S&U delivers steady growth in H1 despite mixed macro backdrop

(Sharecast News) - Specialist lender S&U said on Tuesday that it had delivered steady growth across its motor finance and property bridging divisions despite a mixed macro backdrop. S&U said customer demand remained robust, with credit quality and collections continuing to perform in line with expectations.

Advantage Finance saw net receivables rise 8% year-on-year to £360m, supported by a 6% increase in transaction volumes and stable repayment behaviour, while revenue from its motor finance arm climbed 7% to £54.7m and pre-tax profits grew 6% to £17.2m. Cost of risk remained broadly flat at 6.3%, with the group noting no material impact from recent regulatory developments.

S&U's Aspen Bridging division also delivered growth, with net receivables up 10% to £112m and revenues increasing 12% to £7.5m. Pre-tax profits jumped 18% to £2.6m, driven by improved margins and a more diversified loan book.

The London-listed firm said overall group borrowings rose 5% to £180m, with gearing steady at 63%.

Looking ahead, S&U reaffirmed its full-year guidance and highlighted that it was not exposed to discretionary commission arrangements, distancing itself from potential liabilities linked to the FCA's proposed motor finance redress scheme.

Chairman Anthony Coombs said: "The skies are now brighter for a return to steady sustainable growth than at any time since the pandemic. The difficult regulatory and economic conditions of the past two years have served to prove the resilience of our businesses. Of course, challenges will always remain, but the S&U corporate tanker is undoubtedly turning."

As of 0835 BST, S&U shares were up 3.25% at 1,936p.

Reporting by Iain Gilbert at Sharecast.com