S&U plc

Resolute

and Resilient

Annual Report and Accounts

for the Year ended 31 January 2024

Founded in 1938, S&U’s mission is to provide Britain’s

foremost motor, property bridging and specialist

finance service.

Since 1999 our Advantage motor subsidiary has

provided finance for over 250,000 customers. In

just seven years, Aspen our new property bridging

business has transacted over £500m in secured loans.

Our Values

Making the customer the

heart of our business.

Respect for every

customer and always

treating customers fairly.

Long term success and sustainable

growth depend upon responsible

lending and great customer

outcomes.

Our Businesses

Motor Finance

Hire purchase motor finance

for over 250,000 customers

since 1999.

Property Bridging

Finance

Launched in early 2017 and

grown steadily and successfully

since then.

S&U Mission Statement

In the complex, and ever changing, world of

financial services, over the past eighty years

S&U’s customers have relied on the company

for one quality above all - TRUST. Trust is the

golden seam which runs through everything

we do. In practice it means:

In practice it means:

EAMWORKT

In any business the guardians of integrity are

its people, and their common pursuit of the

highest standards.

ESPECTR

Loving your neighbour is not simply at the

core of Christian values, but transcends our

behaviour towards everyone whatever their

race, gender, religion or personality.

NDERSTANDINGU

Valuing every customer must be grounded in

a clear understanding of their needs, wishes

and circumstances; this guides the service we

offer them.

ERVICES

This is both the product and the proof of our

understanding and respect for our customers,

each other and our neighbours.

RUTHT

Honesty, integrity and transparency are the

best guarantees of the way we treat all with

whom we do business. If people trust S&U

they will have confidence in the services we

provide. The good business which results is

our justified reward.

S&U Annual Report 2024

S&U Plc Annual Report and Accounts 2024IFC

Revenue (£m)

2020

83.0

021

89.9

022

87.9

023

102.7

024 115.4

88.9

Average for 2 pandemic years

Basic EPS (p)

2020

239.6

021

120.7

022

312.8

023

277.5

024 209.2

216.8

Average for 2 pandemic years

Profit before tax (£m)

2020

35.1

021

18.1

022

47.0

023

41.4

024 33.6

32.6

Average for 2 pandemic years

Dividend Declared (p)

2020

120

021

90.0

022

126.0

023

133.0

024 120.0

108.0

Average for 2 pandemic years

Contents

STRATEGIC REPORT

Group at a Glance 04

A1 Chairman’s Statement 05

A2 Strategic Report 10

A2.1 Strategic Review 10

A2.2 Business Review 12

A2.3 Funding Review 13

A2.4 Principal Risks and Uncertainties 13

A3 Statements of Viability and Going Concern 15

A4 Corporate Social Responsibility 23

A4.1 Employees 23

A4.2 Community 24

A4.3 Health and Safety and Diversity Policy 24

A4.4 Climate Change 24

A5 Section 172 Statement 27

A6 Approval of Strategic Report 27

CORPORATE GOVERNANCE

B1 Board of Directors 30

B2 Directors’ Remuneration Report 32

B2.1 Report of the Board to the

Shareholders on Remuneration Policy

B2.2 Remuneration Policy Report 35

B2.3 Annual Remuneration Report 44

B3 Governance 54

B3.1 Audit Committee Report 54

B3.2 Corporate Governance 55

B3.3 Compliance Statement 58

B4 Directors’ Report 59

B5 Directors’ Responsibilities Statement 61

C1 Independent Auditor’s Report to the

Members of S&U plc

THE ACCOUNTS

D1 The Accounts 70

D1.1 Group Income Statement and

Statement of Comprehensive Income

D1.2 Balance Sheet 71

D1.3 Statement of Changes in Equity 72

D1.4 Cash Flow Statement 73

D2 Notes to the Accounts 74

Five Year Financial Record 98

OTHER INFORMATION

Financial Calendar 99

Officers and Professional Advisers 100

Find us online at

www.suplc.co.uk

Stock Code: SUS ― www.suplc.co.uk 01

STRATEGIC REPORT

IN THIS SECTION

Group at a Glance 04

A1 Chairman’s Statement 05

A2 Strategic Report and Section 172

Statement

A2.1 Strategic Review 10

A2.2 Business Review 12

A2.3 Funding Review 13

A2.4 Principal Risks and Uncertainties 13

A3 Statements of Viability and Going Concern 15

A4 Corporate Social Responsibility 23

A4.1 Employees 23

A4.2 Community 24

A4.3 Health and Safety and Diversity Policy 24

A4.4 Climate Change 24

A5 Section 172 Statement 27

A6 Approval of Strategic Report 27

Strategic

Report

S&U Plc Annual Report and Accounts 202402

STRATEGIC REPORT

03Stock Code: SUS ― www.suplc.co.uk

Founded in 1938, S&U’s mission is to provide Britain’s foremost motor, property bridging and

specialist finance service. We now have over 65,000 customers and over 200 loyal and valued staff

and plans for continued sustainable growth.

Motor Finance Property Bridging Finance

Aspen Bridging is now entering its 8th year in the property

bridging finance market having successfully established a

strong reputation for service excellence in the delivery of

quality lending products. Aspen has developed an appealing

range of award winning bridging loan products that has a

good reach across the market for residential and commercial

property as well as sectors such as refinancing, capital raising

and refurbishment loans. Aspen can lend up to £10m per

deal with an average loan size of circa £900,000. Aspen has

continued to strengthen broker relationships, often appealing

to them as a one-stop shop for their customer bridging loan

needs and positioning ourselves as a respected lender in the

property bridging market. As members of the ASTL and FIBA

along with promoting our lending propositions at key industry

events, Aspen has won three industry awards at the Bridging

and Commercial awards. Aspen, based in Solihull, has continued

to grow and develop the team of 25 with highly skilled and

experienced staff. During the year, Aspen has continued to

expand the customer acquisition channels via additional broker

networks, added another member of the dedicated broker

development team and attended all the key industry forums

and financial showcasing events which helps support the

continued expansion of the business. Aspen continues on its

journey towards being a significant contributor to the future of

the Group.

2023 has seen Aspen continue to reach new positive highs with

our customer and broker relationships that we have organically

grown since our launch in 2017. Having managed through the

previous ‘mini budget’ challenges early in the year the second

half of 2023 has been strong. With our tenacity to find good

loan deals and our strong product suite we are reaching a wide

borrower and broker sector in the bridging market. We have

shown that by focusing on delivering a fast, consistent and

reliable service for both new and returning customers we can

successfully operate in this speciality lending market. We will

remain vigilant as always about any emerging market risks but

in 2024 we will take quality lending opportunities when they

are there. With the ever increasing talent that we have in the

Aspen team, maintaining the right product appeal and with our

focused determination to succeed we believe that Aspen will

continue to build a successful bridging lending business.’’

Ed Ahrens

Chief Executive

Advantage Finance has grown into one of the most progressive

and innovative motor finance companies in the country. As

active members of the Finance and Leasing Association (FLA),

and with representation on the FLA Board, deputy chair of the

Motor Finance Division, and chair of the Credit Risk Committee,

we punch above our weight in terms of shaping our industry.

Based in Grimsby, Advantage employs over 200 people, and

working closely with most of the UK’s motor finance Brokers,

we have provided hire purchase finance for over 250,000

customers across our great country. We operate within the

non-prime sector and have built an outstanding reputation and

track record in terms of service to our business partners and

customers alike. Funding is invested wisely through a hugely

experienced and skilled management team, the majority of

whom have been with the company since its inception

24 years ago.

Advantage continues to combine its experience, culture and

expertise to thrive during challenging times and deliver for

its customers, partners and shareholders. Whilst the motor

finance market finds itself operating within an environment of

economic and regulatory change, Advantage have succeeded in

building new capabilities, expanded distribution, and continued

to deliver great outcomes for customers. We look forward to

the next step on our long and established journey with a sense

of confidence, resilience and focus upon the opportunities

ahead’’.

Karl Werner

Chief Executive

Group at a glance

S&U Plc Annual Report and Accounts 202404

Introduction

Times of change and contrasting fortune

often bring out the best in people. The

past year has been such a time. After

a first half which saw profit before tax

ahead of both 2022/23 and budget, a

combination of prolonged and raised

interest rates, a British economy sliding

towards recession and, most of all, a

flurry of regulatory activity has seen

profits for the year as a whole at £33.6m

against £41.4m (the highest normalised

profit in S&U’s history) last year.

Whilst short of the “emerging

opportunities” we foresaw a year ago,

the results do not do justice to the solid

underlying trading of the Group, nor to

the sterling efforts of our staff. Working

as always together, they will continue to

ensure that we shall overcome short-

term challenges and restore S&U to its

habitual path of steady and sustainable

growth.

The strength of S&U’s trading is

demonstrated by Group revenue this year

at £115.4m (2023: £102.7m) and record

equity of £234.2m (2023: £224.9m).

Customer numbers in both Advantage,

our Grimsby-based motor finance

provider, and at Aspen our property

financier in Solihull, are at a record. So

are the Group total repayments they

produce of nearly £370m, up 18.5% on

2023. Net receivables for S&U have now

reached a best ever £462.9m, and Aspen

has recently attained the £500m mark for

lending over its seven-year history.

That growth has occurred whilst

preserving sustainable quality. Our

repayments are one indicator of our

historically good relations with our

valued customers. Thus, despite what

we anticipate to be a temporary hiatus in

the last quarter, Advantage live monthly

repayments as percent of due finished

at 92.1% for the year (2023: 93.6%) with

bad debt and voluntary termination

write-offs remaining within budget and

just under 10% more than last year.

Meanwhile, not only were Aspen’s profits

at a record £4.8m (2023: £4.5m) but its

total repayments reached £144.4m for

the first time, with just 15 loans beyond

term at year end.

Financial Highlights*

2024 2023

Revenue: £115.4m £102.7m

Profit before tax (“PBT”): £33.6m £41.4m

Earnings per share (“EPS”) 209.2p 277.5p

Group net assets: £234.2m £224.9m

Group gearing*: 95.8% 85.5%

Group total repayments*: £369.8m £311.9m

Dividend proposed: 120p per ordinary share 133p

* key alternative performance measurement definitions are given in note 1.14 below.

Advantage Finance

(“Advantage”)

The contrast between the very

creditable trading record mentioned

in my introduction and the results we

announce at Advantage can be explained

in two ways. The first is a persistently

higher level of borrowing costs as books

have grown and interest rates remained

higher than anticipated. As a result, on

Advantage year-end borrowings £18m

higher than last year, interest payable has

risen by £4.4m for the year as a whole.

Second, and even more significant,

there has been an upsurge over the

past months in regulatory activity by the

Financial Conduct Authority involving

inquiries into Advantage alongside, we

understand, the majority of firms in the

motor lending industry. One such current

inquiry is into the linking of interest

rates charged to customers to the level

of commission paid by lenders to broker

introducers. Happily, Advantage is not

involved since it has never engaged in this

practice which would cut across its long-

standing model of matching rate to risk.

As Marcus Aurelius, a second century

Roman Emperor and Stoic philosopher

once said, “sometimes the art of living

is more like wrestling than dancing”.

Confident in our people, business

philosophy and the markets we serve so

well, we wrestle on.

Anthony Coombs MA (OXON)

Chairman

A1 Chairman’s Statement

Stock Code: SUS ― www.suplc.co.uk 05

STRATEGIC REPORT

However, another FCA inquiry focusing on

affordability, forbearance and vulnerable

customers has been initiated by the FCA

across the industry to ease the perceived

burden of a prolonged period of cost-

of-living increases. This FCA inquiry

has increased Advantage’s costs and

inhibited both the range of products we

offer our customers, and our ability to

sensibly help them maintain their loan

repayments - which bolsters their future

credit rating.

These inquiries should not detract from

the underlying strength of Advantage’s

results and business model. Receivables

have reached a record £332.5m (2023:

£306.8m) and revenue is up to a record

£98.2m (2023: £89.8m). Total new deal

numbers were over 21,500, which was on

budget. Live monthly repayments were

a record £172.1m representing 92.1% of

due for the year (2023: 93.6%). Total deal

numbers written off to bad debt were

3717 of a total c. 65,000 on the books,

under budget, but up 540 on a year ago

and 74% of customers were up to date at

year end, against 77.6% a year ago.

Those fundamental strengths were

not reflected in Advantage’s PBT of

£28.8m for two reasons. The first is

that provisions prudently made on an

IFRS9 estimate of future cash flows have

increased by £8.2m on last year. Whether

these prove overcautious or otherwise

will be evident as the year progresses.

The second relates to additional costs

incurred as a result of the FCA’s inquiries

in “professional fees” as well as an

increase in base rate driving extra finance

costs in Advantage of over £4m on last

year. Both are not expected to persist.

More widely than just at Advantage,

on an industry wide basis, this recent

upsurge in regulation has a number

of important characteristics and

implications.

Before delving into the specifics, it’s

essential to acknowledge that S&U

endorses the FCA’s objectives aimed at

enhancing the consumer experience,

safeguarding customers from the

infrequent but possible negligence

within the finance sector and assisting

individuals in navigating challenges that

may arise during the tenure of their loan.

We have consistently maintained that

lending is not a win-lose scenario, and

believe that transparent, straightforward,

and mutually agreed-upon regulations

serve the best interests of both the

customer and the lender. This perspective

aligns with the FCA’s additional

responsibilities to uphold the integrity

of the UK’s financial system and to

foster competitive practices that benefit

consumers. By fulfilling these roles, the

FCA, along with other regulatory bodies,

can more effectively meet its broader

mandate to support the international

competitiveness and growth of the UK

economy.

This includes efforts to broaden access

to credit for all consumer segments,

particularly those often categorized

as non-prime by traditional financial

standards. Such initiatives can stimulate

consumption, which constitutes a

significant portion of overall demand,

thereby driving economic expansion.

In recent years, a notable trend has

emerged contrary to expectations. The

workforce of the FCA has expanded

to 4,289 employees, an increase of

1,100 in the last year, paralleled by

a substantial contraction in credit

availability. A February report by

Clearscore, a data provider and credit

scorer, in collaboration with Ernst and

Young, highlights a marked decrease in

the availability of debt products for non-

standard customers over the last twelve

years. Specifically, the non-prime market

has seen a reduction of more than 30%

since 2019. Consequently, Clearscore/

E&Y estimates indicate that the number

of people whose credit needs are not met

has risen from 12 to 13 million in 2018 to

16 to 17 million. This has led to a greater

reliance on illegal money lending.

The report by Clearscore and E&Y

also notes the inherent challenges in

regulation, which must consider the

‘fairness’ of outcomes for customers

in diverse situations. This has been

reflected in the FCA’s continuous

issuance of guidance, including the

recent introduction of an outcome-based

consumer duty.

This approach, often based on

retrospective assessment, introduces

a degree of uncertainty regarding

customer relationships, which in the case

of Advantage, have been established

and refined over 25 years. Unintended

consequences may include a dampening

effect on innovation and the introduction

of new products. Furthermore, there

has been a notable decrease in industry

capital, with Ernst & Young estimating a

reduction of £2 billion in recent years, as

funders grow cautious due to concerns

about repayment reliability.

Additionally, imposing restrictions on

customers’ ability to address their

arrears, in pursuit of comprehensive

and sometimes intrusive affordability

assessments, may inadvertently lead to

a preventable worsening of their credit

scores.

Central to ensuring consistent and

equitable outcomes for customers is

the precise definition of terms such as

‘affordability’ and ‘vulnerability’, which

are inherently subjective and fluctuate

over time, particularly in an inflationary

environment where the lines between

‘essential’ and ‘discretionary’ spending

may become indistinct.

Customer numbers in both Advantage, our

Grimsby-based motor finance provider, and at

Aspen our property financier in Solihull, are at

a record.

Anthony Coombs MA (OXON)

Chairman

A1 Chairman’s Statement

S&U Plc Annual Report and Accounts 202406

In efforts to clarify these critical issues,

Advantage actively collaborates with

regulators, prioritizing the long-term

interests of its customers. The company

takes pride in its high customer

satisfaction ratings, evidenced by a 4.7

out of 5 score on FEEFO and Trustpilot,

and remains committed to offering a

spectrum of forbearance options to assist

customers facing payment challenges,

ensuring they can continue to use their

vehicles whenever feasible.

Advantage’s strap line for new customers

is “We see more than your score” an

initial assessment which goes alongside

Advantage’s traditional aim to improve

a customer’s credit rating following

the successful repayment of their loan.

Since a typical ‘non-prime’ customer has

experience of credit arrears and often

default in the years prior to application,

this is an approach many customers find

comforting and valuable as Advantage

testimonials show. Almost all can improve

their credit score following successful

repayment of an Advantage loan.

Preparations for the Consumer Duty at

Advantage last summer were thorough.

Readiness for the new Duty was overseen

by independent legal advisers and then

reviewed by RSM, S&U’s internal auditors.

Moreover, a previous FCA review of

affordability at Advantage had been

deemed satisfactory.

In response to ongoing concerns

regarding the cost of living and its

declared objective to “deliver quantifiable

consumer benefits,” the FCA has

launched comprehensive inquiries across

the industry, affecting approximately

two-thirds of non-prime motor finance

companies. In anticipation of the findings,

Advantage has consented to specific

limitations on its repayment processes.

These modifications have temporarily

influenced monthly repayments and

recovery efforts. However, following

constructive dialogues with the

regulatory body, these measures are

being thoughtfully adjusted to ensure

flexibility and effectiveness.

As the motor finance industry transitions

to new modes of regulation and evolving

assurance of fair customer outcomes, it is

to be expected that the mutual learning

and understanding between firms and

regulator will cause some temporary

disruption. In future however, Advantage

expects that its long-term experience and

humane approach to every customer,

irrespective of their background, as

evidenced by its industry-leading

customer satisfaction and Ombudsman

“uphold” rates, will be vindicated and

rightly bear fruit.

Finally, I have great pleasure in welcoming

Karl Werner as the new Chief Executive

of Advantage. Karl has impressed

enormously in the few months he has

been with us, and his long experience of

the finance industry and its regulation,

particularly at MotoNovo and Aldermore

Bank will make him a distinguished

successor to Graham Wheeler.

£115.4m

Group Revenue

(2023: £102.7m)

£33.6m

Group Profit Before Tax

(2023: £41.4m)

£234.2m

Group Net Assets

(2023: £224.9m)

Stock Code: SUS ― www.suplc.co.uk 07

STRATEGIC REPORT

A1 Chairman’s Statement

Aspen Bridging

Aspen has continued its impressive

progress. Despite an increase in finance

costs of £3.6m, profit this year has

reached a record £4.8 m (2023: £4.5m)

on revenues of £17.3 m (2023: £12.9m).

Net receivables are now £130.4 m (2023:

£113.9m) following record deal numbers

in the year. As Aspens’ reputation

amongst the finance broking community

grows, so does the quality of deal and

customer it attracts. As we foresaw last

year, this has meant a continuation of

last year’s higher £0.9m average loan

size, whilst average Loan to Values were

under 70%, a small reduction on last year.

This reflects high quality security and the

more experienced developer/investor

customers Aspen now attracts.

This is welcome, given the uncertainty

surrounding the housing market, which

continues to mirror the wider economic

issues of the past two years. Annual UK

residential transactions last year were

1 million, about 15% down on the year

before. However, as mortgage approvals

recover, this is expected to reach 1.1

million transactions next year. Average

prices for residential properties, which

are Aspens’ main security, fell slightly

last year but have shown recent signs of

recovery. Predictions for the current year

range from a 3% average rise at Knight

Frank to a 3% price fall from Halifax.

Given the prospects for a further fall

in mortgage rates and a healthy labour

market feeding latent demand, our view

is that house prices will rise up to 5%

on average this year, and possibly more

in the south east, where most bridging

activity occurs.

These trends are also reflected in

the refinance market which has seen

average falls of nearly one percent

in both interest and stress test rates

over the past six months. All this is

reflected in total repayments in the year

by Aspen of a record £144.4m (2023:

£96.1m). A growing book requires expert

supervision, and Aspen has strengthened

its risk and recoveries department by

recruiting further experience in that area.

The capital receivables book of c£133m is

high quality. Of 163 current loans, just 15

are beyond term, up just one on last year.

Only four properties were in repossession

at year end, for which recovery is in

progress and adequate provision has

been made.

The team at Aspen, based in Solihull in

newly expanded offices, has grown to

25 from 21 two years ago. Since Aspen’s

live book debt has roughly doubled to

£130.4m in that period, productivity has

substantially increased.

Efficiency measures are carried out

quarterly; current trends on all measures

are impressive and will be maintained.

Staff are encouraged into CPD; partly as

a result, staff turnover has remained low

and morale high. Aspen runs a female-

managed football team, predictably ‘Aspen

Villa’, promoted last season. Regular

staff excursions and celebrations occur,

most recently to mark £500m of lending.

Momentum is being maintained with

current lending at over £15m per month.

Since its launch in 2017, Aspen has more

than met S&U’s expectations, and great

things are expected of it in the future.

Dividends

Whilst recognising its primary

responsibilities to its shareholders,

S&U has always sought to balance the

interests of all its stakeholders. This

year’s fall in profit together with our wish

to protect our loyal staff from recent

increases in the cost of living has made

this a particularly delicate one this year.

Thus, except for senior directors, average

salaries this year have matched the rate

of inflation, with more for living wage

earners. Higher base interest rates have

cost the Group an additional £8m this

year, and our incoherent Government

have raised the rate of corporation tax by

nearly a third.

Taking all this into account, subject to the

approval of shareholders at our AGM on 6

June, the board proposes a final dividend

of 50p per ordinary share (2023: 60p).

This will be paid on 12 July 2024 to the

shareholders on the register on 21 June

2024. Total dividends for the year will

then be 120p per share (2023: 133p).

S&U Plc Annual Report and Accounts 202408

Funding and Treasury

Our confidence in S&U’s business

strategy, in our customers and the

market we serve has been reflected

in the additional £32m invested in

our businesses over the past year. Net

borrowings at year-end was £224.4m

(2023: £192.4m). Current Group gearing

therefore stands at 95.8%, well within

banking covenants and S&U’s traditionally

conservative risk appetite. The first

half of the year saw Group funding

facilities increase by £70m, excluding

overdrafts, to £280m from our funding

partners, comfortably in excess of our

anticipated requirements until 2026.

In the meantime, we budget for the

current Bank rate, but hope for speedy

reductions and a more growth-friendly

approach from the Bank of England.

Governance and

Regulation

The recent period of modest economic

growth, alongside political uncertainties,

has heightened awareness of the critical

role that corporate sustainability and

profitability play in any functioning free-

market system. This shift in focus has

even led figures like Larry Fink, who was

once a staunch advocate for corporations

in the United States, to reconsider

the overriding importance of the

Environmental, Social, and Governance

(ESG) agenda.

S&U’s extensive experience in engaging

with respectable individuals, who

may not have flawless credit histories,

predates the establishment of the FCA by

seventy-five years. While acknowledging

that the commercial landscape evolves,

my stance has been consistent on two

fronts.

Firstly, I believe that in organizations

where Christian and family values are at

the core, such as S&U, there is a natural

alignment between commercial pursuits

and consumer protection. History has

shown that a well-regulated free-market

system is unparalleled in enhancing

welfare and living standards.

Secondly, S&U has always been a

proponent of the critical role the FCA

plays in ensuring fair treatment for

consumers. Nonetheless, for the markets

serving these consumers to remain

stable and competitive, ensuring access

is paramount. Without this, numerous

vulnerable consumers might find

themselves resorting to unregulated,

and potentially illicit, lending options—a

scenario diametrically opposed to the

expectations of a civilized society.

S&U’s commitment to such a society

is evidenced in part by the community

activities in which our employees are

involved. At Group level this year saw the

tenth anniversary of the Keith Coombs

Trust, named for my father and former

chairman. The Trust focuses its work

on children and young people with

all kinds of disability - mental, physical

and emotional. Through charities in

Birmingham, London, Kidderminster and

in Africa and India, it funds and promotes

work for those who are unable to help

themselves.

Finally, in challenging times we should

remind ourselves that sustainable success

depends upon happy and satisfied

customers and the people who serve

them. The past six months have not been

easy and I pay tribute to all of them;

and also, to Graham Wheeler who, over

the past four years has led Advantage

through COVID, a cost of living crisis and

regulatory change. On his retirement,

I am pleased that he has now agreed

to join S&U’s board in a non-executive

capacity.

Current Trading and

Outlook

Enthusiastic and supportive customers

underpin S&U’s long success and

guarantee its future. Current trends, both

at Advantage and Aspen, prove that S&U

has an abundance of these and trading

since our year end is encouraging. Of

course, challenges remain. As Marcus

Aurelius, a second century Roman

Emperor and Stoic philosopher once said,

“sometimes the art of living is more like

wrestling than dancing”. Confident in

our people, business philosophy and the

markets we serve so well, we wrestle on.

Anthony Coombs

Chairman

10 April 2024

Stock Code: SUS ― www.suplc.co.uk 09

STRATEGIC REPORT

A2 Strategic Report

Overview

The directors are required to publish a

Section 172(i) statement showing how

they have fulfilled their duties under the

Companies Act 2006.

How S&U’s directors do this is set out

below in our Strategic and Business

Review (A2), our Corporate Social

Responsibility Review (A4), our

Chairman’s Statement (A1) and our

Governance Section (B3). The Board has

reviewed these documents, how they

describe the company’s decision-making

processes and the issues which most

inform S&U’s business strategy. Specific

examples of how the process works have

been provided. As a result, the Directors

are confident firstly, that the report fully

covers areas of relevant disclosure such

as on Strategy, Employees, Stakeholders,

Suppliers, Customers, Community and

Ethics and secondly, that the extent of

these disclosures is consistent with the

size and complexity of the business.

A2.1 Strategic Review

S&U’s purpose and vision is to maximise

profit and returns to its shareholders in

a sustainable and responsible way. This

provides security for our employees,

fairness for our customers, credibility

for our financial and other partners and,

ultimately, the ability to enhance the

communities and environment in which

we live, and therefore fulfil our ESG

responsibilities. S&U have set up an ESG

committee under my chairmanship to

progress these important matters.

S&U operates in two areas of specialist

finance. The first and most established

is Advantage Finance, based in Grimsby

and engaged for the past two decades

in the non-prime sector of the motor

finance business. During those 24 years

the remarkable success of Advantage in

producing competitive finance products,

lent responsibly and with excellent

customer service has been reflected

in an excellent profit record. This long

experience has enabled Advantage

to gain a significant understanding

of the kind of simple hire purchase

motor finance suitable for customers

in lower and middle-income groups.

Although decent, hardworking and well

intentioned, some of these customers

may have impaired credit records, which

have seen them in the past unable to

access rigid and inflexible “mainstream”

finance products. Advantage provides

transparency, simplicity, clarity and

suitability to both service and product,

which these customers require.

As a result, Advantage currently now

receives over 2m unique applications

a year and has written over 250,000

customer loans since starting trading in

1999. The loans have an average original

term of 4.5 years. This year the Financial

Conduct Authority produces one of

the biggest overhauls of its regulatory

approach to the financial services

industry for many years. In addition to

the now fifty-year-old Consumer Credit

Act, a raft of secondary legislation and

regulatory controls over the past 20

years have now all been encapsulated in

the new Consumer Duty regime, which

became operational from July 31.

This “paradigm shift” represents a major

part of the FCA’s 2022 – 2025 strategy

and extends the principle of consumer

protection from their initial treatment,

including underwriting, communication

and product design, to a wider

concern with “good outcomes for retail

customers”. At present these outcomes

are not subject to unequivocal definitiion

and, given the longevity of some finance

agreements, will be difficult to both

interpret and monitor in the future.

This year, such difficulties have been

focussed on forbearance, particularly

due to the FCA’s understandable concern

about the sustainability of customer

repayments given the prolonged cost of

living pressures they are experiencing.

Vulnerable customers are another area

of understandable concern, but one

where the definition of ‘vulnerable’ can

cover a multiplicity of economic, social

and emotional circumstances. Some

estimates have up to 16 million people

classified as vulnerable in the UK today.

Nevertheless, vulnerable customers have

to be recorded and accorded a different

repayment treatment and the company’s

policies for doing so must be laid down,

wherever possible, in advance.

Of course, Advantage have responsibly

embraced the new consumer duty and

will further work with the regulator

to make it effective in practice. First,

because it is right to do so and second,

since it will give well organised companies

like Advantage a commercial advantage

over those who are not. Advantage is

currently working with the regulator and

a company appointed ‘skilled person’

to do so.

The success of Advantage, our motor

financier, depends as ever upon three

fundamental strengths. First, is the

enduring reliability of the UK motor

market. Enduring does not mean

unchanging, since finance and leasing

association figures show that the used

car consumer finance market fell by 5% in

the year to 31 January 2024 the value of

the market for each of the last 5 years has

been over £20 billion and the outlook for

2024 is for single digit growth.

Nevertheless, the used car market is

not homogeneous, The Government set

ambitious targets for a ban on the sale

of new internal combustion engine cars

by 2030, although these have sensibly

been put back to 2025, to be replaced by

electric vehicles and hybrids. Although

Advantage agrees that the proportion of

electric vehicles in the UK “car parc” may

reach 30% by 2030, electric vehicle sales

are largely confined to socio economic

groups outside those we serve. Thus,

Advatnage provided finance for 80 such

cars last year, five times that in 2022 but

a very small proportion of the 21,565

total. Althought the proportion of EVs in

the new car market is predicted to grow

to 26% by 2025 from about 12% in 2023,

petrol will still constitute at least 46%

then. Even that level of EV growth will

depend on supply constraints, cost and

confidence in recharging points. Currently

about 98% of the UK Used car finance

market involves petrol or diesel vehicles.

Advantage’s second strength is its

experienced, sensitive and sophisticated

under-writing. Backed by ever more

customer historical information;

Advantage uses this forensically to

analyse the likely circumstances of

actual and potential customers. This

year it has adopted greater use of ever

more granular household information

to improve its already sophisticated

customer affordability process. The

improvement in affordability monitoring

during the life of the agreement has been

helped by greater use of open banking

S&U Plc Annual Report and Accounts 202410

and of income and expenditure surveys,

although the completion of these

detailed surveys and what expenditure

is classified as essential can be difficult

and is not helped by understandable

customer reluctamce to reveal every

nook and cranny of their budgets.

Advantage’s third great strength is to

recognise that supplying the right product

to reach the customer at the right time

is just part of its service. It also collects

its payments responsibly. Advantage

has always regarded its relationship

with its customers as a partnership.

This involves understanding the more

sensitive and frequently changing

circumstances of those in the non-prime

sector. It has recently been required to

demonstrate this to the FCA, as part

of the latter’s work on forbearance.

Although the UK labour market remains

strong, rising cost of living pressures

mean that well intentioned customers

ocassionally require knowledgeable

assistance, particularly should their

financial buffers reduce. Our team at

Advantage produce excellent results by

being trained and empathetic to the

needs of their customers. Collecting

and default figures demonstrate this

and will now be supplemented by

regular reporting of softer performance

measures. These will include more data

on vulnerable customers and the success

of forbearance arrangements in restoring

and improving customers’ repayments

and credit scores. They underpin our

responsibility under Consumer Duty and

are integral to Advantage’s commercial

success.

