

S&U’s Advantage motor finance business lends on a simple HP basis to lower- and middle-income groups that may have impaired credit records restricting access to mainstream products. It has c 65,000 customers. The Aspen property bridging business has been developing since its launch in 2017.

Finance applications at Advantage remain robust, but loan advances in the period were 7% lower than last year as management exercises caution in its lending approach. Advantage announced that its relationship with the FCA, regarding its industry-wide review into customer forbearance and affordability, has deepened. It has since made preventative changes to its collection and repossession processes. Positively, the FCA has approved the appointment of Karl Werner as CEO of Advantage, succeeding Graham Wheeler.

Latest Insights

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Financials | Update

S&U — Impairments drag FY24 PBT, moderation in FY25

Financials | Update

S&U — Maintaining cautious approach

Financials | Update

S&U — Resilient despite macroeconomic uncertainty

Financials | Update

S&U — Softer volumes but solid EBITDA growth expected

Sector

Financials

Equity Analyst

Rob Murphy

Managing Director, Financials and Investment Trusts

Martyn King

Martyn King

Director, Financials

Key Management

  • Anthony Coombs

    Executive Chairman of the Board

  • Chris Redford

    FD

Balance Sheet

Forecast net cash (£m)

220.8

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 1.7 (10.2) (20.9)
Relative 0.0 (14.6) (20.8)
52 week high/low 2570.0p/1800.0p

Financials

In its trading update for December 2023 to end January 2024, S&U announced that group PBT will fall 10–15% below consensus of c £38m, as lower collection rates in Advantage of 90% (H123: 94%) prompted an increase in provisions. Management expects the collection rate to partly recover in the following months. Aspen continues to grow steadily, with net receivables just over £130m (FY23: £114m), and has now achieved a record £500m in gross lending since the company’s inception. Encouragingly, credit quality remains robust. Elevated borrowing, at £224m, alongside higher base rates have consequently doubled S&U’s interest payments to £15.1m (FY23: £7.5m). We have lowered our FY24 and FY25 PBT estimates by 12% and 8%, respectively.

Y/E Jan Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 87.9 51.3 47.0 312.7 5.9 N/A
2023A 102.7 49.4 41.4 277.5 6.7 N/A
2024E 113.5 48.7 33.0 206.5 9.0 N/A
2025E 129.1 55.2 36.4 224.6 8.2 N/A

Research

Update

Financials

S&U — Softer volumes but solid EBITDA growth expected

Update

Financials

S&U — Results on track to meet FY24 expectations

Outlook

Financials

S&U — Confident but remaining prudent in approach

Update

Financials

S&U — FY23 results set to meet expectations

Update

Financials

S&U — Positive trading update

Update

Financials

S&U — Experienced specialist lender performs well

Update

Financials

S&U — H1 growth ahead of expectations

Update

Financials

S&U — Positive update despite macro uncertainties

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