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Wednesday 09 December, 2020


Trading Statement

RNS Number : 9871H
09 December 2020


9  December 2020


S&U plc

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




S&U, the specialist motor finance and property bridging lender, announces its trading update for the period from the 1st August 2020 to the 8th December 2020. This period has seen a rebound in Group trading and profitability, despite a slowdown in November resulting from the renewed Covid-19 lockdown and uncertainties relating to its planned aftermath. We have continued to focus on quality at both Advantage and Aspen and demand for motor and bridging loans over the period has been healthy.


The business is resilient and financially strong and, notwithstanding constantly changing Government guidance on Covid-19 restrictions, we are confident of a resumption of our usual rates of growth in the first half of next year.




The demand for good quality used cars and their auction values has recovered well during the period. Overall used car transactions rose by 4.4% in the UK in the third quarter, at 2,160,000 vehicles. Indeed, recent FLA figures showed the strongest used car price growth in a decade.  At Advantage, our motor finance subsidiary, this was reflected in an improved rate of transactions in the period. However, Advantage's  temporary withdrawal from the self-employed and lower tier sectors of the market, means that despite the recent market improvement, current net receivables are at £253 million (£280 million: 2019) and current live customer numbers are at 63,000, slightly less than last year's 63,500.


Undoubtedly the Covid-19 epidemic is prompting an unease about public transport and a general desire for the security and convenience of a wholly-owned (and unshared) vehicle. Further, considerations of value in uncertain times favour the smaller used car sector in which Advantage specialises.


These trends have been reflected in Advantage's robust receivables quality. Despite imposition by the Financial Conduct Authority of further and extended customer repayment "holidays" in the period, monthly collections remain within 7% of last year's and are improving as customers return to normal payment. Thus, the third quarter saw collection rates at 87.5% of due  (2019: 94%) against 74.1% in the second quarter. Whilst 12,900 customers were still on payment "holiday" at the end of July, this has fallen to below 5,000 currently. New customer quality and early repayments are performing very well.


Advantage are using the Covid-19 hiatus to prepare for recovery and to embed long term operational improvements. Current examples include developing affinity partnerships, still closer systems integration with our introducer partners to improve transaction rates, and further customer service and affordability analysis which will drive Advantage's already excellent Trustpilot customer satisfaction ratings even higher.



Aspen Bridging Finance


Aspen Bridging has in the period achieved the landmark £100 million of lending since it was founded. Whilst prudently viewing the residential market with their customary caution, Aspen has seen transactions improve considerably over the period. Hence current net receivables stand at £29.6 million against just £18.5 million at half-year.


Loan quality has strengthened too. A sustained focus on overdue and extended customers has seen their number successfully reduce in the period, meaning that in the current live book only two accounts are just past due with no defaults remaining. This improvement in quality has seen an  improvement in profitability and provides a firm base for future growth.




Significant cash generation at Advantage, offset by net investment in Aspen of £10.6 million since half year and payment to shareholders of our first interim dividend, means current Group borrowings are at £103 million against just £108 million in July. With Group facilities at over £130 million and gearing at only 58%, this gives S&U its habitually firm base for the accelerated growth we anticipate may be appropriate next year.




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


"Despite the persistent drag anchor that is Covid-19 and the possibly inevitable zigzagging in Government policy to deal with it, S&U is in fine fettle. Aside from our traditional strengths -  experience, conservative financial policies and sustainable growth -  most of all I pay tribute to the dedication and sensible ambition of our people.  To paraphrase Liverpool FC's Jurgen Klopp, whatever Covid-19 brings "we deal with it, recover, prepare and go again".  Hence our great confidence in the future."




For further information, please contact:



Anthony Coombs, Chairman     0121 705 7777


Newgate Communications

Bob Huxford, Megan Kovak, Tom Carnegie       020 7653 9848


Peel Hunt

Adrian Trimmings, Andrew Buchanan, Rishi Shah                                               020 7418 8900



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