S & U Regulatory News (SUS)

21st May 2015

S&U plc ("S&U" or "the Group)

Interim Management Statement

S&U, Britain's foremost specialist motor finance and home credit provider, issues an IMS for the period from the 2nd February 2015 to the 20th May 2015 ahead of its AGM being held later today.

Group trading continues to be satisfactory. Advantage Finance, our motor finance business, maintains record debt quality and anticipates meeting transaction targets this year. Whilst sales in our home credit business have reflected a more cautious climate prior to the General Election and full Financial Conduct Authority ("FCA") authorisation, weekly collections remain strong on conservative underwriting standards.

Cash generation remains good in both businesses and overall Group profitability is comfortably ahead of last year.

Funding and Capital

Increased cash generation from our home credit business has partly off-set a lower year on year investment in our maturing motor finance business. Hence current head room remains substantial, and allows the continued expansion of our motor finance business to meet an expected increase in summer and autumn demand particularly following the General Election.

This strong treasury position has been buttressed during the period by the confirmation of further medium term facilities from HSBC, our principal bankers. Nevertheless, to achieve our objective of diversifying long-term funding, we are in constructive and continuing negotiations with both the Prudential Regulatory Authority ("PRA") and Financial Conduct Authority ""("FCA") with a view to obtaining a Deposit Taking Licence.

Regulatory Environment

Our Home Credit business has been preparing its application for full FCA authorisation. We anticipate that the FCA will adopt a proportionate and co-operative regulatory approach and that the preparations made for authorisation will further improve the quality of our customer service and the operational efficiency of our representatives. Advantage Finance will similarly embark on an application for full authorisation early next year and looks forward to continuing a positive and pragmatic relationship with the Regulator.

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

"Although forthcoming regulatory changes and a pause in consumer appetite pending the General Election have made sales less buoyant than the recent past, Group collections, debt quality and our treasury position remain very strong. We look forward to yet another successful year."

For further information, please contact: