S&U - Edison Group

S&U (LSE: SUS)

Currency in GBP

Last close As at 05/12/2023

GBP22.30

▲ 70.00 (3.24%)

Market capitalisation

GBP271m

Overview
Price performance
Financials
Research
Thematics

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.

S&U continues to perform well. Momentum at Advantage has slowed, as the number of new motor loans fell 15% y-o-y, and we note that new lending was very strong in H223. Alongside weakening macroeconomic indicators, we have reduced our net receivables expectations, which is partially offset by increasing loan rates. We also expect cost inflation to continue to affect EBITDA. Our PBT assumptions for FY24 remain broadly unchanged at £40.9m, but we have lowered FY25 by 9% to £44.1m. Our dividend forecast is unchanged as the business generates a strong return on capital and is highly cash generative.

Latest Insights

Financials |
Update

16.10.23

S&U — Resilient despite macroeconomic uncertainty

Financials |
Update

14.08.23

S&U — Softer volumes but solid EBITDA growth expected

Financials |
Update

26.05.23

S&U — Results on track to meet FY24 expectations

Financials |
Outlook

31.03.23

S&U — Confident but remaining prudent in approach

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Sector

Financials

Equity Analyst

Robert Murphy

Managing Director, Financials and Investment Trusts

Armando Hoxha

Associate Analyst, Financials

Martyn King

Director, Financials

Key Management

Anthony Coombs

Executive Chairman of the Board
Chris Redford

FD

Balance Sheet

Forecast net cash (£m)

186.6

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	3.7	0.0	6.2
Relative	2.4	(0.6)	7.9
52 week high/low	2570.0p/2060.0p

Financials

Advantage and Aspen both performed well and broadly in line with our expectations. PBT in H124 was £21.4m, 2% above H123. Impairments were better than expected, particularly at Aspen, but costs were affected by the inflationary environment and a more than twofold increase in finance expenses. Profit after tax of £16.2m was 5% below H123 as the tax rate rose. The group declared a dividend of 35p/share, in line with H123. S&U also increased its funding facilities by £70m to £280m in anticipation of future growth. Graham Wheeler, CEO of Advantage, is to retire at the beginning of FY24 and will be replaced by Karl Werner, former deputy CEO of MotoNovo Finance.