S&U PLC Reports 32% Rise in Pre-Tax Profit to £31.8m, Boosts Dividend

S&U’s 2026 prelims: profit up 32%, dividend raised, and both divisions firing

S&U plc has posted a robust rebound. Pre-tax profit rose 32% to £31.8m despite lower revenue, thanks to sharply reduced impairments and tighter finance costs. The final dividend is lifted to 45p, taking the full-year payout to £1.15 per share.

Under the bonnet, Advantage Motor Finance recovered strongly with better collections and higher advances, while Aspen Bridging delivered record profit and revenue with low losses. Gearing has moved up as the loan books grow, and a securitisation push in Q2 aims to add cheaper, flexible funding.

Key numbers retail investors should know

Metric	2026	Prior year
Profit before tax	£31.8m	£24.0m
Revenue	£107.4m	£115.6m
Group net receivables (loan book)	£496.8m	£435.8m
Impairment charge	£13.0m	£35.6m
Net finance costs	£14.3m	£18.1m
Basic EPS	195.2p	147.4p
Final dividend	45p	40p
Total dividend for the year	115p	100p
Net assets	£249.0m	£238.1m
Net borrowings	£241.8m	£192.3m
Gearing (net debt to equity)	97.1%	80.8%

Quick jargon buster: impairment is the charge taken for expected credit losses on loans; net receivables is the value of the loan books after provisions; gearing is net debt divided by equity.

Advantage Motor Finance: disciplined growth and better credit outcomes

Advantage’s pre-tax profit jumped to £23.4m, up from £16.5m, even with revenue lower at £83.0m. The story is credit quality. The impairment charge fell to £12.8m from £33.2m as average collections improved and arrears dropped.

• Average live monthly repayments were 90.5% of due, ending the year at 93.1%.
• Advances rose to £181.6m, and new agreements climbed 44% to 18,279.
• Net receivables increased 12% to £317.1m as average loan size and margins edged higher.
• Revised repayment plans had an 82% success rate, and repossessed cars achieved 83% of trade values.
• A £53m sale of aged and written-off debt tidied the back book and supported profit.

Operationally, Advantage sharpened its credit scorecards, rolled out new risk tech, and leaned into AI for collections, call recording and productivity. The FCA’s s166 work closed in April 2025 with changes described as more evidential than substantive, which reduces a major distraction and helps management focus on growth.

Aspen Bridging: record profit, strong collections, low losses

Aspen set records again: pre-tax profit rose to £8.8m and revenue to £24.4m, with a very low impairment charge of £0.2m. Net receivables grew to £179.7m, backed by £212.3m of advances and a step-up in collections and recoveries to £187.7m.

• Less than 10% of 245 live loans were beyond term at year end, well under budget.
• Nearly 70% of loan deals settled within term – a record.
• Yield on the loan book ticked up to 13.6%, with ROCE at 11.2%.

Management is preparing for substantial growth and has added funding lines, though the macro backdrop for UK housing is mixed. The company flags uncertainty around interest rates and mortgage availability, but the book quality remains solid.

Funding, cash and gearing: growth now, securitisation next

To finance the expanding books, net borrowings rose to £241.8m and gearing to 97.1%. The Group added £50m in facilities and plans around £100m of additional investment this year. A refinancing using securitised facilities is targeted for Q2 and has been well received by potential funders.

Operating cash flow was an outflow of £21.5m, driven mainly by a £60.9m increase in receivables – a normal by-product of stepping up new lending. Net finance costs eased to £14.3m as average borrowings and rates moved favourably versus last year.

Regulatory backdrop: commission redress provision booked

The FCA’s final rules on historical motor finance commission were issued on 30 March 2026. S&U states Advantage has never used discretionary commission or tied broker arrangements, so it is only captured by high-commission cases as defined. A £1.79m provision has been recognised, including scheme running costs. The provision excludes any potential Financial Ombudsman Service referral fees, which are not yet reliably estimable.

Separately, the previous year’s forbearance remediation work is largely complete, with £0.21m of provision remaining from the original £2.736m exceptional item.

Why profit is up while revenue is down

Revenue slipped to £107.4m from £115.6m, but the profit engine was the sharp fall in impairments to £13.0m from £35.6m, plus lower net finance costs. Operating profit nudged up to £46.2m, though administrative expenses rose to £24.7m as the businesses scaled and invested in people and technology. On balance, healthier books and improved collections more than offset the top-line dip.

Dividend uplift and what it signals

A final dividend of 45p lifts the yearly total to £1.15 per share. With EPS at 195.2p, dividend cover sits comfortably within S&U’s stated range in recent years. The higher payout underlines the Board’s confidence in current trading and the funding plan to support further growth.

My take: momentum is back, but watch the leverage and macro

• Positives: materially better credit performance, higher advances at both divisions, record results at Aspen, and a clean bill of health post the FCA’s s166 process. EPS up 32% and dividend up 15% is a strong signal.
• Less positive: gearing at 97.1% requires careful management until the securitisation lands. Revenue is lower year on year, and administrative costs have risen. Cash from operations turned negative as lending accelerated.
• Known uncertainties: the FCA redress scheme for high-commission cases, interest rate path, and property market sentiment amid geopolitical noise. Management has booked a £1.79m provision for commission and is maintaining prudent overlays in its credit models.

Overall, this is a quality rebound built on improved loan books rather than accounting smoke and mirrors. If securitisation closes on time and credit metrics hold, S&U has room to compound from here – with a fatter dividend cheque in the meantime.