S&U — H122 ahead of expectation and outlook good

S&U (LSE: SUS)

Last close As at 20/04/2024

GBP18.50

−12.50 (−0.67%)

Market capitalisation

GBP225m

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Research: Financials

S&U — H122 ahead of expectation and outlook good

S&U’s focus on establishing customer relationships as well as refining its credit scoring in motor finance and providing high service levels in property bridging are paying off through strong collections (and lower than expected impairments) at Advantage and further strong loan and profit growth at Aspen Bridging.

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Financials

S&U

H122 ahead of expectation and outlook good

H122 results update

Financial services

1 October 2021

Price

2,817p

Market cap

£342m

Net debt (£m) at end July 2021

115.5

Shares in issue

12.1m

Free float

28%

Code

SUS

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

0.7

7.5

69.3

Rel (local)

2.0

6.3

36.9

52-week high/low

2,950p

1,640p

Business description

S&U’s Advantage motor finance business lends on a simple hire-purchase basis to lower- and middle-income groups who may have impaired credit records that restrict their access to mainstream products. It has c 62,000 customers. The Aspen property bridging business has been developing, following its launch in early 2017.

Next events

Q322 trading update

9 December 2021

Q422 trading update

10 February 2022

Analysts

Andrew Mitchell

+44 (0)20 3681 2500

Martyn King

+44 (0)20 3077 5745

S&U is a research client of Edison Investment Research Limited

S&U’s focus on establishing customer relationships as well as refining its credit scoring in motor finance and providing high service levels in property bridging are paying off through strong collections (and lower than expected impairments) at Advantage and further strong loan and profit growth at Aspen Bridging.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

01/21

83.8

18.1

120.7

90.0

23.3

3.2

01/22e

86.5

38.7

258.2

115.0

10.9

4.1

01/23e

95.2

38.0

253.1

127.0

11.1

4.5

01/24e

103.7

41.0

256.7

129.0

11.0

4.6

Note: *PBT and EPS are reported. EPS are diluted.

H122 results

S&U reported H122 revenue of £42.8m (unchanged from H121), pre-tax profit of £19.9m (versus £6.3m) and diluted EPS of 133p (41.9p). A first interim dividend of 33p (22p) was announced. As foreshadowed in the August trading update, a cautious approach to underwriting and strong collections benefited Advantage motor finance profits but the improvement was much bigger than we expected (pre-tax profit was £18.5m versus £6.1m in H121) as the loan-loss provision fell from £21.4m to £4.9m. Customer receivables were just above the year-end level at £248.8m (and below H121 £263.5m) with growth constrained by very strong collections, tighter underwriting and limitations on supply of vehicles in the market. Aspen property bridging reported a pre-tax profit of £1.5m (£0.1m) and with net new loans of £56.5m, mainly through participation in the government-backed Coronavirus Business Interruption Loan Scheme (CBILS), the loan book stood at £57.7m at the period end (H121 £34.1m).

Prospects bright

S&U’s outlook comments are positive, pointing to a brightening background for Advantage with the supply of used vehicles to the market likely to improve over time with strong demand still to be satisfied. Advantage should also continue to see benefits from a previous tightening of credit criteria and further refinements within the business. While the CBILS loan inflow will not be repeated, Aspen’s pipeline of new business is reported to be 15% ahead of budget at half year and with an enlarged sales team, new products and an increased maximum loan size, the prospects for growth remain good. We have increased our estimates with FY22 and FY23 EPS rising by 27% and 14% respectively and introduce a forecast for FY24.

Valuation

The shares have risen by more than 70% over the last year as concerns over the impact of the pandemic eased. This has left them trading on a current price to book multiple of 1.8x, in line with the 10-year average. A return on equity/cost of equity (ROE/COE) model indicates that at the current price the market is assuming an ROE of 16.5%, in line with our FY22 estimate. The shares are also supported by a prospective dividend yield of 4.1%.

H122 results

Exhibit 1 gives a summary of the results with key points highlighted below. Comparisons are with H121 unless stated.

S&U’s revenues were stable, within which motor finance revenues fell 6% on 9% lower average receivables and property bridging revenues were two and a half times above the H121 level on a 75% increase in the average loan book.