Whilst lending is on a fully secured basis,

debt quality at Aspen, our property

bridging lender also relies on the

experience and reliability of the borrower

as much as on the value of the property

being financed. Notwithstanding this,

under pressure from the cost of living and

persistently higher interest ratesrising

interest rates the housing market in

the UK has undoubtedly contracted

slightly over the past year. Although

the pessimistic forecasts for UK average

house price decline of 5% were wrong,

prices did end the year 1.8% lower than

the year before. In addition, transactions

were still 10% down on pre-pandemic

levels. Although both trends showed

signs of abating at the end of the

year, the proportion of take-home pay

required to sustain and average mortgage

remained at an historically high 38%.

Aspen values its security properties very

conservatively and keeps gross LTV’s to an

average 70% and the business now only

considers experienced borrowers from

the top three quality bands. Such caution

is justified. However, demand from good

borrowers remains high and hence Aspen

plans a slightly accelerated rate of growth

this year.

“Mainstream” banks, including the

newer “challengers”, continue to lack the

speed, flexibility and appetite to furnish

the smaller, short-term loans in which

Aspen specialises. Recent consolidation

and instability in the challenger banking

sector is evidence of this and again shows

that, technology, speed and a quality

bespoke service – as well as price – are

what give smaller entrants like Aspen

their competitive edge.

An over-arching factor in the success of

our business over 80 years and through

three family generations of management

is our business philosophy. The identity

of interest between management and

shareholders has fused our ambition for

growth with a conservative approach to

both credit quality and funding.

Stock Code: SUS ― www.suplc.co.uk 11

STRATEGIC REPORT

A2 Strategic Report

Advantage Motor Finance

• PBT £28.8m (2023: £37.2m)

• New transactions 21,565 (2023:

23,922) at £8,158 average advance

(2023: £7,799)

• Revenue up 9% to £98.2m (2023:

£89.8m)

• Impairment at £23.3m (2023:

£12.9m) reflecting an increase in

customer arrears in H2 this year

• Administrative expenses increased

by 25% relecting continued staff cost

inflation and an extra £1.5m spent on

regulatory costs this year

• Net receivables at yearend up 8% to

£332.6m (2023: £306.8m)

• ROCE at 12.7% (2023: 15.7%)

(note 1.14)

Whilst Advantage’s fundamental business

performance remains stable and

impressive, its second half performance

has been affected by a combonation of

customer cost of living pressures and

increased regulatory activity. This has led

to what is anticipated to be temporarily

higher professional, provisioning and

operating costs, which together with

higher funding costs have led to a

profit shortfall for the year as a whole.

Discussions and operational changes

are being made to ensure that having

built greater capabilities and increased

capacity following this engagement, this

profit hiatus is kept as short as possible

and Advantage are then positioned for

renewed profit growth.

Aspen Property

Bridging Finance

• PBT at £4.8m (2023: £4.5m)

• 164 new transactions (2023: 148) at

£881k average gross advance (2023:

£905k) and lower LTVs

• Revenue up 34% to £17.3m (2023:

£12.9m)

• Net receivables at yearend up to

£130.4m (2023: £113.9m).

• Book quality good with a record 142

loans repaid or recovered this year

Aspen’s has continued to make excellent

but careful progress in a fluctuating and

still subdued housing market, affected

by continued high interest rates and

persistently high mortgage costs as a

proportion of average incomes. Both

are expected to improve in 2024. In the

A2.2 Business Review

Operating Results

Year ended

31 January

2024

£m

Year ended

31 January

2023

£m

Revenue 115.4 102.7

Cost of Sales – Impairment (24.2) (13.9)

Cost of Sales – Other (22.8) (23.6)

Gross Profit 68.4 65.2

Administrative Expenses (19.8) (16.3)

Operating Profit 48.6 48.9

Finance Costs (15.0) (7.5)

Profit before Taxation 33.6 41.4

Taxation (note 11 in the accounts) (8.2) (7.7)

Profit after Taxation 25.4 33.7

Please note the businesses use financial and other key performance indicators such

as new deal volumes and other alternative performance measures set out in A2.1 and

A2.2 within this Strategic Report – definitions for the alternative performance measures

are given in note 1.14 to the financial statements.

Please also note that government increased the headline rate of corporation tax from

19% to 25% in April 2023.

S&U Plc Annual Report and Accounts 202412

meantime, Aspen produced a record

£4.8m profit before tax for the year

ended 31 January 2024 (2023: £4.5m)

with a best ever return on capital

employed before costs of funds of 10.5%

(2023: 8.9%).

The Aspen team continues to expand

its capabilities and Aspen’s reputation

amongst the property bridging broking

community continues to burnish. It

has further tightened its valuation and

underwriting processes and still insists

every property upon which Aspen lends

for security is personally visited by a

member of the team. As a result of these

strengths, further steady and sustainable

growth is anticipated in the coming year.

A2.3 Funding and Balance

Sheet Review

S&U has a strong balance sheet which has

facilitated the group total assets growing

during the year from £428.2m to a record

£466.8m to take advantage of good

lending opportunities. As a result, gearing

increased from 85.5% to 95.8% which is

still low for a financial servies group. S&U

net group borrowings are £224m within

S&U’s medium-term facilities which were

increased from £210m to £280m during

the year with its excellent, loyal and

constructive funding partners.

A2.4 Principal Risks and

Uncertainties

Whilst Corporate Governance guidelines,

and the loan loss provisioning insisted

upon by International Financial Reporting

Standards require macro-economic

forecasts, a feeble British economy

now technically in recession, current

inflationary trends, a continuing war

in Europe and now an impending

general election with a probable

change of government make this a

virtually impossible task. Against such

an uncertain background, S&U has

maintained its historically cautious

attitude in its three-year forecasts.

A2.4.1 Consumer and

Economic risks

The Group is involved in the provision of

consumer credit and it is considered that

the key material risk to which the Group

is exposed is the credit risk inherent in

amounts receivable from customers.

This risk is principally controlled through

our credit control policies supported

by ongoing reviews for impairment.

The value of amounts receivable from

customers may also be subject to the

risk of a severe downturn in the UK

economy which might affect the ability of

customers to repay.

A febrile economic climate, wars in

Ukraine and possibly a widening one

in the Middle East and forthcoming

elections in both the UK and USA have

recently continued to adversely impact

the economy and cost of living inflation

including energy and fuel costs may

lead to more motor finance repayment

delinquency. However, both of our

businesses operate solely in the UK and

Advantage historically has been resilient

through adverse macro-economic

conditions and so we currently believe

these risks are limited.

The Group is particularly exposed to

the non-prime motor sector and within

that to the market risk of the values of

used vehicles which are used as security.

This risk is controlled through our credit

control policies including loan to value

limits for the security and through

ongoing monitoring and evaluation. Loan

to values are also controlled within our

property bridging business although

historically impairment rates in that

market are low, mainly because loan

to value calculations are conservative,

interest is retained upfront and loan

periods average around one year.

A2.4.2 Funding and

Liquidity Risk

Funding and Liquidity risk relates to

the availability of sufficient borrowing

facilities for the Group to meet its

liabilities as they fall due. This risk is

managed by ensuring that the Group

has a variety of funding sources and by

managing the maturity of borrowing

facilities such that sufficient funding

is available for the medium term.

Compliance with banking covenants

is monitored closely so that facilities

remain available at all times. The Group

is aware of current less stable banking

markets but due to its facility maturities

and low gearing should be relatively

unaffected by this. The Group’s activities

expose it to the financial risks of changes

in interest rates and where appropriate

the Group uses interest rate derivative

contracts to hedge these exposures in

bank borrowings - the Group has no

such interest rate derivative contracts

currently. However, current interest rate

levels have prudently been expected

to continue throughout this year in our

budgeting assumptions.

A2.4.3 Legal, Regulatory

and Conduct Risk

The Group is subject to legislation

including consumer credit legislation

which contains very detailed and highly

technical requirements. To fulfil its

responsibilities in this area, the Group

has procedures in place and employs

dedicated compliance resource and

specialist legal advisers to ensure

compliance with this legislation.

Advantage directors are prominent

members of the Finance and Leasing

Association’s committees and, through

them, regularly liaise with the FCA.

Advantage also engages in regular “face

to face” liaisons with the FCA and the

relationship is excellent.

Regulatory Risk at Advantage is addressed

by a strong compliance function and

by the constant review and monitoring

of Advantage’s internal controls and

processes, overseen by RSM, S&U’s

internal auditors. This process is

buttressed by specific advice from Trade

and other organisations, by RSM and

by Shoosmiths, Advantage’s specialist

lawyers.

Keith Charlton is Chief Risk Officer

of Advantage and plays a key role in

managing and mitigating legal, regulatory

and conduct risk within Advantage.

Keith has over 30 years of motor finance

experience and his colleague Alan Tuplin

who is the Chief Credit Risk Officer has

over 20 years of experience in non-

prime motor finance and both have had

significant involvement with the work of

our trade body the finance and leasing

association.

This year Advantage implemented

the consumer duty as required by 31

July 3023. This year has also seen an

upsurge in regulatory activity by the

FCA involving inquiries into Advantage

as well as, we understand, into the

majority of firms in the specialist motor

lending industry. into Advantage as well,

we understand, as into the majority of

firms in the specialist motor lending

industry. One such current inquiry is into

the linking of interest rates charged to

customers to the level of commission

Stock Code: SUS ― www.suplc.co.uk 13

STRATEGIC REPORT

A2 Strategic Report

paid by lender to broker introducers.

However, Advantage has never engaged

in this practice which would cut across

its long-standing model of matching rate

to risk. Another FCA inquiry focusing on

affordability, forbearance and vulnerable

customers has been initiated by the FCA

across the industry to ease the perceived

burden of a prolonged period of cost

of living increases. Undoubtedly this

FCA inquiry has increased Advantage’s

costs and inhibited both the range of

products we offer our customers, and

our ability to sensibly help them maintain

their loan repayments - thus bolstering

their future credit rating. This year has

also seen an increase in the number

of complaints to Advantage reaching

the Financial Ombudsman Service at

732 versus 146 last year, with most of

the increase relating to the activities of

claims firms and claims lawyers targeting

Advantage with meritless commission

and affordability themed complaints

which have caused both a strain on

the business as well as an unnecessary

additional cost of £750 for each case. The

proportion of these complaints which are

upheld continues to be very low and one

of the best in the industry with an uphold

rate of only 16%, they still take valuable

resources to deal with and we welcome

moves to bring in a fee for claims firms

which should make them at least think

about the merits of the claims they are

making.

Given Advantage’s compliance record

and the detailed operations above it is

to be hoped that, in turn, the FCA will

ensure an absolute clarity and identity of

interpretation between itself and other

regulators, particularly the Financial

Ombudsman Service. Fair and effective

regulation does require co-ordination and

consistency.

Aspen Bridging operates in the

unregulated bridging sector aimed at

professional borrowers. It nevertheless

operates high lending and operational

standards and procedures, which are also

subject to review under our internal audit

program. As required for companies in

this sector, it has also registered with FCA

for Anti Money Laundering purposes.

The Group is also exposed to conduct

risk in that it could fail to deliver fair

outcomes to its customers which in turn

could impact the reputation and financial

performance of the Group. The Group

principally manages this risk through

Group staff training and motivation

(Advantage is an Investor in People) and

through detailed monthly monitoring of

customer outcomes for compliance and

treating customers fairly.

The Group is very proud of its excellent

underwriting and fraud deterrence

processes which it continues to develop.

Advantage’s underwriting capability,

already state of the art in the motor

finance industry, is being further refined

through work with open-banking

providers which will give an even more

comprehensive overview of customer

circumstances, affordability and their

income and expenditure.

A2.4.4 Operational Risk

The Group is also exposed to operational

risk including the risk of not maintaining

effective internal systems, organisation

and staffing. Increased use of technology

and excellent application by our staff has

helped the management of this systems

risk and the Company has Cybersecurity

measures in place which are regularly

tested. As part of Advantage’s IT

governance framework, a real time

monitoring suite for quality assurance

is being evolved. This will both provide

absolute assurance in line with IT’s

second line risk enterprise and offer still

greater regulatory transparency.

A2.4.5 Risk Management

Under Provision 28 of the 2018 UK

Corporate Governance Code, the Board

is expected to establish procedures to

manage risk, identify the principal risks

the Company takes in order to achieve

its strategic objectives and to oversee an

effective internal control framework. In

addition, the FRC now expects Boards to

assess emerging risks to the company’s

strategy.

Although compliance with the Code

is the responsibility of the Board as a

whole, risk in particular is independently

assessed by members of the Audit

Committee. They receive regular reports,

both from the management of Advantage

Finance and Aspen Bridging and from

S&U’s external and internal auditors.

These concern the effectiveness of the

risk management and internal control

systems, which during the year were

determined by the Audit Committee to

be operating effectively.

As outlined above, the Audit Committee

oversees the work of RSM, S&U’s Internal

Auditors. The Committee meets regularly

to receive specific reports on RSM’s

work, which includes Cyber Security,

GDPR oversight and Cash Management

Procedures amongst many other areas.

The Committee also recently received

and approved a report on Governance

at Advantage. All Senior Management

Regime designations include S&U Board

executive directors who serve on the

Advantage board.

Finally, Advantage’s former Chief

Executive and main Board member,

Graham Wheeler was Vice-Chairman

of the Executive Committee of the

FLA and is regularly requested by the

Government on advice on regulatory

matters, particularly in the environmental

field. We are pleased to note that his vast

experience of regulation in the motor

finance field will continue to be available

to the Group through his new role as a

non-executive director.

S&U Plc Annual Report and Accounts 202414

A3 Statement of Viability and Going Concern

The Group’s business activities together

with the factors likely to affect its future

development, performance and position

are set out above. The financial position

of the Group, its cash flows, liquidity

position, borrowing facilities, legal and

regulatory risk position are set out in the

financial statements and Strategic Report.

Statement of Viability

In assessing the viability of the Group

as required by the UK Corporate

Governance Code, the directors

considered funding, business planning,

financial forecasting and risk evaluation

cycles and concluded that a three-year

period was appropriate for viability

assessment. The three-year period is

consistent with the Group planning

horizons.

The directors therefore considered

the three-year period commencing

1 February 2024 and assessed the

prospects of the company considering:

• the Group’s current position as set

out in these financial statements;

• the principal risks facing the Group as

set out in A2.4;

• information regarding the current

prospects of the Group; and

• current information regarding the

economy and the markets the Group

is involved in.

The directors then considered the

same three-year period commencing 1

February 2024 to consider as required if

they had a reasonable expectation that

the Group will be able to continue in

operation and meet its liabilities as they

fall due over the three-year period taking

into account:

• the impacts of different

macroeconomic scenarios and

whether any severe shock could

threaten the Group’s future

performance, solvency or liquidity;

• funding and financial forecasts

for this period and the underlying

assumptions by considering the

potential impact of the principal risks

facing the Group, as set out in A2.4.

• analysis of key sensitivities which

could affect profitability during

the viability period; Assumptions

made are clearly stated and

additional scenarios are modelled to

demonstrate the potential impact of

risks and uncertainties on profitability

and funding; and

• information regarding mitigating

actions which can be taken.

Having considered all relevant

information, the directors confirm

that they have robustly assessed the

principal risks facing S&U plc. From

this assessment, the directors have a

reasonable expectation that the Group

will be able to continue in operation and

meet its liabilities as they fall due over

the three-year period commencing 1

February 2024.

Statement of

Going Concern

In assessing the appropriateness of the

going concern assumption, the directors

are mindful of the need to effectively

manage the Group’s risks and internal

controls. Details of the Group’s financial

risk management objectives, its financial

instruments, and its exposures to credit

risk, market risk, liquidity risk and

economic risk are set out in the notes

to the financial statements and in the

principal risks and uncertainties noted

in A2.4 above. The Group’s objectives,

policies and processes for managing its

capital are described in the notes to the

financial statements.

In considering all of the above the

directors believe that the Group is

well placed and has sufficient financial

resources to manage its business risks

successfully despite the current uncertain

economic outlook.

After making enquiries, the directors

have a reasonable expectation that

the Group has adequate resources to

continue in operational existence for the

foreseeable future. Accordingly, they

continue to adopt the going concern

basis in preparing the Annual Report

and Accounts of at least 12 months from

the date of approval of the financial

statements.

Stock Code: SUS ― www.suplc.co.uk 15

STRATEGIC REPORT

Mr Y

Mr Y is currently living with his partner in rented

accommodation and is employed as an HGV driver, where

he takes home £2265 each month.

Mr Y is an existing customer requesting finance for the

purchase of a Jaguar XE. Mr Y wanted to part exchange

his previous car which he had financed with Advantage on

25 February 2022. Although there were problems initially

with the length of the agreement and settlement of the

existing finance we were able to assist with the customer

contributing additional funds. The assessment included

a full appraisal of the customer’s existing credit and a

separate affordability assessment which confirmed the

loan was affordable. Additionally, due to the age of the

customer and the possibility he may retire in four years’

time, we limited the term to 42 months.

Mr Y was grateful for the help we gave him to secure the

new vehicle and took the time to review his purchasing

experience through an online review site and was clearly

happy with the service he received from Advantage,

leaving the following comments as part of a 5-star review.

From the time I called

Advantage, Bayley handled

my refinance deal and worked

hard to get the right result,

Bayley made me feel like I was

a top priority customer and

got the deal over the line from

start to finish I was made to

feel that I had no problems

gaining refinance First class

job and service. I will definitely

recommend Advantage finance

to friends as I’ve used them

before. Top job”

CASE STUDY

Our Customers

S&U Plc Annual Report and Accounts 202416

Mrs A

Mrs A is married, living with her husband and is currently

working as a Manager for a large bedding company, where

she takes home £2050 per month.

Mrs A has had three previous agreements with Advantage

Finance which were well paid. Her previous agreement was

unwound due to some issues with this car, thus enabling

her to purchase a Hyundai Tucson with a purchase price

of £13,794. Mrs A was very happy with the service we

provided over the last decade in helping her finance her

vehicles. She kindly wrote a review on Trust Pilot awarding

us 5 stars.

Ellie has been extremely helpful

throughout the entire process.

She has kept in touch with us

and updated us throughout the

process. We have been with

Advantage finance for nearly 10

years now. We’ve have not any

bad experiences with them so

far. Thank you Ellie for all your

help.”

CASE STUDY

Our Customers

Stock Code: SUS ― www.suplc.co.uk 17

STRATEGIC REPORT

Excellent service

This is the second time I have needed to

call and both times I have received the

best customer care and service from any

company I have ever used. The advice given

was precise and delivered by happy and

competent staff on both occasions.

Date of experience:

17 January 2024

Very supportive and understanding

Very supportive and understanding,

Advantage Finance have been excellent with

me throughout my finance which I took out

just before pandemic and found myself in a

very difficult situation. However, with their

help and understanding, I’m nearly at the

end of my contract. I definitely recommend

them and great service again today!!

Date of experience:

16 January 2024

We have today collected our new…

We have today collected our new vehicle; found

& financed by Advantage Finance. We couldn’t

be happier!! A big Thank you to Bayley Lammin

for all his assistance throughout. Bayley didn’t

just arrange the finance, he helped find our

exact car requirements. Everything was signed

over within 2 days.

I would highly recommend Advantage Finance,

they really do go the extra mile.

Thank you again

Date of experience:

01 November 2023

Our Customers

ONLINE TESTIMONIALS

S&U Plc Annual Report and Accounts 202418

CASE STUDY

Mrs W

Mrs W is working as a Nightshift Supervisor, she is divorced

and is currently a council tenant for the last 8 years. Mrs W

takes home £2000 per month.

Mrs W has a previous agreement with Advantage Finance

which was well paid. Her previous agreement was settled

following an insurance claim when the vehicle was written

off. We carried out a credit search and an affordability

assessment to ensure that any new agreement would

be affordable for her. Mrs W chose a Skoda Fabia with

a purchase price of £5,858. There was an error in the

mileage originally proposed on the replacement vehicle

which resulted in an additional sum to be paid as a

deposit. We negotiated with the seller and agreed they

would reduce the price of the vehicle to make the finance

fit. Mrs W was very happy with the service we provided

from assisting in the insurance settlement of the previous

agreement and setting up of the replacement. She kindly

wrote a review on Trust Pilot awarding us 5 stars.

Phoebe was absolutely

fantastic. She informed me of

everything I needed to know.

Excellent service and everything

was sorted very quickly and

smoothly. I would recommend

this company to everyone I know

with their fantastic customer

service. Thank you so much.

Phoebe is an excellent member

of staff, a true asset.”

Our Customers

Stock Code: SUS ― www.suplc.co.uk 19

STRATEGIC REPORT

Our Customers

14-Day Completion for Foreign Client

using Remote Signing

Aspen Bridging stepped in to assist an American foreign-

national secure their latest high-end London investment

property thanks to a £1.75m facility, completed in just 14-

days and at a loan-to-value of less than 25%.

The financing of the £7.5m purchase for the 3,028 square

foot four-bedroom luxury apartment in Kensington was

further speeded through the use of Aspen’s bespoke

remote signing process.

Thanks to Aspen’s clear and

transparent lending-process we

managed to secure a short-term

loan facility for a High Net Worth

foreign investment client on very

short notice with underwriting

completed within a week and

full completion delivered within

the fortnight.”

Broker Review

CASE STUDY

S&U Plc Annual Report and Accounts 202420

Dev-Exit in 20 days on Stepped

Product

Aspen finalised a rapid £1,650,000 Development Exit

bridge at 80% LTV when an experienced developer

required a quick release of equity after a proposed sale fell

through at the eleventh hour.

Having been satisfied that the two new build 4-bedroom

houses represented good quality security Richard Coombs

ensured the deal was finalised in just 20 days on Aspen’s

Stepped Rate product which meant the developer could

re-market the properties and have a controlled sales

strategy.

We needed a quick development

exit loan for a client who needed

time to sell two luxury new-

builds with plenty of purchaser

interest. Aspen worked with

myself and the client to ensure

we got the loan done in time.

Their can-do attitude and desire

to lend got the client what

he wanted in both speed and

leverage. Thanks again guys!”

Broker Review

CASE STUDY

Our Customers

Stock Code: SUS ― www.suplc.co.uk 21

STRATEGIC REPORT

Bridge-to-Let with Additional

Comfort Charge on 2

Property

Aspen Bridging’s award-winning Bridge-to-Let Product

made perfect sense for a developer client who sought a

bridging solution to complete the finishing touches on their

six-bedroom detached house in Twickenham. With their

development facility due for redemption, Aspen’s 2-year

product allows them time for the market to recover in the

aftermath of the brief Truss government to then execute a

more lucrative and structured sales process.

Aspen’s conservative approach to lending saw them take

further security on a 2

property in order to allow for

sufficient rental coverage to meet the stress test that

Aspen demands enabling the £2.1m bridge to complete.

Aspen understood the deal

circumstance and swiftly

restructured the loan to

include a comfort charge on

an additional property whilst

organising rapid security visits to

do so. They took a commercial

and common-sense approach

throughout and we could not be

happier with the result.”

Broker Review

CASE STUDY

Our Customers

S&U Plc Annual Report and Accounts 202422

A4.1 Employees

Time of change and contrasting fortune

often bring out the best in people and

the magnificent way our staff throughout

the Group have adapted to the challenges

of the past year, reflect the loyalty and

“family ethos” at S&U of which we have

always been proud. Those colleagues

who feel in need of further support and

counselling are able to access mental

health services.

We ensure that all staff receive

appropriate initial training and regular

re-training in the field and in areas of

specialism. We encourage employees

to gain professional qualifications

where appropriate. For instance, at

Aspen this year we are supporting a

number of members of staff to complete

professional qualifications including a

Masters in Real Estate, Level 3 Certified

Practitioner in Specialist Property Finance

(CPSP), RICS Commercial Valuation

Methodology, RICS Residential Valuation

Methodology, RICS Development and

Pluralsite.

As part of employee engagement, Aspen

also field a football team ‘Aspen Villa’ in a

local Solihull league.

At Advantage in addition to regular

external management and specialist

training, significant use is made of

the Government’s apprenticeship

schemes. During the last business year,

4 employees completed their level

3 Apprenticeships in either Business

Administration or Digital Support

Technician and we currently have a

further two level 3 apprenticeships

ongoing.

We also supported staff to complete a

number of professional qualifications

during the year including AAT Level 2 &

3, Level 3 Team Leader Apprenticeship,

CiLex Legal Executive Foundation

and Level 2 Team Leader. Ongoing

professional qualifications include CIPD in

HR Practice Level 3 & 5, AAT Level 4, CiLex

Legal Executive Advanced, Level 5 Team

leader Apprenticeship.

Our average length of service at

Advantage is 7 years, with 28% of staff

having over 10 years’ service.

In order to better support our staff’s

work life balance, 35 requests for flexible

working were submitted by staff and 34

of these were approved as requested.

These include changes to working

location, such as hybrid working, or a

change to the number of hours work or

their working pattern.

The FCA Regulatory regime is now

centred on our duty to the Customer. All

employees within the Group are required

to demonstrate appropriate knowledge

and skills particularly in customer facing

roles. Over 1600 individual training

courses were completed by staff over

the year, these include internally

developed training and a wide range of

externally provided through FLA, FCA,

MBL Seminars, ACAS, .Net and SAF for

example.

Annual appraisals highlight areas

of training needs for all employees.

Advantage Finance is also an accredited

Silver Investor in People.

The Group’s policy is to give full and

fair consideration to applications for

employment by disabled persons,

having regard to the nature of their

employment. Suitable opportunities

and training are offered to disabled

persons in order to provide their career

development. It goes without saying

that a Group based on a family ethos

has no truck with discrimination of any

kind – except of course on the basis

of performance. Further equality and

diversity information is contained in the

corporate governance report on page

55. People prosper and are promoted

within S&U purely on merit. As required

by legislation, we confirm that as an

organisation, we respect and recognise

human rights in all aspects of our

business.

Formal reviews of performance take place

annually and all operations are reviewed

on a monthly basis. We encourage staff to

make suggestions for constructive change

within the Group.

A4 Corporate Social Responsibility

Stock Code: SUS ― www.suplc.co.uk 23

STRATEGIC REPORT

A4.2 Community

Our success at S&U depends upon our

understanding the customers we serve.

Where this may not be the case, we

have well established policies for any

who may wish to complain, routed to

our Complaints Department in Grimsby

or to our head office in Solihull. We are

proud to enjoy high levels of customer

satisfaction. Last year our FEEFO and

Trustpilot ratings were both 4.7 out

of 5. In year to 31 January 2024, 357

out of 424 (84%) complaints were

decided by the Financial Ombudsman

Service in Advantage’s favour (year to

31 January 2023: 55 out of 66 or 83%)

and these levels of favourable complaint

adjudications for Advantage represent

the highest level versus peers in the

non-prime motor finance sector. S&U

supports its wider community through

charitable giving and activities relating

to fundraising. Whilst staff are regularly

involved in their own charitable activities,

S&U plc channels its philanthropic

activities through The Keith Coombs

Trust which this year celebrates its 12th

anniversary. The Trust which Anthony

Coombs chairs, but which has a Board

of independent trustees, mainly gives to

charities helping children with disabilities.

Amongst other causes, last year the

Company supported The National

Institute for Conductive Education, which

deals with adults and children with

cerebral palsy, strokes and head injuries.

It is also working with Whizz-Kidz to

provide equipment for disabled children

and to offer employment opportunities to

wheelchair users. The Trust also supports

the Marie Curie Hospice which is close

to its Solihull HQ, by sponsoring the

Hospice’s costs for the 10th January every

year – Keith Coombs birthday. During the

past year the KC Trust donated a total of

£117,500 to these charities. In total, the

past 12 years will have seen donations of

over £1m to charity.

As an independent charity, The Keith

Coombs Trust also makes financial

contributions to the arts, to sport and in

supporting the Christian faith, including

initiatives such as Dancetrack at the

Birmingham Royal Ballet that encourages

young children with disabilities. The trust

continues to support the Emily Jordan

Foundation in its work with people

with learning disabilities, giving them a

change of rewarding work. It supports

charities abroad for Albino people being

prosecuted in Malawi and Emergency

Services Aid Charity which will deliver

emergency services vehicles, equipment

and training to Gambia. The trust also

supports the Premier Christian media

organisation.

This year S&U plans to involve more staff

within the Group in active volunteering;

Aspen are currently investigating

the development of a “volunteer”

programme and one volunteer will

be travelling to Gambia to deliver the

emergency services vehicle.

Advantage continued supporting their

local charities by becoming a Corporate

Partner of Women’s Aid. We donated

over 1500 items to their Christmas

Collection drive and the company

matched that with a cash donation.

During the year, the staff and the

business also supported Macmillan, Not

Home Alone and Andy’s Man Club.

Finally, S&U is pleased to announce its

support for the Tax Payers Alliance, a

non-political charitable organisation

committed to ensuring efficient and

effective government in the tax payers’

interest.

A4.3 Health and Safety

and Diversity Policy

Although we recognise that current

thinking means that diversity reporting

should be based around a statistical

analysis of our staff’s racial origin, given

our above long-standing policies, we

consider that this can too often itself be

divisive and potentially discriminatory.

By recruiting the best people for the

job, both enhance their self-esteem,

irrespective of their background, racial

or socio economic, and at the same time

create an esprit de corps unmarked by

tokenism.

S&U takes its responsibilities towards

the health, safety and good working

environment of its employees very

seriously. However, in the finance

field it is not engaged in the kind of

processes which compromise health

and safety for either our staff or our

visitors. Nevertheless, it seeks to provide

a congenial and productive working

environment and in recent years we have

expanded our facilities for Advantage

and Aspen. Facilities will continue to be

reviewed to improve and maximise space,

ensure safety and provide better break

out areas.

It therefore goes without saying that

in a Company where family values are

so prized, and where staff turnover is

so low, that workers are always treated

fairly without any form of discrimination.

Recruitment and promotion decisions,

whilst reflecting the social and racial

makeup of the areas in which we operate,

are always based on ability and aptitude,

not according to any racial or gender

stereotypes.

A4.4 Climate Change

Like any group of people who cherish

our environment both for our own sakes

and for those of succeeding generations,

S&U supports the Government’s Green

Finance Strategy and is taking measures

to reduce our carbon footprint and

minimise and then eliminate carbon

emissions so far as we are able directly to

control them.

This means that, particularly so far as

Advantage Finance, our motor business

and Head Office in Solihull are concerned,

we need to monitor and reduce those

areas of emissions which we can most

directly control in order to achieve net

zero status by 2030.

Both for commercial and climate change

reasons, the Board monitors the type,

age and stated emissions of the vehicles

Advantage finances. Currently just under

half of customers opt for diesel vehicles,

whilst the proportion of fully electric

vehicles, principally on the grounds of

their significant cost, is at present very

small. These proportions will change

over the next twenty years as the market

changes.

Our ability to influence our customers

environmental decisions at Aspen

Bridging is equally constrained.

Nevertheless, statutory requirements to

publish Energy Performance Certificates

for residential properties to let, as well

as building regulation requirements

for substantial refurbishments, will

increasingly reflect our customers

environmental responsibilities.

The Board also monitor the energy usage

in our office buildings and have taken

action to reduce this via the installation

of solar panels in our Grimsby office.

A4 Corporate Social Responsibility

S&U Plc Annual Report and Accounts 202424

The Company is pleased to present its

second climate change report under the

framework provided by the Task Force

on Climate Related Financial disclosures

(‘TCFD’). In late 2023 this task force

was disbanded and their work has been

incorporated into the new standards IFRS

S1 and IFRS S2 issued by the International

Sustainability Standards Board, under

which we will be reporting for future

financial years.

A4.4a Governance

An ESG and climate change committee

chaired by the Chairman Anthony

Coombs and consisting of senior

executives and the senior non-executive

director meets on a regular basis to

review the identification, assessment

and management of climate change risks

within the Group. The Committee reports

to the Board of directors of S&U plc

which has overall oversight of the Group’s

work on climate change and this is now a

regular Board agenda item and the Board

consider climate when setting budgets,

forming capex plans and setting strategy.

