S&U - Softer volumes but solid EBITDA growth expected

S&U held a cautious approach to new lending in H124, emphasising higher-quality customers and avoiding competition directly on price. Consequently, net receivables were 5% below our expectations in H124. Encouragingly, S&U has experienced a rise in transactions and new customer pipeline in the past two months in the Advantage motor business, but weakening consumer confidence, higher interest rates and paydowns are likely to curtail the usual rate of growth in Aspen for FY24. Despite this, impairments and arrears are below budget, which should provide some resilience to the net interest margin. We have marginally lowered our estimates for FY24 and FY25 but still expect EBITDA growth of 16% and 15%, respectively.