S&U Plc Provides Trading Update, Sees Profitability Recovery Next Year
Why we think this is neutral
The trading update from S&U plc contains a mix of positive and negative information. While the broader outlook for the Group remains positive, with encouraging performance in areas outside of the Advantage business, the company is facing continuing headwinds at Advantage that will impact profits in the current half-year period. However, the company anticipates a recovery in profitability during the next financial year, as it addresses the challenges through improving trends in advances and collection rates. Additionally, the removal of the section 166 investigation is a positive development that reduces uncertainty. Overall, the update paints a balanced picture, with both positive and negative factors, resulting in a neutral sentiment assessment.
Key Points
- Advantage business facing continuing headwinds, impacting profits in current half-year
- Anticipate recovery in profitability during next financial year
- Aspen property finance lender reports record year with 17% increase in net receivables and 50% profit growth
- Removal of section 166 investigation reduces uncertainty
Summary
In its trading update, S&U plc reported that while trading at its Advantage business continues to reflect the challenges experienced in 2024, the broader outlook for the Group remains positive, supported by encouraging performance in other areas. The company anticipates a recovery in profitability during the next financial year, as it addresses the headwinds at Advantage. Additionally, the removal of the section 166 investigation is a positive development that reduces uncertainty. The company's property finance lender, Aspen, has enjoyed a record year with net receivables up c.17% and profits likely to rise by 50%.