The outlook is positive for S&U PLC (LSE:SUS) after its six-month results, which revealed the impact of regulatory scrutiny of the car finance industry and hit its Advantage Finance operation, according to broker Peel Hunt.
With the stock trading at around seven times its expected earnings for 2026 and offering a 6.9% dividend for 2025, it presents good long-term value for investors, Peel Hunt noted.
The shares rose 4% to 1,719.86p in morning trading after the interims came in as forecast at the time of the company's trading statement.
With the figures came a cautiously optimistic assessment of prospects. Scrutiny from the Financial Conduct Authority, while directly impacting the company's Advantage business, should also provide a "sustainable basis" for future growth, the company said.
Chairman Anthony Coombs told investors: "Half-year results for Advantage reflect a temporary adjustment to shifting market dynamics and evolving regulatory expectations.
"Nevertheless, the resulting internal reforms should provide greater certainty for renewed success. In the more dynamic bridging sector, Aspen continues to perform strongly.
"Whether future policy developments by the government lead to a more growth-oriented approach will depend on ongoing dialogue with the industry.
"Appropriately, the last word should therefore go to Harold Wilson, Labour PM in the sixties. 'I'm an optimist,' he said. 'But I carry a raincoat.' Accordingly, we embrace the future with our usual cautious optimism."