A4.4b Strategy

The Group will continue to identify

opportunities to manage its scope 1,

scope 2 and scope 3 business travel

emissions and will continue to seek to

directly reduce its contribution in these

areas to climate change.

In addition, in order to off-set those

scope 1, scope 2 and scope 3 (business

travel emissions and emissions sources),

which we are not at present able to

reduce to zero, S&U plc group have for

the years 1.2.22 to 31.1.23 and 1.2.23

to 31.1.24 engaged Carbon Neutral

Britain to measure, calculate and offset

the organisation’s carbon footprint. Our

group emissions for the year ended

31.1.24 in scope, 1, scope 2 and scope 3

(business travel emissions and emissions

sources) are 160t CO

e as shown in the

table in A4.4d below. These emissions

have been offset with Carbon Neutral

Britain via their Woodland fund which

supports Climate Fund, Reforestation,

Deforestation Prevention and Woodland

Management Projects, with a strong

focus on having a positive impact on the

local wildlife, ecology and biodiversity.

The Group has also made progress in

identifying opportunities to manage other

indirect scope 3 emissions associated

with the loan assets we finance for our

customers. In our motor finance business,

the average CO

emissions of the cars

and vans we financed reduced from 129

g/km last year to 126 CO

g/km this

year and by working with customers and

other companies in our supply chain we

are looking to accelerate this reduction.

We are also evaluating the likely future

year reporting requirements of IFRS S1

and S2 and the challenges involved for

companies trying to sensibly measure,

monitor and manage indirect scope 3

requirements within the value chain. The

ISSB has sensibly allowed some scope 3

reporting transition relief in this respect.

In order to assess the resilience of the

Group’s strategy, we have identified 2

climate scenarios being:

1. the global temperature increase is

kept to below 2 degrees, or

2. climate change mitigation is slower

and the global temperature increases

by 2 to 4 degrees.

The Group has considered the risks

relevant to each of these climate

scenarios over the short, medium and

long term, being the next year, the next

3 years and the next 5 years and beyond

respectively.

Scenario 1

The risks the Group has identified under

this climate scenario are mainly indirect

over the long term, where stricter

regulations and taxes to help keep global

temperatures lower are applied in the

UK and affect the used vehicle and

property finance products which can be

supplied to our customers and/or our

customers’ affordable use and enjoyment

of those products. The UK Government

is committed to banning the sale of new

diesel and petrol cars from 2030 with an

opt out for some plug-in hybrids and we

will continue to monitor this commitment

and associated developments ahead of

this date alongside the availability and

affordability of used electric vehicles,

in order to refine our strategy in a

sustainable way for our customers.

Scenario 2

The risks the Group has identified under

this climate scenario include the indirect

risks over the long term mentioned for

Scenario 1 as the UK makes change but

global temperatures still rise further.

Scenario 2 also includes more medium-

and long-term direct risks too such as

the increased flood and weather risk to

our office buildings and to properties

financed – these risks are mitigated by

insurance and wider operational risk is

mitigated by the business continuity plans

we have in place.

The Group has assessed its strategy

as resilient for the likely risk events

arising under these two scenarios,

with a minimal expected impact on the

business.

A4.4c Risk Management

The Group identifies climate change

risks through the ESG committee and

the wider executive teams including the

risk management teams of both our

operating businesses, Advantage Finance

Limited and Aspen Bridging Limited.

Our biggest business Advantage Finance

reports to the ESG committee through

its experienced director Mike Walker.

Underwriting policies and procedures

consider climate risk factors particularly

in our property bridging business where

consideration is taken of the potential for

flood and subsidence with a requirement

for appropriate insurance. Climate risk

is an emerging risk but it is not currently

considered a significant risk for the Group.

All our underlying global energy use is

UK based and during the year we have

and will continue to take action in order

to reduce these emissions and where

that is not fully possible offset them.

Solar panels on our office buildings in

Grimsby and electric company vehicles

are examples of where we have managed

to reduce energy usage this year.

The Group is keen to progress further

opportunities to manage and reduce its

impact on climate change over shorter

term, medium term and longer-term

planning horizons being the next year,

the next 3 years and the next 5 years and

beyond respectively. The climate related

risks and opportunities we have identified

as potentially having a material financial

impact on the Group are as follows:

Stock Code: SUS ― www.suplc.co.uk 25

STRATEGIC REPORT

Risks with potential

material financial impact Related Opportunity Planning Horizon

1. Potential for increased

UK regulation and

taxes affecting motor

vehicles and their

affordability for our

loan customers

Continue to align our

products in advance to

meet evolving customer

preferences and

affordability in the light of

planned regulatory and tax

changes

Medium and Long Term

2. Potential for increased

UK adverse weather

events or natural

disasters affecting

operations and

properties

Continue to maintain

and improve appropriate

insurance and business

continuity procedures

Short, Medium and Long

term

The potential financial impact of these risks and opportunities on the group would be

reflected in the potential for reduced revenue or increased expenditure.

A4.4d Metrics and Targets

S&U’s own direct environmental footprint is reported in the following table:

Greenhouse gas emissions data

For period 1 February 2023 to 31 January 2024

Tonnes CO

Year ended

31 Jan 2024

Year ended

31 Jan 2023

Scope 1 (Direct emissions)

Combustion of fuel – Petrol & diesel used by

company cars 34 27

Gas consumption 11 15

Scope 2 (Energy indirect emissions)

Purchased electricity (location based) 44 37

Electric vehicle energy usage 9 5

Total Scope 1 and 2 98 84

Scope 3 (Other indirect emissions)

Business travel not using owned/leased vehicles 30 30

Total Scope 1,2 and 3 (business travel) 128 114

Transmission and Distribution Losses 4 n/a

Well to Tank 28 n/a

Total Scope 1,2 and 3 (business travel emissions and

emissions sources) 160

Company’s chosen intensity measurement:

Normalised tonnes scope 1, 2 and 3 (business travel)

CO2e per £m turnover 1.1 1.1

For the year ending 31 January 2024

we achieved the target of below 1.3

normalised tonnes per £m turnover

excluding additional supply chain

emissions sources for fuel (well to

tank) and electricity (transmission and

distribution losses).

For the year ending 31 January 2024 the

annual quantity of energy consumed

by the group under scopes 1 and 2 was

273,814 kwh (31.1.23: 259,178 kwh).

For the year ending 31 January 2025

we are targeting below 1.4 normalised

tonnes per £m turnover including

additional supply chain emissions sources

for fuel (well to tank) and electricity

(transmission and distribution losses).

The methodology used to calculate our

emissions is based on the “Environmental

Reporting Guidelines: including

mandatory greenhouse gas emissions

reporting guidance” (June 2013) issued

by the Department for Environment,

Food & Rural Affairs (“DEFRA”) and

updated HM Government SECR guidance

dated March 2019. We have also

utilised DEFRA’S 2023 conversion factors

within our reporting methodology. The

emissions for year ended 31.1.24 were

verified by Carbon Neutral Britain.

The 2013 data forms the baseline data for

subsequent periods. In order to express

our annual emissions in absolute and

relative terms, we have used turnover

in our intensity ratio calculation, as

this is the most relevant indication of

our growth and provides for a good

comparative measure over time.

The Directors confirm that under listing

rule 9.8.6R (8) (a) we have included in the

above report disclosures consistent with

the 2017 Final TCFD Recommendations

and Recommended Disclosures.

A4 Corporate Social Responsibility

S&U Plc Annual Report and Accounts 202426

A5 Section 172 Statement

The Directors confirm they have

considered their obligations under S172

of the Companies Act 2006 including

their duty to promote the success of the

company and how they have engaged

with the following key stakeholders in the

business:

1. Our Customers

S&U focuses on;

i) making the customer the heart of our

business; and

ii) having respect for every customer

and always treating customers fairly.

Key actions taken demonstrating how

we do this are set out in section A2.1

above. The outcomes of this customer

engagement are reflected in high

customer satisfaction ratings (Trustpilot),

low levels of complaints and above all

the Group’s success over the last two

decades.

2. Our Employees

S&U maintains a family ethos for all those

who work within it.

Key actions taken demonstrating

how we do this are set out in section

A4.1 above. The outcomes of this

employee engagement are reflected in

a streamlined management structure,

high staff retention rates, high skill

levels, positive reward and recognition

and a strong culture of continuous

improvement.

3. Our Business Partners

S&U continuously seeks to nurture and

improve key business relationships with

our key introducing brokers, dealers and

key suppliers.

Key actions taken demonstrating how we

do this are set out in our strategic report

above. The outcomes of these key actions

are reflected in the positive feedback and

high retention rates for our partners and

in the steady, sustainable and successful

growth of the Group in the past two

decades.

4. Our Investors and

Funding Partners

S&U’s significant family management

shareholdings means an identity of

interest between shareholders and

the management of the company and

together with help from trusted advisers

maintains close relationships with

investors, analysts and also with long

term funding partners.

Key actions taken demonstrating how

we do this are set out in section B3.2 of

our corporate governance report and in

section A2.3 of our strategic report. The

outcomes of this investor engagement

help underpin the total shareholder

return graph on page 50. The outcomes

of this funder engagement help the

strong balance sheet and treasury

position outlined in this annual report

and accounts.

5. Our regulators and

other statutory bodies

S&U has a strong compliance culture

which is overseen by management and

the audit committee with help from our

internal auditors RSM.

Key actions demonstrating how we do

this are set out in section B3.1 of our

audit committee report. The outcomes

of these actions have led to positive

feedback from regulatory and other

statutory bodies of which the Group

is proud.

6. Our Community and

Our Environment

S&U does not exist in a vacuum and

prides itself on supporting the wider

community and looking after its

environment.

Key actions demonstrating how we

do this are set out in section A4 of

the strategic report. The outcomes

of these key actions have led to a

low environmental footprint and the

community and charity support set out in

section A4.2 above.

In assessing the Group’s engagements

within our 6 stakeholder areas above,

the directors have also ensured such

engagements reflect the Group’s values,

business model, key performance

indicators and principal risks as set out in

the strategic report above.

A6. APPROVAL OF

STRATEGIC REPORT

Section A of this Annual Report comprises

a Strategic Report prepared for the

Group as a whole in accordance with the

Companies Act 2006 (Strategic Report

and Directors’ Report) Regulations 2013.

Approved by the Board of Directors and

signed on behalf of the Board.

Anthony Coombs

Chairman

10 April 2024

Stock Code: SUS ― www.suplc.co.uk 27

STRATEGIC REPORT

IN THIS SECTION

B1 Board of Directors 30

B2 Directors’ Remuneration Report 32

B2.1 Report of the Board to the

Shareholders on Remuneration Policy

B2.2 Annual Remuneration Report 44

B3 Governance 54

B3.1 Audit Committee Report 54

B3.2 Corporate Governance 55

B3.3 Compliance Statement 58

B4 Directors’ Report 59

B5 Directors’ Responsibilities Statement 61

C1 Independent Auditor’s Report to the

Members of S&U plc

Corporate

Governance

S&U Plc Annual Report and Accounts 202428

CORPORATE GOVERNANCE

29Stock Code: SUS ― www.suplc.co.uk

Anthony Coombs MA (OXON)

Chairman

Joined S&U in 1975 and was appointed

Managing Director in 1999 and then

Chairman in 2008 served as a Member

of Parliament and was a member of

the Government. He is a director and

trustee of a number of companies and

charities.

Graham Coombs

MA (OXON) MSC (LON)



Joined S&U after graduating from

London Business School in 1976.

Chris Redford ACA



A Chartered Accountant with over 10

years business experience in the Fast-

Moving Consumer Goods, food and

travel sectors prior to his appointment

as Finance Director of Advantage

Finance in 1999. Following a successful

start-up period for Advantage he was

appointed as Group Finance Director

with effect from 1 March 2004.

Ed Ahrens



Ed has been in banking and speciality

finance for over 30 years having started

his career at Abbey National and

working in senior roles for Barclays,

AIB and being a founding executive

director of Vanquis Bank. Ed joined the

S&U Group in 2014 then became Group

Strategic Development Director before

leading the development of Aspen

Bridging as CEO since the launch of the

business in 2017.

Jack Coombs MA (OXON) ACA

Executive

Co-founder of Aspen Bridging. Joined

S&U in 2016 as Group Development

Executive having previously worked in

PWC’s Valuations team and qualified

there as a Chartered Accountant.

Member of the Lender Committee for

the Financial Intermediary and Broker

Association (FIBA) industry body. Jack

is also an avid supporter of charity and

swam the Channel from England to

France in 2011 in 13 hrs and 46 mins to

raise funds for Alzheimer’s Research &

Mondo Challenge.

B1 Board of Directors

Graham Wheeler



Graham brings over 40 years’

experience in motor finance across

consumer and business lending,

much of it in a senior leadership role.

He developed through blue chip

Companies like GM, Barclays, GE

Capital, and Volkswagen FS, where

he held the post of UK CEO for 11

years. Graham joined S&U Plc board in

September 2020 and after 4 1/2 years

leading its successful motor finance

subsidiary Advantage Finance, Graham

retired in January 2024. He joined the

S&U Plc Board as non-executive director

in February 2024.

N A R

S&U Plc Annual Report and Accounts 202430

KEY

Nominations Committee

Audit Committee

Remuneration Committee

Graham Pedersen



Graham joined the Board of S&U

in early 2015 and brings enormous

experience as a regulator at the Bank

of England, Financial Services Authority

and Prudential Regulation Authority and

as a banker with detailed knowledge

and involvement in the speciality

finance sector.

N A R

Jeremy Maxwell



Jeremy brings broad expertise in digital

innovation, marketing, commercial

development and customer experience

from over 25 years in the retail and B2B

distribution industries. In addition to

other NED and advisory roles, he has

held senior customer-facing executive

positions at Carpetright, Wolseley UK,

Mothercare, Screwfix and B&Q.

N A R

Tarek Khlat MBE



Tarek has over 25 years of experience

in financial services and he co-founded

Crossbridge Capital, where he is currently

Group CEO leading the firm’s businesses

that serve the wealth management needs

of high-net-worth clients globally. Prior

to this he held leading roles in financial

services with Credit Suisse and JP Morgan

and in journalism with CNN and Fox News.

Tarek holds a BA degree in Economics

from Georgetown University and an MBA

degree from Harvard Business School.

He is a Trustee and Patron of the NSPCC

as well as Chair of the Board of Trustees

of Centrepoint, the UK’s leading youth

homelessness charity. Tarek was awarded

an MBE by her late Majesty Queen

Elizabeth II in 2021.

Manjeet Bhogal

ACMA CGMA

Company Secretary

Manjeet joined S&U in February 2019

and was appointed Company Secretary

on 1st January 2024

N A R

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE







as well as the Companies Act 2006 and other related regulations.

B2.1 Report of

the Board to the

Shareholders on

Remuneration Policy

Introduction

On behalf of your Board, I am pleased

to present our Directors’ Remuneration

Report for the year ended 31 January 2024.

Faced with an array of challenges ranging

from weak consumer confidence, cost

of living pressures, funding costs and

regulatory activity, 2023/24 has not been

a vintage year for either S&U plc or the

specialist financial services sector. Whilst

we continue to invest in the receivables

which drive our future profits, we do so

with caution.

Trading at Advantage was better in

the first half year with good customer

repayments which then reduced in the

second half year as the cost of living

started to have a greater impact on

our customer base and this combined

with increased funding, regulatory and

overhead costs impacted second half

Advantage profits. Aspen has made

steady progress throughout the year

and our bridging profits have increased

although these have also been affected

by increased funding costs where there

is a lag effect in repricing the book. As a

result, Group profit before tax is £33.6m

for the year ended 31 January 2024

which is 18% below prior year (31.1.23

£41.4m) and compares to an average

during the 2 previous pandemic years of

£32.6m group profit before tax (2020/21:

£18.1m; 2021/22: £47.0m).

This year’s annual Directors’ Remuneration

Report sets out how the Remuneration

Policy was applied during the year ended

31 January 2024 and provides details of

amounts earned in respect of the year

ended 31 January 2024. It also sets out

how the Remuneration Committee has

decided the Remuneration Policy will be

operated for the year commencing

1 February 2024.

We intend for the Company’s

Remuneration Policy to be updated at

least every 3 years. The Remuneration

Policy was last updated in 2021 and

a copy of this was published in full in

the 2021 Annual Report. Following

this three-year update cycle, we have

reviewed and updated the Remuneration

Policy for 2024. An updated copy of the

proposed Remuneration Policy for 2024

is therefore included in section B2.2,

which will be considered for approval at

this year’s Annual General Meeting. A

copy of the existing 2021 Remuneration

Policy can be found in the About us

Governance section on our website at

www.suplc.co.uk

2023/24 key decisions

and pay outcomes

The aim of the Company’s Remuneration

Policy is to deliver simple and fair

remuneration packages which are linked

to both Group and personal performance,

retention focussed and appropriate for

the Company, its Shareholders and the

directors.

Group profit before tax reduced from

an impressive £41.4m in 2022/23 to

£33.6m in 2023/24. This result derives

mainly from reduced repayments and

increased impairment at Advantage in

the second half of the year together with

increased regulatory and funding costs.

The Committee noted that this result was

still robust in a challenging environment

and would not have been possible

without the hard work, leadership, focus

and strength of the executive team at

S&U as well as the overall resilience of

the Company. We have taken this into

account in the difficult decisions taken

regarding salaries and bonuses, whilst

at the same time maintaining good

discipline in our policies on remuneration.

Against a backdrop of a competitive

landscape and the need for a cautious

approach in a difficult macro economy,

Advantage advanced 21,565 new

motor finance agreements during the

year ending 31 January 2024 (2023:

23,922). As last year, our Advantage

team has continued to work diligently to

support customers in the more difficult

circumstances they have faced in the

second half of this year. Looking forward,

due to potential continued impacts from

inflation and used car price correction,

we remain optimistic but cautious in

our outlook and adopt our normal

conservative approach to impairment

provisions.

In its seventh year of operation, Aspen

Bridging made 165 new loan facilities

lending over £144m (2023: 148 new

loan facilities lending £134m). At the

end of the year Aspen had 163 live

loans amounting to net receivables of

£130m (2023: 141 live loans amounting

to £114m) which reflects an almost

annual turnover in the Aspen bridging

book. Whilst political and economic

uncertainties have and will continue to

affect S&U, the Company has continued

to demonstrate its historic ability to

produce robust and resilient results.

Anthony Coombs, Graham

Coombs and Chris Redford

Based on the underlying profit

performance of the Group, the

Remuneration Committee judged the

level at which the annual bonus payments

should be made. In a challenging

environment, Group Profit Before Tax

(“PBT”) for the year of £33.6m was

significantly below budget and decreased

by 18% on the 2023 result. Therefore, the

Remuneration Committee determined

that for the financial year 2023/24 a

bonus of £10,000 each would be awarded

to Anthony Coombs and Graham Coombs

which was significantly lower than their

target bonus of £60,000 due to the

actual group PBT of £33.6m being below

their on-target performance level of

£43m group PBT. Anthony Coombs and

Graham Coombs have elected to waive

B2 Directors’ Remuneration Report

S&U Plc Annual Report and Accounts 202432

their entitlement to these bonuses

of £10,000 each. The Committee also

determined that for the financial year

2023/24 a bonus of £10,000 would be

awarded to Chris Redford, which was

significantly lower than his target bonus

of £50,000 and his maximum annual

bonus of £75,000, given both the normal

bonus target of £42m group PBT and the

stretch bonus target of £44m group PBT

respectively were not reached.

The Remuneration Committee therefore

considers these annual bonus awards

to be fair and reasonable and reflective

of each director’s achievement against

performance targets set during the year.

In May 2023 Chris Redford was granted

5,000 shadow share options under the

2021 LTIP, as disclosed in last year’s

Directors’ Remuneration Report. The

Remuneration Committee determined

that none of these shadow share options

vested with reference to performance

during the year ended 31 January 2024,

based on group PBT being below the

group PBT normal and stretch target

levels for shadow share options of £42m

and £44m respectively. As the shadow

share options granted in 2023 did not

vest, these options have now lapsed.

Graham Wheeler

The Committee have considered

Graham’s management of the Advantage

Finance team in light of the significant

challenges in consumer motor finance

arising from the political and economic

environment, and the Advantage PBT

result of £28.8m for the year ended 31

January 2024. The Committee judged the

level at which the annual bonus payment

should be made. For the financial

year 2023/24 a bonus of £20,000 was

awarded to Graham Wheeler which was

significantly lower than his target bonus

of £50,000 and his maximum annual

bonus of £75,000.

In May 2023 Graham Wheeler was

granted 5,000 shadow share options

under the 2021 LTIP, as disclosed in

last year’s Directors’ Remuneration

Report. The Remuneration Committee

determined that none of these shadow

share options vested with reference

to performance during the year ended

31 January 2024 with reference to

the underlying profit performance of

Advantage and achievement against

the PBT and ROCE based targets set for

that year. As the shadow share options

granted in 2023 did not vest, these

options have now lapsed.

Ed Ahrens

The Committee have considered Ed’s

management of the Aspen Bridging

Finance team in light of the competitive

landscape and the Aspen PBT result of

£4.8m for the year ended 31 January

2024. The Committee judged the level at

which the annual bonus payment should

be made. For the financial year 2023/24

a bonus of £10,000 was awarded to Ed

Ahrens which was significantly lower

than his target bonus of £30,000 and his

maximum annual bonus of £40,000.

In May 2023 Ed Ahrens was granted 3,000

shadow share options under the new

LTIP, as disclosed in last year’s Directors

Remuneration Report. The Remuneration

Committee determined that none of

these shadow share options vested with

reference to performance during the year

ended 31 January 2024 with reference

to the underlying profit performance of

Aspen and achievement against the PBT

and ROCE based targets set for that year.

As the shadow share options granted in

2023 did not vest, these options have

now lapsed.

Jack Coombs

The Committee have considered Jack’s

significant contribution to the continued

growth of Aspen Bridging, including

growth during the year ended 31

January 2024, helping Aspen Bridging

achieve a profit before tax of £4.8m. The

Committee judged the level at which the

annual bonus payment should be made.

For the financial year 2023/24 a bonus

of £10,000 was awarded to Jack Coombs

which was significantly lower than his

target bonus of £30,000.

Stock Code: SUS ― www.suplc.co.uk 33

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

Key remuneration

decisions and related

matters for the year

ending 31 January 2025

Salary increases, annual

bonus and LTIP

For the year ended 31 January 2024

salary increases were in the range

1.3% to 3.3% except where exceptional

circumstances merited a higher

increase. This was below the average

increases given to the wider workforce

which averaged 9.0% in a difficult

inflationary cost of living environment

for our employees. The Remuneration

Committee has now agreed salary

increases for the year ended 31 January

2025 in the range 1.7% to 3.6% except

where exceptional circumstances merited

a higher increase, as noted below. This

is below the average increases given to

the wider workforce which averaged

5.5% in light of the continued difficult

inflationary cost of living environment for

our employees. After a review of market

comparables, and after his excellent

performance as an executive director of

our growing Aspen Bridging subsidiary,

it was decided to award Jack Coombs a

salary increase of 25% for the year ended

31 January 2025.

For the year ending 31 January 2025,

where the targets levels of performance

set are achieved, the annual bonus

has been set at £50,000 for Anthony

Coombs and Graham Coombs, £40,000

for Chris Redford and £30,000 for Ed

Ahrens and Jack Coombs. Where the

performance targets set are exceeded,

the Remuneration Committee has the

discretion to pay an increased annual

bonus based on stretch performance

targets to each of Jack Coombs, Ed

Ahrens and Chris Redford and the

maximum amount payable will not

exceed the maximum limits stated in the

Remuneration Policy. The annual bonuses

will continue to be mainly assessed

against stretching divisional and group

Profit Before Tax (PBT) targets and Return

on Capital Employed (ROCE), although

up to 25% of the annual bonus will now

be assessed based on the achievement

of specific non-financial targets. These

non-financial targets will be confirmed

during the year ending 31 January 2025,

but the Remuneration Committee aims to

align the targets to the Company’s KPI’s

in the areas of governance structures and

environmental impact. The Committee

believes Environmental, Social and

Governance factors have become

critical to good business practice and

are tied to the success and long-term

sustainability of organisations across

all sectors and these will therefore be

carefully considered when setting the

non-financial targets for the annual

bonus. In order for the bonuses to be

paid in full, these stretching performance

targets must be achieved and, if not

fully met, the Remuneration Committee

will determine the level of any reduced

annual bonus payment.

The Committee intends to grant 3,000

shadow share options under the 2021

LTIP to Ed Ahrens, subject to achieving

certain threshold Aspen PBT and ROCE

targets for the year ending 31 January

2025. The Committee also intends

to grant 5,000 shadow share options

under the 2021 LTIP to Chris Redford,

subject to achieving certain stretch

group PBT targets for the year ending 31

January 2025.

For the year ending 31 January 2025,

the Remuneration Committee considers

that the significant shareholding held by

Anthony Coombs, Graham Coombs and

Jack Coombs similarly provides adequate

alignment to shareholders and therefore

no shadow share option awards are made

to these directors.

Fees for the non-executive directors have

now been increased by 3.3% to £39,250

and for the senior non-executive director

increased by 3.4% to £41,350 for the year

ending 31 January 2025. For the year

ended 31 January 2024 fees had been

increased by 2.7% for the non-executive

directors and 2.5% for the senior non-

executive director.

The Remuneration Committee continues

to welcome Shareholder feedback on

remuneration decisions or on any issue

related to executive remuneration. I

commend this report to Shareholders

and ask that you support the resolution

to approve the Company’s Annual

Remuneration Report at the Company’s

AGM on 6 June 2024.

Tarek Khlat

Chairman of the Remuneration

Committee

10 April 2024

S&U Plc Annual Report and Accounts 202434

B2.2 Remuneration Policy Report



executive directors, which Shareholders will be asked to approve at the AGM



AGM on 20 May 2021 will continue to apply.

A summary of the main changes that have been made to the Remuneration Policy are outlined below.

Current Policy Proposed changes and rationale

The maximum variable remuneration which may be granted

(other than in exceptional circumstances) from combined annual

bonus awards and LTIP awards is 150% of salary.

In exceptional circumstances, the maximum variable

remuneration which may be granted is 200% of salary.

Up to 50% of the bonus earned may be deferred for at least

twelve months and usually subject to performance targets in the

deferral period and continued employment.

The overall maximum variable remuneration which may be

granted from combined annual bonus awards and LTIP awards

will be limited to 150% of base salary in any year, even in

exceptional circumstances. The Remuneration Committee

believes this change brings the Company’s maximum variable

remuneration levels in line with market practice whilst still

providing sufficient headroom to make meaningful awards to

directors, reflective of their performance.

Up to 50% of the bonus earned may be deferred for at least

twelve months and usually subject to performance targets in

the deferral period and continued employment.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

The following table describes each of the components of the remuneration package for executive directors:

Component Purpose Operation Opportunity

Performance

Measures

Base Salary

To help recruit

and retain

executive

directors.

To provide the

core element

of fixed

remuneration,

which reflects

the director’s

experience

and the size

and scope of

the role.

Normally reviewed annually

and fixed for 12 months,

but may be reviewed more

frequently in cases where an

individual changes position or

responsibility.

Salaries are determined by the

Remuneration Committee, who

will take into account a range

of factors, including, but not

limited to:

• Role, experience and

individual performance;

• Corporate and individual

performance;

• Pay levels for comparable

positions in companies

of a similar size and

complexity; and

• Group profitability and

organisational salary

budgets.

No maximum salary opportunity

has been set out in this

policy report to avoid setting

expectations for executive

directors and employees. The

base salaries effective as at

1 February 2024 are:

Anthony Coombs: £385,000

Graham Coombs: £370,000

Chris Redford: £260,000

Ed Ahrens: £215,000

Jack Coombs: £150,000

Salary increases (in percentage

salary terms) for Executive

Directors will normally be in

line with those for the wider

workforce, expect for in

exceptional circumstances.

Where the Remuneration

Committee consider it

appropriate, base salaries will be

moved progressively (including

larger salary increases) to a level

which is market competitive

taking account of individual

factors such as:

• Increased individual

responsibilities;

• Performance in role;

• A new executive director

being moved to market

positioning over time;

• Remuneration trends

within the financial services

industry; and

• Alignment to market level.

N/A

Benefits

To provide

cost-effective

benefits to help

recruit and

retain executive

directors,

through ensuring

a competitive

overall

remuneration

package.

Executive directors are entitled

to a range of benefits in line with

market practice, including, but

not limited to, private medical

insurance, and a company car.

Other benefits may be

provided based on individual

circumstances. These may

include, for example, permanent

health cover, death in service

benefit, relocation and travel

allowances.

Whilst the Remuneration

Committee has not set an

absolute maximum, the value of

benefits is set at a level which

the Remuneration Committee

considers is appropriately

positioned against companies of

a similar size and complexity in

the relevant market.

N/A

S&U Plc Annual Report and Accounts 202436

Component Purpose Operation Opportunity

Performance

Measures

Annual

Bonuses

To reward

executive

directors for the

achievement

of the annual

financial and

individual

targets.

Provide

alignment with

Shareholders’

interests.

Targets are set annually and

any pay-out is determined by

the Remuneration Committee

after the period-end, based

on performance against those

targets.

The Remuneration Committee

may adjust the bonus pay- out

either up or down should

the formulaic outcome be

considered not to produce a fair

result for either the executive

director or the Company, taking

account of the Remuneration

Committee’s assessment of

overall business performance.

Up to 50% of the bonus earned

may be deferred (in cash) for

at least twelve months, usually

subject to meeting specified

performance targets in the

deferral period and continued

employment.

Up to 150% of base salary.

The combined annual bonus and

LTIP opportunities for any year

cannot exceed 150% of base

salary.

Targets are set

annually, reflecting

the Group’s strategy

and alignment

with key financial,

strategic and

/ or individual

objectives.

Targets, whilst

stretching, do

not encourage

inappropriate

business risks to

be taken.

At least 75% of the

bonus is assessed

against key financial

performance

metrics of the

business and the

balance may be

based on non-

financial strategic

and ESG measures

which align with the

strategic aims of

the Company at the

time of each grant,

and/or individual

performance.

Vesting of the

annual bonus will

apply on a scale

between 0% and

100% based on

the Remuneration

Committee’s

assessment of the

extent to which

the performance

metrics have

been met.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

Component Purpose Operation Opportunity

Performance

Measures

Long Term

Incentive

Plan (LTIP)

2021

To provide

an incentive

to executive

directors to

achieve the

annual and

longer term

financial and

strategic

business targets

and to align

their interests

with those of

Shareholders.

The current cash based LTIP was

approved by Shareholders at the

2021 AGM.

Under the LTIP, the

Remuneration Committee may

grant nil-priced shadow share

options that will deliver the

equivalent share value in cash,

resulting in no equity dilution for

shareholders as a result of these

awards.

The vesting of shadow share

options is dependent on

the achievement of such

performance conditions as

the Remuneration Committee

determines, measured over a

minimum period of one year.

Shadow share options will

normally vest and become

exercisable three years from

the date of grant, subject to

satisfaction of the performance

conditions and the continued

employment of the participant

by the Group for such period as

specified by the Remuneration

Committee. Participants have 3

years from the date of vest to

exercise any shadow options.

On the basis the LTIP is a cash

award, no holding period is

applied.

