S&U (SUS) Trading Update summary

Trading performance and business trends

• Aspen Bridging achieved strong, profitable growth with record profits in June and continued positive results in July, supported by a firming property sector and lower interest rates.

• Advantage Finance experienced a period of consolidation and retrenchment due to FCA-imposed restrictions, impacting collections and profitability in the first half.

• Advantage's year-to-date advances are 10% lower than last year, with net receivables at £327m and customer numbers slightly down.

• Monthly collections at Advantage are marginally up, but repayments to due have dropped to 87% from 94% last year due to restrictions.

• Group borrowings are £240m, well within the £280m committed facilities.

Regulatory and market environment

• FCA section 166 notice has led to operational restrictions at Advantage, with negotiations nearing conclusion and a recovery plan ready for implementation.

• The new Labour government is expected to take a more pragmatic regulatory approach, potentially benefiting specialist credit markets.

• UK used car finance market saw a 6% decline in value and 4% drop in volume year-on-year to May, reflecting broader market challenges.

• Recent FCA statements offer some optimism for regulatory improvements.

Outlook and strategic focus

• Advantage Finance anticipates a rebound in the second half once FCA restrictions are lifted, supported by a plan for recovery.

• Aspen Bridging expects further steady growth in the second half, with a strong deal pipeline and excellent credit quality (late payers under 8%).

• S & U remains committed to providing responsible credit access and sees opportunity in serving the growing non-standard credit market.

• The group is confident and determined for the year ahead, despite current challenges in motor finance.