Total impairments fell by 66% with the key change being at motor finance reflecting the absence of the substantial forward-looking provisions made last year and a lower-than-normal rate of impairment this year. As a percentage of revenue, the charge was 12.6% in H122 compared with an average charge of 20.4% between FY16 and FY20 and the 52% seen in H121. As an alternative comparison, Provident Financial’s Moneybarn business had impairments equivalent to 29% of revenue in H121 (to end June) versus 56% in H120. Other cost of sales, which includes broker commissions, increased by 28% as the result of increased activity levels in both businesses. In motor finance the per-transaction cost at £861 was 3% lower than the prior year period reflecting work undertaken last year to contain costs. Administration costs increased by 21%, a figure that is boosted by the absence of a one-off VAT reclaim in H121 and the return of more normal staff bonuses in the current year. Finance expense was more than 10% lower, broadly in line with lower receivables. The result was a pre-tax profit, at £19.9m, more than three times the prior year level, with similar increases in net profit and EPS.

Reflecting this performance and an improving trading backdrop the board announced a 50% increase in the first interim dividend to 33p.

Exhibit 1: H122 results summary

£000 except where shown

(year-end January)

H121

H221

H122

sequential

% change

H122 vs H121

% change

New motor loans (number)

7,811

7,778

9,697

24.7

24.1

Motor finance receivables at period end

263,452

246,766

248,751

0.8

-5.6

Bridging loans at period end

18,454

34,144

57,666

68.9

212.5

Revenue

Motor finance

41,187

38,366

38,583

0.6

-6.3

Property bridging

1,640

2,568

4,230

64.7

157.9

Total

42,827

40,934

42,813

4.6

0.0

Impairments

Motor finance

(21,369)

(14,626)

(4,868)

-66.7

-77.2

Property bridging

(307)

(403)

(223)

-44.7

-27.4

Total

(21,676)

(15,029)

(5,091)

-66.1

-76.5

Other cost of sales

(7,146)

(7,118)

(9,125)

28.2

27.7

Administration expenses

(5,455)

(5,121)

(6,607)

29.0

21.1

EBITDA

8,550

13,666

21,990

60.9

157.2

Depreciation

(252)

(268)

(268)

0.0

6.3

Operating profit/loss

8,298

13,398

21,722

62.1

161.8

Finance expense

(1,989)

(1,579)

(1,778)

12.6

-10.6

Pre-tax profit

6,309

11,819

19,944

68.7

216.1

Tax

(1,225)

(2,257)

(3,790)

67.9

209.4

Net profit

5,084

9,562

16,154

68.9

217.7

EPS fully diluted (p)

41.9

78.8

133.0

68.8

217.4

Dividend per share (p)

22.0

68.0

33.0

50.0

Source: S&U, Edison Investment Research

Looking more closely at the Advantage motor finance result, the rate of transactions recovered progressively during the period following the easing of lockdown restrictions: increasing by 24% from H121 and 25% sequentially to nearly 9,700. Nevertheless, the bounce back was more muted than some industry expectations with pent-up demand tempered by the availability of second-hand stock and the sharp price increases that followed. Bottlenecks in new car production contributed to the supply shortage which has had a knock-on effect through the different tiers of the used market. The higher-mileage lower cost cars which Advantage typically finances have seen a slower improvement in volumes than the nearly new segment. This has made for a competitive market with a lower percentage take-up of finance offers than previously.

Positively, the increase in used car prices did contribute to an increase in the average loan size of 10% to £7,050. While this could be seen as increasing risk somewhat, if prices correct with a better-balanced supply, Advantage is alert to this and emphasises that its close attention to affordability criteria should mitigate the risks here.

On affordability, Advantage notes that it has continued to work on improving affordability assessment and supporting customers by implementing IT systems to ease payments while providing personal attention to customers facing difficulties. This helps to reduce the number of repossessions and guides customers to return to regular payments.

Exhibit 2 is drawn from a table S&U provides to illustrate changes in the payment profile of Advantage customers. In these figures customers on a payment holiday were counted as in arrears to illustrate the impact on cash collections (in the accounts they are not counted as part of Stage 3 or credit-impaired provisioning). By end July this year only 48 customers were on a payment holiday and currently there are none. Looking at the percentage of receivables where payments are up to date, this fell by 18.5 percentage points between FY20 and H121 due to the pandemic but improved by 8.2 percentage points to 67.6% by H122 reflecting economic recovery as lockdown restrictions eased and Advantage’s own work with customers, as noted above.

