S&U - Edison Group

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.

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 |
Outlook

22.04.24

S&U — PBT ahead, encouraging volume trends

Financials |
Update

29.02.24

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

Financials |
Update

18.12.23

S&U — Maintaining cautious approach

Financials |
Update

16.10.23

S&U — Resilient despite macroeconomic uncertainty

Sector

Financials

Equity Analyst

Managing Director, Financials and Investment Trusts

Martyn King

Director, Financials

Key Management

Anthony Coombs

Executive Chairman of the Board
Chris Redford

FD

Balance Sheet

Forecast net cash (£m)

268.5

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	5.5	(9.5)	(20.1)
Relative	4.6	(15.0)	(21.3)
52 week high/low	2570.0p/1800.0p

Financials

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as additional regulatory cost, the company looks well positioned to deliver steady growth from here on, especially if interest rates fall in the latter half of 2024 (which we have not included in our model). Diluted EPS was 209.3p (FY23: 277.5p) and DPS was 120p (FY23:133p). We have raised FY25e EPS estimate by 2.4% to 230p and introduced FY26e EPS at 263p.

Y/E Jan	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (fd) (p)	P/E (x)	P/CF (x)
2023A	102.7	49.4	41.4	277.5	6.9	N/A
2024A	115.4	49.2	33.6	209.3	9.1	N/A
2025E	133.2	57.8	37.3	230.0	8.3	N/A
2026E	145.7	65.7	42.6	263.0	7.3	N/A

Research

Update

Financials

29.09.22

S&U — Experienced specialist lender performs well

Update

Financials

11.08.22

S&U — H1 growth ahead of expectations

Financials

Update

S&U — Positive trading update

Update

Financials

30.05.22

S&U — Positive update despite macro uncertainties

Outlook

Financials

01.04.22

S&U — Seeing recovery and adapting to grow

Update

Financials

11.02.22

S&U — FY22 profit beat and positive outlook

Update

Financials

10.12.21

S&U — Upbeat update

Update

Financials

01.10.21

S&U — H122 ahead of expectation and outlook good

Update

Financials

11.08.21

S&U — Reduced impairments underpin increased profit

Update

Financials

24.05.21

S&U — Strong start to the year

Outlook

Financials

08.04.21

S&U — Ready to meet unlocked demand

Update

Financials

15.02.21

S&U — Planning for a significant rebound

Update

Financials

14.12.20

S&U — Looking towards a resumption of growth

Update

Financials

07.10.20

S&U — Adapting to the new environment

Update

Financials

12.08.20

S&U — Still in profit and tentative positive trends

Update

Financials

11.06.20

S&U — Covid-19 impacts but ready to resume progress

Update

Financials

16.04.20

S&U — Sound liquidity, positive near-term cash flow

Update

Financials

12.02.20

S&U — Encouraging year-end update

Update

Financials

11.12.19

S&U — Resilient amid softer sentiment and economy

Update

Financials

30.09.19

S&U — Advantage growth resumes

Update

Financials

12.08.19

S&U — Trading update confirms positive trends

Flash note

Financials

24.05.19

S&U — Encouraging update

Outlook

Financials

04.04.19

S&U — Adjusting to prevailing conditions

Update

Financials

07.02.19

S&U — Lending discipline tempers pace of growth

Update

Financials

10.12.18

S&U — Trading broadly in line

Update

Financials

27.09.18

S&U — Positioning for sustainable growth

Outlook

Financials

12.04.18

S&U — Set for further growth with tighter credit criteria

Update

Financials

12.02.18

S&U — Good loan growth and credit experience on track

Update

Financials

08.12.17

S&U — Positive trend in quantity and quality of lending

Update

Financials

05.10.17

S&U — Strong loan growth continues

Outlook

Financials

07.04.17

S&U — Strong growth, cautious approach

Update

Financials

13.02.17

S&U — Update 13 February 2017

Update

Financials

15.12.16

S&U — Update 15 December 2016

Update

Financials

12.10.16

S & U — Update 12 October 2016

Update

Financials

20.05.16

S&U — Update 20 May 2016

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