S & U Regulatory News (SUS)

5 August 2015

S&U plc

("S&U", "the Company" or "the Group")

HALF YEAR UPDATE AND NOTICE OF RESULTS

Further to the successful conclusion of a General Meeting of shareholders held on August 3 2015, and completion of the disposal of its Home Credit division Loansathome4u yesterday, S&U PLC issues its trading update for the six months to 31 July 2015.

Motor finance

Advantage Finance continues to trade at record levels of both quality and quantity. Gross receivables have just reached £200 million for the first time. Transaction volumes cumulatively this year are slightly down on the record levels in H1 14 but have picked up in recent weeks and the Board believes should exceed record annual budgets. Refinements to its industry leading underwriting capabilities are continuously being made and have provided the platform for record levels of collections and customer service. This has and is being reflected in profitability.

Home Credit

Loansathome4u has again demonstrated the consistency of performance and debt quality which has characterised it over the past 77 years. Although sales are around 9% down on the record level of last year, profitability is running at levels comparable to the last five years, although less than last year's high.

Disposal of Home Credit

Following the circular to shareholders on July 6 announcing the proposed disposal of Loansathome4u, its home credit division, to NSF PLC, S&U's shareholders have since approved the sale with completion taking place yesterday.

The net proceeds of the sale will firstly be reinvested into the accelerated growth of Advantage Finance. Net proceeds will also finance the development of a new Advantage SME vehicle lending product and allow an exceptional distribution to shareholders; further announcements will follow in due course.

Although temporarily and inevitably earnings dilutive, the disposal will significantly enhance the Group's net asset position and enable it to focus on higher growth areas of specialist finance.

Funding

The Loansathome4u disposal will generate around £80 million net of fees and tax. Whilst retaining our revolving credit facilities of £40 million with our banking partners, these will be paid down temporarily pending further use of the funds. Our longer term loan facility of £30m will remain fully drawn. This means that the Group will have cash balances of around £50 million for investment and returns to shareholders.

Overview

Anthony Coombs, S&U's chairman, said: "The decision to sell our Home credit division which has formed the ballast of our business for so long was wrenching and difficult, but we believe the right one. I would like to pay tribute to the many friends, colleagues and customers with whom we have been privileged to work over so many years. I am confident that Loansathome4u, and all who work in it, will prosper under its new owner.

This transaction heralds an exciting new era for S&U in which we will continue to develop as an innovative and responsible specialist lender of the highest quality".

For further information, please contact:

S&U plc www.suplc.co.uk 

Anthony Coombs, Chairman 0121 705 7777

Financial Advisers and Brokers

Chris Hardie Arden Partners 0207 614 5900

Media and Investor Relations

Will Swan Smithfield 0207 360 4900

Julia Cooke