S&U - Edison Group

Overview
Price performance
Financials
Research
Thematics

S&U’s Advantage motor finance business lends on a simple HP basis to lower- and middle-income groups that may have impaired credit records restricting access to mainstream products. It has c 65,000 customers. The Aspen property bridging business has been developing since its launch in 2017.

Against a backdrop of improving UK consumer confidence, industry data in early 2024 indicate a stabilisation in used car prices and a pick-up in transactions. However, the FCA industry-wide review into customer forbearance and affordability is negatively affecting profitability at Advantage as it takes a cautious approach until discussions with the regulator are finalised. UK residential property market data continue to improve as inflation and mortgage rates have moderated, providing a positive trading environment for Aspen.

Latest Insights

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Financials |
Update

11.06.24

S&U — Elevated regulatory impact

Financials |
Outlook

22.04.24

S&U — PBT ahead, encouraging volume trends

Financials |
Update

29.02.24

S&U — Impairments drag FY24 PBT, moderation in FY25

Financials |
Update

18.12.23

S&U — Maintaining cautious approach

Sector

Financials

Equity Analyst

Managing Director, Financials and Investment Trusts

Martyn King

Director, Financials

Key Management

Anthony Coombs

Executive Chairman of the Board
Chris Redford

FD

Balance Sheet

Forecast net cash (£m)

245.5

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	(6.0)	4.1	(16.0)
Relative	(4.8)	0.5	(24.1)
52 week high/low	2450.0p/1800.0p

Financials

The Q125 trading update disclosed increased pressure as S&U steers cautiously through the changing regulatory landscape. The payment rate in the Advantage motor finance business fell to 87.7% from an average 92.1% in FY24, which led to group PBT falling 34% to £6.9m from higher impairments. The negative effects will likely have an impact on future quarters as management expects discussions with the FCA to conclude only in H2 CY24 and lending criteria were tightened at end Q1. On the positive side, demand remains strong, with applications at a record high. Moreover, the Aspen bridging business continues to grow rapidly, with Q1 PBT up by 36% y-o-y to a record £1.45m. We have cut our estimates for FY25 EPS by 22% to 179p and FY26 EPS by 15% to 223p for an RoE of 11%.

Y/E Jan	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (fd) (p)	P/E (x)	P/CF (x)
2023A	102.7	49.4	41.4	277.5	6.8	N/A
2024A	115.4	49.2	33.6	209.3	9.1	N/A
2025E	123.3	48.5	29.0	179.3	10.6	N/A
2026E	130.3	57.5	36.2	223.4	8.5	N/A

Research

Update

Financials

12.12.22

S&U — Positive trading update

Update

Financials

29.09.22

S&U — Experienced specialist lender performs well

Financials

Update

S&U — FY23 results set to meet expectations

Update

Financials

11.08.22

S&U — H1 growth ahead of expectations

Update

Financials

30.05.22

S&U — Positive update despite macro uncertainties

Outlook

Financials

01.04.22

S&U — Seeing recovery and adapting to grow

Update

Financials

11.02.22

S&U — FY22 profit beat and positive outlook

Update

Financials

10.12.21

S&U — Upbeat update

Update

Financials

01.10.21

S&U — H122 ahead of expectation and outlook good

Update

Financials

11.08.21

S&U — Reduced impairments underpin increased profit

Update

Financials

24.05.21

S&U — Strong start to the year

Outlook

Financials

08.04.21

S&U — Ready to meet unlocked demand

Update

Financials

15.02.21

S&U — Planning for a significant rebound

Update

Financials

14.12.20

S&U — Looking towards a resumption of growth

Update

Financials

07.10.20

S&U — Adapting to the new environment

Update

Financials

12.08.20

S&U — Still in profit and tentative positive trends

Update

Financials

11.06.20

S&U — Covid-19 impacts but ready to resume progress

Update

Financials

16.04.20

S&U — Sound liquidity, positive near-term cash flow

Update

Financials

12.02.20

S&U — Encouraging year-end update

Update

Financials

11.12.19

S&U — Resilient amid softer sentiment and economy

Update

Financials

30.09.19

S&U — Advantage growth resumes

Update

Financials

12.08.19

S&U — Trading update confirms positive trends

Flash note

Financials

24.05.19

S&U — Encouraging update

Outlook

Financials

04.04.19

S&U — Adjusting to prevailing conditions

Update

Financials

07.02.19

S&U — Lending discipline tempers pace of growth

Update

Financials

10.12.18

S&U — Trading broadly in line

Update

Financials

27.09.18

S&U — Positioning for sustainable growth

Outlook

Financials

12.04.18

S&U — Set for further growth with tighter credit criteria

Update

Financials

12.02.18

S&U — Good loan growth and credit experience on track

Update

Financials

08.12.17

S&U — Positive trend in quantity and quality of lending

Update

Financials

05.10.17

S&U — Strong loan growth continues

Outlook

Financials

07.04.17

S&U — Strong growth, cautious approach

Update

Financials

13.02.17

S&U — Update 13 February 2017

Update

Financials

15.12.16

S&U — Update 15 December 2016

Update

Financials

12.10.16

S & U — Update 12 October 2016

Update

Financials

20.05.16

S&U — Update 20 May 2016

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