20^th May 2021

S&U plc

("S&U" or "the Group")

AGM Statement and Trading Update

S&U PLC, the leading specialist motor finance and property bridging lender, issues a trading statement for the period 1st February 2021 to the 19th May 2021 prior to its AGM today. As last year, Covid restrictions dictate a closed AGM but S&U will be holding a question and answer session for registered shareholders at 11:30 am today, the 20th of May. Details on how to access the conference are in note 9 of the AGM notice.

As outlined in our Chairman's statement accompanying the full-year results published in March, the Group has weathered the Covid pandemic and its consequences quite superbly. All S&U staff are well and looking forward to the new "normality". For Advantage Finance ("Advantage") this means that currently 60 staff are back at our Grimsby offices with 120 expected to return at the end of June. Aspen Bridging ("Aspen") also expects to return to its Solihull offices by the end of June.

All staff, however, are being given the option of flexible continued homeworking, to which they have adapted so successfully over the past year.

As a result of their sterling efforts, the Group continues its strong recovery as both motor and housing markets revive and as, more generally, the UK is poised for 7% GDP growth this year. Profitability for the period in our Advantage motor finance business and in Aspen, our property bridging arm, was ahead of group projections.  Loan advances and collections rates in the period were ahead of the same period last year, whilst Group net receivables are now around £295 million.

Advantage Finance

Advantage Finance has produced an excellent first quarter, ahead of expectations, and continues to invest in operational improvements which will strengthen its market position, risk profile and efficiency.

Although the bounce in loan advances anticipated following the reopening of motor dealerships in April was less than expected, year on year advances growth continues to accelerate and new business quality has continued at a very good level. Advantage continues to develop its offering across the non-prime motor spectrum, which is reflected in the quality of new customers it is attracting. As well as developing closer links with its loyal introducer partners, Advantage is making good progress in its own digital marketing and in providing loans for the nascent electric vehicle market. Indeed, Advantage is supporting the Finance and Leasing Association in its work to try to create a Green Finance Guarantee with HM Treasury.

Monthly collection rates are cumulatively above budget and an excellent £12.6 million of monthly collections were reached in April. Covid-related FCA "payment holidays" have now fallen to just 1,200 customers from the cumulative 21,527 customers originally taking such deferrals. Customers unaffected by "payment holidays" maintain their usual excellence, and even those returning from "payment holidays" have now returned to levels at 85.4% of due, as the labour market strengthens and consumer confidence revives.

Hence, the trends currently observed at Advantage make us optimistic that profit recovery and advances growth will meet our expectations this year. We are laying the foundations for a return towards Advantage's historic levels of profitability.

Aspen Bridging

Fuelled by a rising and buoyant residential property market in which price levels currently stand 7% ahead of 2020, Aspen, is set for a record year. Early transaction numbers have been boosted by Aspen's authorisation for the Government guaranteed CBILS scheme, so that current net receivables have reached over £50 million. Whilst the past quarter has also seen an increase in average gross loan size to £1 million per deal, book quality is at its best ever level. Thus, the first quarter saw repayment collections at £11.5 million - or nearly three times the figure last year.

Profitability in the first quarter reflects this and April saw a record surplus for the business. Costs remain close to budget despite systems investment and new recruitment, reflecting the increase in business. Meanwhile underwriting processes and standards continue to be refined, valuations remain conservative, and overall maximum gross LTVs have reduced to just 59%.

Treasury

Both our very encouraging business prospects and our traditionally conservative Treasury policy have resulted in further strengthening of S&U's Treasury position during the first quarter. The latter is reflected in Group gearing of just 60%, and current medium-term facilities standing at £155 million against borrowings of £111 million. In my statement for S&U's full-year results, I said that "our growth prospects and strategy will require additional funding"; I am therefore pleased to report an additional £25 million of funding arranged during the period. This takes Group facilities to £180 million, which provides appropriate scope for the Group's future growth.

Commenting on S&U's trading outlook, Anthony Coombs, S&U chairman, said:

"The financial year has started very well for S&U - a recovery which, as the British economy resumes growth, we expect to continue. With our habitual determination, imagination and commitment we remain very confident as to the Group's prospects for this year."