S&U PLC on Thursday reported a lower profit for the first quarter of 2024 but said it traded soundly overall.

The West Midlands-based lender is focused on motor finance and property bridging. It said it continued to trade solidly in challenging economy, regulatory and political conditions.

Pretax profit declined 34% to £6.9 million in the first quarter of 2024 from £10.5 million a year prior.

S&U highlighted that for its motor business Advantage Finance, 2024 will be ‘a year of consolidation’. It noted that increased impairment provisioning due to lower repayments at Advantage accounted for £3.6 million of the fall in first-quarter profit.

‘At Advantage, our cautious approach to repayments in the light of continuing discussions with the FCA and skilled person on interpreting and adapting to the new consumer duty regime and the sector wide review of borrowers in financial difficulty, have had a significant impact on repayments and profitability. We anticipate that these discussions will be concluded during the second half of the year, when we will welcome the new regulatory clarity which will provide a strong platform for the continuing growth of the business,’ the company said.

Chair Anthony Coombs said: ‘Although fully cognisant of the challenges currently being negotiated at Advantage, an improving economic outlook both for consumers and businesses, a strong labour market and greater political stability will all benefit S&U over the coming year. We wrestle on with confidence.’

S&U shares were down 3.6% to 1,875.00 pence each on Thursday morning in London.

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