Exhibit 2: Motor finance receivables payments analysis

% unless shown

FY20

H121

FY21

H122

Up to date

77.9

59.4

60.8

67.6

Monthly payments past due – up to:

1

9.0

5.3

4.5

4.5

2

3.9

5.1

3.3

2.5

3

2.4

9.9

7.8

5.9

4

1.5

8.1

5.1

3.5

5

0.9

4.4

3.5

2.4

6

0.6

2.0

2.9

2.6

Over 6

2.0

4.1

10.1

9.4

Legal and debt recovery

1.8

1.8

1.9

1.7

Total net receivables

100.0

100.0

100.0

100.0

Total net receivables (£m)

280.8

263.5

246.7

248.8

Source: S&U, Edison Investment Research. Note: Payment holidays here are shown as arrears.

Advantage has continued to fine tune its risk/reward positioning in the market and, while it remains conservative in its credit criteria, it has now taken measured steps back into higher risk segments of the market such as the self-employed and tiers D and E using modified scorecards to contain risk. At the same time, it has introduced more competitive products for near prime tiers A and A+ which will generate a lower yield but, prospectively, an attractive risk-adjusted yield. The average customer credit score increased from 867 for FY20 to 905 for H122. In conjunction with this the flat annual interest rate for the same periods fell from 17.7% to 16.2%. Prospectively, the trend in average credit score and interest rate will depend on the take up from the different tiers and the mix is likely to see continued change as Advantage adapts to changing market conditions and system refinements.

Other initiatives at Advantage include enhancing its digital marketing, work on attracting more repeat customers (currently c 5%) and developing affinity partnerships with prime lenders.

Turning to Aspen Bridging, the business carried out a record 66 transactions in the first half (25 in H121) bolstered by CBILS participation. This has given the business exposure to larger borrowers, lending on high quality properties thereby extending and improving Aspen’s customer network. To support the growing scale of the business the sales team has been increased and new products with revised rates and an increased maximum loan size have been introduced. While S&U seeks to develop the business to a size where it makes a significant profit contribution the emphasis on loan quality remains in place and at the period end only one loan was in default.

Background and outlook

In this section we update background data we track as indicators for the Advantage and Aspen businesses starting with economic and industry figures relevant for the used car finance market.

Exhibit 3 shows independent forecasts for UK GDP and unemployment as collected by the UK Treasury in September. Compared with the July data shown in our last note, movements are very small. Unemployment expectations remain moderate compared with the second half of 2020 when the Q421 forecast peaked at c 7% (versus the latest figure of 5.3%). This should be positive for Advantage as unemployment is an important sensitivity for credit risk.

Exhibit 3: Comparison of independent economic forecasts for the UK (September)

%

Average

Average of new forecasts

Low

High

GDP growth

2021

6.9

6.8

6.0

8.2

2022

5.5

5.5

3.5

8.2

Labour Force Survey unemployment rate Q4

2021

5.3

5.2

4.5

5.8

2022

4.8

4.7

4.2

6.0

Source: HM Treasury

Exhibit 4 shows that consumer confidence has staged a major recovery, albeit with a slight recent softening. Uncertainties remain and the influence of COVID-19, supply bottlenecks and inflation fears is likely to fluctuate, but for the moment expectations remain centred on a progressive normalisation in economic activity. Exhibit 5 shows that the unemployment rate has moved up since early 2020 but appears to be flat or slightly lower on the latest, provisional, readings. Redundancies, a more immediate measure, saw a very sharp spike as the pandemic took hold, but fell rapidly and have remained on a downward trend on recent figures.

Exhibit 4: GfK UK consumer confidence indicator

Exhibit 5: UK redundancies and unemployment

Source: Refinitiv (last value September 2021)

Source: ONS (last value July 2021)

Exhibit 4: GfK UK consumer confidence indicator

Source: Refinitiv (last value September 2021)

Exhibit 5: UK redundancies and unemployment

Source: ONS (last value July 2021)

We now turn to data on used car transactions and used car finance. Exhibit 6 shows the sharp drop in used car transactions in April 2020. Volume recovered very well following the initial lockdown, albeit with a further dip following subsequent lockdowns. April to June 2021 saw a return to activity levels close to pre-pandemic levels as represented here by the 2019 monthly figures, although the April bounce was smaller than industry participants had thought possible. Exhibit 7 shows a similar pattern in used car finance.

Exhibit 6: Monthly used car transactions 2019–21

Exhibit 7: Used car finance through dealerships

Source: SMMT. Note: Last value June 2021.

