S&U - Edison Group

S&U (LSE: SUS)

Currency in GBP

Last close As at 20/09/2023

GBP22.80

▲ 65.00 (2.93%)

Market capitalisation

GBP269m

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.

Having already provisioned for margin compression in our forecast prior to the update, the reduced volume outlook has led us to trim our FY24 revenue and PBT estimates to £116.8m and £41.4m, from £119.3m and £42.9m respectively. Our FY25 estimates remain broadly unchanged, which results in a solid result this year coupled with an attractive dividend yield and a return to stronger growth in FY25.

Latest Insights

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

Financials |
Update

10.02.23

S&U — FY23 results set to meet expectations

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Sector

Financials

Equity Analyst

Robert Murphy

Managing Director, Financials and Investment Trusts

Key Management

Anthony Coombs

Executive Chairman of the Board
Chris Redford

FD

Balance Sheet

Forecast net cash (£m)

210.5

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	0.0	(1.3)	11.2
Relative	(5.6)	(3.0)	4.6
52 week high/low	2570.0p/1905.0p

Financials

S&U held a cautious approach to new lending in H124, emphasising higher-quality customers and avoiding competition directly on price. Consequently, net receivables were 5% below our expectations in H124. Encouragingly, S&U has experienced a rise in transactions and new customer pipeline in the past two months in the Advantage motor business, but weakening consumer confidence, higher interest rates and paydowns are likely to curtail the usual rate of growth in Aspen for FY24. Despite this, impairments and arrears are below budget, which should provide some resilience to the net interest margin. We have marginally lowered our estimates for FY24 and FY25 but still expect EBITDA growth of 16% and 15%, respectively.