Shadow share options vest

early on a change of control (or

other relevant event) unless

the Remuneration Committee

determines otherwise, taking

into account the performance

conditions (as determined by the

Remuneration Committee) and

pro-rating for time, although the

Remuneration Committee has

discretion not to apply time pro-

rating in these circumstances.

Shadow share option awards

may also vest early in “good

leaver” circumstances i.e. as a

result of death; illness, injury

or disability; redundancy; or

retirement.

The LTIP allows for the grant

of shadow share options over

shares worth up to 50% of base

salary in any plan year (and up

to 150% of salary in exceptional

circumstances including

recruitment and retention).

However, the combined annual

bonus and LTIP opportunities

for any year cannot exceed

150% of base salary, in any

circumstances.

The grant and/

or vesting of LTIP

shadow share

options is subject

to the satisfaction

of performance

targets set by the

Remuneration

Committee.

The performance

measures are

reviewed regularly

to ensure they

remain relevant but

will be based on

individual and/or

financial measures

and/or share price

growth related

measures.

The relevant metrics

and the respective

weightings may vary

each year based

upon Company

strategic priorities.

Vesting of LTIP

shadow share

options will

apply on a scale

between 0% and

100% based on

the Remuneration

Committee’s

assessment of the

extent to which

the performance

metrics have

been met.

S&U Plc Annual Report and Accounts 202438

Component Purpose Operation Opportunity

Performance

Measures

Retirement

benefits

To provide

competitive

retirement

benefits to help

recruit and

retain executive

directors.

The Company offers defined

contribution pensions to

all executive directors. In

appropriate circumstances,

executive directors may

take a salary supplement

instead of contributions into a

pension plan.

Maximum contributions for a

director will be up to 15% of

base salary.

N/A

The following table provides a summary of the key components of the remuneration package for non-executive directors:

Component Purpose Operation Opportunity

Fees

To provide

the core fixed

element of

remuneration

for the particular

non-executive

director role.

The Board of directors determines non-

executive fees, taking into account the

skills, knowledge, and experience of the

individual, whilst taking into account

appropriate market data.

Directors may be entitled to benefits

such as the use of secretarial support,

travel costs, or other benefits that may be

appropriate.

The fee is set at a fixed annual fee of £39,250

for non-executive directors and £41,350 for

senior non-executive directors, effective from

1 February 2024.

Overall fees paid to non-executive directors

will remain within the limit set out in

the Company’s Articles of Association of

£300,000, taking into account the percentage

increase in the General Index of Retail Prices

for the 12 preceding months.

Legacy awards

The 2010 Long Term Incentive Plan

(“LTIP”) lapsed in May 2020, no further

grants can be made under this LTIP and

there are no remaining outstanding

options under this LTIP.

Recovery provisions

The annual bonus (including any deferred

awards delivered under the annual bonus

and LTIP awards) are subject to “malus”

and “clawback” provisions as follows.

For up to two years following the

payment of the annual bonus award,

the Committee may require repayment

of all or part of the bonus in the event

of a material misstatement or error in

assessing performance measures which

has led to an overpayment of the bonus

or in the event of dismissal due to gross

misconduct in the bonus year or in the

event of criminal behaviour. Some or

all of any deferred award under the

annual bonus may be clawed back (via a

cancellation of the award) prior to vesting

in equivalent circumstances.

During the vesting period of an LTIP

award the Committee may clawback all

or part of the award (via the cancellation

of unvested awards) in the event of

a material misstatement or error in

assessing performance measures which

has led to the award vesting to a greater

degree than would otherwise have been

the case or in the event of dismissal due

to gross misconduct.

Remuneration Committee

approach to setting

performance measures

and targets

Performance measures are selected that

are aligned to the Company’s strategy.

Stretching performance targets are set

each year for the annual bonus and

long-term incentive awards. When

setting these performance targets, the

Remuneration Committee will take into

account a number of different reference

points, which may include the Company’s

business plans and strategy, the wider

market environment and broader

company obligations on Environmental,

Social and Governance matters. Full

vesting will only occur for what the

Remuneration Committee considers to be

stretching performance.

In setting appropriate annual bonus

and long-term incentive parameters the

Remuneration Committee considers

the Group’s and each division’s financial

performance, typically pre-tax profit

performance for the year, and the

appropriate percentage of basic salary to

be awarded for each executive director.

Remuneration

Committee Flexibility

The Remuneration Committee retains

the ability to adjust or set different

performance measures where it

considers it appropriate to do so (for

example, to reflect changes in the

structure of the business and to assess

performance on a fair and consistent

basis from year to year).

The Remuneration Committee

administers the bonus scheme and the

variable incentive plan according to

their respective rules and in accordance

with HMRC rules where relevant. They

have flexibility within the limits in the

table above to determine the timing

and quantum of awards to individual

participants, and to determine good

or bad leaver status for determining a

leaver’s entitlement to shadow share

options under the rules of the LTIP

scheme.

Options under the LTIP may be adjusted

in the event of a variation of capital in

accordance with the scheme rules.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

Consideration of

Remuneration Policy

for other employees

Remuneration arrangements are

determined throughout the Group based

on the principle that reward should

be sufficient to attract and retain high

calibre talent, without paying more than

is necessary, and should be aligned to the

delivery of our business strategy.

The Committee takes into account the

wider pay context and all members of

staff receive an annual pay review. All

members of staff whose performance

has been exceptional are entitled to a

discretionary bonus.

Senior employees are eligible to

participate in the LTIP 2021, at the

Remuneration Committee’s discretion,

thereby encouraging wider workforce

alignment to Company performance.

In determining pay levels for employees,

management consider individual and

Company performance and market rates

for similar positions. Senior management

whose performance has been exceptional

may also be eligible for shadow share

options with similar performance

conditions to the shadow share options

awarded to executive directors.

Approach to

remuneration

The policy aims to facilitate the

appointment of individuals of sufficient

calibre to lead the business and execute

the strategy effectively for the benefit of

Shareholders. When appointing a new

director, the Remuneration Committee

seeks to ensure that arrangements are

in the best interests of the Company and

not to pay more than is appropriate.

The Remuneration Committee will seek

to offer a remuneration package in

line with the Remuneration Policy and

commensurate with other directors

having regard to their responsibilities and

experience.

Fixed pay

Salary and benefits (including retirement

benefits) would be determined in

accordance with the Policy and in line

with market practice.

Variable pay

The maximum level of variable

remuneration which may be granted

in any year (excluding buy-out awards

referred to below) is 150% of salary

(i.e. the maximum annual bonus and

LTIP opportunity). The Remuneration

Committee retains the discretion to make

remuneration decisions which are outside

the policy set out in the table above to

facilitate the recruitment of candidates

of the appropriate calibre required

to optimise Company performance

(but subject to the limit on variable

remuneration). The Remuneration

Committee ensure that awards within

the 150% of salary variable remuneration

limit are linked to the achievement of

appropriate and challenging performance

measures. It is not the Company’s

intention to make non-performance

related incentive payments (for example,

“golden hellos”).

Buy-outs

The Remuneration Committee may make

payments or awards to recognise or

‘buy-out’ remuneration arrangements

forfeited on leaving a previous employer.

The Remuneration Committee will

normally aim to do so broadly on a

like-for-like basis taking into account a

number of relevant factors regarding

the forfeited arrangements which

may include the form of award, any

performance conditions attached to the

awards and the time at which they would

have vested. These payments or awards

are excluded from the maximum level of

variable remuneration referred to above,

however the Remuneration Committee’s

intention is that the value awarded would

be no higher than the expected value of

the forfeited arrangements.

Shadow share options as part

of remuneration

Any new shadow share options are

granted under the LTIP 2021. If necessary,

and subject to the limits referred to

above, in order to facilitate the awards

mentioned above, the Remuneration

Committee may rely on exemption

9.4.2 of the Listing Rules which allows

for the grant of awards to facilitate,

in exceptional circumstances, the

recruitment of a director.

Where a position is fulfilled internally,

any ongoing remuneration obligations or

outstanding variable pay elements shall

be allowed to continue according to the

original terms.

Fees payable to a newly-appointed

Chairman or non- executive director will

be in line with the fee policy in place at

the time of appointment.

Director Service contracts

It is the Company’s policy that executive

directors should have contracts with an

indefinite term providing for a maximum

of one year’s notice.

Non-executive directors are not

employed under contacts of service, but

are generally appointed for fixed terms

of three years renewable for further

terms of one to three years, if both

parties agree.

All directors offer themselves for re-

election at each AGM in accordance with

the UK Corporate Governance Code.

S&U Plc Annual Report and Accounts 202440

Payments for loss of office

The policy set out below provides the framework for contracts for directors:

Termination

Payment

Severance payments in relation to the service contracts are limited to basic salary for the notice period plus

benefits in kind (including company car and private health insurance) and pension contributions (which may

include salary supplements).

Benefits provided in connection with termination of employment may also include, but are not limited to,

outplacement and legal fees.

Vesting of

incentives for

leavers

Annual bonus

The Remuneration Committee has the discretion to determine appropriate bonus amounts taking into

consideration the circumstances in which an executive director leaves. Typically for ‘good leavers’, bonus

amounts (as determined by the Remuneration Committee) will be pro-rated for time in service to termination

and will be, subject to performance, paid at the usual time.

Deferred annual bonus

Typically for ‘good leavers’, unless the Committee determines otherwise, unvested deferred bonus awards

shall continue and vest on the normal vesting date subject to meeting any minimum performance target

set during the deferral period. If a participant dies, unvested deferred bonus awards will vest at that time.

Unvested deferred bonus awards will usually, lapse on termination for any other reason.

2021 Long Term Incentive Plan

The vesting of cash-based awards under the LTIP 2021 is governed by the rules of the incentive plan, as

approved by Shareholders.

Under the LTIP if a participant leaves employment of the Group, options will normally lapse if the participant

leaves employment before vesting unless and to the extent the Remuneration Committee decides otherwise.

Options may vest and become exercisable in “good leaver” circumstances, including death, disability, ill-health,

injury, redundancy, retirement or any other reason determined by the Remuneration Committee.

Under the LTIP any “good leaver” options will vest at the date of cessation of employment unless the

Remuneration Committee decides they should vest at the normal vesting date.

In either case, unless the Remuneration Committee determines otherwise, the extent to which an option

vests will be determined by the Remuneration Committee taking into account the time which has elapsed

between the grant of that option and the date of leaving and the extent to which any performance conditions

have been satisfied. In determining the proportion of an option which vests, the Remuneration Committee

may take into account such other factors, including the performance of the Company and the conduct of the

participant as it deems relevant.

An option may then be exercised, to the extent vested, during the period of six months, or twelve months in

the case of death, (or such other period as the Remuneration Committee may determine) commencing on the

date of such cessation or from the normal vesting date as appropriate.

Where a buy-out award is made under the listing rules then the leaver provisions would be determined at the

time of the award.

Mitigation

The executive directors’ service contracts do not provide for any reduction in payments for mitigation or for

early payment.

The Remuneration Committee reserves

the right to make additional exit

payments where such payments are

made in good faith in discharge of an

existing legal obligation (or by way of

damages for breach of such an obligation)

or by way of a settlement or compromise

of any claim arising in connection

with the termination of a director’s

office or employment. In doing so, the

Remuneration Committee will recognise

and balance the interests of Shareholders

and the departing executive director, as

well as the interests of the remaining

directors.

Where the Remuneration Committee

retains discretion, it will be used to

provide flexibility in certain situations,

taking into account the particular

circumstances of the director’s departure

and performance, with the objective of

ensuring that the director is not paid for

poor performance.

The notice period to be given by the non-

executive directors or the Company is up

to six months and discretion is retained

to terminate with or without due notice

or paying any payment in lieu of notice

dependent on what is considered to be in

the best interests of the Company in the

particular circumstances.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

Statement of consideration

of employment conditions

elsewhere in the Company

When determining the remuneration

arrangements for executive directors,

the Remuneration Committee takes into

consideration, as a matter of course,

the pay and conditions of employees

throughout the Group. The Remuneration

Committee does not formally consult

employees on executive remuneration.

Statement of

consideration of

Shareholder views

From time to time the Remuneration

Committee also consults with major

Shareholders (other than on their own

pay for those on the Board) in addition to

proposing the remuneration report and

resolutions annually to all Shareholders.

Illustration of application

of Remuneration Policy

The charts below set out an illustration

of the potential total remuneration

opportunity under the Remuneration

Policy with effect from 1 February 2024.

For these purposes base salary is the

latest known salary as at 1 February

2024 and benefits is as disclosed in the

single figure table on page 45 for the

year ending 31 January 2024. Pension is

based on the policy set out in the future

policy table (i.e. a maximum contribution

of 15% of base salary) and base salary

effective at 1 February 2024.

Three scenarios have been illustrated for each executive director:

Minimum

performance

• No bonus pay-out

• No LTIP

Performance in line

with expectations

• Bonus: £50,000 for Anthony Coombs and Graham Coombs, £40,000 for Chris Redford and £30,000

for Ed Ahrens and Jack Coombs.

• Shadow Share Option award over 4,000 shares for Chris Redford and 3,000 shares for Ed Ahrens.

Maximum

performance

• Bonus: £50,000 for Anthony Coombs and Graham Coombs, £50,000 for Chris Redford, £40,000 for

Jack Coombs and £40,000 for Ed Ahrens.

• Shadow Share Option award over 5,000 shares for Chris Redford and 3,000 shares for Ed Ahrens.

As required by the regulations, the scenarios are based on the proposed operation of the policy for the year ended 31 January 2025.

Scenario charts

Anthony Coombs Graham Coombs

Base salary, benefits and pension

Bonus

£550,000

£500,000

£450,000

£400,000

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0

Minimum

performance

Performance in line

with expecta�ons

Maximum

performance

100% 90% 90%

10% 10%

Base salary, benefits and pension

Bonus

£500,000

£450,000

£400,000

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0

Minimum

performance

Performance in line

with expecta�ons

Maximum

performance

100% 89% 89%

11% 11%

S&U Plc Annual Report and Accounts 202442

Chris Redford Ed Ahrens

Base salary, benefits and pension

Bonus

LTIP

£500,000

£450,000

£400,000

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0

Minimum

performance

Performance in line

with expecta�ons

Maximum

performance

100% 72% 68%

19%

22%

9% 10%

Base salary, benefits and pension

Bonus

LTIP

£400,000

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0

Minimum

performance

Performance in line

with expecta�ons

Maximum

performance

100% 74% 68%

18%

17%

15%

Jack Coombs

Base salary, benefits and pension

Bonus

LTIP

£500,000

£450,000

£400,000

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0

Minimum

performance

Performance in line

with expecta�ons

Maximum

performance

100% 86% 83%

14%

17%

NB: For the purposes of this illustration, the value of the LTIP has been calculated with reference to the S&U Plc share price on

31 January 2024.

Existing contractual arrangements

The Remuneration Committee retains discretion to make any remuneration payments and/or payments for loss of office (including

exercising any discretions available to it in connection with such payments) notwithstanding that they are not in line with the policy

set out above where the terms of the payment were agreed:

• before the AGM held on 20th May 2014 (the date the Company’s first shareholder-approved Directors’ Remuneration Policy came

into effect);

• after the AGM held on 20th May 2014 and before the policy set out above came into effect, provided that the terms of the

payment were consistent with the shareholder-approved Directors’ Remuneration Policy in force at the time they were agreed; or

• at a time when the relevant individual was not a director of the Company and, in the opinion of the Committee, the payment was

not in consideration for the individual becoming a director of the Company.

For these purposes “payments” includes the Remuneration Committee satisfying awards of variable remuneration and, in relation to

an award over shares, the terms of the payment are “agreed” no later than at the time the award is granted.

The Remuneration Committee may make minor changes to this Remuneration Policy which do not have a material advantage to

directors, to aid in its operation or implementation, taking into account the interests of Shareholders but without the need to seek

Shareholder approval.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B2 Directors’ Remuneration Report

B2.3 Annual Remuneration Report



ending 31 January 2024. Certain elements of the Annual Remuneration Report

are subject to audit and this has been highlighted at the start of each section.

Remuneration Committee

(this section is not subject

to audit)

The Company has established a

Remuneration Committee which is

constituted in accordance with the

recommendations of the Combined

Code. The current members of the

Remuneration Committee are Mr Graham

Pedersen, Mr Jeremy Maxwell and Mr

Tarek Khlat, who are all independent non-

executive directors. Biographical details

of these directors are set out on pages 30

and 31. The Remuneration Committee is

chaired by Mr Tarek Khlat.

None of the Remuneration Committee

has any personal financial interest

(other than as Shareholders), conflicts of

interest arising from cross-directorship

or day-to-day involvement in running the

business. The Remuneration Committee

makes recommendations to the Board.

The Remuneration Committee is

responsible within the authority

delegated by the Board for determining,

implementing and operating the

Remuneration Policy and for determining

the specific remuneration packages

for each of the executive directors. In

particular, the Remuneration Committee

has the following key responsibilities:

• determining and setting variable and

performance-related pay, and the

assessment of performance targets

for executive directors;

• reviewing and approving the

remuneration arrangements and fees

for each individual director;

• reviewing and approving the

remuneration arrangements and

any payments for loss of office or

severance packages for new directors

and those stepping down as a

director or ceasing to be a member of

the senior management team; and

• reviewing and having regard to

the general remuneration pay

practices and polices across the

wider workforce when setting

executive pay.

In its role to implement and operate the

Remuneration Policy for directors the

Remuneration Committee considers;

• the need to attract, retain and

motivate high quality individuals to

optimise Group performance;

• the need for an uncomplicated

link and clear line of sight between

performance and rewards;

• the need for an appropriate

balance between fixed and variable

remuneration and short term and

long-term rewards and alignment

with shareholder interests;

• best practice and remuneration

trends within the Company and the

financial services industry;

• the requirements of the UK Corporate

Governance Code and existing

director contracts; and

• previous shareholder feedback

and the interests of other relevant

stakeholders and employees.

The Remuneration Committee’s terms of

reference were reviewed during the year

and are available on our website www.

suplc.co.uk.

Advisors to the

Remuneration Committee

The Remuneration Committee is assisted

in its work by the Chairman, Deputy

Chairman and the Group Finance

Director. The Chairman is consulted on

the remuneration of those who report

directly to him and also of other senior

executives. No executive director or

employee is present or takes part in

discussions in respect of matters relating

directly to their own remuneration.

During the year, the Remuneration

Committee was also assisted in its work

by KPMG LLP who provide advice and

guidance on remuneration matters. The

Remuneration Committee is comfortable

that the KPMG team which provided

advice to the Remuneration Committee

was and is independent and that they did

not have any connections with S&U plc

that may have impaired their objectivity.

The total fees paid to KPMG for the

provision of independent advice during

the year ended 31 January 2024 was

£12,000. KPMG also provide taxation

compliance and advisory services to

the Group.

Attendance at meetings

Details of the number of Remuneration

Committee meetings held during the year

and attendance at those meetings is set

out in the Governance section on page 58

of this Annual Report.

S&U Plc Annual Report and Accounts 202444

Single Figure Tables (this section is subject to audit)

The table below sets out in a single figure the total amount of remuneration including each component received by each of the

directors for the year ended 31 January 2024, together with comparative figures for the year ended 31 January 2023:

Executive

Directors

Anthony

Coombs

£000

Graham

Coombs

£000

Chris

Redford

£000

Graham

Wheeler

£000

Jack

Coombs

£000

Ahrens*

£000

2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23

Salaries and fees 379 374 363 358 253 245 310 300 120 110 208 n/a

Allowances and

benefits 88 82 35 34 22 22 13 13 23 1 9 n/a

Pension

Contribution 0 0 0 0 37 36 31 30 18 16 31 n/a

Total Fixed 467 456 398 392 312 303 354 343 161 127 248 n/a

Bonus 0 50 0 50 10 50 20 75 10 25 10 n/a

Shadow Share

Incentive 0 0 0 0 0 128 0 128 0 0 0 n/a

Total Variable 0 50 0 50 10 178 20 203 10 25 10 n/a

Total 467 506 398 442 322 481 374 546 171 152 258 n/a

* Ed Ahrens was appointed a director of S&U plc on 14 February 2023 (after the 31 January 2023 yearend) and so no remuneration is

shown in the single figure table for 2022/23.

Non-executive

Directors

Demetrios Markou*

£000

Graham Pedersen

£000

Tarek Khlat

£000

Jeremy Maxwell

£000

2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23

Salaries and fees 40.0 39.0 38.0 37.0 38.0 37.0 38.0 37.0

Total 40.0 39.0 38.0 37.0 38.0 37.0 38.0 37.0

* Demetrios Markou retired on 2nd October 2023 and Tarek Khlat has been appointed the senior non-executive director of S&U Plc with effect from 1 February 2024.

Stock Code: SUS ― www.suplc.co.uk 45

CORPORATE GOVERNANCE

Salaries & fees

The amount of salary / fees received in the period.

Allowances

and benefits

The taxable value of benefits received in the period. These are company car or allowance, private fuel, life

insurance and private medical insurance.

Pension

The pension figure represents the cash value of pension contributions received by the executive directors.

This includes the Company’s contributions to the defined contribution pension scheme and any salary

supplement in lieu of a Company pension contribution.

Annual Bonus

Annual bonus is the value of the cash bonus earned in respect of the year. A description of the performance

targets against which the bonus pay-out was determined is provided on page 32. The Remuneration

Committee determined that no part of any bonus paid for the year ended 31 January 2024 would be

deferred.

Share incentive

plans ( LTIP)

For the year ended 31 January 2024 figures for the value of nil cost options vesting in respect of

performance under the shadow share incentive plan have been calculated as follows:

• PBT and ROCE based performance targets for the year to 31 January 2024 were not met; accordingly,

the Remuneration Committee determined that 0% of the 5,000 LTIP shadow share options granted to

Graham Wheeler, 0% of the 5,000 shadow share options granted to Chris Redford and 0% of the shadow

share options granted to Ed Ahrens vested in respect of achieving performance targets in the year to 31

January 2024. Although the above LTIP options would also have been subject to continued employment,

we disclose the value of the shares vesting by reference to performance to 31 January 2024 which is £nil

(i.e. no shares vested by reference to performance).

• We intend to grant further shadow share options in May 2024 based on the value of a total of 8,000

shares in S&U. These awards will be subject to a performance period which will commence on 1

February 2024 and will end on 31 January 2025. The share price at the start of the performance period

was £20.60; if the share price were to increase by a further 50% between May 2024 and May 2027, then

the share price of the awards would have increased to £30.90, representing an increase in the face value

of Chris Redford’s award of £51,500 and an increase in the face value of Ed Ahrens’ award of £30,900.

For the year ending 31 January 2023 comparative figures:

• 6,000 shadow share options were granted to Graham Wheeler in that year of which 100% vested in

respect of achieving stretch performance targets in that year. 6,000 shadow share options were granted

to Chris Redford in that year of which 100% vested in respect of achieving stretch performance targets in

that year.

Individual elements of remuneration (this section is subject to audit apart from the application of the Remuneration Policy to the

individual elements of remuneration for the year ending 31 January 2024).

Base salary and fees

Base salaries for individual executive directors are reviewed annually by the Remuneration Committee and are set with reference

to individual performance, experience and responsibilities within the Group as well as with reference to similar roles in comparable

companies. Non-executive directors will continue to receive directors’ fees in line with market practice. As disclosed in the Annual

Report on Remuneration last year, for the year ending 31 January 2024, the base salaries of the executive directors were increased in

the range 1.3% to 3.3%, except where exceptional circumstances merited a higher increase.

For the year ending 31 January 2025, the Remuneration Committee has now agreed salary increases in the range 1.7% to 3.6%

except where exceptional circumstances merited a higher increase, as noted below. This was below the increases given to the wider

workforce. After a review of market comparables, and after his excellent performance as an executive director of our growing Aspen

Bridging subsidiary, it was decided to award Jack Coombs a salary increase of 25% for year ending 31 January 2025.

B2 Directors’ Remuneration Report

S&U Plc Annual Report and Accounts 202446

The table below shows the base salary increases awarded for next year:

Executive director

Base salary as at

31 January 2024

£000

Base salary for year

to 31 January 2025

£000

Increase

Anthony Coombs 378.5 385.0 1.7

Graham Coombs 363 370 1.9

Chris Redford 252.5 260.0 3.0

Graham Wheeler* 310 n/a n/a

Jack Coombs 120 150 25.0

Ed Ahrens 207.5 215.0 3.6

* Graham Wheeler retired as CEO of Advantage Finance Limited on 31 January 2024 and so no remuneration is shown in the table for base salary as at 31 January 2025. He

will remain on the Board of S&U plc as a non-executive director and with effect from 1 February 2024 will be paid a non-executive fee.

Non-Executive Directors

The remuneration policy for non-executive directors is determined by the Board. Fees reflect the responsibilities and duties placed

upon non-executive directors whilst also having regard to market practice. The basic non-executive director fee was increased by 3.3%

to £39,250 with effect from 1 February 2024. The basic senior non-executive fee was increased by 3.4% to £41,350 with effect from 1

February 2024. The non-executive directors do not participate in any of the Company’s share incentive plans nor do they receive any

benefits, bonus or pension contributions.

Non-executive director fees

2022/23

£000

2023/24

£000

2024/25

£000

Basic fee 37 38 39.25

Additional fee for Senior Independent Non-executive director 2 2 2.1

Annual bonus

For the year ended 31 January 2024, annual bonuses for the executive directors were based on stretching Group or divisional PBT

targets. The table below sets out the maximum bonus opportunity that each of the executive directors could earn for the year ended

31 January 2024 together with the Group PBT targets and details of the actual bonus earned.

Performance targets

Maximum annual

bonus opportunity

year ending

31 January 2024

£000

Bonus pay-out % of

maximum

Actual bonus

earned for the year

ending 31 January

2024

£000

Anthony Coombs

Group PBT target (£42m to £44m)

50 0 0**

Graham Coombs 50 0 0**

Chris Redford 75 13 10

Graham Wheeler Advantage Finance PBT and ROCE

target* 75 27 20

Ed Ahrens Aspen Bridging PBT and ROCE target* 40 25 10

Jack Coombs Aspen Bridging PBT and ROCE target* 30 33 10

** Anthony Coombs and Graham Coombs waived their entitlement to the determined earned bonus of £10,000 for the year ended 31 January 2024

* Whilst the Remuneration Committee is aware that some shareholders wish to see detailed retrospective disclosure of bonus targets, it considers this inappropriate for the

divisional PBT and Group and Divisional targets given that such targets are based on commercially sensitive information that the Board believes could negatively impact

the Group’s competitive position by providing our competitors with insight into our business plans and expectations, resulting in significant risk to future profitability and

shareholder value. We will review annually this commercial sensitivity and consequent non-disclosure of the historic divisional PBT and Group and Divisional ROCE targets.

However, we are committed to providing as much information as we are able to, in order to assist our investors in understanding how our incentive pay-outs relate to

performance delivered. Details of the Group PBT targets are disclosed above.

Stock Code: SUS ― www.suplc.co.uk 47

CORPORATE GOVERNANCE

Based on the achievement of below target performance levels in the year ended 31 January 2024 the Remuneration Committee

exercised its discretion to determine bonuses of £10,000 each were deemed payable to Anthony Coombs, Graham Coombs, Ed

Ahrens, Jack Coombs and Chris Redford and a bonus of £20,000 was deemed payable to Graham Wheeler. The Committee considered

the extent to which both financial and individual performance targets had been met in determining these bonuses. Anthony Coombs

and Graham Coombs each then waived their entitlement to the £10,000 bonus awarded, such that no amounts were paid to them or

directed by them, in relation to the annual bonus for the year ended 31 January 2024.

Annual bonus in 2024/25

For the year ending 31 January 2025, where the threshold performance targets set are achieved, the annual bonus has been set at

£50,000 for Anthony Coombs and Graham Coombs, £40,000 for Chris Redford and £30,000 for Ed Ahrens and Jack Coombs. Where

the target levels of performance set are exceeded, then based on stretch performance targets the Remuneration Committee has the

discretion to pay an increased annual bonus to each of Jack Coombs, Ed Ahrens and Chris Redford and the maximum amount payable

will not exceed the maximum limits stated in the Remuneration Policy. The annual bonus will continue to be assessed predominantly

against stretching Group and divisional PBT and ROCE targets, but for the year ended 31 January 2025 up to 25% of the annual bonus

will be assessed against specific non-financial targets.

The Remuneration Committee considers that the actual annual bonus targets are commercially sensitive and should therefore remain

confidential to the Company. They provide our competitors with insight into our business plans, expectations and our strategic

actions. However, the Remuneration Committee will continue to disclose how the bonus pay-out delivered relates to performance

against the Group PBT targets on a retrospective basis.

Long Term Incentives – Long Term Incentive Plan (LTIP) 2021

Awards granted during the period

Graham Wheeler was awarded 5,000 nil cost shadow share options under the 2021 LTIP in May 2023 at a notional nil exercise price,

subject to achieving specified stretch Advantage PBT and ROCE targets for the year ended 31 January 2024.

Chris Redford was awarded 5,000 nil cost shadow share options under the 2021 LTIP in May 2023 at a notional nil exercise price,

subject to achieving specified stretch Group PBT targets for the year ended 31 January 2024.

Ed Ahrens was awarded 3,000 nil cost shadow share options under the 2021 LTIP in May 2023 at a notional nil exercise price, subject

to achieving specified stretch Group PBT targets for the year ended 31 January 2024.

No other shadow share options were envisaged to be granted to S&U directors and none were granted during the year ended 31

January 2024.

Awards vesting based on performance in respect the year ended 31 January 2024

No awards vested based on performance in respect of the year ended 31 January 2024 and therefore none have been included in the

notes to the single figure tables on page 45.

Awards for 2024/25

The Committee intends to grant 3,000 nil cost shadow share options under the 2021 LTIP to Ed Ahrens, subject to achieving certain

threshold Aspen PBT and ROCE targets for the year ending 31 January 2025.

The Committee also intends to grant 5,000 nil cost shadow share options under the 2021 LTIP to Chris Redford, subject to achieving

certain stretch group PBT targets for the year ending 31 January 2025.

The LTIPs will normally become exercisable three years from grant, subject to the satisfaction of the performance conditions and the

director remaining in employment. The Remuneration Committee considers that the targets are commercially sensitive and should

therefore remain confidential to the Company. They provide our competitors with insight into our business plans, expectations and

our strategic actions. However, the Remuneration Committee will continue to disclose how the LTIP vesting relates to performance

against the Aspen and Group PBT and ROCE targets on a retrospective basis.

B2 Directors’ Remuneration Report

S&U Plc Annual Report and Accounts 202448

The table below shows a comparison between the actual amounts paid or vested in the year ending 31 January 2024 and the

amounts granted for the year ending 31 January 2025.

Amounts actually paid

or vested in the year

2024

Amounts granted in the year

(subject to the achievement

of performance conditions)

2025

Anthony Coombs Bonus £0 £50,000

Shadow share options - -

Graham Coombs Bonus £0 £50,000

Shadow share options - -

Chris Redford Bonus £10,000 £40,000

Shadow share options 0 5,000

Graham Wheeler* Bonus £20,000 n/a

Shadow share options 0 n/a

Jack Coombs Bonus £10,000 £30,000

Shadow share options - -

Ed Ahrens* Bonus £10,000 £30,000

Shadow share options 0 3,000

* Graham Wheeler retired as CEO of Advantage Finance Limited on 31 January 2024. From 1 February 2024 Graham will remain on the S&U plc Board as a non-executive

director. Therefore, no variable remuneration is shown in the table for 2025 for Graham.