Source: Finance and Leasing Association. Note: Last value July.

Exhibit 6: Monthly used car transactions 2019–21

Source: SMMT. Note: Last value June 2021.

Exhibit 7: Used car finance through dealerships

Source: Finance and Leasing Association. Note: Last value July.

Used car prices (see Exhibit 8), were buoyant in 2020 and have seen a sharp step up in the latest data for July and August this year, with strong consumer demand and reduced supply pushing prices up. The ONS data are supported by a similarly marked strength in the Autotrader retail price index. Advantage’s exposure to auction prices for repossessed cars is moderated by the relatively low value of vehicles it finances, but rising prices are generally favourable (unless they are a precursor to a correction, as mentioned earlier).

Exhibit 8: Second-hand car prices (CPI index)

Source: ONS (last value August 2021)

Looking at the background for Aspen Bridging, Exhibit 9 shows the number of UK non-residential and residential transactions, with residential being most relevant for Aspen. Both saw sustained improvement following the initial lockdown in 2020 with residential data fluctuating sharply as buyers sought to take advantage of the temporary increase in the stamp duty land tax nil rate band. On a longer view, S&U sees an imbalance between supply and demand for good-quality homes as a favourable backdrop for its customers who are refurbishing and developing properties. As a small business, Aspen should also have significant scope for expansion now that it is more established in the market. As mentioned earlier, the CBILS lending has given useful access to larger and more established developer customers as well as expanding the loan book in the short term.

The outlook for both businesses therefore appears promising in terms of market background while, as mentioned in the discussion of the results, both have been taking internal actions to improve their operations. Key sensitivities for the businesses should also be considered including the macroeconomic background, the competitive environment (both car finance and bridging markets have periodically been subject to new entrants), changes in funding costs and any adverse developments in the pandemic.

Exhibit 9: UK property transactions (seasonally adjusted)

Source: HM Revenue & Customs. Note: Figures for June to August 2021 are provisional. SA = seasonally adjusted.

Financials

Changes in the key numbers from our estimates following the H122 results are shown in Exhibit 10. Our revenue assumptions for FY22 and FY23 are increased by 2.5% and 4.7% respectively, while lower impairment charge assumptions mean there is a much larger increase in pre-tax profit and earnings per share estimates. We have introduced an estimate for FY24 to provide a more normalised year in terms of impairment provisioning; profit in this year moves more in line with our assumed growth in customer receivables. At the earnings per share level FY24 is affected by the introduction of a significantly higher UK corporate tax rate (25%).

Exhibit 10: Changes to estimates

Year-end
January

Revenue (£m)

PBT (£m)

EPS (p)

DPS (p)

Old

New

Change (%)

Old

New

Change (%)

Old

New

Change (%)

Old

New

Change (%)

FY22e

84.4

86.5

2.5%

30.6

38.7

26.5%

204.2

258.2

26.4%

100.0

115.0

15.0%

FY23e

90.9

95.2

4.7%

33.2

38.0

14.3%

221.7

253.1

14.2%

110.0

127.0

15.5%

FY24e

103.7

N/A

41.0

N/A

256.7

N/A

129.0

N/A

Source: Edison Investment Research

The next table gives details of our estimate assumptions. In the motor business our assumed receivables growth for FY22 is now more modest following the first half outcome but we look for stronger growth in FY23 as we assume used car supply normalises. Then we use a more conservative 5% growth rate for FY24 (a more tentative, illustrative estimate at this stage). Following the unusually low impairment rate in H122 we look for an increase in FY23 and FY24 to 18.5% and 20.5% of revenue respectively.

We assume bridging receivables will reach £68m by the end of the current financial year and then rise to £97m by end FY24. In that year, on our estimates, Aspen would be contributing over £5m – or more than 10% of group pre-tax profit.

