Shares in S&U PLC (LSE:SUS) rose 5% to 1,960p after the motor and property lender said the recovery it flagged in the summer is now firmly underway, with profit at the end of its third quarter running ahead of budget.
The group’s net receivables (the loan balances that generate its interest income) have grown to about £491 million from £447 million a year ago. Management calls these balances the “lifeblood” of future profit because they determine how much the company earns as customers repay.
Momentum has improved since regulators lifted a review at Advantage, S&U’s car finance arm, in April. A Supreme Court ruling on commission disclosure in August has also steadied the wider market, with used car finance volumes rising 6% in September.
Advantage has been the standout. Applications hit a record 869,000 in the third quarter, lifting receivables 14% to roughly £318 million. Monthly loan volumes have risen to about 2,500, worth more than £25 million, and collection rates climbed to a record 93.4% in November.
Aspen, the group’s property lender, is also expanding despite weak housing activity. Its loan book has increased to about £173 million, helped by £75 million of new advances.
Borrowings have risen to £241 million, and S&U is working on securing larger funding facilities. Chairman Anthony Coombs said recent months show the firm has regained its “Va Va Voom”.