S&U PLC interim results: profit up 22% as credit quality improves and dividend lifted to 35p
S&U has delivered a tidy recovery in its half-year numbers to 5 August 2025. Group profit before tax rose 22% to £15.6 million despite revenue falling to £51.8 million, thanks to sharply lower impairments and reduced finance costs. The board has upped the first interim dividend to 35p per share, signalling confidence in the outlook and the balance sheet.
There is still regulatory noise around historic motor finance commissions, but S&U’s Advantage Finance looks relatively insulated based on the facts disclosed. The funding position is comfortable, collections are trending better, and both divisions are contributing to the rebound.
Key numbers that matter for investors
| Metric | H1 2025 | H1 2024 |
|---|---|---|
| Revenue | £51.8m | £60.4m |
| Profit before tax | £15.6m | £12.8m |
| Basic EPS | 95.5p | 78.6p |
| First interim dividend | 35p | 30p |
| Net group receivables | £426.8m | £475.4m |
| Impairment charge | £8.1m | £18.9m |
| Net finance costs | £6.6m | £9.6m |
| Net borrowings | £180.0m | £239.6m |
| Gearing | 75% | 103% |
Translation: the loan book is smaller and revenue is down, but asset quality has improved, cash generation is stronger, and leverage has come down meaningfully.
Advantage Finance: quality up, impairments down, momentum rebuilding
Advantage’s recovery is the main engine behind the group’s profit growth. Profit before tax rose 14.9% to £10.8 million, even as revenue fell to £39.3 million. The big swing is the impairment charge, which dropped to £8.0 million from £18.1 million. Impairments are the expected credit losses recognised on the loan book under IFRS 9 – when they fall, it usually means customers are paying better and underwriting is tighter.
Repayment performance has improved: live monthly repayments hit 90% of due (up from 87%). Adherence to contracted repayments was 89.8% over the half, and nearly 45% of new deals were in the higher-quality tiers. Advances were £70.6 million (H1 2024: £73.2 million), with fewer deals (7,121 vs 8,752) but larger average loans.
Margins are currently tighter due to the shift up the credit curve, but management expects improvement in H2 as affordability changes bed in. Net receivables sit at £279.1 million (H1 2024: £326.2 million), reflecting deliberate discipline through a choppy macro period. Given Advantage operates in non-prime motor finance, these trends – better collections, lower losses, controlled growth – are exactly what you want to see at this point in the cycle.
Aspen Bridging: record half with 14.9% yield and strong recoveries
Aspen posted a record half-year profit of £5.0 million, up 47%. Revenue rose to £12.5 million, and the impairment charge was just £0.2 million. Advances hit £106.4 million (H1 2024: £92.5 million) while collections and recoveries were £113.0 million (H1 2024: £72.8 million), keeping net receivables broadly flat at £147.8 million.
Loan quality improved – 195 live facilities with 181 within term – and yields were excellent. The overall loan book yield was 14.9% (H1 2024: 13.4%), with a blended yield on finished loans up 25% on 2024. Return on capital employed reached 12.3% (H1 2024: 11.5%). New Bridge and Buy-to-Let products delivered £40.1 million of advances (H1 2024: £7.8 million), positioning Aspen to serve small developers at lower loan-to-values and attractive rates.
In plain English: Aspen is scaling responsibly, being paid well for the risk, and collecting strongly.
Regulation watch: FCA commission redress consultation and S&U’s positioning
The Supreme Court’s August ruling overturned key parts of last year’s Court of Appeal decision, removing the broad “bribe” characterisation of dealer commissions. The FCA has since published a consultation (7 October 2025) on a potential redress scheme regarding certain historic motor finance commissions.
Advantage’s disclosures matter here. Management states Advantage:
- Never used discretionary commission arrangements.
- Paid commissions generally well below the FCA’s proposed thresholds of “equal to or greater than 35% of the total cost of credit and 10% of the loan”.
- Did not give brokers exclusivity or first refusal.
- Provided direct, clear commission disclosure to customers.
The company says a liability is possible but not probable, and an immaterial number of cases exceeded 35%. Until the FCA finalises any scheme (expected early 2026), uncertainty remains, but on the disclosed facts S&U appears comparatively well placed in the sector.
Funding, gearing and cash: headroom in place, review under way
Net borrowings are down to £180.0 million, with gearing at 75% (from 103%). Committed facilities total £280 million, with maturities spread to May 2027, March 2028 and March 2029. The group generated £28.0 million of operating cash in the half (H1 2024: £4.9 million), reflecting improved collections and lower receivables growth.
A funding review on scope and cost is due to conclude in H2. With no interest rate hedges in place, potential base rate reductions would ease finance costs from here.
Dividend increased: timetable and context
The board declared a first interim dividend of 35p per share (H1 2024: 30p), payable on 21 November 2025 to shareholders on the register on 31 October 2025. Ex-dividend date is 30 October 2025. The step-up fits S&U’s policy to align shareholder returns with sustainable profit and reflects improved trading, stronger collections and lower gearing.
My take: recovery taking hold, with two watchpoints
This is a clean, credit-led recovery. Lower impairments at Advantage, high-yielding growth at Aspen, and disciplined balance sheet management are driving EPS up even with a smaller book. The dividend hike is a clear statement of confidence.
Two watchpoints remain. First, the macro: the chairman points to weak growth and fragile consumer confidence – if the labour market softens further, Advantage’s customers will feel it, though current repayments at 90% are reassuring. Second, regulation: while S&U’s exposure to any commission redress looks limited on its disclosed profile, we still need the FCA’s final rules.
What to watch in H2 and into 2026
- Advantage margins: management expects improvement in H2 as affordability changes settle.
- Collections trend: can repayment rates hold above 90% through winter and any macro wobble.
- Aspen deployment and yield: continued traction in Bridge and BTL while maintaining 14%-plus yields.
- Funding review outcome: facility size, tenor and pricing versus current £280 million headroom.
- FCA redress scheme: final design, thresholds and any rebuttal mechanics for non-bank lenders.
Bottom line
S&U has turned the corner. Profit and EPS are up, cash generation is better, leverage is lower and the dividend is moving higher again. If collections stay firm and regulation lands broadly as outlined, there is room for further progress in the full year.
