S&U profits ahead of budget as Advantage and Aspen deliver growth

(Sharecast News) - Motor and property finance lender S&U said on Thursday that trading momentum had continued into the third quarter, with group profit running ahead of budget and receivables climbing to around £491m, up from £447m a year earlier. S&U highlighted a strong performance at its Advantage Finance arm, where monthly agreement volumes averaged 2,500 in recent months, worth over £25m, while Q3 applications hit a record 869,000. Receivables at Advantage rose 14% on the prior quarter to £318m.

The London-listed company also noted that improved scorecards and affordability measures had strengthened loan quality, with November collection rates reaching a record 93.4%.

S&U said Advantage was only marginally exposed to the Financial Conduct Authorty's ongoing commission redress consultation, estimating that just 2.4% of customers could potentially qualify. It stated any impact on current trading would be minimal, with the rebound in activity expected to continue.

Aspen Bridging also delivered growth despite weakness in the housing market, with net receivables rising to £173m from £148m at the half year. Repayments in the period totalled £47m, while advances reached £75m, driven by smaller bridging deals and demand for buy‑to‑let loans averaging £1.3m.

Group net borrowings increased to £241m from £180m at the half year, reflecting the acceleration in activity, and, although S&U said existing funding capacity of £280m was sufficient for now, it also noted that it was working on securing larger, flexible medium‑term facilities to support expansion over the next three years.

Chairman Anthony Coombs said: "Recent months have undoubtedly confirmed that S&U has regained its 'va va voom'; to quote my predecessor's habitual phrase. It is also true that investors are increasingly aware of the value inherent in family-controlled SME businesses with rewarding dividend policies. With both Advantage and Aspen on the right track, we have every confidence in the good rewards for shareholders we anticipate in the years to come".

As of 0815 GMT, S&U shares were up 2.75% at 1,911.20p.

Reporting by Iain Gilbert at Sharecast.com