02 September 2025
By Maynard Paton
FY 2025 results summary for S & U (SUS):
- An FY performance blighted by ongoing regulatory matters and an adverse Court of Appeal judgment, with FY motor-finance lending down 38% that prompted FY profit to drop 29% and led to yet another dividend cut.
- Collection rates, up-to-date accounts and Stage 3 impairments within the motor-finance division all moved significantly in the wrong direction, but could soon recover following a shift towards lower-risk borrowers alongside a favourable Supreme Court ruling.
- Indeed, SUS’s exposure to substantial regulatory redress now appears “minimal” while post-FY statements talked of an “expected resurgence in profitability” through “above budget” motor-finance lending on what has become a “level competitive playing field“.
- The property-bridging subsidiary meanwhile delivered “excellent” progress, with record lending at higher rates leading to FY profit surging 50%, a possible 65% pre-tax return on equity and divisional loans supporting 35% of the group’s loan book.
- The shares yield 5%-plus and are valued at 0.95x NAV, and may offer a 10-15% CAGR should the payout be maintained and future NAV growth eventually persuade the market cap to once again trade above book. I continue to hold.