S & U Regulatory News (SUS)

10 December 2010

Interim Management Statement

S&U, Britain's foremost niche home credit ("loansathome4u") and motor finance provider (Advantage Finance), today issues an interim management statement for the period from 1 August 2010 to 9 December 2010.

Home Credit

In an economic environment where levels of consumer confidence are low, job security is uncertain and Government benefits are being constrained, our customers much appreciate the flexibility, convenience and responsibility of our home credit service. During the period this has been reflected in improved debt quality, as collections increased by 2% over the same period last year on slightly lower book debt. However, our customers are not immune to economic sentiment which is translated into greater borrowing caution and a preference for shorter term loans. This, together with our traditionally prudent underwriting, has slightly restrained sales but nevertheless given us an excellent platform in terms of credit available for the Christmas period.

For similar reasons, whilst debt quality overall has improved, part of the period saw an increase in impaired customer numbers. This has been happily reversed in November and year to date our impairment is now 23.4% of revenue (2009: 22.1%). Our cash flow remains strong. Credit available is historically high and, notwithstanding the current disruptive weather, we anticipate a good Christmas.

Motor Finance

Although similar factors have seen a slight slowdown in transactions growth towards the end of the period, Advantage, our motor finance business, continues to head towards a record year. Debt quality and that of new customers in particular, is very strong; live accounts up over 12% on last year are therefore driving record cash generation. Impairment is stable and sensibly covered by prudent provisions. Finally, additions to our panel of high quality brokers have seen an increase in our market share and position us well for continued progress next year.

Funding and Capital

Funding and treasury are prudent and a conservative approach to managing the business continues to reap dividends in the form of lower gearing and net borrowing: the latter has reduced by over £2m in the period during which we paid the first interim dividend and group borrowings are now at the lowest level since 2001. As a result we have significant scope, within existing facilities, for acquisition and organic growth as opportunities arise.

Commenting on Group trading and outlook, Anthony Coombs, S&U Chairman, said:

"Whilst acknowledging the challenges posed by an uncertain economic recovery, and by the current chilly meteorological and consumer confidence climate, the Group continues to trade in line with market expectations. As always, at this period, much will depend upon Christmas and its aftermath, but our solid trading and financial base give every cause for cautious confidence. We will update shareholders on trading in the important Christmas period in a year end trading update on the 11th February 2011."

For further information, please contact:

S&U plc www.suplc.co.uk 

Anthony Coombs, Chairman 0121 705 7777

Financial Advisers, Sponsors and Brokers

Fred Walsh/Jamie Cameron Arden Partners 0207 614 5917

Media and Investor Relations

Will Swan/ Rebecca Whitehead Smithfield 020 7 360 4900