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Business description

S&U’s Advantage motor finance business lends on a simple hire purchase basis to lower- and middle-income customers who may have impaired credit records which restrict their access to mainstream products. At end July 2018 it had over 58,000 customers.

Stock data

Market cap.£257.7m
Last close2,145.00p
High / Low (52 weeks)2790.0p / 1920.0p
Stock market listingLN
Forecast net debt (£m)119.7
Forecast gearing ratio (%)72

Price performance

Relative *4.9(7.7)1.1

* % Relative to local index

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Company news

Investment summary

S&U’s latest trading update indicates it is on track to deliver results close to expectations for the current year. Motor finance receivables growth slowed in the second half, which prompted a reduction in our estimates, primarily for FY20. We still look for a return on equity (ROE) of above 17% and believe the discipline shown in holding to pricing and credit criteria at Advantage is a positive sign for investors. Our expectations for Aspen Property Bridging are unchanged and it should provide a valuable diversifying contribution to profits.

Last updated on 10/12/2018

Y/E Jan Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 60.5 27.1 25.2 169.1 12.7 N/A
2018A 79.8 33.3 30.2 202.4 10.6 N/A
2019E 91.1 39.3 34.5 231.4 9.3 N/A
2020E 100.1 44.4 38.3 256.6 8.4 N/A

Last updated on 10/12/2018

Latest video

Executive Interview – S&U

Industry outlook

The used car market, for which Advantage provides finance, continues to show growth supported by high levels of employment. S&U has prudently contained growth at Advantage to protect returns. In November S&U confirmed that it will develop the Aspen business further. The loan book is currently c £20m and for 2019 investment will be increased to £30m, a significant step up but still measured in the context of the market and the group (Advantage motor finance loan book £264m).

Last updated on 29/11/2018

Key management

Chris Redford, FD
Anthony Coombs, Executive Chairman of the Board

Company address

2 Stratford Court
Cranmore Boulevard
B90 4QT
United Kingdom
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