S&U plc, the specialist lender focused on motor finance and property bridging, has reported a 28.6% fall in pre-tax profits to £24.0 million for the year ended 31 January 2025, down from £33.6 million a year earlier.
The drop in earnings was primarily driven by weaker performance at its Advantage Finance unit, which has faced elevated impairment charges and reduced lending volumes amid continued scrutiny of the UK motor finance sector. Group revenue was broadly flat at £115.6 million (2024: £115.4 million), while basic earnings per share fell to 147.4p from 209.2p.
Shares in the company fell nearly 2% on 15 April following the release.
Advantage Finance, which provides motor loans to non-prime borrowers, posted a 42.7% decline in pre-tax profits to £16.5 million, with revenues down 6.5% to £91.8 million. The unit recorded an impairment charge of £33.2 million, up from £23.3 million the previous year. Monthly repayment collections fell to 86% of dues, compared to 92% in 2024, while annual net advances dropped to £109.4 million from £175.9 million.
In contrast, the group’s property bridging arm, Aspen Bridging, reported a strong year, with pre-tax profits rising 50% to a record £7.2 million and revenue increasing to £23.8 million, up from £17.3 million in 2024. Net receivables at Aspen rose to £152.2 million from £130.4 million.
Group-wide impairment charges increased to £35.6 million (2024: £24.2 million), reflecting rising arrears in the motor finance portfolio. Net receivables decreased to £435.8 million, down from £462.9 million. Net finance costs rose to £18.1 million due to higher average borrowings. However, net borrowings were reduced to £192.3 million (2024: £224.4 million), lowering the group’s gearing ratio to 80.8% from 95.8%.
S&U declared a final dividend of 40p per ordinary share, to be paid on 25 July 2025. This compares to 50p paid the previous year.
Chairman Anthony Coombs acknowledged the challenging year for the motor finance segment, citing legal and regulatory headwinds, but indicated that most of these issues have now been resolved. He expressed confidence in the company’s recovery, supported by what he described as improving regulatory and political conditions.
“Advantage, our resilient and established motor financier has undoubtedly had a difficult year owing to legal and regulatory challenges. However, these are now almost all resolved; hence, we view the future with optimism and recall an old American business adage: ‘If you want the rainbow, you gotta put up with the
rain,’” he said.
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