Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

S&U warns on full-year profits

(Sharecast News) - Specialist motor finance and bridging lender S&U warned on Friday that full-year profits were likely to be below expectations as poor consumer confidence, the cost-of-living crisis and continuing high interest rates take their toll. "The intemperate economic climate in Britain surrounding these unfortunately persists," it said. "Whilst we continue to invest in the receivables which drive our future profits, we do so with caution."

The company now expects group pre-tax profit for the year to the end of January 2024 to be 10% to 15% below consensus expectations of around £38m.

S&U said loan advances in motor finance lender Advantage were 7% lower than last year. Meanwhile, live monthly repayments at Advantage for the second half of the year were 90% of due, down from 94% in the first half.

Although Aspen cumulative repayments are no less than 50% up on last year, more recently that rate of increase has slowed, it said.

"Although these trends, particularly at Advantage, have largely been confined to the last quarter, a prudent approach to their likely effect on collections will have a temporary impact on profitability," the company said.

"In particular, the reduction in the rate of collections has necessitated increased provisioning under the IFRS9 accounting standard."

S&U struck a more upbeat note on the outlook however, saying it expects a "solid" rebound, hence its continued funding investment in both businesses of £15m during the period.

Chairman Anthony Coombs said: "Faced with an array of challenges ranging from weak consumer confidence, cost-of-living pressures, funding costs and regulatory activity, 2023 has not been a vintage year for either S&U or the specialist financial services sector.

"Given the underlying strength, resilience and expertise of our group, I fully expect a resumption of S&U's habitual and robust profit growth in the years to come."

At 0838 GMT, the shares were down 7.8% at 1,936.97p.

Share this article

Related Sharecast Articles

Billionaire Issa nearing deal to sell Asda stake to TDR Capital - report
(Sharecast News) - US private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
Billionaire Issa nearing deal to sell Asda stake to TDR Capital
(Sharecast News) - Private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
DS Smith tumbles as Mondi abandons pursuit
(Sharecast News) - DS Smith tanked on Friday after Mondi said it would not be making an offer for the rival packaging group, clearing the path for a takeover by International Paper.
Eqtec agrees amendment to Verde subscription
(Sharecast News) - Waste-to-energy technology developer Eqtec updated the market on the Verde Corporation subscription on Friday, confirming that an amendment to the subscription letter had been agreed upon with Verde.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.