S & U Regulatory News (SUS)

11 February 2021

S&U plc

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

TRADING STATEMENT AND NOTICE OF RESULTS

S&U plc, the specialist motor finance and property bridging lender, today issues a trading update for the period from its trading statement of 9 December 2020 to the Group's year end on 31 January 2021. The Group's full year results will be announced on 30 March 2021.

The Group's trading remains robust and profitable, despite the current lockdown and the induced coma into which the Government has needed to place the wider UK economy. Demand by customers in both divisions remains strong and collections quality continues to be good.

We are planning for a significant rebound to pre-Covid motor finance transaction levels as lockdown restrictions ease this year, and a substantial increase in business at Aspen our property bridging business.

Motor Finance

Transaction numbers at Advantage have held up well over the period and, despite the closure of a number of car showrooms, continue to improve. In the past 2 months new deal transactions have reached nearly 80% of the comparable period last year and rising. Record application numbers continue, although Advantage's prudently responsible underwriting and affordability requirements have seen new deal transactions for the year as a whole total around 15,600 with customer numbers at year end of just under 63,000 and net receivables of around £247m.

Advantage's industry leading customer analysis and an evolving product range present tremendous opportunity for growth throughout the non-prime finance spectrum, despite the more competitive environment.

Repayment quality remains good; Advantage's collections department has always been proud of the sustainable relationships it develops with customers. Thus, the number of customers remaining on payment holiday has reduced from 15,000 at the peak to below 4,000. These relationships are also reflected in their payment performance, and in January monthly collections improved to 90% of contractual terms due.

More important, despite an increase in covid cases in the first half of the period under review Advantage is keeping staff safe. Moreover, our continuous drive for improvement has seen the launch of initiatives on affiliate introducers, product development and customer service - the latter reflected in Advantage's latest Trustpilot consumer ratings of 4.8 out of 5.0.

Aspen Bridging

Aspen continues to make great progress both in terms of growth and quality. In a resilient residential housing market, (Zoopla's UK house price index recently reported year on year growth of 5.9%), Aspen has seen net receivables rise from £29.6m to around £34m in the period. During this time, new transactions have consistently beaten budget, and Aspen's deal pipeline has more than doubled.

Experience, market credibility and sensible underwriting have seen credit quality at its best ever, with only three of over sixty customers slightly beyond term at year end. These promising trends have justified a further £4m investment in Aspen over the past two months, and the recruitment of experienced new staff in business development and underwriting.

Funding

S&U's financial position has been strengthened still further as borrowings have fallen to £99m from £103m. Gearing now stands at approximately 55% from 58%. This reflects continued and seasonal cash generation at Advantage, offset by additional investment in Aspen. £130m of Group facilities provide significant headroom for growth.

Dividend

Despite the inevitable effect of Covid-19 on S&U's profitability, our confidence in future trading, our financial strength and consistent commitment to shareholder reward justify a second interim dividend this year of 25p per ordinary share (2020: 36p). This will be paid on 12th March 2021 to those shareholders on the register on the 20th February 2021.

Commenting on the Group's performance and outlook, Anthony Coombs, S&U Chairman, said:

"Although the return to economic and general health in the UK will be uneven, the outlook is undoubtedly brightening. The proven strength and experience of S&U, exemplified by our loyal and dedicated staff, make me confident that we can grasp the tremendous opportunities economic revival will bring."

For further information, please contact:

S&U

Anthony Coombs, Chairman 0121 705 7777

SEC Newgate 

Bob Huxford, Megan Kovach, Tom Carnegie 020 7653 9848

Peel Hunt

Adrian Trimmings, Andrew Buchanan, Rishi Shah 020 7418 8900