Daniel Gladiš of Vltava Fund presented his thesis on S&U plc (UK: SUS) at European Investing Summit 2026.
Thesis summary:
S&U is a small British specialist lender, founded in 1938 and listed in London since 1961, with two franchises built organically: Advantage Finance (1999), which provides used-car hire purchase to borrowers poorly served by banks, and Aspen Bridging (2017), which makes short-term property-backed loans. The group holds £541m of net receivables, funded by £251m of equity and £285m of net borrowings. Daniel, whose fund has owned the shares for about nine years, sees a double inflection point.
Demand is not the constraint. Advantage received about 200,000 loan requests last year, 100,000 of them serious, and granted fewer than 20,000, mostly sourced through brokers in a segment large banks abandoned as too labor-intensive. FY2026 new loans averaged £9,935 over about 56 months. Aspen’s loans average £795,000 over 16 months at roughly 1% a month, repaid from property sales or refinancing, with low realized losses so far. Daniel watches collections more closely than loan growth.
The first inflection is operating. Pre-tax profit fell from £47.0m in FY2022 to £24.0m in FY2025 amid a review of forbearance and collections practices and the motor-finance commission controversy, then recovered 32.7% to £31.8m. In the latest half, Advantage advances rose 48.7% to £105.0m, net receivables rose 22.2% to £341.1m, and repayments reached 92% of amounts due. Group pre-tax profit rose only 0.8%, as cost of sales and finance costs absorbed higher revenue, and Aspen’s collections slowed.
The second inflection is funding. Securitization warehouses for Advantage and Aspen, expected to sign in October 2026, would lift total facilities from £337m to about £650m. S&U keeps subordinated interests and the credit risk, so it remains a lender. In Daniel’s illustration, funding a £100m pool with 25% equity instead of 50% lifts its ROE from 10.5% to 16.5%. The Coombs family holds 40.6% with its vehicle Grevayne, pays out about half of earnings and rejects buybacks to preserve liquidity.
At £18.80, S&U trades at 9.6x reported earnings, 0.91x book and a 6.1% dividend yield. Consensus, which excludes securitization, sees EPS rising from £1.95 to £3.00 by FY2029 and ROE reaching 11.4%. Applying 1.22x to FY2029 book value of £24.72 gives £30.16; adding £3.89 of dividends yields a total return of about 81%, roughly 30% annualized. Risks include new-vintage credit quality, slow Aspen exits, funding terms, conduct liabilities, and growth that fails to lift returns.
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