S&U LON: SUS reported a sharp year-over-year increase in full-year earnings, as improved credit performance in its Advantage motor finance business and record results at Aspen Bridging drove a 32% rise in profit before tax to £31.8 million for the year ended February 5, 2026.
Chairman Anthony Coombs characterized the period as “a year of recovery as we anticipated it would be,” pointing to higher profits across both divisions and what he described as improved credit quality. Coombs also told investors the group is pursuing refinancing through securitizations that management expects will expand funding capacity over the next three years, while emphasizing growth would remain opportunity-led rather than funding-led.
Full-year financial performance
Group Finance Director Chris Redford said profit before tax rose to £31.8 million from £24.0 million a year earlier. Redford noted that revenue declined 7% year-over-year, attributing the drop to lower average receivables during the period and a “cautious lending approach” in Advantage during the first half. He said revenue improved in the second half, rising to £56 million versus £51.5 million in the first half.
Redford said impairment “substantially reduced” from the prior year, citing improved Advantage repayments averaging 90.5% of amounts due, up from 85.6% last year. He also said a fourth-quarter debt sale reduced the impairment charge by £2.5 million. For Aspen, Redford highlighted “excellent collection and recoveries” of £188 million compared with £157 million last year.
On costs, Redford said cost of sales increased 44% “from quite a low base” as Advantage returned to higher advances. Administrative expenses rose 31%, which he attributed to higher staff costs tied to growth investment, additional complaints processing costs in Advantage during the first half, and a £1.8 million provision related to the FCA commission redress scheme following the publication of final rules.
Finance costs fell due to lower average borrowings and lower SONIA rates, according to Redford.
Balance sheet, lending growth, and gearing
Redford said the balance sheet remained focused on receivables, borrowings, and equity. Advantage net receivables rose 12% to £317 million, which he said was supported by a recovery in advances in the second half and improved collections and lower provision requirements. Aspen net receivables increased 18% to £179.7 million following “a very strong lending year-on-year” and what Redford described as a more normalized level of collections in the second half.
Net borrowings were £241.8 million at the balance sheet date, including £0.3 million of bank overdrafts, Redford said. He added that net borrowings increased by £49.5 million year-over-year, driven primarily by advances: Advantage advances rose 66% to £182 million, while Aspen advances increased 18% to £212 million. Dividend payments of £12.7 million also contributed to funding needs, he said.
From a leverage standpoint, Redford said gearing ended the year at 97%, up from 81% the prior year.
Funding and securitization plans
Redford said the group’s net borrowings of £241.8 million remained within committed facilities of £330 million, noting the facility total was £50 million higher than at the interim stage after an “accordion agreement” with revolving credit facility lenders secured in January.
Jack Coombs said the company is pursuing two securitizations—one for Aspen and one for Advantage—intended to “give us capacity to double the level of available funding.” He described the initial phase as a like-for-like refinancing of existing facilities, with the accordion providing additional headroom thereafter. Coombs said the securitization facilities would be non-recourse to the subsidiaries and the group and are expected to improve the cost of funds. He also said that, over the longer term, Advantage could qualify for a public securitization.
Anthony Coombs reiterated that management would not expand simply because funding is available, saying growth would depend on lending opportunities and maintaining appropriate margins.
Operational updates: Advantage and Aspen
In an operational review of Advantage, management highlighted a return to growth in cases and volumes driven by “much improved credit risk capabilities,” including a new scorecard and expanded affordability data, with growth accelerating through the third quarter and tapering in the fourth quarter around the festive season. Management said repayment performance improved year-on-year and continued to improve into 2026, crediting investment in platform upgrades, training, and new technologies.
On the regulatory environment, management said the industry is navigating the FCA Motor Finance Redress Scheme and that Advantage has a “clear roadmap” to execute against the final rules.
Redford said Advantage originated 18,279 deals during the year, with a higher average advance of £9,935. He said customer quality improved on average, reflected in higher customer scores and a lower flat interest rate per annum earlier in the year. Following the introduction of the new scorecard and refined affordability models in the third quarter, Redford said originations shifted back toward a more traditional customer base, with the flat interest rate per annum increasing to 13.5% over the course of the year.
Redford also highlighted arrears improvements, with 71.8% of debt in the up-to-date category versus 64.5% last year and accounts in the 6+ arrears buckets falling to 5.7% from 9.3%. He said performance continued to improve after year-end.
At Aspen, CEO Ed Ahrens said the business produced record results, including lending of £212 million and repayments of £188 million, resulting in record profit before tax of £8.8 million. Ahrens said Aspen maintained lending quality while expanding its product offering and broker relationships. He also cited five-year performance of £790 million of capital lending with 0.02% of actual capital losses.
Discussing product mix, management said Aspen’s “bridge to let” and “buy to let” options represented 40% of originations in the last year, and that about 66% convert onto the buy-to-let product. Jack Coombs said Aspen expects average loan terms to increase to around 18 months and that the business is integrating AI to maintain efficiency.
Q&A: Impairments, costs, competition, and what the market may be missing
Addressing whether the year’s impairment charge is sustainable, Redford said the £13 million impairment performance benefited from the £2.5 million debt sale gain, which he described as more of a one-off item. Excluding that benefit, he said Advantage impairments could increase slightly, but management expects cash collection performance to continue improving, limiting the increase even with planned book growth. For Aspen, he said the impairment charge was unusually low due to “excellent collections and recoveries” in the first half and could normalize higher.
On administrative expenses, Redford said the £1.8 million FCA commission provision was a key factor. He said removing it would reduce the year’s admin-expense growth rate from about 31% to closer to 22%, and that next year management expects admin expenses to track broadly in line with inflation.
Asked about competitive dynamics and whether opportunities are opening up as other lenders pull back, management said there may be opportunities in the wake of regulatory developments, but declined to comment on specific competitors or potential book purchases. Advantage management said the business has around 8.5% market share in the non-prime motor finance market, leaving “plenty of runway.”
In response to a question on what investors may be underappreciating, Anthony Coombs argued that the market may not fully recognize what he described as calmer, more consistent regulatory conditions and the company’s return to a growth phase. He referenced the group’s three-year plan, saying receivables could rise from around half a billion pounds to roughly 60% higher—“possibly even more”—if macroeconomic conditions are stable and the right lending opportunities emerge. In closing remarks during the Q&A, Graham added that the company’s market capitalization was roughly in line with net assets, and suggested the market assigns “zero value” to future growth and cash flows.
Management also briefly addressed geopolitical developments, with Anthony Coombs saying he did not anticipate a major impact on motor finance and that Aspen could gain market share if the broader residential market experiences pressure.
About S&U LON: SUS
S&U plc provides motor, property bridging, and specialist finance in the United Kingdom. The company was incorporated in 1938 and is headquartered in Solihull, the United Kingdom.
See Also
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider S&U, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and S&U wasn't on the list.
While S&U currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link to see MarketBeat's list of seven stocks and why their long-term outlooks are very promising.
Get This Free Report
