S&U (SUS) H2 2025 earnings summary

Executive summary

• Navigated a challenging year in motor finance (Advantage) due to regulatory and legal issues, most of which are now resolved, setting the stage for recovery and growth.

• Aspen Bridging delivered record profit and performance, with strong advances and repayments, and a positive outlook for continued growth.

• Regulatory engagement, including a Section 166 review, is now concluded, leading to improved efficiency and optimism for a rebound in the new financial year.

• Supreme Court decision on commission practices is pending, with management expressing cautious optimism about its impact.

• S&U expects a return to steady, sustainable growth, supported by experienced teams and a more favorable regulatory environment.

Financial highlights

• Group profit before tax declined to £24.0m from £33.6m year-over-year, mainly due to an £11m impairment charge, primarily in Advantage.

• Group revenue stable at £115.6m (2024: £115.4m); group impairment charge rose to £35.6m (2024: £24.2m) reflecting increased motor arrears.

• Aspen's profit rose 50% to £7.2m, with continued growth in receivables and new lending.

• Finance costs increased by £3m due to higher average borrowings and SONIA rates in H1; finance costs up 20% to £18.1m.

• Dividend maintained at 40p, reflecting commitment to shareholder returns despite lower profits.

Outlook and guidance

• Expecting a rebound in group profit for FY2025-2026, with early signs of business upturn in both divisions.

• Aspen expects continued growth in the bridging market, supported by house price growth and a more competitive interest rate environment.

• Advantage is resuming growth after regulatory constraints, focusing on higher-quality lending and investment in credit risk and pricing capabilities.

• S&U anticipates restoration to steady, sustainable growth as regulatory issues subside and market conditions improve.