S&U Reaction Note - Aspen Decision Positive
S & U's confirmation that it will extend Aspen Bridging Finance is another positive step in the progress of the company. While the success of Advantage (motor finance) has been evident, and will continue in our opinion, a more diverse lending base should add further to S & U's medium-term prospects.As ever, the company is developing cautiously, extending the current £20m loan book to £30m, but there is evidence that there is strong demand for this product within SME residential developers. Concerns over the UK housing market through Brexit are relevant but, we believe, not material to this market. The current malaise has its roots in mortgage restrictions and the consequent shortage of stock. This is unlikely to change in the medium term. Thus, S & U's position in a relatively niche market, short of funding, should be robust.
Like most UK, consumer-focused companies, S & U has seen its share price come under pressure in recent weeks. On our maintained forecasts and against lending peers, theoretical value remains significantly above the current level.
S & U is engaged in the provision of consumer credit and car finance throughout the United Kingdom.
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