Exhibit 11: Estimate summary

£000 except where shown

(year-end January)

FY21

FY22e

FY23e

FY24e

% change FY22

% change FY23

% change FY24

Number of new motor loans

15,589

20,197

22,900

22,600

29.6

13.4

-1.3

Motor finance receivables at period end

246,766

253,562

284,005

298,165

2.8

12.0

5.0

Bridging loans at period end

34,144

68,000

80,000

97,000

99.2

17.6

21.3

Total customer receivables

280,910

321,562

364,005

395,165

14.5

13.2

8.6

Revenue

Motor finance

79,553

76,599

82,295

88,294

-3.7

7.4

7.3

Property bridging

4,208

9,885

12,863

15,444

134.9

30.1

20.1

Total

83,761

86,484

95,158

103,738

3.3

10.0

9.0

Impairments

Motor finance

(35,995)

(10,570)

(15,236)

(18,100)

-70.6

44.1

18.8

Property bridging

(710)

(1,128)

(2,058)

(2,471)

58.8

82.5

20.1

Total

(36,705)

(11,698)

(17,294)

(20,571)

-68.1

47.8

18.9

Other cost of sales

(14,264)

(18,922)

(21,559)

(21,675)

32.7

13.9

0.5

Administration expenses

(10,576)

(12,896)

(13,132)

(14,316)

21.9

1.8

9.0

EBITDA

22,216

42,968

43,173

47,176

93.4

0.5

9.3

Depreciation

(520)

(527)

(487)

(451)

1.4

-7.7

-7.3

Operating profit/loss

21,696

42,440

42,686

46,724

95.6

0.6

9.5

Finance expense

(3,568)

(3,721)

(4,727)

(5,680)

4.3

27.0

20.2

Pre-tax profit

18,128

38,720

37,959

41,045

113.6

-2.0

8.1

Tax

(3,482)

(7,357)

(7,212)

(9,861)

111.3

-2.0

36.7

Net profit

14,646

31,362

30,747

31,184

114.1

-2.0

1.4

EPS fully diluted (p)

120.7

258.2

253.1

256.7

113.9

-2.0

1.4

Dividend per share (p)

90.0

115.0

127.0

129.0

27.8

10.4

1.6

Source: Edison Investment Research

The segmental cash flow analysis in the table below highlights how Advantage remained cash generative in H122 even as advances began to increase following the contraction seen in FY21. Here the strength in collections performance was an important factor. Aspen Bridging’s high level of advances resulted in a further increase in cash outflow to £22.3m although this increase was tempered by a sharp rise in collections because of early repayments of some CBILS loans. At the group level this left an outflow of £16.3m and net debt of £115.1m and net debt/equity at 61%. Funding facilities of £180m provide headroom for significant growth in lending.

Exhibit 12: Segmental cash flow analysis

£m

H121

H221

H122

Comments on H122 versus H121

Motor Finance

Advances

(50.7)

(51.9)

(68.3)

+35% with progressive revival in transactions during the period

Monthly collections

66.7

71.8

75.1

Up 13% on improved repayments and lower bad debt

Settlements/reloans

13.9

14.1

16.7

Debt recovery

7.2

6.6

8.4

Increased but lower than expected level of repossessions

Overheads/interest

(15.0)

(12.2)

(14.7)

Corporation tax

(4.1)

(2.1)

(2.5)

Dividend

(10.5)

(2.2)

(7.0)

Motor Finance (outflow)/inflow

7.5

24.1

7.7

Strong collections outpace advances

Property bridging

Gross advances

(11.3)

(32.2)

(64.4)

Includes £35m in CBILS

Retention collections

1.4

3.8

7.9

Collections

8.6

6.6

34.1

Includes some early high value CBILS repayments

Debt recovery

5.4

8.2

2.8

Overheads/interest

(1.5)

(1.3)

(2.6)

Corporation tax

(0.2)

0.0

(0.1)

Property bridging (outflow)/inflow

2.4

(14.9)

(22.3)

Investment in expanding the loan book

Other (outflow)/inflow

(0.1)

0.0

(1.7)

Group (outflow)/inflow

9.8

9.2

(16.3)

Opening net debt

117.8

108.0

98.8

Closing net debt

108.0

98.8

115.1

Good headroom to funding facilities of £180m

Source: S&U, Edison Investment Research. Note: Net debt is shown excluding lease liability.

Valuation

P/E comparisons with peers remain difficult to interpret given differences in business mix and significant changes in provisioning levels following the initial impact of COVID-19. We therefore frame valuation using our ROE/COE calculations and the price to book ratio. If we assume a COE of 10% and long-term growth of 2%, then the share price at the time of writing (2,817p) would be consistent with an ROE of 16.5%, which is in line with our estimate for FY22.

Looking at the history of the price to book ratio (Exhibit 13) the current level of 1.8x is in line with the 10-year average following a period of strength in the shares (up 72% over 12 months).

