SUS S&U PLC

Edison Investment Research Limited: S&U (SUS): Seeing recovery and adapting to grow

Edison Investment Research Limited
Edison Investment Research Limited: S&U (SUS): Seeing recovery and adapting to grow

04-Apr-2022 / 07:00 GMT/BST

 

London, UK, 4 April 2022

 

S&U (SUS): Seeing recovery and adapting to grow

S&U recorded a dramatic increase in profit in FY22, but the more telling point is that average pre-tax profit for FY22 and FY21 was nearly £33m, only slightly below the pre-pandemic level of £35m (FY20). In the meantime, the group has continued to refine and develop both its businesses, which should underpin medium-term growth even if the near-term macro background is uncertain.

Our estimates are increased slightly, with EPS raised by 2% and 3% for FY23 and FY24 respectively. Following the exceptionally low level of loan loss provisions in FY22 we expect a normalisation in FY23, hence the reduction in pre-tax profit between the two years, from £47m to £39m. This still leaves the prospective multiple only just above 9x. The disparity between profits and earnings growth in FY24 is the result of allowing for the increase in corporation tax to 25%. The historical and prospective yield of over 5% should be supportive for the share price.


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Reports on S&U PLC

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Advantage and Aspen both performed well and broadly in line with our expectations. PBT in H124 was £21.4m, 2% above H123. Impairments were better than expected, particularly at Aspen, but costs were affected by the inflationary environment and a more than twofold increase in finance expenses. Profit after tax came in at £16.2m, 5% below H123 as the tax rate rose. The group declared a dividend of 35p/share, in line with H123. S&U also increased its funding facilities by £70m to £280m in anticipat...

10/16/23 October 16, 2023 1 EN
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