Motor finance and specialist lender S&U saw annual profits tumble as woes from the car mis-selling scandal linger.
Pre-tax profit for the financial year ending January 31 2025 fell to £24m, compared to £33.6m in the previous period.
Impairment charges rose to £35.6m for the group, reflecting a near £10m increase in motor finance arrears.
Advantage – the firm’s motor finance arm – posted a £16.5m pre-tax profit. This was down from £28.8m in 2024.
The group’s basic earnings per share was slumped to 147.4p – falling from 209.2p last year.
Despite this, group revenue remained steady. The lender pocketed £115.6m for the period, a small increase from the £115.4m recorded in 2024.
This was driven by a record year for the company’s specialist lender arm Aspen Bridging. Aspen booked £23.8m in revenue, up from £17.3m.
Anthony Coombs, chairman of S&U, said: “Advantage, our resilient and established motor financier has undoubtedly had a difficult year owing to legal and regulatory challenges. However, these are now almost all resolved; hence, we view the future with optimism and recall an old American business adage: “If you want the rainbow, you gotta put up with the rain.”
“As trading recovers with the formal conclusion of the FCA S166 process, we are confident that the experience, skill and determination of our people, together with a more supportive government, a more pragmatic regulator and a common-sensical Supreme Court, will lead to a rebound in Advantage’s results.
“Meanwhile, our property lender, Aspen, has produced record profit and performance and beckons a very bright future. We therefore anticipate that S&U will be restored to its habitual path of steady and sustainable growth.”
The London-listed firm was at odds with the Financial Conduct Authority in the final months of 2024.
The lender blamed the watchdogs regulatory pressure for the “uninspiring performance” of its motor finance business in the first six months of the year.
S&U criticised the FCA’s focus on its division, saying it has “significantly constrained Advantage’s ability to interact with and manage its traditional customers, with whom it has happily worked for the past 25 years.”