For the year ending 31 January 2025, the Remuneration Committee considers that the significant shareholding held by Anthony

Coombs, Graham Coombs and Jack Coombs provides adequate alignment to shareholders. No shareholding guideline applies to any

of the other directors of the Company.

Total pension entitlements in 2023/24 (this section is subject to audit)

During the year the Group made contributions into a defined contribution scheme on behalf of Graham Wheeler, Jack Coombs and

Chris Redford (or pays a salary supplement in lieu). None of the directors have accrued benefits under the defined benefit scheme.

Director

Defined contribution

or salary supplement

in lieu

£000

Percentage

of Salary

Chris Redford 37 14.5

Graham Wheeler 31 10.0

Ed Ahrens 31 15.0

Jack Coombs 18 15.0

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

Company performance – shareholder return graph (this section is not subject to audit)

The following graph shows the Company’s Shareholder Return performance, compared with the performance of the FTSE Small Cap,

over the past ten years. This comparator has been selected since it illustrates S&U’s relative performance within their sector.

10-year Total Shareholder Return Index at 31 January 2024

S&U PLC

FTSE SMALL CAP

Return Index

300

250

200

150

100

31/01/2014

31/01/2015

31/01/2016

31/01/2017

31/01/2018

31/01/2019

31/01/2020

31/01/2021

31/01/2022

31/01/2023

31/01/2024

Executive Chairman Remuneration for the previous ten years (this section is not

subject to audit)

The Group does not have a CEO, but the table below shows the detail required by the regulations for our executive chairman

Mr Anthony Coombs:

Single figure of

remuneration

£000

Annual bonus (% of

maximum opportunity

for the year)

Long term incentive

(% of maximum number

of shares for the year)

2024 467 0 n/a

2023 506 100 n/a

2022 469 100 n/a

2021 450 20 n/a

2020 427 33 n/a

2019 412 40 n/a

2018 387 0 n/a

2017 402 50 n/a

2016 394 100 n/a

2015 390 100 n/a

B2 Directors’ Remuneration Report

S&U Plc Annual Report and Accounts 202450

Percentage change in Executive Directors’ Remuneration (this section is not subject

to audit)

The table below sets out in relation to salary, taxable benefits and annual bonus the percentage increase in remuneration for

executive directors and the wider workforce for the years ended 31 January 2024, 31 January 2023, 31 January 2022 and

31 January 2021.

Element

Year to 31.1.24

Anthony

Coombs

Graham

Coombs

Chris

Redford

Graham

Wheeler*

Jack

Coombs**

Wider

Workforce

Base salary 1.3 1.4 3.1 3.3 9.1 5.5

Allowances and benefits 7.3 2.9 0.0 0.0 2300.0 n/a

Bonus (100.0) (100.0) (80.0) (73.0) (60.0) (20.6)

Year to 31.1.23 % % % % % %

Base salary 3.8 3.8 5.4 20.0 10.0 9.0

Allowances and benefits 3.8 (2.9) 0.0 (18.8) 0.0 n/a

Bonus 66.7 66.7 0.0 50.0 150.0 6.6

Year to 31.1.22 % % % % % %

Base salary 0.0 0.0 0.0 0.0 n/a 3.0

Allowances and benefits 5.3 0.0 (15.4) n/a n/a n/a

Bonus 100.0 100.0 100.0 100.0 n/a 186.9

Year to 31.1.21 % % % % % %

Base salary 1.4 1.5 3.1 n/a n/a 6.1

Allowances and benefits 60.0 0.0 (10.3) n/a n/a n/a

Bonus (40.0) (40.0) (19.4) n/a n/a (42.0)

* Graham Wheeler was appointed a director of S&U plc on 29 September 2020, so no comparative data is available for the year to 31.1.21.

** Jack Coombs was appointed a director of S&U plc on 14 April 2021, so no comparative data is available for the year to 31.1.21 or the year to 31.1.22.

*** Ed Ahrens was appointed a director of S&U plc on 14 February 2023 (after the 31 January 2023 yearend) and so no comparative data is available to be shown in

this table.

Anthony Coombs received benefits and allowances of £88,000 in the year ending 31 January 2024 and £82,000 in the year ending

31 January 2023. Anthony Coombs earned a bonus of £10,000 for the year ending 31 January 2024 which he waived payment of, so

therefore his bonus payment is reported as £nil, and earned a bonus of £50,000 for the year ending 31 January 2023.

Graham Coombs received benefits and allowances of £35,000 in the year ending 31 January 2024 and £34,000 in the year ending

31 January 2023. Graham Coombs earned a bonus of £10,000 for the year ending 31 January 2024 which he waived payment of, so

therefore his bonus payment is reported as £nil, and earned a bonus of £50,000 for the year ending 31 January 2023.

Chris Redford received benefits and allowances of £22,000 in the year ending 31 January 2024 and £22,000 in the year ending

31 January 2023. Chris Redford earned a bonus of £10,000 for the year ending 31 January 2024 and earned a bonus of £50,000 for

the year ending 31 January 2023.

Graham Wheeler received benefits and allowances of £13,000 in the year ending 31 January 2024 and £13,000 in the year ending

31 January 2023. Graham Wheeler earned a bonus of £20,000 for the year ending 31 January 2024 and earned a bonus of £75,000

for the year ending 31 January 2023.

Jack Coombs received benefits and allowances of £23,000 in the year ending 31 January 2024 and £1,000 in the year ending

31 January 2023. Jack Coombs earned a bonus of £10,000 for the year ending 31 January 2024 and earned a bonus of £25,000 for

the year ending 31 January 2023.

In accordance with the Companies (Miscellaneous Reporting) Regulations 2018, the average total number of UK employees within

the S&U plc group for the relevant year was less than 250; accordingly, the Company is not currently required to report on the ratio

of the Chairman’s single total figure of remuneration relative to the Company’s UK employees across the group. The Remuneration

Committee shall continue to review and monitor its disclosure obligations under the Companies (Miscellaneous Reporting)

Regulations 2018.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

Relative Importance of Spend on Pay (this section is not subject to audit)

The graph below shows the relative importance of spend on pay against other cash outflows of the Group for the years ending 31

January 2023 and 31 January 2024. Given the nature of the Group’s business, the other significant outflows for the Group are loan

advances and dividends payable.

2023

2024

350

300

250

200

150

100

Wages and salaries Loan advances Dividends paid

Payments for loss of office (this section is not subject to audit) and to past

directors

There were no loss of office payments made during the year ended 31 January 2024.

Statement of directors’ shareholding and share interests

The table below details the beneficial shareholdings and share interests of the directors as at 31 January 2024.

Type

Total at

31 January

2024

Anthony Coombs Shares 1,211,809

Graham Coombs Shares 1,638,619

Chris Redford Shares 11,000

Ed Ahrens Shares 3,000

Jack Coombs Shares 1,677,147

Non-executive directors

Tarek Khlat Shares -

Graham Pedersen Shares -

Jeremy Maxwell Shares -

Graham Wheeler Shares -

In addition to the above holdings, Grevayne Properties Limited, a Company beneficially controlled by Anthony Coombs and Graham

Coombs, holds 379,123 Ordinary Shares.

There are no share options held under the old LTIP 2010 scheme – there are no direct share interests arising under the new LTIP

2021 scheme agreed by shareholders at the AGM in 2021 as options which are granted under this new scheme are shadow share

options only.

There are no specific shareholding requirements for directors and there have been no changes to the above shareholdings and

share interests between 31 January 2024 and the date of this report.

B2 Directors’ Remuneration Report

S&U Plc Annual Report and Accounts 202452

Shareholder vote on the 2023 Remuneration Report and 2021 Remuneration Policy

(this section is not subject to audit)

The table below shows the voting outcome at the 25 May 2023 AGM for the 2022 Directors Remuneration Report (advisory) and the

voting outcome at the 20 May 2021 AGM for the 2021 Remuneration Policy:

Number

of votes

“For” and

“Discretion”

% of votes

cast

Number

of votes

“Against”

% of votes

cast

Total Number

of votes cast

Number

of votes

“withheld”

Annual Report on Remuneration 2023 5,955,173 95.69 268,056 4.31 6,223,229 1,342

Remuneration Policy 2021 5,672,786 96.46 208,467 3.54 5,881,253 228

The Remuneration Committee welcomed the passing of the resolutions and the support shown by those Shareholders who voted

in favour and the Remuneration Committee has taken steps wherever practicable to understand Shareholder concerns when

withholding their support.

Approval

This report section B2 of the Annual Report and Accounts including The Annual Remuneration Report was approved by the Board of

Directors on 10 April 2024 and signed on its behalf by:

Tarek Khlat

Chairman of the Remuneration Committee

10 April 2024

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B3 Governance

B3.1 Audit

Committee Report

Role and Responsibilities

The Audit Committee is a committee

of the Board of Directors, made up of

independent non-executive directors.

Its main role is to assist the Board and

protect the interests of shareholders

by reviewing the integrity and

appropriateness of the Group’s financial

information, the systems of internal

controls and risk management and

the audit process, both internal and

external. The Committee continues to

monitor developments in other areas

in this regard, to ensure that its role is

properly and appropriately applied and

performed. The Committee is cognisant

of the evolving audit landscape for listed

companies and is helping the company

develop and embed its evolving response

to climate change including the work

for the task force on climate related

disclosures (TCFD). Two members of

the audit committee also serve on

the Group’s ESG and climate change

committee.

Composition of the

Committee and Meetings

The Company has established an Audit

Committee which is constituted in

accordance with the recommendations

of the UK Corporate Governance Code.

The members of the Committee are Mr G

Wheeler who is a non-executive director

and was appointed to the Committee

on 1 February 2024 and Mr G Pedersen,

Mr J Maxwell and Mr T Khlat, who are

all independent non-executive directors.

Biographical details of these directors

are set out on pages 30 and 31. The

Committee is chaired by Mr G Pedersen.

Meetings are held not less than twice

a year and generally three times a year

in conjunction with the interim and full

year financial reports issued in October

and April and an external and internal

audit planning meeting in January. The

external or internal auditors or individual

members of the Audit Committee may

request a meeting if they consider one

is necessary and the Committee ensure

that discussions are held with the

external auditors without executive Board

members present. During the year ending

31 January 2024 three meetings were

held including Audit planning meetings.

Significant Matters related to

the financial statements

The significant matters and areas of

judgement considered by the Audit

Committee in relation to the January

2024 Financial Statements were as

follows:

Impairment of receivables – Motor

Finance – see also accounting policy 1.5

on page 75.

Receivables are impaired in Motor

Finance based on the overall contractual

arrears status and also the number

of cumulative contractual monthly

payments that have been missed in the

last six months. Impairment is calculated

using models which use historical

payment performance and amounts

recovered from security realisation

to generate the estimated amount

and timing of future cash flows from

each arrears stage. In addition, and in

accordance with the provisions of IFRS9 a

collective provision is made for expected

credit losses in the next 12 months in

the remainder of the loan book which

again references historical payment

performance and amounts recovered.

Judgement is applied as to the

appropriate point at which receivables

are impaired and the level of cash flows

that are expected to be recovered from

impaired customers.

In order to assess the appropriateness

of the judgements applied, an exercise

is performed to assess the most recent

performance of customers, including the

cash collection and recovery performance

of impaired customers. This is used to

help forecast expected cash collections

which are then discounted at the

effective interest rate and compared to

the carrying value of receivables at the

yearend with the difference being the

impairment provision.

In assessing the adequacy of the Motor

Finance impairment provision, the Audit

Committee considers, reviews and

challenges;

a) The work performed by management

and by Mazars in auditing the

data used and their challenge

of the assumptions used by

management; and

b) The findings in light of current trading

performance and expected future

trading performance.

Revenue Recognition – Motor Finance

- see also accounting policy 1.4 on

page 74.

Interest income is recognised in the

income statement for all loans and

receivables measured at amortised cost

using the constant period rate of return

on the net investment in the loan which is

akin to an effective interest rate method

(EIR). The EIR is the rate that exactly

discounts the expected future cash flows

of the loan back to present value being

the amount advanced to the customer

and hire purchase interest income is then

recognised using the EIR. Acceptance

fees and any direct transaction cost are

included in the calculation of EIR.

In assessing the appropriateness

of revenue recognition, the Audit

Committee considers;

a) The work performed by management

and by Mazars as part of their

external audit, including their

challenge of the assumptions used by

management; and

b) The findings in light of current trading

experience and expected future

trading experience.

The Committee also reviewed the

impairment, revenue recognition

and strong receivables growth of our

Property Bridging Finance business which

is currently less material than motor

finance. There were no issues and areas

of judgement considered significant

by the Committee in relation to Aspen

Bridging.

External Audit

The Committee formally reviews the

effectiveness of the external auditors,

Mazars LLP, and the Group’s relationship

with them. The review consists of a list

of relevant questions, which it discusses

with the Group Finance Director, before

discussing them with external auditors.

As a result, the Committee concluded

that the external audit process during

Mazars LLP’s second year as our auditors

was effective this year. After a rigorous

tender process Mazars LLP were formally

appointed as group auditors at the AGM

in May 2021, taking over from Deloitte

LLP who had been Group Auditors

since 2000.

S&U Plc Annual Report and Accounts 202454

The Audit Committee and Mazars have

put in place safeguards to ensure that

the independence and objectivity of

the external auditor is maintained

including governing the external auditor’s

engagement for non-audit services. In

line with rules for public interest entities

the provision of tax compliance services

was placed with KPMG with effect

from 1 February 2017 and we also now

use KPMG for guidance on directors’

remuneration and reporting matters.

Fees paid to the external auditor are

shown in note 8 to the accounts. Overall

the fees paid to the external auditor for

non-audit services were £30,000 (2023:

£25,000) and this was for the half year

review of interim results. The audit

committee have continued to monitor

the quality of service they provided and

their continuing independence. They

examined Mazars transparency report

which demonstrates how audit quality is

maintained in line with the “Audit Quality

Framework” issued by the professional

oversight board of the Financial Reporting

Council. They also considered Mazars’

understanding of S&U plc’s business,

their access to appropriate specialists,

and their understanding of the financial

sector in which the Group operates.

In accordance with this policy the Audit

Committee ensured no external service

provided by the auditors involved it in

management of functions or decision

making or in influencing Management’s

view on the adequacy of internal controls

or financial reporting. If it were to be

material to the Group, any Corporate

Finance or other advice that Mazars

provided during the year would be

reviewed by the Audit Committee to

ensure that they did not compromise the

auditing function of Mazars in any way.

Internal Audit

During the year, RSM have continued

to provide internal audit services for

the Group. An agreement, overseen by

the Audit Committee, has been entered

into with RSM who will be responsible

for regular internal audits of the

Group’s Regulatory Controls, Customer

Compliance, Risk Management and

Governance Policy and Procedures.

The Committee considers that the Annual

Report and Accounts, taken as a whole,

is fair, balanced and understandable

and provides the information necessary

for shareholders to assess the Group’s

performance, business model and

strategy.

Graham Pedersen

Chairman of the Audit Committee

10 April 2024

B3.2 Corporate

Governance

The 2018 UK Corporate Governance

Code issued by the FRC was applicable

for the whole of the financial year ended

31 January 2024. The FRC have reviewed

the code and issued a new UK Corporate

Governance Code 2024 (effective 2025)

containing a small number of changes.

The 2024 code will first apply to S&U

plc for its financial year ended 31

January 2026 and we report below on

our adherence to the current 2018 UK

Corporate Governance Code.

Narrative Statement

The way in which we comply with the

Code’s Provisions, or explain where we

do not is described below in the five

areas of “Board Leadership and Company

Purpose, Divisions of Responsibilities,

Composition, succession and evaluation,

Audit risk and internal control and

Remuneration.” In addition, our

Chairman’s Statement provides guidance

as to how we interpret the revised

codes more flexible approach in giving

clear reasons for any non-compliance

within the provisions. The rationale for

this includes a “Company’s particular

circumstances based on a range of

factors, including the size, complexity,

history and ownership structure.”

In S&U’s case this has always meant

an identity of interest between major

shareholders and the executive

management of the Company. The

requirement of the Code of Principles

for Board’s to “promote the long-term

sustainability or success of the Company,

generating value for shareholders

and contributing to wider society” is

sustained by this and by our consistent

mantra of “steady, sustainable growth.”

Our mission statement is published on

the inside front cover. Family investment

and management has over the past 85

years been reflected in ambition for

growth and for new markets buttressed

by a conservative approach to risk, to

treasury activities and to return on

capital employed. The same culture

is seen in “work force engagements”

through employment stability, good

communications and a streamlined, non-

bureaucratic, management structure, as a

staple of S&U well before the Governance

Code even existed.

This has inevitably meant some departure

from the detailed Provisions of the

Code which primarily focusses on larger

companies, a more formal approach to

employee relations, a shorter history

to establish a proven responsible

culture, and a divorce between equity

and management. We have carefully

explained the reasons for any departures

and will hopefully, as the revised code

requires, now see these considered

by investors and their representatives

“thoughtfully” and not evaluated in “a

mechanistic way”.

Leadership

During the year the Company was

controlled through the Board of Directors

which at 1 February 2024 comprised

five executive and four non-executive

directors. The Chairman is responsible

for the running of the Board. He has to

ensure that all directors receive sufficient

relevant information on financial,

business and corporate issues prior to

meetings. He is also responsible for

co-ordinating the Company’s business

and implementing Group strategy.

The Chairman and Deputy Chairman

are jointly responsible for acquisitions

outside the traditional business, the

development of the business into new

areas, and relations with the investing

community, public and media.

Under Provision 9 of the Code it is

recommended that the Chairman should

be independent on appointment and

should not have previously served as

Chief Executive of the Company and

under Provision 19 of the Code it is

recommended that the Chairman should

not remain in post beyond nine years

from the date of their first appointment

to the Board. Mr. Anthony Coombs was

appointed Chairman in 2008 as part of

an established succession plan reflecting

the Coombs family’s significant holding

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B3 Governance

in S&U, the identity of interest between

management and shareholders and the

consequent success of the Company. As

explained above this has been (and is

perceived by the investing community) as

a significant strength in the responsible,

long-term strategic approach to S&U’s

development.

Mr. Coombs now serves as Executive

Chairman and his responsibilities as

Managing Director have been transferred

to the Chief Executive of Advantage

Finance and the Chief Executive of Aspen

Bridging.

The Board has a formal schedule of

matters reserved to it and meets at

least four times a year with monthly

circulation of papers. It is responsible

for overall Group strategy, acquisition

and divestment policy, approval of

major capital expenditure projects and

consideration of significant financing

matters. It monitors the exposure to key

business risks and reviews the strategic

direction of the business. This includes

its code of conduct, its annual budgets,

its progress towards achievement of

those budgets and its capital expenditure

programmes. The Board also considers

environmental and employee issues

and key appointments. It also ensures

that all directors receive appropriate

training on appointment and then

subsequently as appropriate. The Board

has established a Nomination Committee,

an Audit Committee and a Remuneration

Committee. Each Committee operates

within defined terms of reference.

Advantage Finance and Aspen Bridging

are each managed by a separate board

of directors. The minutes of the standing

Committees will be circulated to and

reviewed by the Board of Directors. Terms

of reference for the Committees are

available from S&U plc head office and on

our website www.suplc.co.uk.

Graham Pedersen was appointed to the

Board in February 2015 and brings a

wealth of experience to the S&U Board

both as a regulator and a banker. He

has therefore served as a non-executive

director on the Board for over nine

years. Notwithstanding this length of

service, the Board considers him to be

independent due to his robust judgement

and character and the invaluable balance

and experience he has brought to the

Board’s deliberations. In March 2016,

Tarek Khlat, a Banker, FCA Approved

Person and Wealth Manager of great

experience and expertise was appointed

to the Board. In January 2022, Jeremy

Maxwell was appointed to the Board

and brings broad expertise in digital

innovation, marketing, commercial

development and customer experience

from over 25 years in the retail and B2B

distribution industries.

On 1st February 2024, after the end of

the financial year, Graham Wheeler was

appointed as a non-executive of the

Board following his retirement as CEO

of Advantage Finance. In his new non-

executive capacity Graham will continue

to bring the benefit of over 40 years of

experience in the motor and finance

sectors to the S&U Board. On 14th

February 2023 and as mentioned in last

year’s report, Ed Ahrens the CEO of Aspen

Bridging was appointed to the Board of

S&U plc as an Executive Director. This was

considered appropriate given his prudent

and controlled leadership of our growing

property bridging business and the wide

range of skills and experience from his

banking background which enhance the

overall Board management of the Group.

On 2nd October 2023, Demetrios Markou

retired as a non-executive director of S&U

plc after 25 years of careful and dedicated

service to S&U plc.

The Nomination Committee, chaired

by Mr. J Maxwell, comprises the four

non-executive directors and Anthony

Coombs, Group Chairman. Audit and

Remuneration Committees are made up

of the four non-executive directors and

chaired by Graham Pedersen and Tarek

Khlat respectively.

Board Effectiveness and the

work of the Nomination

Committee

Our executive directors are appraised

annually by the Chairman, the Deputy

Chairman and the independent non-

executives. The Chairman and the Deputy

Chairman are appraised annually by the

independent non-executives. The results

of these appraisals are considered by

the Remuneration Committee for the

determination of their remuneration

recommendations. During the year

there was no external evaluation of the

Board but the performance of the Board

and each of the Board Committees was

reviewed by the Board with regard to

the performance and achievements

during the year. The performance of the

Board and all three committees was self-

assessed by the Board to be effective.

Our non-executive directors receive

full updates on Company progress and

relevant issues and bring their experience

and sound judgement to bear on matters

arising. The Chairman considers the

effectiveness of each non-executive

director annually.

Directors have both the time and

experience to fulfil their responsibilities

and none sit on other PLC boards. The

Nomination Committee advises the

Board on refreshment and succession

planning, whilst independent recruitment

consultants are used for important

executive roles. During the current year

the Nomination Committee played a

significant role in the appointment of Ed

Ahrens, an appointment which enhances

the relevant skills and experience of the

Board. The Committee together with

appropriate outside advisers also played

a key role in the succession planning and

the successor recruitment process ahead

of the retirement of Graham Wheeler

as CEO of Advantage Finance on 31

January 2024. Within this process the

Nomination Committee also considered

the potential suitability of Advantage

Finance CEO candidates to join the S&U

Board after a suitable assessment period.

The recruitment process led to the

successful appointment of Karl Werner

to succeed Graham Wheeler as CEO of

Advantage Finance on 1st February after

a planned 3-month handover period.

Karl was formerly Managing Director of

Motor, Aldermore Bank and before that

Deputy CEO of MotoNovo Finance and is

already bringing his extremely impressive

skills to his new role as CEO of Advantage

Finance. The Nomination Committee will

continue to monitor the availability of

relevant skills and experience alongside

its corporate governance responsibilities,

in its further succession planning

and when considering any future

appointments to the Board. Whilst the

Board notes the Code’s focus on diversity,

both Board and executive appointments

are made purely on the basis of ability

and temperament, irrespective of race,

gender or sexual orientation.

Messrs Anthony Coombs, Graham

Coombs, Chris Redford, Ed Ahrens, Jack

Coombs, Graham Pedersen, Tarek Khlat,

Jeremy Maxwell and Graham Wheeler

being eligible offer themselves for

re-election at the next Annual General

S&U Plc Annual Report and Accounts 202456

Meeting. Tarek Khlat, Graham Pedersen,

Graham Wheeler and Jeremy Maxwell are

non-executive directors and the Chairman

has determined their performance to be

both effective and committed.

The Senior Independent Director Tarek

Khlat provides a sounding Board and

objective support for the Chairman and

serves as an intermediary for the other

directors when necessary.

The Company Secretary Manjeet Bhogal

is available to provide advice and services

to all Board members and is responsible

for ensuring Board procedures are

followed. All directors are also able to

take independent advice in furtherance

of their duties if necessary.

Accountability

Financial Reporting

Reviews of the performance and financial

position of the Group are included in the

Chairman’s Report. The Board uses this,

together with the Strategic Report within

pages 10 to 27, to present a balanced

and understandable assessment of the

Company’s position and prospects. The

Directors’ responsibilities in respect of

the financial statements are described

on page 61 and those of the auditor on

page 66.

Internal Control

The Board acknowledges that it is

responsible for the Group’s system of

internal control and for reviewing its

effectiveness. Such a system is designed

to manage rather than eliminate the risk

of failure to achieve business objectives

and can only provide reasonable and

not absolute assurance against material

misstatement or loss.

The Group’s internal control systems are

reviewed regularly by management and

by our independent internal auditors RSM

with the aim of continuous improvement.

Whilst the Board acknowledges its overall

responsibility for internal control, it

believes strongly that senior management

within the Group’s operating businesses

should also contribute in a substantial

way and this has been built into the

process. The Audit Committee overviews

the monitoring of the adequacy of

the Group’s internal controls and

whistleblowing procedures.

There is an ongoing process for

identifying, evaluating and managing

the significant risks faced by the Group.

The process has been in place for the

year under review and up to the date

of approval of the report and financial

statements. The process is regularly

reviewed by the Board including a review

during the reporting period and accords

with the guidance in the UK Corporate

Governance Code.

The Board intends to keep its risk control

procedures under constant review,

particularly as regards the need to embed

internal control and risk management

procedures further into the operations

of the business and to deal with

areas of improvement which come to

management’s and the Board’s attention.

As might be expected in a Group of this

size, a key control procedure is the day

to day supervision of the business by

the executive directors, supported by

the managers with responsibility for

operating units and the central support

functions of finance, information systems

and human resources.

The executive directors are involved in

the budget setting process, constantly

monitor key statistics and review

management accounts on a monthly

basis, noting and investigating major

variances. All significant capital

expenditure decisions are approved by

the Board as a whole.

The executive directors receive reports

setting out key performance and risk

indicators and consider possible control

issues brought to their attention by

early warning mechanisms, which

are embedded within the operational

units and reinforced by risk awareness

training. The executive directors also

receive regular reports from the credit

control and health and safety functions,

which include recommendations for

improvement. The Audit Committee’s

role in this area is confined to a high-level

review of the arrangements.

Relationship with Auditor

The Audit Committee has specific terms

of reference which deal with its authority

and duties. It meets at least twice a year

with the external auditor attending by

invitation and RSM as a regular attendee

in order that the Committee can review

the external and internal audit process

and results. The Committee overviews

the monitoring of the adequacy of

the Group’s internal controls and

whistleblowing procedures, accounting

policies and financial reporting and

provides a forum through which the

Group’s external auditor reports to the

non-executive directors. The Committee

assists the Board in discharging its duties

to ensure the financial statements meet

legal requirements, and also reviews the

independence of the external auditor.

This is assessed through examination

of the nature and value of non-audit

services performed during the year. The

value of non-audit services is disclosed

on page 55 and all non-audit service

requirements are considered by the

Group before an appointment is made.

The non-audit services provided were

audit-related assurance.

Equality and Diversity

The Group is committed to ensuring

that existing members of staff, job

applicants, or workers are treated fairly

in an environment which is free from

any form of discrimination. The Group

will always wish to ensure appointments

reflect the best skills available for the

role. Currently 14 women hold 33%

of senior management positions and

women hold 62% of other employee

positions and during the year no female

directors served on the Board. Currently

29 men hold 67% of senior management

positions and men hold 38% of other

employee positions and during the

year nine male directors served on the

Board. The Company had 11 employees

of which two are women and nine are

men including seven S&U plc Directors.

In total all nine of the current S&U plc

board of directors are men of which one

is from a minority ethnic background. The

Board therefore confirms in accordance

with listing rule 9.6.8 (9) that as at 31

January 2024 it had not met the targets

for listed companies of at least 40% of

the individuals on the board of directors

being women and at least one of the

senior board positions being a woman,

due principally to other candidates having

more particular skills and experience

for the handful of recent appointments

made. Whilst we believe appointments

will continue to be made on relevant

ability and experience, we would like

to make better progress towards these

targets and welcome more women to the

Board. The Board confirms that it has met

the target that at least one individual on

its board of directors is from a minority

ethnic background. The tables required

under Listing Rule 9.8.6R (10) are set out

on page 58:

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B3 Governance

Table for reporting on gender identity or sex

Number

of board

members % of board

Number

of senior

positions on

board

Number in

executive

management

% of

executive

management

Men 9 100% 3 20 59%

Women 0 0% 0 14 41%

Not specified or prefer not to say 0 0% 0 0 0%

White British or other white 8 89% 2 33 97%

Mixed/Multiple ethnic groups 0 0% 0 0 0%

Asian/Asian British 0 0% 0 1 0%

Black/African/Caribbean/Black British 0 0% 0 0 0%

Other ethnic group including Arab 1 11% 1 0 3%

Not specified or prefer not to say 0 0% 0 0 0%

Board and Committee attendance

The attendance of individual directors at the regular meetings of the Board and its Committees during the year ended 31 January

2024 is shown in the table below:

Meeting Attendance Board Nomination Remuneration Audit

Number of meetings 5 1 1 4

AMV Coombs 5 0 n/a n/a

GDC Coombs 5 n/a n/a n/a

G Pedersen 5 1 1 3

T Khlat 5 1 1 3

JP Maxwell 5 1 1 3

D Markou (retired 2.10.23) 2 0 1 1

J EC Coombs 5 n/a n/a n/a

EH Ahrens (appointed 14.2.23) 4 n/a n/a n/a

TG Wheeler 5 n/a n/a n/a

CH Redford 5 n/a n/a n/a

Ed Ahrens was appointed to the Board

on 14 February 2023 and there was

one Board meeting ahead of this

appointment.

Remuneration

The Remuneration Committee has specific

terms of reference which deal with its

authority and duties and these, together

with details of how the Company has

complied with the Remuneration provisions

of the UK Corporate Governance Code,

are detailed in the Directors Remuneration

Report on page 32.

Relations with Stakeholders

The Company continues to communicate

with both institutional and private

investors and responds quickly to all

queries received verbally or in writing.

All shareholders have at least twenty

working days’ notice of the Annual

General Meeting at which all directors are

introduced and are available for questions.

The Board is aware of the importance

of maintaining close relations with

investors and analysts for the Group’s

market rating. Positive steps have been

taken in recent years to enhance these

relationships. Twice yearly road shows

are conducted by the Chairman and

senior directors when the performance

and future strategy of the company

is discussed with larger shareholders.

Queries from all shareholders are dealt

with personally by the Chairman.

Members of the Board including the

Chairman meet frequently with shareholders

and conduct regular roadshows throughout

the UK to present to current and future

investors. Shareholder and Investor

relations are managed in tandem with our

Stockbroker Peel Hunt who issue regular

reports on these activities.

Mutual commitment and loyalty between

the Company and its employees has

under-pinned S&U’s 86-year history.

Both its size, with currently over 200

employees in Grimsby and over 20 in

Solihull and its family ethos ensure

that the “employee voice” is heard and

heeded. Regular appraisals and feedback

meetings are held and internal promotion

is encouraged. As a result, staff retention

rates are very high. Whistle-blower

Policies are in place at Advantage.

The size, history and culture of the

company encourage participation of all

directors and senior management and

employee relations and make designated

board members or workforce committees

unnecessary.

Although, the S&U Group does not

have a formal mechanism of staff

engagement with the Board, staff in the

major operating subsidiary, Advantage

Finance, do actively participate in regular

“cascade” meetings where business

developments and resourcing levels are

discussed. It is felt that such practices

do allow proper workforce engagement

to take place without the specific need

to create a formal “Staff Consultative”

committee structure.

