S&U - Trading broadly in line

S&U’s latest trading update indicates it is on track to deliver results close to expectations for the current year. Motor finance receivables growth slowed in the second half, which prompted a reduction in our estimates, primarily for FY20. We still look for a return on equity (ROE) of above 17% and believe the discipline shown in holding to pricing and credit criteria at Advantage is a positive sign for investors. Our expectations for Aspen Property Bridging are unchanged and it should provide a valuable diversifying contribution to profits.