S&U (SUS) H1 2025 earnings summary

Executive summary

• Revenue rose 9% year-over-year to £60.4m for H1 2024, but profit before tax fell 40% to £12.8m from £21m due to higher impairments and increased funding costs, mainly at Advantage Finance.

• Net group receivables reached a record £475.4m, with group equity at £233.4m and gearing at 103%, up from 80% a year ago.

• Advantage Finance faced regulatory scrutiny, leading to lower sales, collections, and a sharp drop in profit before tax to £9.4m.

• Aspen Bridging delivered record results, with profit before tax up 42% to £3.4m, net receivables up 43% to £149.3m, and strong growth in lending and repayments.

• Celebrated 25th anniversary, emphasizing customer care and staff dedication as key to long-term growth.

Financial highlights

• Group impairment charge rose to £18.9m (H1 2023: £7.2m), mainly from increased motor arrears at Advantage.

• Finance costs increased by £2.8m to £9.6m due to higher borrowings and rising SONIA/base rates.

• Earnings per share dropped to 78.6p (H1 2023: 133.2p); interim dividend set at 30p (H1 2023: 35p).

• Net cash from operating activities was £4.9m, down from £27.1m in H1 2023.

• Group cash outflow of £15.1m, mainly from Aspen receivables growth and dividend payments.

Outlook and guidance

• Management anticipates regulatory headwinds at Advantage to be temporary, with normalization and a return to growth expected in H2 and a rebound anticipated in 2025.

• Aspen expects continued strong growth, supported by a robust property market, government housing initiatives, and increasing direct customer engagement.

• No significant long-term cost increases expected from new regulatory standards; dividend policy remains focused on sustainability.

• Anticipated reduction in group borrowings and gearing in Q3 and October due to lending caution and seasonality.

• Internal reforms at Advantage aim to restore growth and stability.