B3.3 Compliance

Statement

Throughout the year ended 31 January

2024 the company has discharged

and met its responsibilities under the

Principles and Provisions of the 2018 UK

Corporate Governance Code and under

the guidance attached to it. Where it

has not followed provisions 9 and 19 of

the code with its appointment of the

Chairman in 2008 and service thereafter,

“a clear rationale for the action” is also

set out above.

Jeremy Maxwell



Committee

10 April 2024

S&U Plc Annual Report and Accounts 202458

B4 Directors’ Report

The directors present their Annual Report

and the audited financial statements for

the year ended 31 January 2024 and for

the period up to the date of signing these

accounts on 10 April 2024.

The names of all of the directors who

served during the year and up to the

date of signing the accounts are shown

in the directors’ biographies on page

30. The CEO of our Advantage motor

finance business Graham Wheeler retired

from that role on 31 January 2024 but

has agreed to stay on the board of S&U

plc as a non-executive director from 1st

February 2024. We are pleased that we

will continue to receive benefit of his over

40 years’ experience in the industry. Our

non-executive director Demetrios Markou

retired from the Board on 2nd October

2023. As announced in last year’s report

Ed Ahrens the CEO of our Aspen bridging

business was appointed to the S&U Board

on 14th February 2023. All the other

current directors served for the full year

to 31 January 2024.

No political donations were made during

the year (2023: £nil).

Dividends

Dividends of £16,154,000 (2023

£15,546,000) were paid during the year.

After the year end a second interim

dividend for the financial year of

£4,253,000 being 35.0p per ordinary

share (2023: 38.0p) was paid to

shareholders on 8 March 2024.

The directors now recommend a final

dividend, subject to shareholders

approval of 50.0p per share (2023:

57.0p). This, together with the interim

dividends totalling 70.0p per share

(2023: 73.0p) already paid, makes a total

dividend for the year of 120.0p per share

(2023: 133.0p).

Substantial shareholdings

At 10 April 2024, the Company had been

notified of the following interests of

3% or more in its issued ordinary share

capital (excluding those of the directors

disclosed on page 52 of the Directors’

Remuneration Report above): -

Shareholder

No of

ordinary

% of

Ordinary

capital

Jennifer Coombs 461,885 3.8%

Wiseheights Limited 2,420,000 19.9%

Capital structure

Details of the issued share capital,

together with details of the movements

in the Company’s issued shared capital

during the year are shown in note 21. The

Company has one class of ordinary shares

which carry no right to fixed income. Each

ordinary share carries the right to one

vote at general meetings of the Company.

The cumulative preference shares carry

6% interest but do not carry voting rights.

There are no specific restrictions on

the size of a holding nor on the transfer

of shares, which are both governed by

the general provisions of the Articles of

Association and prevailing legislation.

The directors are not aware of any

agreements between holders of the

Company’s shares that may result in

restrictions on the transfer of securities

or on voting rights.

Changes in

accounting policies

There were no significant changes in

accounting policies this year.

Auditor

Each of the persons who is a director at

the date of approval of the annual report

confirms that; so far as each director

is aware, there is no relevant audit

information of which the Company’s

auditor is unaware; each director has

taken all the steps that he ought to

have taken as a director in order to

make himself aware of any relevant

audit information and to establish that

the Company’s auditor is aware of that

information. This confirmation is given

and should be interpreted in accordance

with the provisions of section 418 of the

Companies Act 2006.

Mazars LLP have expressed their

willingness to continue in office as

auditor and a resolution to reappoint

them will be proposed at the forthcoming

Annual General Meeting.

Post balance sheet events

There are no significant post balance

sheet events to report.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

B4 Directors’ Report

Directors

Under article 154 of the Company’s

articles of association, the Company

has qualifying third party indemnity

provisions for the benefit of its directors

and those of subsidiary company

directors which remain in force at the

date of this report. The two matters to

report under the disclosure requirements

of the Large and Medium-sized

Companies and Groups (Report and

Accounts) Regulations 2008, are that;

1. The Board may appoint a director

during the year and until the

dissolution of the next AGM as long

as the maximum number of 15

directors is not exceeded.

2. The Board have the power to issue

and allot up to 10% of the ordinary

share capital of the company

and to buy back up to 3,598,506

31.5% preference shares and up to

200,000 6% preference shares of the

company.

The two matters required to report under

listing rule 9.8.4R are as follows:

1. The Company has a long-term

incentive scheme (LTIP 2021) with

awards of shadow share options

which can only be cash settled.

Details of awards under this

scheme to directors are shown in

section B2.2.

2. Under the old long-term incentive

scheme (LTIP 2010) nil ordinary

shares were issued during the year

as per note 27 to the accounts. The

5,500 issued in the year ended 31

January 2023 were the last shares

which could be issued under this

LTIP 2010.

Information presented

in other sections

Certain information required to be

included in the Director’s report can be

found in other sections of the Annual

Report and Accounts as described below.

All the information presented in these

sections is incorporated by reference into

this Director’s report and is deemed to

form part of this report.

• Information surrounding future

developments is given in the Strategic

Report and Chairman’s Statement.

• Information surrounding engagement

with customers, business partners

and others is given in the Strategic

Report and S172 Statement.

• Disclosures concerning greenhouse

gas emissions are given in Section

A4.4 in the Strategic Report.

• Information about the Group’s use of

financial instruments is given in the

note to the accounts 23.

The Board confirms that the Annual

Report and accounts, taken as a whole,

is fair, balanced and understandable

and provides the information necessary

for shareholders to assess the Group’s

performance, business model and

strategy.

Approved by the Board of Directors and

signed on behalf of the Board

Manjeet Bhogal

Company Secretary

10 April 2024

S&U Plc Annual Report and Accounts 202460

B5 Directors’ Responsibilities Statement

The directors are responsible for

preparing the Annual Report and the

financial statements in accordance with

applicable law and regulations.

Company law requires the directors

to prepare financial statements for

each financial year. Under that law the

directors are required to prepare the

parent company (the “company”) and

Group financial statements in accordance

with UK-adopted international accounting

standards. Under company law the

directors must not approve the accounts

unless they are satisfied that they give a

true and fair view of the state of affairs

of the company and of the profit or

loss of the company and the Group for

that period. In preparing these financial

statements, the directors are required to:

• properly select suitable accounting

policies and then apply them

consistently;

• make judgements and accounting

estimates that are reasonable and

prudent;

• state whether applicable UK-adopted

international accounting standards

have been followed, subject to

any material departures disclosed

and explained in the financial

statements; and

• prepare the financial statements on

the going concern basis unless it is

inappropriate to presume that the

company will continue in business.

The directors are responsible for keeping

adequate accounting records that

are sufficient to show and explain the

company’s and group’s transactions

and disclose with reasonable accuracy

at any time the financial position of the

company and enable them to ensure

that the financial statements comply

with the Companies Act 2006. They are

also responsible for safeguarding the

assets of the company and group and

hence for taking reasonable steps for the

prevention and detection of fraud and

other irregularities.

The directors are responsible for the

maintenance and integrity of the

corporate and financial information

included on the company’s website.

Legislation in the United Kingdom

governing the preparation and

dissemination of financial statements

may differ from legislation in other

jurisdictions.

Responsibility statement

We confirm that to the best of our

knowledge:

• the financial statements, prepared

in accordance with UK-adopted

international accounting standards,

give a true and fair view of the assets,

liabilities, financial position and profit

of the company and the undertakings

included in the consolidation taken as

a whole;

• the strategic report includes a fair

review of the development and

performance of the business and

the position of the company and

the undertakings included in the

consolidation taken as a whole,

together with a description of the

principal risks and uncertainties that

they face; and

• the annual report and financial

statements, taken as a whole, are fair,

balanced and understandable and

provide the information necessary for

shareholders to assess the company’s

performance, business model and

strategy.

By order of the Board

Anthony Coombs

Chairman

10 April 2024

Chris Redford

Group Finance Director

10 April 2024

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

C1 Independent Auditor’s Report

to the Members of S&U Plc

Opinion

We have audited the financial statements

of S&U plc (the ‘parent company’) and

its subsidiaries (the ‘group’) for the year

ended 31 January 2024 which comprise

the group income statement, the group

and parent company statements of

comprehensive income, the group and

parent company balance sheets, the

group and parent company statements of

changes in equity, the group and parent

company cash flow statements and notes

to the financial statements, including

material accounting policy information.

The financial reporting framework that

has been applied in their preparation

is applicable law and UK-adopted

international accounting standards and,

as regards the parent company financial

statements, as applied in accordance

with the provisions of the Companies

Act 2006.

In our opinion, the financial statements:

• give a true and fair view of the state

of the group’s and of the parent

company’s affairs as at 31 January

2024 and of the group’s profit for the

year then ended;

• have been properly prepared

in accordance with UK-adopted

international accounting standards

and, as regards the parent company

financial statements, as applied in

accordance with the provisions of the

Companies Act 2006; and

• have been prepared in accordance

with the requirements of the

Companies Act 2006.

Basis for opinion

We conducted our audit in accordance

with International Standards on Auditing

(UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards

are further described in the “Auditor’s

responsibilities for the audit of the

financial statements” section of our

report. We are independent of the group

and the parent company in accordance

with the ethical requirements that are

relevant to our audit of the financial

statements in the UK, including the

FRC’s Ethical Standard as applied to

listed entities and public interest entities

and we have fulfilled our other ethical

responsibilities in accordance with these

requirements. We believe that the audit

evidence we have obtained is sufficient

and appropriate to provide a basis for our

opinion.

Conclusions relating to

going concern

In auditing the financial statements, we

have concluded that the directors’ use

of the going concern basis of accounting

in the preparation of the financial

statements is appropriate.

Our audit procedures to evaluate the

directors’ assessment of the group’s

and the parent company’s ability to

continue to adopt the going concern

basis of accounting included but were not

limited to:

• Undertaking an initial assessment

at the planning stage of the audit to

identify events or conditions that may

cast significant doubt on the group’s

and the parent company’s ability to

continue as a going concern;

• Obtaining an understanding of the

relevant controls relating to the

directors’ going concern assessment;

• Making enquiries of the directors to

understand the period of assessment

considered by them, the assumptions

they considered and the implication

of those when assessing the group’s

and the parent company’s future

financial performance

• Challenging the appropriateness of

the directors’ key assumptions in

their cash flow forecasts, by reviewing

supporting and contradictory

evidence in relation to these key

assumptions. This included assessing

the viability of mitigating actions

within the directors’ control;

• Assessing the historical accuracy of

forecasts prepared by the directors;

• Reviewing regulatory correspondence,

minutes of meetings of the Audit

Committee and the Board of Directors,

and post balance sheet events to

identify events of conditions that may

impact the group’s and the parent

company’s ability to continue as a

going concern;

• Considering the consistency of the

directors’ forecasts with other areas

of the financial statements and our

audit; and

• Evaluating the appropriateness of the

directors’ disclosures in the financial

statements on going concern.

Based on the work we have performed,

we have not identified any material

uncertainties relating to events

or conditions that, individually or

collectively, may cast significant doubt

on the group’s and the parent company’s

ability to continue as a going concern

for a period of at least twelve months

from when the financial statements are

authorised for issue.

Our responsibilities and the

responsibilities of the directors with

respect to going concern are described in

the relevant sections of this report.

In relation to S&U plc’s reporting on

how it has applied the UK Corporate

Governance Code, we have nothing

material to add or draw attention to in

relation to the directors’ statement in

the financial statements about whether

the director’s considered it appropriate

to adopt the going concern basis of

accounting.

S&U Plc Annual Report and Accounts 202462

Key audit matters

Key audit matters are those matters that,

in our professional judgement, were

of most significance in our audit of the

financial statements of the current period

and include the most significant assessed

risks of material misstatement (whether

or not due to fraud) we identified,

including those which had the greatest

effect on: the overall audit strategy; the

allocation of resources in the audit; and

directing the efforts of the engagement

team. These matters were addressed in

the context of our audit of the financial

statements as a whole, and in forming

our opinion thereon, and we do not

provide a separate opinion on these

matters.

We summarise below the key audit

matter in forming our opinion above,

together with an overview of the

principal audit procedures performed

to address that matter and our key

observations arising from those

procedures.

This matter, together with our findings,

were communicated to those charged

with governance through our Audit

Completion Report.

Key Audit Matter How our scope addressed this matter

Measurement of loan impairments on loans and advances to

customers - Group 2024: £104.6m (2023: £96.5m).

Refer to note 1.5 for the accounting policy, note 1.13 for details

of the key sources of estimation uncertainty and note 16 for

relevant disclosures.

The estimation of expected credit losses (ECL) on loans and

advances to customers is complex and inherently judgemental.

The models require probabilities of default (PD), loss

given default (LGD) and exposures at default (EAD) to be

determined, as well as significant increase in credit risk (SICR)

triggers, that are altogether adjusted to take into account

probability weighted forward-looking economic scenarios.

In the financial year, this has been made all the more

challenging by the cost-of-living crisis putting additional

financial pressure on household finances and their ability to

service debt, greater volatility in used vehicle prices and how

management’s loan provision reflects these risks.

The unprecedented economic environment is making

modelling even more challenging, including the Group’s choice

of macroeconomic scenarios and weightings.

The ECL model is most sensitive to:

• Identification of SICR and the resulting staging of

loans, and

• The core PD and LGD assumptions.

The range of reasonable outcomes could be greater than

materiality for the financial statements as a whole.

Our audit procedures included, but were not limited to:

• Understanding and evaluating the control environment over

the ECL model;

• Challenging the key assumptions of the PD, LGD and SICR and

the staging applied;

• Critically assessing the methodology for determining the

SICR criteria and independently test a sample of loans for

appropriateness of staging;

• Independently challenging the forward-looking economic

scenarios and their probability weightings;

• Assessing the integrity of data used in the calibration of the

PD and LGD; and

• Performing a stand back assessment of the resulting ECL

estimates to assess its reasonableness.

Our observations

Based on the audit procedures performed, we found the

resulting estimate of the loan impairment provision as of

31 January 2024 and the approach taken in respect of ECL

are consistent with the requirements of IFRS 9 and that the

judgements made were reasonable.

The key audit matter remains consistent from prior year, except that the key audit matter in respect to revenue recognition – constant

periodic rate of return assessment as per IFRS 16 is no longer considered a KAM. The calculation of dealer commissions, which

was previously a manual process, was automated during that year and the transition to automatic calculation simplified the audit

procedures required to gain sufficient appropriate evidence on this matter so that it is no longer considered a key audit matter in the

current year’s audit.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

C1 Independent Auditor’s Report

to the Members of S&U Plc



Our application of materiality and an overview of the scope of our audit

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,

together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our

audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and on the financial statements as a whole. Based on our professional judgement, we determined materiality for the

financial statements as a whole as follows:

Group materiality

Overall materiality £1.7m (2023: £2.1m)

How we determined it 5% of profit before tax (PBT) (2023: 5% of PBT)

Rationale for benchmark applied We determined PBT to be the most appropriate benchmark to assess the performance of this

profit-focused group.

Performance materiality Performance materiality is set to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements in the financial statements exceeds

materiality for the financial statements as a whole.

We set performance materiality at £1.1m (2023: £1.3m), which represents 65% (2023: 65%) of

overall materiality.

In determining the performance materiality, we considered a number of factors, including

the effectiveness of internal controls and the history of misstatement, and concluded that an

amount toward the upper end of our normal range was appropriate.

Reporting threshold We agreed with the directors that we would report to them misstatements identified during our

audit above £50,000 (2023: £62,000) as well as misstatements below that amount that, in our

view, warranted reporting for qualitative reasons.

Parent company materiality

Overall materiality £0.7m (2023: £0.7m)

How we determined it 1% net assets (2023: 1% net assets)

Rationale for benchmark applied Net assets are used as the basis for materiality because the parent company is primarily a

holding company for the trading components of the Group, as such we consider net assets to

reflect its holding activities.

Performance materiality Performance materiality is set to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements in the financial statements exceeds

materiality for the financial statements as a whole.

We set performance materiality at £0.5m (2023: £0.5m), which represents 65% (2023: 65%) of

overall materiality.

In determining the performance materiality, we considered a number of factors, including

the effectiveness of internal controls and the history of misstatement, and concluded that an

amount toward the upper end of our normal range was appropriate.

Reporting threshold We agreed with the directors that we would report to them misstatements identified during our

audit above £21,000 (2023: £21,000) as well as misstatements below that amount that, in our

view, warranted reporting for qualitative reasons.

S&U Plc Annual Report and Accounts 202464

As part of designing our audit,

we assessed the risk of material

misstatement in the financial statements,

whether due to fraud or error, and

then designed and performed audit

procedures responsive to those risks.

In particular, we looked at where the

directors made subjective judgements,

such as assumptions on significant

accounting estimates.

We tailored the scope of our audit to

ensure that we performed sufficient

work to be able to give an opinion on

the financial statements as a whole. We

used the outputs of our risk assessment,

our understanding of the group and the

parent company, their environment,

controls, and critical business processes,

to consider qualitative factors to ensure

that we obtained sufficient coverage

across all financial statement line items.

Our group audit scope included an audit

of the group and the parent company

financial statements. Based on our risk

assessment, all components of the group,

including the parent company, were

subject to full scope audit. This provided

100% coverage of group revenue, PBT,

total assets and net assets.

All audit procedures across all

entities were performed by the group

engagement team. At the parent

company level, the group audit team

also tested the consolidation process

and carried out analytical procedures

to confirm our conclusion that there

were no significant risks of material

misstatement of the aggregated financial

information.

Other information

The other information comprises the

information included in the Report and

Financial Statements other than the

financial statements and our auditor’s

report thereon. The directors are

responsible for the other information.

Our opinion on the financial statements

does not cover the other information

and, except to the extent otherwise

explicitly stated in our report, we do not

express any form of assurance conclusion

thereon.

Our responsibility is to read the other

information and, in doing so, consider

whether the other information is

materially inconsistent with the financial

statements, or our knowledge obtained in

the course of audit or otherwise appears

to be materially misstated. If we identify

such material inconsistencies or apparent

material misstatements, we are required

to determine whether this gives rise to

a material misstatement in the financial

statements themselves. If, based on the

work we have performed, we conclude

that there is a material misstatement of

this other information, we are required to

report that fact.

We have nothing to report in this regard.

Opinions on other

matters prescribed by the

Companies Act 2006

In our opinion, the part of the directors’

remuneration report to be audited has

been properly prepared in accordance

with the Companies Act 2006.

In our opinion, based on the work

undertaken in the course of the audit:

• the information given in the strategic

report and the directors’ report

for the financial year for which the

financial statements are prepared

is consistent with the financial

statements and those reports have

been prepared in accordance with

applicable legal requirements;

• the information about internal

control and risk management systems

in relation to financial reporting

processes and about share capital

structures, given in compliance with

rules 7.2.5 and 7.2.6 in the Disclosure

Guidance and Transparency Rules

sourcebook made by the Financial

Conduct Authority (the FCA Rules),

is consistent with the financial

statements and has been prepared

in accordance with applicable legal

requirements; and

• information about the parent

company’s corporate governance

code and practices and about

its administrative, management

and supervisory bodies and their

committees complies with rules 7.2.2,

7.2.3 and 7.2.7 of the FCA Rules.

Matters on which we

are required to report by

exception

In light of the knowledge and

understanding of the group and the

parent company and their environment

obtained in the course of the audit,

we have not identified material

misstatements in the:

• strategic report or the directors’

report; or

• information about internal control

and risk management systems

in relation to financial reporting

processes and about share capital

structures, given in compliance with

rules 7.2.5 and 7.2.6 of the FCA Rules.

We have nothing to report in respect of

the following matters in relation to which

the Companies Act 2006 requires us to

report to you if, in our opinion:

• adequate accounting records

have not been kept by the parent

company, or returns adequate for our

audit have not been received from

branches not visited by us; or

• the parent company financial

statements and the part of the

directors’ remuneration report to

be audited are not in agreement

with the accounting records and

returns; or

• certain disclosures of directors’

remuneration specified by law are

not made; or

• we have not received all the

information and explanations we

require for our audit; or

• a corporate governance statement

has not been prepared by the parent

company.

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

C1 Independent Auditor’s Report

to the Members of S&U Plc



Corporate governance

statement

The Listing Rules require us to review

the directors’ statement in relation to

going concern, longer-term viability and

that part of the Corporate Governance

Statement relating to S&U plc’s

compliance with the provisions of the

UK Corporate Governance Statement

specified for our review.

Based on the work undertaken as part

of our audit, we have concluded that

each of the following elements of the

Corporate Governance Statement is

materially consistent with the financial

statements or our knowledge obtained

during the audit:

• Directors’ statement with regards

the appropriateness of adopting the

going concern basis of accounting

and any material uncertainties

identified, set out on page 15;

• Directors’ explanation as to its

assessment of the entity’s prospects,

the period this assessment covers

and why they period is appropriate,

set out on page 15;

• Directors’ statement on fair, balanced

and understandable, set out on

page 60;

• Board’s confirmation that it has

carried out a robust assessment of

the e-merging and principal risks, set

out on page 13;

• The section of the annual report that

describes the review of effectiveness

of risk management and internal

control systems, set out on page

14; and;

• The section describing the work

of the audit committee, set out on

page 54.

Responsibilities

of Directors

As explained more fully in the directors’

responsibilities statement set out on page

61, the directors are responsible for the

preparation of the financial statements

and for being satisfied that they give a

true and fair view, and for such internal

control as the directors determine is

necessary to enable the preparation of

financial statements that are free from

material misstatement, whether due to

fraud or error.

In preparing the financial statements, the

directors are responsible for assessing

the group’s and the parent company’s

ability to continue as a going concern,

disclosing, as applicable, matters related

to going concern and using the going

concern basis of accounting unless the

directors either intend to liquidate the

group or the parent company or to

cease operations, or have no realistic

alternative but to do so.

Auditor’s responsibilities

for the audit of the

financial statements

Our objectives are to obtain reasonable

assurance about whether the financial

statements as a whole are free from

material misstatement, whether due to

fraud or error, and to issue an auditor’s

report that includes our opinion.

Reasonable assurance is a high level

of assurance but is not a guarantee

that an audit conducted in accordance

with ISAs (UK) will always detect a

material misstatement when it exists.

Misstatements can arise from fraud

or error and are considered material

if, individually or in the aggregate,

they could reasonably be expected to

influence the economic decisions of

users taken on the basis of these financial

statements.

The extent to which our procedures

are capable of detecting irregularities,

including fraud is detailed below.

Irregularities, including fraud, are

instances of non-compliance with laws

and regulations. We design procedures

in line with our responsibilities,

outlined above, to detect material

misstatements in respect of irregularities,

including fraud.

Based on our understanding of the

group and the parent company and

their industry, we considered that non-

compliance with the following laws and

regulations might have a material effect

on the financial statements: breaches

of the regulatory requirements of the

Financial Conduct Authority (‘FCA’) and

the Listing Rules.

To help us identify instances of

non-compliance with these laws

and regulations, and in identifying

and assessing the risks of material

misstatement in respect to non-

compliance, our procedures included, but

were not limited to:

• Gaining an understanding of the legal

and regulatory framework applicable

to the group and the parent company,

the industry in which they operate,

and the structure of the group, and

considering the risk of acts by the

group and the parent company which

were contrary to the applicable laws

and regulations, including fraud;

• Inquiring of the directors,

management and, where appropriate,

those charged with governance, as

to whether the group and the parent

company is in compliance with laws

and regulations, and discussing

their policies and procedures

regarding compliance with laws and

regulations;

• Inspecting correspondence with

relevant licensing or regulatory

authorities including the FCA;

• Reviewing minutes of directors’

meetings in the year; and

• Discussing amongst the engagement

team the laws and regulations listed

above, and remaining alert to any

indications of non-compliance.

We also considered those laws and

regulations that have a direct effect

on the preparation of the financial

statements, such as tax legislation,

pension legislation and the Companies

Act 2006.

In addition, we evaluated the directors’

and management’s incentives and

opportunities for fraudulent manipulation

of the financial statements, including the

risk of management override of controls,

and determined that the principal risks

related to posting manual journal entries

to manipulate financial performance,

management bias through judgements

and assumptions in significant accounting

estimates, in particular in relation to

those areas as should in our key audit

matter, IFRS 16 constant yield revenue

recognition (which we pinpointed to

the existence and accuracy assertions),

and significant one-off or unusual

transactions.

S&U Plc Annual Report and Accounts 202466

Our procedures in relation to fraud

included but were not limited to:

• Making enquiries of the directors and

management on whether they had

knowledge of any actual, suspected

or alleged fraud;

• Gaining an understanding of the

internal controls established to

mitigate risks related to fraud;

• Discussing amongst the engagement

team the risks of fraud;

• Addressing the risks of fraud through

management override of controls by

performing journal entry testing;

The primary responsibility for the

prevention and detection of irregularities,

including fraud, rests with both

those charged with governance and

management. As with any audit, there

remained a risk of non-detection of

irregularities, as these may involve

collusion, forgery, intentional omissions,

misrepresentations or the override of

internal controls.

The risks of material misstatement that

had the greatest effect on our audit are

discussed in the “Key audit matters”

section of this report.

A further description of our

responsibilities is available on the

Financial Reporting Council’s website at

www.frc.org.uk/auditorsresponsibilities.

This description forms part of our

auditor’s report.

Other matters which we

are required to address

Following the recommendation of the

audit committee, we were appointed by

the Audit Committee on 4 August 2021 to

audit the financial statements for the year

ending 31 January 2022 and subsequent

financial periods. The period of total

uninterrupted engagement is three years,

covering the years ended 31 January

2022 to 31 January 2024.

The non-audit services prohibited by the

FRC’s Ethical Standard were not provided

to the group or the parent company and

we remain independent of the group

and the parent company in conducting

our audit.

Our audit opinion is consistent with our

additional report to the audit committee.

Use of the audit report

This report is made solely to the

company’s members as a body in

accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work

has been undertaken so that we might

state to the company’s members those

matters we are required to state to them

in an auditor’s report and for no other

purpose. To the fullest extent permitted

by law, we do not accept or assume

responsibility to anyone other than the

company and the company’s members as

a body for our audit work, for this report,

or for the opinions we have formed.

David Allen (Senior Statutory Auditor)

for and on behalf of Mazars LLP

Chartered Accountants and

Statutory Auditor

30 Old Bailey, London, EC4M 7AU

10 April 2024

Stock Code: SUS ― www.suplc.co.uk

CORPORATE GOVERNANCE

IN THIS SECTION

D1 The Accounts 70

D1.1 Group Income Statement and

Statement of Comprehensive Income

D1.2 Balance Sheet 71

D1.3 Statement of Changes in Equity 72

D1.4 Cash Flow Statement 73

D2 Notes to the Accounts 74

Five Year Financial Record 98



S&U Plc Annual Report and Accounts 202468

THE ACCOUNTS

69Stock Code: SUS ― www.suplc.co.uk

The Accounts

 Group income Statement

FOR THE YEAR ENDED 31 JANUARY 2024

From continuing operations 

2024

£000

2023

£000

Revenue 3 115,437 102,714

Cost of sales 4 (22,821) (23,676)

Impairment charge 5 (24,203) (13,877)

Gross profit 68,413 65,161

Administrative expenses 6 (19,767) (16,256)

Operating profit 8 48,646 48,905

Finance costs 9 (15,062) (7,495)

Profit before taxation 2 33,584 41,410

Taxation 11 (8,147) (7,692)

Profit for the year attributable to equity holders 25,437 33,718

Earnings per share

Basic 13 209.2p 277.5p

Diluted 13 209.2p 277.5p

Statement of

Comprehensive Income



Group

2024

£000

Group

2023

£000

Company

2024

£000

Company

2023

£000

Profit for the year attributable to equity holders 25,437 33,718 16,445 16,039

Actuarial loss on defined benefit pension scheme 28 (6) (13) (6) (13)

Total Comprehensive Income for the year 25,431 33,705 16,439 16,026

Items above will not be reclassified subsequently to the Income Statement.

S&U Plc Annual Report and Accounts 202470

 Balance Sheet

AS AT 31 JANUARY 2024

COMPANY REGISTRATION NO: 0342025



Group

2024

£000

Group

2023

£000

Company

2024

£000

Company

2023

£000

ASSETS

Non-current assets

Property, plant and equipment 14 2,310 2,616 376 446

Investments 15 – – 1 1

Amounts receivable from customers 16 241,985 219,305 – –

Trade and other receivables 17 – – 223,500 210,000

Deferred tax assets 20 155 110 30 15

244,450 222,031 223,907 210,462

Current assets

Amounts receivable from customers 16 220,953 201,405 – –

Trade and other receivables 17 1,442 1,601 72,318 57,833

Cash and cash equivalents 1 3,137 85 –

222,396 206,143 72,403 57,833

Total assets 466,846 428,174 296,310 268,295

LIABILITIES

Current liabilities

Bank overdrafts and loans 18 (881) – – (273)

Trade and other payables 19 (4,897) (4,602) (670) (711)

Current tax liabilities (564) (888) (100) (69)

Lease liabilities (170) (166) (72) (51)

Accruals (1,971) (1,262) (289) (225)

(8,483) (6,918) (1,131) (1,329)

Non-current liabilities

Borrowings 18 (223,500) (195,500) (223,500) (195,500)

Lease liabilities (251) (421) (220) (292)

Financial liabilities 22 (450) (450) (450) (450)

(224,201) (196,371) (224,170) (196,242)

Total liabilities (232,684) (203,289) (225,301) (197,571)

NET ASSETS 234,162 224,885 71,009 70,724

Equity

Called up share capital 21 1,719 1,719 1,719 1,719

Share premium account 2,301 2,301 2,301 2,301

Profit and loss account 230,142 220,865 66,989 66,704

Total equity 234,162 224,885 71,009 70,724

The parent company’s profit for the financial year after taxation amounted to £16,445,000 (2023: £16,039,000)

These financial statements were approved by the Board of Directors on 10 April 2024.

Signed on behalf of the Board of Directors

AMV Coombs CH Redford

Chairman Group Finance Director

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Statement of Changes In Equity

FOR THE YEAR ENDED 31 JANUARY 2024

Group 

Called up

share capital

£000

premium

account

£000

Profit and

loss account

£000

Total

equity

£000

At 1 February 2022 1,718 2,301 202,728 206,747

Profit for year – – 33,718 33,718

Other comprehensive income for year – – (13) (13)

Total comprehensive income for year – – 33,705 33,705

Issue of new shares in year 21 1 – – 1

Cost of future share-based payments 27 – – 6 6

Tax charge on equity items 20 – – (28) (28)

Dividends 12 – – (15,546) (15,546)

At 31 January 2023 1,719 2,301 220,865 224,885

Profit for year – – 25,437 25,437

Other comprehensive income for year – – (6) (6)

Total comprehensive income for year – – 25,431 25,431

Dividends 12 – – (16,154) (16,154)

At 31 January 2024 1,719 2,301 230,142 234,162

Company £000 £000 £000 £000

At 1 February 2022 1,718 2,301 66,246 70,265

Profit for year 10 – – 16,039 16,039

Other comprehensive income for year – – (13) (13)

Total comprehensive income for year – – 16,026 16,026

Issue of new shares in year 21 1 – – 1

Cost of future share-based payments 27 – – 6 6

Tax charge on equity items 20 – – (28) (28)

Dividends 12 – – (15,546) (15,546)

At 31 January 2023 1,719 2,301 66,704 70,724

Profit for year 10 – – 16,445 16,445

Other comprehensive income for year – – (6) (6)

Total comprehensive income for year – – 16,439 16,439

Dividends 12 – – (16,154) (16,154)

At 31 January 2024 1,719 2,301 66,989 71,009

S&U Plc Annual Report and Accounts 202472

 Cash Flow Statement

FOR THE YEAR ENDED 31 JANUARY 2024

Group

2024

£000

Group

2023

£000

Company

2024

£000

Company

2023

£000

Net cash used in operating activities 24 (446) (55,265) (14,314) (68,516)

Cash flows used in investing activities

Proceeds on disposal of property, plant and equipment 76 166 – 88

Purchases of property, plant and equipment 14 (265) (826) (27) (419)

Net cash used in investing activities (189) (660) (27) (331)

Cash flows from financing activities

Dividends paid 12 (16,154) (15,546) (16,154) (15,546)

Finance cost paid (15,062) (7,495) (141) (142)

Finance income received – – 3,045 2,648

Issue of new shares – 1 – 1

Receipt of new borrowings 173,500 84,500 173,500 84,500

Repayment of borrowings (145,500) – (145,500) –

Increase/(decrease) in lease liabilities (166) 170

Net (decrease)/increase in overdraft 881 (2,568)

(51) 260

(273) (2,874)

Net cash generated from financing activities (2,501) 59,062 14,426 68,847

Net increase/(decrease) in cash and cash equivalents (3,136) 3,137 85 –

Cash and cash equivalents at the beginning of year 3,137 – – –

Cash and cash equivalents at the end of year 1 3,137 85 –

Cash and cash equivalents comprise

Cash and cash in bank 1 3,137 85 –

There are no cash and cash equivalent balances which are not available for use by either the Group or the Company (2023: £nil).