Exhibit 13: 10-year price to book value history

Source: Edison Investment Research

Exhibit 14: Financial summary

£'000s

2018

2019

2020

2021

2022e

2023e

2024e

Year end 31 January

PROFIT & LOSS

Revenue

 

 

79,781

82,970

89,939

83,761

86,484

95,158

103,738

Impairments

(19,596)

(16,941)

(17,220)

(36,705)

(11,698)

(17,294)

(20,571)

Other cost of sales

(17,284)

(15,751)

(19,872)

(14,264)

(18,922)

(21,559)

(21,675)

Administration expenses

(9,629)

(10,763)

(12,413)

(10,576)

(12,896)

(13,132)

(14,316)

EBITDA

 

 

33,272

39,515

40,434

22,216

42,968

43,173

47,176

Depreciation

 

 

(294)

(414)

(450)

(520)

(527)

(487)

(451)

Op. profit (incl. share-based payouts pre-except.)

 

 

32,978

39,101

39,984

21,696

42,440

42,686

46,724

Exceptionals

0

0

0

0

0

0

0

Non recurring items

0

0

0

0

0

0

0

Investment revenues / finance expense

(2,818)

(4,541)

(4,850)

(3,568)

(3,721)

(4,727)

(5,680)

Profit before tax

 

 

30,160

34,560

35,134

18,128

38,720

37,959

41,045

Tax

(5,746)

(6,571)

(6,252)

(3,482)

(7,357)

(7,212)

(9,861)

Profit after tax

 

 

24,414

27,989

28,882

14,646

31,362

30,747

31,184

Average Number of Shares Outstanding (m)

12.1

12.1

12.1

12.1

12.1

12.1

12.1

Diluted EPS (p)

 

 

202.4

232.0

239.4

120.7

258.2

253.1

256.7

EPS - basic (p)

 

 

203.8

233.2

239.6

120.7

258.3

253.3

256.9

Dividend per share (p)

105.0

118.0

120.0

90.0

115.0

127.0

129.0

EBITDA margin (%)

41.7%

47.6%

45.0%

26.5%

49.7%

45.4%

45.5%

Operating margin (before GW and except.) (%)

41.3%

47.1%

44.5%

25.9%

49.1%

44.9%

45.0%

Return on equity

16.7%

17.6%

16.8%

8.1%

16.5%

14.8%

13.9%

BALANCE SHEET

Non-current assets

 

 

181,015

185,383

197,806

173,413

205,170

228,083

247,250

Current assets

 

 

84,178

95,430

108,275

111,426

121,109

142,403

154,166

Total assets

 

 

265,193

280,813

306,081

284,839

326,279

370,486

401,416

Current liabilities

 

 

(7,927)

(6,722)

(7,424)

(5,309)

(6,261)

(6,724)

(7,052)

Non current liabilities inc pref

(104,450)

(108,724)

(119,183)

(98,501)

(119,878)

(146,798)

(161,718)

Net assets

 

 

152,816

165,367

179,474

181,029

200,141

216,964

232,646

NAV per share (p)

1,276

1,375

1,493

1,490

1,648

1,786

1,916

CASH FLOW

Operating cash flow

 

 

(43,418)

10,530

4,946

32,940

(7,399)

(10,955)

667

Net cash from investing activities

(1,040)

(785)

(265)

(1,112)

(302)

(300)

(300)

Dividends paid

(11,377)

(13,080)

(14,461)

(13,098)

(12,268)

(13,962)

(15,540)

Other financing (excluding change in borrowing)

12

14

14

2

1

0

0

Net cash flow

 

 

(55,823)

(3,321)

(9,766)

18,732

(19,968)

(25,216)

(15,173)

Opening net (debt)/cash

 

 

(49,167)

(104,990)

(108,311)

(118,077)

(99,345)

(119,313)

(144,530)

Closing net (debt)/cash

 

 

(104,990)

(108,311)

(118,077)

(99,345)

(119,313)

(144,530)

(159,702)

Source: S&U accounts, Edison Investment Research. Note: EPS on a reported basis


General disclaimer and copyright

This report has been commissioned by S&U and prepared and issued by Edison, in consideration of a fee payable by S&U. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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United States

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Frankfurt +49 (0)69 78 8076 960

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60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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United Kingdom

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United States of America

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by S&U and prepared and issued by Edison, in consideration of a fee payable by S&U. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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