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

1. Accounting Policies

1.1 General Information

S&U plc is a Company incorporated in England and Wales under the Companies Act and is a public company limited by shares. The

address of the registered office is given on page 100 which is also the Group’s principal business address. All operations are situated

in the United Kingdom. S&U plc is the parent and the ultimate parent company of the group. S&U plc is a listed holding company and

within the group the main operations are motor finance and property bridging finance.

1.2 Basis of preparation and consolidation

As a listed Group we are required to prepare our consolidated financial statements in accordance with international accounting

standards in conformity with the requirements of the Companies Act 2006 and UK-adopted international accounting standards. We

have also prepared our S&U plc Company financial statements in in conformity with the requirements of the Companies Act 2006

and UK-adopted international accounting standards. Under S404 of the Companies Act 2006, the parent company S&U plc has

taken exemption from reporting its own profit and loss. These financial statements have been prepared under the historical cost

convention. The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries for

the year ended 31 January 2024. As discussed in the strategic report, the directors have a reasonable expectation that the Group

has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the

going concern basis in preparing the annual report and accounts of at least 12 months from the date of the approval of the financial

statements.

There are no new standards which have been adopted by the group this year which have a material impact on the financial

statements of the Group.

All companies within the Group are 100% owned and consolidated and the assets, liabilities, costs and revenues are fully

consolidated. All intercompany balances and transactions are eliminated on consolidation.

At the date of authorisation of these financial statements the directors anticipate that the adoption in future periods of any other

Standards and interpretations which are in issue but not yet effective, will have no material impact on the financial statements of the

Group.

1.3 Financial assets and financial liabilities accounting policy

When initially recognising a financial asset, it is classified into one of the following three categories based on the group’s business

model for managing that asset and the asset’s contractual cash flow characteristics:

i) Amortised cost – a financial asset is measured at amortised cost if both of the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are payments of principal and

interest on the principal amount outstanding.

ii) Fair value through other comprehensive income – financial assets are classified and measured at fair value through other

comprehensive income if they are held in a business model whose objective is achieved by both collecting contractual cash flows

and selling financial assets.

iii) Fair value through profit or loss – any financial assets that are not held in one of the two business models mentioned are

measured at fair value through profit or loss.

The group has classified its financial assets and its financial liabilities as measured at amortised cost.

1.4 Revenue recognition

Interest income is recognised in the income statement for all loans and receivables measured at amortised cost using the constant

periodic rate of return on the net investment in the loans, which is akin to an effective interest rate (EIR) method. The EIR is the rate

that exactly discounts estimated future cash flows of the loan back to the present value of the advance and hire purchase interest

income is then recognised using the EIR. Acceptance fees charged to customers and any direct transaction costs are included in the

calculation of the EIR. For hire purchase agreements in Advantage Finance which are classified as credit impaired (i.e. stage 3 assets

under IFRS 9), the group recognises revenue ‘net’ of the impairment provision to align the accounting treatment under IFRS 16 with

the requirements of IFRS 9 and also with the treatment adopted for similar assets in Aspen. Revenue starts to be recognised from the

date of completion of the loan – after completion hire purchase customers have a 14-day cooling off period during which they can

cancel their loan.

S&U Plc Annual Report and Accounts 202474

1. Accounting Policies

1.5 Impairment and measurement of amounts receivable from customers

All customer receivables are initially recognised as the amount loaned to the customer plus direct transaction costs. After initial

recognition the amounts receivable from customers are subsequently measured at amortised cost.

Amortised cost includes a deduction for loan loss impairment provisions for expected credit losses (“ECL”) assessed by the directors in

accordance with the requirements of IFRS9.

There are 3 classification stages under IFRS9 for the impairment of amounts receivable from customers:

Stage 1: Not credit impaired and no significant increase in credit risk since initial recognition

Stage 2: Not credit impaired and a significant increase in credit risk since initial recognition

Stage 3: Credit impaired

The directors assess whether there is objective evidence that a loan asset or group of loan assets is credit impaired and should be

classified as stage 3. A loan asset or a group of loan assets is credit impaired only if there is objective evidence of credit impairment

as a result of one or more events that occurred after the initial recognition of the loan. Objective evidence may include evidence that

a borrower or group of borrowers is experiencing financial difficulty or delinquency in repayments. Impairment is then calculated

by estimating the future cash flows for such impaired loans, discounting the flows to a present value using the original EIR and

comparing this figure with the balance sheet carrying value. All such impairments are charged to the income statement. Under IFRS 9

for all stage 1 accounts which are not credit impaired, a further collective provision for expected credit losses in the next 12 months is

calculated and charged to the income statement.

Key assumptions in ascertaining whether a loan asset or group of loan assets is credit impaired include information regarding the

probability of any account going into default (PD) and information regarding the likely eventual loss including recoveries (LGD). These

assumptions and assumptions for estimating future cash flows are based upon observed historical data and updated to reflect current

and future conditions. As required under IFRS9, all assumptions are reviewed regularly to take account of differences between

previously estimated cash flows on impaired debt and the eventual losses.

For all loans in stages 2 and 3 a provision equal to the lifetime expected credit loss is taken. In addition and in accordance with

the provisions of IFRS9 a collective provision for 12 months expected credit losses (“ECL”) is recognised for the remainder of the

loan book which is Stage 1. 12-month ECL is the portion of lifetime ECL that results from default events on a financial asset that are

possible within 12 months after the reporting date.

In our Motor Finance business, all loans 1 month or more in contractual arrears are deemed credit impaired and are therefore

included in IFRS9 stage 3. This results in more of our net receivables being in stage 3 and the associated stage 3 loan loss provisions

being higher than if we adopted a more prime customer receivables approach of 3 months or more in arrears. Our approach of 1

month or more in contractual arrears is based on our historical observation of subsequent loan performance after our customers

fall 1 month or more in contractual arrears within our non-prime motor finance customer receivables book. The expected credit loss

(“ECL”) is the probability weighted estimate of credit losses.

A PD/LGD model was developed by our Motor Finance business, Advantage Finance, to calculate the expected loss impairment

provisions in accordance with IFRS9. Stage 1 expected losses are recognised on inception/initial recognition of a loan based on the

probability of a customer defaulting in the next 12 months. This is determined with reference to historical data updated for current

and future conditions. If a motor finance loan falls one month or more in contractual arrears, then this is deemed credit impaired and

included in IFRS9 Stage 3. There are some motor finance loans which are up to date with payments but the customer is in some form

of forbearance and we deem this to be a significant increase in credit risk and so these loans are included in Stage 2.

As required under IFRS9 the expected impact of movements in the macroeconomy is also reflected in the expected loss model

calculations. For motor finance, assessments are made to identify the correlation of the level of impairment provision with forward

looking external data regarding forecast future levels of employment, inflation, interest rates and used car values which may

affect the customers’ future propensity to repay their loan. The macroeconomic overlay assessments for 31 January 2024 reflect

that further to considering such external macroeconomic forecast data, management have judged that there is currently a more

heightened risk of an adverse economic environment for our customers. To factor in such uncertainties, management has included an

overlay for certain groups of assets to reflect this macroeconomic outlook, based on estimated unemployment and inflation levels in

future periods. An overlay for used vehicle prices was also included at 31 January 2023 as we assumed at that point that these prices

would fall by 13.5% after a large increase in the previous 12 months. As at 31 January 2024, we have not included an overlay for used

vehicle prices as we assume that used vehicle prices will now remain stable after the anticipated large decrease in the previous 12

months. Further sensitivity over this estimation uncertainty is provided in note 1.13.

Other than the changes to the approach mentioned above, there were no significant changes to estimation techniques applied to the

calculations used at 31 January 2023 and those used at 31 January 2022.

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

1. Accounting Policies

PD/LGD calculations for expected loss impairment provisions were also developed for our Property Bridging business Aspen Bridging

in accordance with IFRS9. Stage 1 expected losses are recognised on inception/initial recognition of a loan based on the probability of

a customer becoming impaired in the next 12 months. The Bridging product has a single repayment scheduled for the end of the loan

term and if a bridging loan is not granted an extension and is still outstanding beyond the end of the loan term then this is deemed

credit impaired and included in IFRS9 Stage 3. Due mainly to the high values of property security attached to bridging loans, the

bridging sector typically has lower credit risk and lower impairment than other credit sectors.

Assets in both our secured loan businesses are written off once the asset has been repossessed and sold and there is no prospect of

further legal or other debt recovery action. Where enforcement action is still taking place, loans are not written off. In motor finance

where the asset is no longer present then another indicator used to determine whether the loan should be written off is the lack of

any receipt for 12 months from that customer.

1.6 Impairment of amounts owed by subsidiary companies to the parent company

These are initially recognised as the amount loaned to the subsidiary company. After initial recognition amounts owed by subsidiary

companies to the parent company are subsequently measured at amortised cost. Amortised costs include any deduction for loan loss

impairment provisions for expected credit losses in accordance with the requirements of IFRS9. Management consider that there is

a low probability of default on these loans and there has been no significant increase in credit risk or credit impairment since these

loans were first recognised. Therefore, the loans continued to be held at the amount loaned.

1.7 Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation. Certain freehold property is held at previous revalued

amounts less accumulated depreciation as the Group has elected to use these amounts as the deemed cost as at the date of

transition to IFRS under the transitional arrangements of IFRS 1.

Depreciation is provided on the cost or valuation of property, plant and equipment in order to write such cost or valuation over the

expected useful lives as follows;

Freehold Buildings 2% per annum straight line

Fixtures and Fittings -Computers 20% per annum straight line

Fixtures and Fittings - Other 10% per annum straight line or 20% per annum reducing balance

Motor Vehicles 25% per annum reducing balance

Right to Use Assets Straight line over the normal term of the lease

Freehold Land is not depreciated.

1.8 Taxation

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or

substantively enacted at the balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates and laws that have been

enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised

or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will

be available against which the temporary differences can be utilised.

1.9 Preference shares

The issued 31.5% preference share capital is carried in the balance sheet at amortised cost and shown as a financial liability. The

issued 6% preference share capital is valued at par and shown as called up share capital.

1.10 Pensions

The Group contributes as required to a defined benefit pension scheme. The defined benefit pension asset at the balance sheet

date is calculated as the fair value of the plan assets less the present value of the defined benefit obligation. The scheme is currently

in surplus but as the group has no ability to access this asset the surplus is capped at £nil. Actuarial gains and losses are recognised

immediately in the financial statements.

The Group also operates several defined contribution pension schemes and the pension charge represents the amount payable by

the Company for the financial year.

S&U Plc Annual Report and Accounts 202476

1. Accounting Policies

1.11 Share-based payments

The Company issued share options under the S&U plc 2010 Long Term Incentive Plan. The cost of these share-based payments is

based on the fair value of options granted as required by IFRS2. This cost is then charged to the income statement over the three-

year vesting period of the related share options with a corresponding credit to reserves. When any share options are exercised, the

proceeds received are credited to share capital.

1.12 Investments

Investments in subsidiaries held as non-current assets are stated at cost less provision for any impairment.

1.13 Critical accounting judgements and key sources of estimation uncertainty

In preparing these financial statements, the Company has made judgements, estimates and assumptions which affect the reported

amounts within the current and next financial year. Actual results may differ from these estimates.

Estimates and judgements are regularly reviewed based on past experience, expectations of future events and other factors.

Critical accounting judgements

The following are the critical accounting judgements, apart from those involving estimations (which are dealt with separately below),

that the Directors have made in the process of applying the Company’s accounting policies and that have the most significant effect

on the amounts recognised in the financial statements.

Significant increase in credit risk for classification in Stage 2

The Company’s transfer criteria determine what constitutes a significant increase in credit risk, which results in a customer being

moved from Stage 1 to Stage 2. Stage 2 currently includes customers who have a good payment record but have been identified as

vulnerable by trained staff. Vulnerability can be driven by factors including health, life events, resilience or capability. All customer

facing staff are trained to help recognise characteristics of vulnerability. Stage 2 previously included some pandemic payment holiday

customers but these customers have all now had 12 months to re-establish their post-holiday payment track record and are therefore

now either correctly included in another stage or their agreement has finished.

Key sources of estimation uncertainty

The directors consider that the sources of estimation uncertainty which have the most significant effect on the amounts recognised in

the financial statements are those inherent in the consumer credit markets in which we operate relating to impairment as outlined in

1.5 above. In particular, the Group’s impairment provision is dependent on estimation uncertainty in forward-looking on areas such as

employment rates, inflation rates and used car and property prices.

The Group implemented IFRS 9 from 1 February 2018 by developing models to calculate expected credit losses in a range of

economic scenarios. These models involve setting modelling assumptions, weighting of economic scenarios, the criteria of

determining significant deterioration in credit quality and the application of adjustments to model outputs. We have outlined

assumptions in our expected credit loss model in the current year. Reasonable movement in these assumptions might have a material

impact on the impairment provision value.

Macroeconomic overlay for our motor finance business

For this overlay, the Group considers four probability-weighted scenarios in relation to unemployment rate: base, upside, downside

and severe scenarios as follows:

Upside Severe Base Weighted Weighting 50% 10% 35% 5%Q1 2024 4.40% 3.08% 5.72% 6.60% 4.84%Q1 2025 4.70% 3.29% 6.11% 7.05% 5.17%Q1 2026 4.90% 3.43% 6.37% 7.35% 5.39%Q1 2027 4.90% 3.43% 6.37% 7.35% 5.39%

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

1. Accounting Policies

Inflation rates were not previously been factored into the macroeconomic overlay prior to 31 January 2022 when we included them

due to the extraordinary increases forecast for the following 12 months period and the potential impact on our customers and their

repayments – high inflation and forecast inflation were still present at 31 January 2023 and to a lesser extent at 31 January 2024.

The Group considers four probability-weighted scenarios in relation to inflation rate: base, upside, downside and severe scenarios as

follows:

Upside Severe Base Weighted Weighting 50% 10% 35% 5%Q1 2024 9.70% 6.79% 12.61% 14.55% 10.96%Q1 2025 3.00% 2.10% 3.90% 4.50% 3.39%Q1 2026 1.00% 0.70% 1.30% 1.50% 1.13%Q1 2027 0.40% 0.28% 0.52% 0.60% 0.45%

An increase by 0.5% in the weighted average unemployment rate would result in an increase in loan loss provisions by £1,108,644.

A decrease by 0.5% would result in a decrease in loan loss provisions by £1,108,644. An increase by 0.5% in the weighted average

inflation rate would result in an increase in loan loss provisions by £503,929. A decrease by 0.5% would result in a decrease in loan

loss provisions by £503,929.

Used vehicle price sensitivity for our motor finance business

At the year ended 31 January 2024, we have assumed that used vehicle prices will remain stable after a period when used vehicle

prices increased during years ended 31 January 2022 and 31 January 2023 and then decreased during year ended 31 January 2024.

This assumption as at 31 January 2024 has been made after considering market trends and expectations but is uncertain. If used car

prices were assumed to fall by 5% instead, then this would result in an increase in loan loss provisions of £2,967,534. If used vehicle

prices were assumed to increase by 5% instead, then this would result in a decrease in loan loss provisions of £2,967,534.

Expected loss sensitivity for our property bridging business

The PD/LGD expected loss impairment provision model calculations developed for our Aspen bridging business have been based on

extrapolating an inherently low volume sample of historic defaults and losses to reflect the current receivables and current market

conditions. If the probability of default were assessed to be 10% higher than these calculations, then this would result in an increase

in loan loss provisions of £320,769. If the probability of default were assessed to be 10% lower than these calculations, then this

would result in a decrease in loan loss provisions of £320,769.

1.14 Alternative Performance Measurements

i) Risk adjusted yield as % of average monthly receivables is the gross yield for the period (revenue minus impairment) divided by

the average amounts receivable from customers for the period.

ii) Rolling 12-month impairment to revenue % is the impairment charged in the income statement during the 12 months prior to the

reporting date divided by the revenue for the same 12-month period. Historic comparisons using this measure were affected by

the adoption of new accounting standards IFRS9 and IFRS16 and risk adjusted yield is considered a more historically comparable

guide to receivables performance.

iii) Return on average capital employed before cost of funds (ROCE) is calculated as the Operating Profit divided by the average

capital employed (total equity plus Bank Overdrafts plus Borrowings less cash and cash equivalents)

iv) Dividend cover is the basic earnings per ordinary share for the financial year divided by the dividend per ordinary share declared

for the same financial year.

v) Group gearing is calculated as the sum of Bank Loans and Overdrafts less cash and cash equivalents divided by total equity.

vi) Group total repayments are the total live monthly repayments, settlement proceeds and recovery collections in motor finance

added to the total amount retained from advances, customer redemptions and recovery collections in property bridging.

S&U Plc Annual Report and Accounts 202478

2. Segmental Analysis

Analyses by class of business of revenue and profit before taxation from continuing operations are stated below:

Revenue Profit before taxationYear ended Year endedYear ended Year ended 31.1.24 31.1.2331.1.2431.1.23Class of business£000£000£000£000Motor finance 98,177 89,801 28,810 37,171Property bridging finance 17,260 12,913 4,803 4,457Central costs net of central finance income – – (29) (218)115,437 102,714 33,584 41,410

Analyses by class of business of assets and liabilities are stated below:

Assets LiabilitiesYear ended Year endedYear ended Year ended 31.1.24 31.1.2331.1.2431.1.23Class of business£000£000£000£000Motor finance 335,502 311,168 (181,944) (164,452)Property bridging finance 130,808 116,714 (121,431) (109,485)Central 536 292 70,691 70,648466,846 428,174 (232,684) (203,289)

Depreciation of assets for motor finance was £399,000 (2023: £425,000), for property bridging finance was £14,000 (2023: £15,000)

and for central was £97,000 (2023: £85,000). Fixed asset additions for motor finance were £218,000 (2023: £394,000), for property

bridging finance were £20,000 (2023: £13,000) and for central were £27,000 (2023: £419,000).

The net finance credit for central costs was £2,904,000 (2023: £2,507,000), for motor finance was a cost of £11,018,000

(2023: £6,619,000) and for property bridging finance was a cost of £6,948,000 (2023: £3,383,000). The tax charge for central

costs was £25,000 (2023: £58,000 credit), for motor finance was a tax charge of £6,967,000 (2023: £6,901,000) and for property

bridging finance was a tax charge of £1,155,000 (2023: £848,000).

The significant products in motor finance are car and other vehicle loans secured under hire purchase agreements.

The significant products in property bridging finance are bridging loans secured on property.

The assets and liabilities of the Parent Company are classified as Central.

No geographical analysis is presented because all operations are situated in the United Kingdom.

3. Revenue

20242023£000£000Interest and other income from motor finance hire purchase loans 98,177 89,801Interest and other income from property bridging loans 17,260 12,913Total revenue 115,437 102,714

4. Cost of Sales

20242023£000£000Cost of sales – motor finance 20,726 21,687Cost of sales – property bridging finance 2,095 1,989Total Cost of sales 22,821 23,676

Stock Code: SUS ― www.suplc.c

o.uk 79

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

5. Impairment Charge

20242023£000£000Loan loss provisioning chargeLoan loss provisioning charge – motor finance 23,280 12,885Loan loss provisioning charge – property bridging finance 923 992Total impairment charge 24,203 13,877

6. Administrative Expenses

20242023£000£000Administrative expenses – motor finance 14,343 11,439Administrative expenses – property bridging 2,491 2,092Administrative expenses – central 2,933 2,725Total Administrative Expenses 19,767 16,256

7. Information Regarding Employees

GroupGroupCompanyCompany2024202320242023No.No.The monthly average number of persons employed by the Group in the year was:Motor finance 205 192 – –Property bridging finance 23 21 – –Central 11 11 11 11 Total Group average number of employees 239 224 11 11

The monthly average employed by the Company was 11 (2023: 11).

2024202320242023£000£000£000£000Staff costs during the year (including directors):Wages and salaries 11,184 10,522 1,407 1,535Social security costs 1,285 1,186 234 209Pension costs for defined contribution scheme 521 456 40 38Total Staff Costs 12,990 12,164 1,681 1,782

Directors’ remuneration and details of the highest paid director are disclosed in the audited section of the Directors’ Remuneration

Report. No director or current employee is a member of the small historical defined benefit pension plan the details of which are

contained in note 28 of these notes to the accounts.

S&U Plc Annual Report and Accounts 202480

8. Operating Profit

20242023£000£000Operating profit from continuing operations is after charging:Depreciation and amortisation:Owned and Right to Use assets 510 525Staff costs 12,990 12,164Cost of future share-based payments – 6(Profit)/Loss on sale of fixed assets (16) (1)

The analysis of auditor’s remuneration is as follows:

20242023£000£000Fees payable to the Group’s auditor for the audit of the Company’s annual accounts 45 30Fees payable to the Group’s auditor for other services to the GroupThe audit of the Company’s subsidiaries 155 133Total audit fees 200 163Audit related assurance services 30 25Other services – –Total non-audit fees 30 25Total 230 188

9. Finance Costs

20242023£000£00031.5% cumulative preference dividend 141 141Lease Liabilities 16 12Bank loan and overdraft interest payable 14,905 7,342Total Finance Costs 15,062 7,495

10. Profit of Parent Company

As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Parent Company is not presented as part

of these accounts. The Parent Company’s profit for the financial year after taxation amounted to £16,445,000 (2023: £16,039,000).

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

11. Tax on Profit Before Taxation

20242023£000£000Continuing OperationsCorporation tax at 24.0% (2023: 19.0%) based on profit for the year 8,176 7,894Adjustment in respect of prior years 16 (184)8,192 7,710Deferred tax (temporary differences - origination and reversal) (45) (18)8,147 7,692

The actual tax charge for the current and the previous year from continuing operations varies to the standard rate for the reasons set

out in the following reconciliation.

20242023£000£000Profit on ordinary activities before tax from continuing operations 33,584 41,410Tax on profit on ordinary activities at standard rate of 24.0% (2023: 19.0%) 8,060 7,868Factors affecting charge for the period:Expenses not deductible for tax purposes 48 41Effects of other tax rates and permanent differences 23 (33)Prior period adjustments 16 (184)Total actual amount of tax 8,147 7,692

The Finance Act 2021 confirms an increase of UK corporation tax rate from 19% to 25% with effect from 1 April 2023 and this was

substantively enacted by the statement of financial position date and therefore included in these financial statements.

12. Dividends

20242023£000£0002nd Interim dividend paid for the year ended 31/1/2023 – 38.0p per Ordinary share (36.0p) 4,617 4,372Final dividend paid for the year ended 31/1/2023– 60.0p per Ordinary share (57.0p) 7,290 6,9261st Interim dividend paid for the year ended 31/1/2024 – 35.0p per Ordinary share (35.0p) 4,253 4,253Total ordinary dividends paid 16,160 15,5516% cumulative preference dividend paid March and September 12 12Credit for unpresented dividend payments over 12 years old (18) (17)Total dividends paid 16,154 15,546

A second interim dividend of 35.0p per ordinary share for the year ended 31 January 2024 was paid on 8 March 2024 totalling £4.3m

and the directors are proposing a final dividend for the year ended 31 January 2024 of 50p per ordinary share totalling £6.1m. The

final dividend will be paid on 12 July 2024 to shareholders on the register at close of business on 21 June 2024 subject to approval by

shareholders at the Annual General Meeting on Thursday 6 June 2024.

13. Earnings Per Ordinary Share

The calculation of earnings per ordinary share (“eps”) from continuing operations is based on profit after tax of £25,437,000

(2023: £33,718,000).

The number of shares used in the basic eps calculation is the weighted average number of shares in issue during the year

of 12,150,760 (2023: 12,149,205). There are a total of nil dilutive share options in issue (2023: nil) and taking into account

the appropriate proportion of these dilutive options the number of shares used in the diluted eps calculation is 12,150,760

(2023: 12,149,205).

S&U Plc Annual Report and Accounts 202482

14. Property, Plant and Equipment

Land andMotor Fixtures andRight to buildingsvehicles Fittings UseTotalGroup£000£000£000£000£000Cost At 1 February 2022 1,829 413 1,603 773 4,618Additions 61 192 210 363 826Disposals (4) (224) (17) (251) (496)At 31 January 2023 1,886 381 1,796 885 4,948Additions 15 63 187 – 265Disposals (4) (122) (110) (56) (292)At 31 January 2024 1,897 322 1,873 829 4,921Accumulated depreciationAt 1 February 2022 394 215 1,162 392 2,163Charge for the year 115 68 178 164 525Eliminated on disposals (4) (106) (17) (229) (356)At 31 January 2023 505 177 1,323 327 2,332Charge for the year 108 53 173 176 510Eliminated on disposals (3) (68) (104) (56) (231)At 31 January 2024 610 162 1,392 447 2,611Net book valueAt 31 January 2024 1,287 160 481 382 2,310At 31 January 2023 1,381 204 473 558 2,616

Included in the above is land at a cost of £22,000 (2023: £22,000) which is not depreciated.

Included in Right to Use assets above, are leases now capitalised under IFRS16 which are depreciated over the normal term of the

lease. The total cash outflow for these leases during the year to 31.1.24 was £ 178,000 (2023: £ 173,000 ).

Land andMotor Fixtures andRight to buildingsvehicles Fittings UseTotalCompany£000£000£000£000£000Cost At 1 February 2022 42 79 268 251 640Additions – 75 1 343 419Disposals – (101) – (251) (352)At 31 January 2023 42 53 269 343 707Additions – – 27 – 27Disposals – – – – –At 31 January 2024 42 53 296 343 734Accumulated depreciationAt 1 February 2022 12 63 182 184 441Charge for the year – 6 22 57 85Eliminated on disposals – (36) – (229) (265)At 31 January 2023 12 33 204 12 261Charge for the year 1 5 23 68 97Eliminated on disposals – – – – –At 31 January 2024 13 38 227 80 358Net book valueAt 31 January 2024 29 15 69 263 376At 31 January 2023 30 20 65 331 446

Included in the above is land at cost of £22,000 (2023: £22,000) which is not depreciated.

Included in Right to Use assets above, are leases now capitalised under IFRS16 which are depreciated over the normal term of the

lease. The total cash outflow for these leases during the year to 31.1.24 was £66,000 (2023: £ 51,000).

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

15. Investments and Related Party Transactions

20242023Company£000£000Shares in subsidiary companiesAt historical cost less impairment 1 1

Interests in subsidiaries

The principal subsidiaries of the Company, which are wholly owned directly by the Company, operate in Great Britain and are

incorporated in England and Wales.

Subsidiary and Registered Number Principal activity

Advantage Finance Limited (03773673) Motor finance

Aspen Bridging Limited (10270026) Property bridging finance

The following are wholly owned dormant subsidiaries of the group which take advantage of exemptions provided under s394a and

s448a and do not prepare, file or have audited individual company accounts;

Advantage Motor Finance Limited (03773678), Advantage4u Limited (06691669), Advantage Direct Finance Limited (07037684),

Advantage Partner Finance Limited (07036720), Advantage Asset Finance Limited (06691598), S&U Stores Limited (00448884) and

Cash Kangaroo Limited (08435795).

All dormant subsidiaries are directly owned by S&U plc with the exception of Advantage Motor Finance Limited which is indirectly

wholly owned via Advantage Finance Limited.

All companies in the Group have their registered office at 2 Stratford Court, Cranmore Boulevard, Solihull B90 4QT.

Related party transactions

Group

Transactions between the Company and its subsidiaries, which are related parties have been eliminated on consolidation and are not

disclosed in this note. Transactions with the Company’s pension scheme are disclosed in note 28. During the year the Group made

charitable donations amounting of £117,500 (2023: £109,500) via the Keith Coombs Trust which is a related party because Messrs

GDC Coombs, AMV Coombs and CH Redford are trustees. The amount owed to the Keith Coombs Trust at the year-end was £20,000

(2023: £nil). During the year the Group obtained supplies at market rates amounting to £4,110 (2023: £4,123) from Grevayne

Properties Limited a Company which is a related party because Messrs G D C and A M V Coombs are directors and shareholders. All

related party transactions were settled in full when due.

Company

The Company received dividends from other Group undertakings totalling £16,500,000 (2023: £16,200,000). During the year the

Company recharged other Group undertakings for various administrative expenses incurred on their behalf. The Company also

received administrative cost recharges from other Group undertakings. At 31 January 2024 the Company was owed £295,926,496

(2023: £267,945,745) by other Group undertakings as part of an intercompany loan facility and owed £217,119 to S&U Stores

Limited, a dormant group company (2023: £217,119). All related party transactions were settled in full when due. Key management

personnel compensation is disclosed on page 45 in the Directors Remuneration Report.

S&U Plc Annual Report and Accounts 202484

16. Amounts Receivable from Customers

Group20242023£000£000Motor finance hire purchase 437,181 403,282Less: Loan loss provision motor finance (104,685) (96,465)Amounts receivable from customers motor finance 332,496 306,817Property bridging finance loans 132,746 115,451Less: Loan loss provision property bridging finance (2,304) (1,558)Amounts receivable from customers property bridging finance 130,442 113,893Amounts receivable from customers total 462,938 420,710Analysis by future date due– Due within one year 220,953 201,405– Due in more than one year 241,985 219,305Amounts receivable from customers 462,938 420,710Analysis of securityLoans secured on vehicles under hire purchase agreements 327,485 302,159Loans secured on property 130,442 113,893Other loans not secured (motor finance where security no longer present) 5,011 4,658Amounts receivable from customers 462,938 420,710Analysis of not impaired and impairedNot impairedNeither past due nor impaired 395,047 367,245Past due up to 3 months but not impaired – –Past due over 3 months but not impaired – –ImpairedPast due up to 3 months 48,986 40,249Past due over 3 months and up to 6 months 9,070 4,772Past due over 6 months or default 9,835 8,444Amounts receivable from customers 462,938 420,710

The credit risk inherent in amounts receivable from customers is reviewed as per note 1.5 and under this review the credit quality

of assets which are neither past due nor impaired was considered to be good with the exception of 881 vulnerable customers who

although not in arrears at 31.1.24 were assessed from a review of internal data to have a significant increase in credit risk (2023:

473). Under IFRS9 therefore these customers although not in arrears are included in stage 2 at 31.1.24 with an increased impairment

provision.

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

16. Amounts Receivable from Customers

Analysis of loan loss provision and amounts receivable from customers (capital)

Stage 1:Stage 2:Stage 3:Subject to 12 Subject to Subject to months ECL lifetime ECL lifetime ECL Total As at 31 January 2024£’000£’000£’000£’000Amounts receivable (capital)Motor finance 291,566 5,125 140,490 437,181Property bridging finance 121,908 – 10,838 132,746Total 413,474 5,125 151,328 569,927Loan loss provisionsMotor finance (21,315) (1,323) (82,047) (104,685)Property bridging finance (914) – (1,390) (2,304)Total (22,229) (1,323) (83,437) (106,989)Amounts receivable (net)Motor finance 270,251 3,802 58,443 332,496Property bridging finance 120,994 – 9,448 130,442Total 391,245 3,802 67,891 462,938

Stage 1: Stage 2: Stage 3: Subject to 12 Subject to Subject to  As at 31 January 2023’000£’000£’000£’000Amounts receivable (capital)Motor finance 285,050 2,236 115,996 403,282Property bridging finance 108,378 – 7,073 115,451Total 393,428 2,236 123,069 518,733Loan loss provisionsMotor finance (26,640) (662) (69,163) (96,465)Property bridging finance (1,116) – (442) (1,558)Total (27,756) (662) (69,605) (98,023)Amounts receivable (net)Motor finance 258,410 1,574 46,833 306,817Property bridging finance 107,262 – 6,631 113,893Total 365,672 1,574 53,464 420,710

Collateral held

Motor finance – except for loans valued at £5.011m (2023: £4.658m), where we are aware the security is no longer present, security

is held on a used vehicle for each hire purchase motor finance agreement. As stated in note 1.13 above, valuing these used vehicles

secured under our hire purchase agreements is uncertain as the condition and mileage of the used vehicle are unknown. We

estimate the trade value of collateral held at 31.1.24 for motor finance loans currently in stage 3 was £68.8m (2023: £64.5m) – these

estimated values are stated before taking into account recovery and disposal costs.

Property bridging finance – the estimated value of first charge secured properties held under our bridging loan facility agreements at

31.1.24 is £199.6m (2023: £184.7m). This includes £15.3m estimated value of properties secured which is held for loan agreements

currently in Stage 3 (2023: £13.4m).

Advances in both our motor finance business and our property bridging business are only made with collateral security and this

is important in both these markets for the collectability of these loans – there have been no significant changes in the quality of

collateral held during the year.

S&U Plc Annual Report and Accounts 202486

16. Amounts Receivable from Customers

Stage 1:Stage 2:Stage 3:Subject to 12 Subject to Subject to Total months ECL lifetime ECL lifetime ECL Provision Loan loss provisions£’000£’000£’000£’000At 1 February 2022 22,575 2,769 66,783 92,127Net transfers and changes in credit risk restated (10,020) (1,905) (1,710) (13,635)New loans originated 15,599 148 11,765 27,512Total impairment charge to income statement 5,579 (1,757) 10,055 13,877Amounts netted off revenue for stage 3 assets – – 8,893 8,893Utilised provision on write-offs (398) (350) (16,126) (16,874)At 31 January 2023 27,756 662 69,605 98,023Net transfers and changes in credit risk (14,755) 565 12,331 (1,859)New loans originated 11,863 354 13,845 26,062Total impairment charge to income statement (2,892) 919 26,176 24,203Amounts netted off revenue for stage 3 assets – – 9,162 9,162Utilised provision on write-offs (2,635) (258) (21,506) (24,399)At 31 January 2024 22,229 1,323 83,437 106,989

There were no significant changes in the capital carrying value of amounts receivable from customers this year which contributed to

changes in the loan loss provisions other than growth in new loans originated.

17. Trade and Other Receivables

Group Company2024202320242023£000£000£000£000Amounts owed by subsidiary undertakings – – 295,709 267,729Other debtors 52 55 10 10Prepayments and accrued income 1,390 1,546 99 941,442 1,601 295,818 267,833

The amounts owed by subsidiary undertakings in the Company’s balance sheet are stated net of nil impairment and, other than

£125.0m of intercompany receivables from Advantage Finance Limited (2023: £130.0m) and £98.5m of intercompany receivables

from Aspen Bridging Limited (2023: £80.0m), which are due after more than one year, the amounts owed by subsidiary undertakings

have no fixed maturity date. Under IFRS7, there are no amounts included in trade and other receivables which are past due but

not impaired and no amounts which are impaired or have a significant increase in credit risk. The carrying value of trade and other

receivables is not materially different to their fair value.

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

18. Borrowings including Bank Overdrafts and Loans

Group Company2024202320242023£000£000£000£000Bank overdrafts and loans – due within one year 881 – – 273Bank and other loans – due in more than one year 223,500 195,500 223,500 195,500224,381 195,500 223,500 195,773

The carrying value of bank overdrafts and loans is not materially different to the fair value.

S&U plc had the following overdraft facilities available at 31 January 2024:

– a facility for £ 5 million (2023: £5m) which is subject to annual review in June 2024.

– a facility for £2 million (2023: £2m) which has no annual review date.

Total drawdowns of these overdraft facilities at 31 January 2024 were £880,564 (2023: £nil).

S&U plc had the following revolving credit facilities available at 31 January 2024:

– a facility for £230 million (2023: £nil) which is due for repayment in May 2026.

At 31 January 2023 S&U plc had revolving credit facilities totalling £160m being facilities of £60m, £20m, £25m and £55m which were

due for repayment in March 2026, March 2025, April 2026 and May 2027 respectively.

S&U plc had the following term loan facilities available at 31 January 2024:

– a facility for £50 million (2023: £50m) - £25m of which is due for repayment in March 2028 and £25m is due for repayment in

March 2029. All the bank overdrafts facilities, revolving credit facilities and term loan facilities mentioned above incur interest at a

variable rate.

The bank overdraft and loans are secured under a multilateral guarantee provided by S&U plc and its operating subsidiaries

Advantage Finance Ltd and Aspen Bridging Ltd.

The Company is part of the Group overdraft facility and at 31 January 2024 was £nil overdrawn (2023: £273,163 overdrawn). A

maturity analysis of the above borrowings is given in note 23.

19. Trade and Other Payables

Group Company2024202320242023£000£000£000£000Trade creditors 920 617 63 67Other creditors including commissions and remuneration payable 3,977 3,985 607 6444,897 4,602 670 711

The carrying value of trade and other payables is not materially different to the fair value.

S&U Plc Annual Report and Accounts 202488

20. Deferred Tax

Accelerated Shadow tax Share based SharedepreciationpaymentsOptionsTotal Group£000£000£000£000At 1 February 2022 (133) 27 226 120Credit/(debit) to income 24 1 (7) 18Debit to equity – (28) – (28)At 31 January 2023 (109) – 219 110Credit/(debit) to income (4) – 49 45At 31 January 2024 (113) – 268 155Company £000 £000 £000 £000At 1 February 2022 2 27 6 35Credit/(debit) to income (9) 1 16 8Debit to equity – (28) – (28)At 31 January 2023 (7) – 22 15Credit to income 4 – 11 15At 31 January 2024 (3) – 33 30

Shadow share options are long term share based incentive instruments which will be settled in cash when exercised based on future

share price and require achieving certain performance targets and are subject to continued employment conditions.

The Finance Act 2021 confirms an increase of UK corporation tax rate from 19% to 25% with effect from 1 April 2023 and this was

substantively enacted by the statement of financial position date and therefore included in these financial statements.

21. Called up Share Capital and Preference Shares

20242023£000£000Called up, allotted and fully paid12,150,760 Ordinary shares of 12.5p each (2023: 12,150,760) 1,519 1,519200,000 6.0% Cumulative preference shares of £1 each 200 200Called up share capital 1,719 1,719

The 6.0% cumulative preference shares enable the holder to receive a cumulative preferential dividend at the rate of 6.0% on paid up

capital and the right to a return of capital plus a premium of 10p per share at either a winding up or a repayment of capital. The 6.0%

cumulative preference shares do not carry voting rights so long as the dividends are not in arrears.

22. Financial Liabilities

20242023Preference Share Capital£000£000Called up, allotted and fully paid3,598,506 31.5% Cumulative preference shares of 12.5p each (2021 3,598,506) 450 450

The 31.5% cumulative preference shares entitle the holder to receive a cumulative preference dividend of 31.5% plus associated tax

credit and the right to a return of twice the capital (2 lots of 12.5p) plus a premium of 22.5p per share on either a winding up or a

repayment of capital. The rights of the holders of these shares to dividends and returns of capital are subordinated to those of the

holders of the 6.0% cumulative preference shares. The 31.5% cumulative preference shares do not carry voting rights so long as the

dividends are not in arrears.

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts 

YEAR ENDED 31 JANUARY 2024

23. Financial Instruments

The Group and the Company’s principal financial instruments are amounts receivable from customers, cash, preference share capital,

bank overdrafts and bank loans.

The Group and the Company’s business objectives rely on maintaining a well spread customer base of carefully controlled quality by

applying strong emphasis on good credit management, both through strict lending criteria at the time of underwriting a new credit

facility and continuous monitoring of the collection process. The motor finance hire purchase debts are secured by the financed

vehicle. All financial assets are held at amortised cost.

As at 31 January 2024 the Group’s indebtedness amounted to £224,381,000 (2023: £192,363,000) and the Company’s indebtedness

amounted to £223,415,000 (2023: £195,773,000). The Group gearing was 95.8% (2023: 85.5%), being calculated as borrowings net

of cash as a percentage of total equity. The Board is of the view that the gearing level remains conservative, especially for a lending

organisation. The table below on page 91 analyses the Group and Company assets and liabilities into relevant maturity groupings

based on the remaining period at the balance sheet date (to contractual maturity).

S&U plc has unused committed borrowing facilities at 31 January 2024 of £56.5m (2023: £14.5m). The preference share capital

financial liability of £450,000 has no maturity date and is classified as more than five years.

The average effective interest rate on financial assets of the Group at 31 January 2024 was estimated to be 26% (2023: 25%). The

average effective interest rate of financial liabilities of the Group at 31 January 2024 was estimated to be 8% (2023: 6%). The average

effective interest rate on financial liabilities of the Company at 31 January 2024 was estimated to be 8% (2023: 6%).

Currency and credit risk

The Group has no material exposure to foreign currency risk. The credit risk inherent in amounts receivable from customers is

reviewed under impairment as per note 1.5. It should be noted that the credit risk at the individual customer level is limited by strict

adherence to credit control rules which are regularly reviewed. The credit risk is also mitigated in the motor finance segment of our

business by ensuring that the valuation of the security at origination of the loan is within glasses guide and cap limits. The credit risk

is also mitigated in the bridging property finance segment of our business by ensuring that the valuation of the security at origination

of the loan is rigorously assessed and is within loan to value limits. As confirmation required under IFRS 8, no individual customer

contributes more than 10% of the revenue for the Group. Group trade and other receivables and cash are considered to have no

material credit risk as all material balances are due from highly rated banking counterparties.

Interest rate risk

The Group’s activities expose it to the financial risks of changes in interest rates and the Group uses interest rate derivative contracts

where appropriate to hedge these exposures in bank borrowings. There are no interest rate derivative contracts held at 31 January

2024 (2023: none held). There is considered to be no material interest rate risk in cash, trade and other receivables, preference

shares and trade and other payables.

The sensitivity analyses below have been determined based on the exposure to interest rates at the balance sheet date. The Group

has low gearing for its sector and the directors consider a 1% and a 2% movement in interest rates to reflect the UK interest rate

environment and to be appropriate for sensitivity analyses. For floating rate liabilities, the analysis is prepared assuming the liability

outstanding at the balance sheet date was outstanding for the whole year.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s;

– profit for the year ended 31 January 2024 would decrease/increase by £1.6 million (2023: decrease/increase by £1.3million). This

is mainly attributable to the Group’s exposure on its variable rate borrowings.

– total equity would decrease/increase by £1.6million (2023: decrease/increase by £1.3million). This is mainly attributable to the

Group’s exposure on its variable rate borrowings.

If interest rates had been 2% higher/lower and all other variables were held constant, the Group’s;

– profit for the year ended 31 January 2024 would decrease/increase by £3.2million (2023: decrease/increase by £2.6million). This

is mainly attributable to the Group’s exposure on its variable rate borrowings.

– total equity would decrease/increase by £3.2million (2023: decrease/increase by £2.6million). This is mainly attributable to the

Group’s exposure on its variable rate borrowings.

S&U Plc Annual Report and Accounts 202490

23. Financial Instruments

Capital risk management

The Board of Directors assess the capital needs of the Group on an ongoing basis and approve all material capital transactions. The

Group’s objective in respect of capital risk management is to maintain a conservative “Group Gearing” level with respect to market

conditions, whilst taking account of business growth opportunities in a capital efficient manner. “Group Gearing” is calculated as the

sum of Bank Overdrafts plus Bank Loans less Cash and Cash Equivalents divided by Total Equity. At 31 January 2024 the Group gearing

level was 95.8% (2023: 85.5%) which the directors consider to have met their objective.

Although Advantage have not sold insurance products in recent years, they are required to hold a regulatory minimum capital figure

of £5000 in this regard. Throughout the year this Company has maintained a capital base greater than this requirement.

Fair values of financial assets and liabilities

The fair values of amounts receivable from customers, bank loans and overdrafts and other assets and liabilities with the exception of

the junior preference share capital are considered to be not materially different from their book values. The junior preference share

capital classified as a financial liability is estimated to have a fair value of £1.9m (2023: £1.9m) but is considered more appropriate

under IFRS to be included in the balance sheet at amortised cost. Fair values which are recognised or disclosed in these financial

statements are determined in whole or in part using a valuation technique based on assumptions that are supported by prices from

observable current market transactions in the same instrument (i.e. without modification or repackaging) and based on available

observable market data. The fair value hierarchy is derived from Level 2 inputs in accordance with IFRS13.

Liquidity risk

The Group’s liquidity risk is shown in the following tables which measure the cumulative liquidity gap. Management review and

manage the maturity of borrowing facilities appropriately. Most of the Group’s financial assets are repayable anyway within two years

which together with net gearing of around 95.8% results in a positive liquidity position.

More than More than 1 year but 2 years but Less than not more not more More than No fixed Group1 yearthan 2 yearsthan 5 years5 yearsmaturitydateTotalAt 31 January 2024£’000£’000£’000£’000£’000£’000Financial assets 220,953 71,353 170,632 – – 462,938Other assets – – – – 3,907 3,907Cash at bank and in hand 1 – – – – 1Total assets 220,954 71,353 170,632 – 3,907 466,846Shareholders’ funds – – – – (234,162) (234,162)Bank overdrafts and loans (881) – (198,500) (25,000) – (224,381)Lease liabilities (170) (102) (149) – – (421)Financial liabilities – – – (450) – (450)Other liabilities – – – – (7,432) (7,432)Total liabilities and shareholders’ funds (1,051) (102) (198,649) (25,450) (241,594) (466,846)Cumulative gap 219,903 291,154 263,137 237,687 – –

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

23. Financial Instruments

More than More than 1 year but 2 years but Less than not more not more More than No fixed Group1 yearthan 2 yearsthan 5 years5 yearsmaturitydateTotalAt 31 January 2023£’000£’000£’000£’000£’000£’000Financial assets 201,405 67,476 151,829 – – 420,710Other assets – – – – 4,327 4,327Cash at bank and in hand 3,137 – – – – 3,137Total assets 204,542 67,476 151,829 – 4,327 428,174Shareholders’ funds – – – – (224,885) (224,885)Bank overdrafts and loans – – (145,500) (50,000) – (195,500)Lease liabilities (166) (169) (252) – – (587)Financial liabilities – – – (450) – (450)Other liabilities – – – – (6,752) (6,752)Total liabilities and shareholders’ funds (166) (169) (145,752) (50,450) (231,637) (428,174)Cumulative gap 204,376 271,683 277,760 227,310 – –

More than More than 1 year but 2 years but Less than not more not more More than No fixed Company1 yearthan 2 yearsthan 5 years5 yearsmaturitydateTotalAt 31 January 2024£’000£’000£’000£’000£’000£’000Other assets – – 198,500 25,000 72,725 296,225Cash at bank and in hand 85 – – – – 85Total assets 85 – 198,500 25,000 72,725 296,310Shareholders’ funds – – – – (71,009) (71,009)Bank overdrafts and loans – – (198,500) (25,000) – (223,500)Financial liabilities – – – (450) – (450)Lease liabilities (72) (76) (144) – – (292)Other liabilities – – – – (1,059) (1,059)Total liabilities and shareholders’ funds (72) (76) (198,644) (25,450) (72,068) (296,310)Cumulative gap 13 (63) (207) (657) – –

More than More than 1 year but 2 years but Less than not more not more More than No fixed Company1 yearthan 2 yearsthan 5 years5 yearsmaturitydateTotalAt 31 January 2023£’000£’000£’000£’000£’000£’000Other assets – – 160,000 50,000 58,295 268,295Cash at bank and in hand – – – – – –Total assets – – 160,000 50,000 58,295 268,295Shareholders’ funds – – – – (70,724) (70,724)Bank overdrafts and loans (273) – (145,500) (50,000) – (195,773)Financial liabilities – – – (450) – (450)Lease liabilities (51) (71) (221) – – (343)Other liabilities – – – – (1,005) (1,005)Total liabilities and shareholders’ funds (324) (71) (145,721) (50,450) (71,729) (268,295)Cumulative gap (324) (395) 13,884 13,434 – –

S&U Plc Annual Report and Accounts 202492

23. Financial Instruments

The cash flows payable under financial liabilities are analysed as follows:

More than More than 1 year but 2 years but Repayable Less than not more not more More than Groupon Demand1 yearthan 2 yearsthan 5 years5 yearsTotalAt 31 January 2024£’000£’000£’000£’000£’000£’000Bank overdrafts and loans 881 – – – – 881Trade and other payables – 4,897 – – – 4,897Tax liabilities – 564 – – – 564Accruals and deferred income – 1,971 – – – 1,971Borrowings – – – 198,500 25,000 223,500Lease liabilities – 170 102 149 – 421Financial liabilities – – – – 450 450At 31 January 2024 881 7,602 102 198,649 25,450 232,684

More than More than 1 year but 2 years but Repayable Less than not more not more More than Groupon Demand1 yearthan 2 yearsthan 5 years5 yearsTotalAt 31 January 2023£’000£’000£’000£’000£’000£’000Bank overdrafts and loans – – – – – –Trade and other payables – 4,602 – – – 4,602Tax liabilities – 888 – – – 888Accruals and deferred income – 1,262 – – – 1,262Borrowings – – – 145,500 50,000 195,500Lease liabilities – 166 169 252 – 587Financial liabilities – – – – 450 450At 31 January 2023 – 6,918 169 145,752 50,450 203,289

More than More than 1 year but 2 years but Repayable Less than not more not more More than Companyon Demand1 yearthan 2 yearsthan 5 years5 yearsTotalAt 31 January 2024£’000£’000£’000£’000£’000£’000Bank overdrafts and loans – – – – – –Trade and other payables – 670 – – – 670Tax liabilities – 100 – – – 100Accruals and deferred income – 289 – – – 289Borrowings – – – 198,500 25,000 223,500Lease liabilities – 72 76 144 – 292Financial liabilities – – – – 450 450At 31 January 2024 – 1,131 76 198,644 25,450 225,301

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

23. Financial Instruments

More than More than 1 year but 2 years but Repayable Less than not more not more More than Companyon Demand1 yearthan 2 yearsthan 5 years5 yearsTotalAt 31 January 2023£’000£’000£’000£’000£’000£’000Bank overdrafts and loans 273 – – – – 273Trade and other payables – 711 – – – 711Tax liabilities – 69 – – – 69Accruals and deferred income – 225 – – – 225Borrowings – – – 145,500 50,000 195,500Lease liabilities – 51 71 221 – 343Financial liabilities – – – – 450 450At 31 January 2023 273 1,056 71 145,721 50,450 197,571

24. Reconciliation of Operating Profit to Net Cash from Operating Activities

GroupGroupCompanyCompany2024202320242023£000£000£000£000Operating Profit 48,646 48,905 13,566 13,475Tax (paid)/received (8,515) (7,748) (9) 3Depreciation on plant, property and equipment 510 525 97 85(Profit)/loss on disposal of plant, property and equipment (16) (26) – (1)Increase in amounts receivable from customers (42,228) (97,795) – –Decrease/(increase) in trade and other receivables 159 138 (27,985) (82,132)Increase in trade and other payables 295 255 (51) 57Increase in accruals 709 488 74 4Equity-settled future share-based payments addback – 6 – 6Movement in retirement benefit asset/obligations (6) (13) (6) (13)Net cash used in operating activities (446) (55,265) (14,314) (68,516)

25. Financial Commitments

Capital commitments

At 31 January 2024 the Group had £nil capital commitments contracted but not provided for (2023: £nil). At 31 January 2024, the

Company had no capital commitments contracted but not provided for (2023: £nil).

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

S&U Plc Annual Report and Accounts 202494

26. Contingent Liabilities

Our motor finance subsidiary Advantage was included in the FCA’s multi-firm Cost of Living Forbearance Outcomes review in 2023

and as a result the FCA concluded that enhancements may be required to Advantage’s approach to arrears management and the

application of forbearance. Advantage and the FCA have been in correspondence throughout 2023/24 to discuss and agree the

necessary steps and Advantage will carry out an assessment of whether any customers were adversely affected by its practices.

Where this is found to be the case Advantage will seek to redress any detriment.

The financial effect of any customer redress cannot be reliably assessed at this early stage of the review. This ongoing assessment is

expected to be in advanced stages in Summer 2024, with any redress being made after that.

The Company has entered into cross-guarantee arrangements with respect to the bank overdrafts of certain of its subsidiaries. The

maximum exposure under this arrangement at 31 January 2024 was £2,253,817 (2023: £nil).

27. Share Based Payments

The Company operated a Long-Term Incentive Plan (LTIP 2010) and full details of the share options outstanding during the year are

shown below:

NumberOf ShareOptions 20242023 LTIP 2010Outstanding at beginning of year – 5,500Granted during the year – –Lapsed during the year – –Exercised during the year – (5,500)Expired during the year – –Outstanding at end of year – –Exercisable at end of year – –

All share options issued under the LTIP are exercisable at the ordinary share nominal value 12.5p.

The weighted average share price for share options exercised during the year was not applicable (2023: £24.00).

The weighted average remaining contractual life of the outstanding share options is not applicable as there are no outstanding share

options remaining (2023: none).

The Group recognised total share-based payment expenses for LTIP of £nil in the year to 31 January 2024 (2023: £6,000).

LTIP 2010 is now over 10 years old and no further grants can be made under that LTIP. Further to a review by the Remuneration

Committee a new LTIP allowing shadow share options, which can only be cash settled and therefore do not dilute current

shareholders, was approved by the AGM in May 2021(LTIP 2021).

The Group recognised total share-based payment expenses for LTIP 2021 of £631,936 in the year to 31 January 2024 (2023:

£399,532). At 31 January 2024 the creditor for LTIP 2021 shadow share options amounted to £1,368,768 (31.1.23: £1,027,781).

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

 Notes to the Accounts

YEAR ENDED 31 JANUARY 2024

28. Retirement Benefit Obligations

The Company operates a defined benefit scheme in the UK. The plan is funded by payment of contributions to a separate trustee

administered fund. The pension cost relating to the scheme is assessed in accordance with the advice of a qualified independent

actuary using the attained age method. The last formal valuation was at 31 March 2022. At that valuation it was assumed that the

appropriate post retirement discount rate was 1.95% and pension increases would be 3.6% per annum. The valuation results have

been updated on the advice of a qualified actuary to take account of the requirements of IAS19 in order to assess the liabilities of

the scheme as at 31 January 2024. The last actuarial valuation highlighted that the scheme was in surplus on an ongoing basis with

the value of assets being sufficient to cover the actuarial value of accrued liabilities. No contributions are therefore being paid to the

scheme at the present time and the estimated amount of contributions expected to be paid into the scheme during the year to 31

January 2025 is £nil.

The scheme is run by Trustees who are responsible for the affairs of the scheme. Trustees during the year were Mr GDC Coombs

and Mr CH Redford who are also directors of S&U plc. The scheme is closed to new members. The Trustees discuss the affairs of the

scheme and deal with discretionary matters regarding benefits. The trustees have employed Barclays Wealth as investment managers.

S&U plc has power, under the Trust Deed and Rules which govern the operation of the Fund, to remove Trustees from office, to

accept their resignations, and to appoint new or additional Trustees. The directors of S&U plc consider all these arrangements to

be appropriate, having noted that the scheme has been closed to new members for over 40 years, the scheme continues to have a

significant surplus and the scheme’s defined benefit obligations are not material in the context of the group.

Disclosures made in accordance with IAS 19

A full actuarial valuation was carried out at 31 March 2022 and updated to 31 January 2024 by a qualified independent actuary. The

valuation method used was the projected unit method. The major assumptions used by the actuary were (in nominal terms):

At year endAt year end31 January 31 January 20242023Rate of increase in salariesNa NaPension increases:Pre-97 Pension0.0%0.0%Post 97 Pension3.3%3.1%Discount rate 4.7% 4.2%

Mortality assumption for 31 January 2024 comes from the S3PA tables with CMI-2022 1.25% long term trend and for 31 January 2023

mortality assumption was from the S3PA tables with CMI-2021 1.25% long term trend.

The analysis of the scheme assets and the expected rate of return at the balance sheet date were as follows:

Proportion held atheld at 31 January 31 January 2024 2023 £000£000Equities 51% 66%Bonds 33% 21%Cash/Other 16% 13%Total market value of assets 100% 100%

The amount included in the balance sheet arising from the Group’s obligations in respect of its defined benefit schemes is as follows:

Jan 24 Jan 23£000 £000 Fair value of plan assets 1,070 1,092Present value of defined benefit obligations (348) (342)Surplus before restriction 722 750Restriction on Surplus (722) (750)Pension asset 0 0

S&U Plc Annual Report and Accounts 202496

28. Retirement Benefit Obligations

The amount recognised in the income statements during the year

Jan 24Jan 23£000 £000 Current service cost – –Past service cost 26 –Interest on obligation 14 11Expected return on plan assets (46) (24)Expense recognised in the income statement (6) (13)Opening net (asset) – –Expense (6) (13)Contributions paid – –Actuarial loss 6 13Closing net (asset) 0 0

The expense credit in both years is shown within administrative expenses.

Jan 24Jan 23Movement in present value of obligation £000 £000 Present value of obligation at 1 February 342 483Interest cost 14 10Current service cost – –Past service cost 26 –Benefits paid (39) (38)Actuarial (gain)/loss on obligation – assumptions (11) (96)Actuarial (gain)/loss on obligation – experience 16 (17)Present value of obligation at 31 January 348 342Experience adjustment on scheme liabilities Actuarial (gain)/loss as percentage of scheme liabilities 1% (33%)Movement in fair value of plan assetsFair value of plan assets at 1 February 1,092 1,141Expected return on plan assets 46 24Contributions – –Benefits paid (39) (38)Actuarial gain/(loss) on plan assets (29) (35)Fair value of plan assets at 31 January 1,070 1,092Experience adjustment on assets Actuarial (gain)/loss as percentage of scheme assets (3%) (3%)

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

Five Year Record (Unaudited)

2020

£000

2021

£000

2022

£000

2023

£000

2024

£000

Continuing Operations Only

Revenue 89,939 83,761 87,889 102,714 115,437

Cost of Sales (19,872) (14,264) (18,771) (23,676) (22,821)

Impairment (17,220) (36,705) (4,120) (13,877) (24,203)

Administrative Expenses (12,863) (11,096) (14,208) (16,256) (19,767)

Operating profit 39,984 21,696 50,790 48,905 48,646

Finance Costs (net) (4,850) (3,568) (3,772) (7,495) (15,062)

Profit before taxation 35,134 18,128 47,018 41,410 33,584

Taxation (6,252) (3,482) (9,036) (7,692) (8,147)

Profit for the year 28,882 14,646 37,982 33,718 25,437

Assets employed in all operations

Fixed assets 2,108 2,713 2,455 2,616 2,310

Amounts receivable and other assets 303,973 282,126 324,774 425,558 464,536

306,081 284,839 327,229 428,174 466,846

Liabilities (126,607) (103,810) (120,482) (203,289) (232,684)

Total equity 179,474 181,029 206,747 224,885 234,162

Earnings per Ordinary share 239.6p 120.7p 312.8p 277.5p 209.2p

Dividends declared per Ordinary share 120.0p 90.0p 126.0p 133.0p 120.0p

Group gearing 65.7% 54.6% 54.9% 85.5% 95.8%

“Group Gearing” is calculated as the sum of Bank Overdrafts plus Borrowings less Cash and Cash Equivalents divided by Total Equity.

S&U Plc Annual Report and Accounts 202498

Financial Calendar

Annual General Meeting

6 June 2024

Announcement of Results

Half year ending 31 July 2024

Year ending 31 January 2025

8 October 2024

April 2025

Payment of Dividends

6% Cumulative Preference Shares 30 September 2024 &

31 March 2025

31.5% Cumulative Preference Shares 31 July 2024 & 31 January 2025

Ordinary Shares – 2023/24 final 12 July 2024

– Ex dividend date 20 June 2024

– Record date 21 June 2024

– 2024/25 first interim November 2024

– 2024/25 second interim March 2025

Annual General Meeting Arrangements

The Annual General Meeting will take place on 6 June 2024 – further details of arrangements are contained in the Notice of Annual

General Meeting sent to shareholders and on the company website at www.suplc.co.uk

Stock Code: SUS ― www.suplc.co.uk

THE ACCOUNTS

Officers and Professional Advisors

Directors

A M V Coombs MA (Oxon) (Chairman)

G D C Coombs MA (Oxon) MSc (Lon) (Deputy Chairman)

J E C Coombs MA (Oxon) ACA (Director)

C H Redford ACA (Group Finance Director)

E H Ahrens (CEO Aspen Bridging)

T G Wheeler (Non-executive)

G Pedersen (Non-executive)

T Khlat MBE (Non-executive)

J P Maxwell (Non-executive)

Secretary

M K Bhogal ACMA CGMA

Registered office Registrars

2 Stratford Court

Cranmore Boulevard

Solihull

West Midlands

B90 4QT

Tel: 0121 705 7777

Link Group

10th Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

Shareholders can contact Link Group on:-

0871 664 0300 (calls cost 10p per minute plus network costs).

Bankers Financial Public Relations

HSBC Bank plc

130 New Street

Birmingham

B2 4JU

SEC Newgate Communications

14 Greville Street,

London

EC1N 8 SB

Natwest Bank

250 Bishopsgate

London

EC2M 4AA

Solicitors

DLA

Victoria Square

Birmingham

B2 4DL

Stockbrokers

Peel Hunt LLP

7th Floor, 100 Liverpool Street

London

EC2M 2ATT

Auditor Internal Auditor

Mazars LLP

Statutory Auditor

30 Old Bailey

London

EC4M 7AU

RSM Risk Assurance Services LLP

6th Floor 25 Farringdon Street

London

EC4A 4AB

S&U Plc Annual Report and Accounts 2024100

Stock Code: SUS ― www.suplc.co.uk

OTHER INFORMATION

101

2 Stratford Court

Cranmore Boulevard

Shirley

Solihull

West Midlands

B90 4QT

T: 0121 705 7777

Registered in England No. 342025