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Robust and
Resilient
Annual Report and Accounts
for the Year ended 31 January 2022
Welcome to
the S&U 2022
Annual Report
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 200,000 customers. In
just four years, Aspen our new property bridging
business has transacted over £200m in secured
loans.
Visit our website at www.suplc.co.uk
OUR VALUES
Our Businesses
Making the
customer the heart
of our business.
Respect for every
customer and
always treating
customers fairly.
Conservative
approach to
underwriting and
collections to enable
sustainable growth.
MOTOR FINANCE
Hire purchase motor finance
for over 200,000 customers
since 1999.
PROPERTY BRIDGING
FINANCE
Launched in early 2017
and growing steadily after
successful pilot phase.
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:
T EAMWORK. – in any business the guardians of integrity are its people,
and their common pursuit of the highest standards.
R ESPECT. – 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.
U NDERSTANDING. – valuing every customer must be grounded in a
clear understanding of their needs, wishes and circumstances; this guides
the service we offer them.
S ERVICE. – this is both the product and the proof of our understanding
and respect for our customers, each other and our neighbours.
T RUTH. – 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.
Financial Highlights
Revenue (£m)
18
19
20
21
22
79.8
83.0
89.9
83.8
87.9
Basic EPS (p)
18
19
20
21
22
203.8
233.2
239.6
120.7
312.8
AVERAGE for the last 2 years 85.9
AVERAGE for the last 2 years 216.7
Profit Before Tax (£m)
Dividend Declared (p)
18
19
20
21
22
30.2
34.6
35.1
18.1
47.0
18
19
20
21
22
105.0
118.0
120.0
90.0
126.0
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CONTENTS
Strategic Report
Group at a Glance
A1 Chairman’s Statement
A2 Strategic Report and Section
172 Statement
A2.1 Strategic Review
A2.2 Business Review
A2.3 Funding Review
A2.4 Principal Risks and
Uncertainties
A3 Statements of Viability and
Going Concern
A4 Corporate Social Responsibility
A4.1 Employees
A4.2 Community
A4.3 Health and Safety and
Diversity Policy
A4.4 Climate Change
A5 Section 172 Statement
A6 Approval of Strategic Report
Corporate Governance
B1 Board of Directors
B2 Directors’ Remuneration
Report
B2.1 Report of the Board to
the Shareholders on
Remuneration Policy
B2.2 Annual Remuneration
Report
B3 Governance
B3.1 Audit Committee Report
B3.2 Corporate Governance
B3.3 Compliance Statement
B4 Directors’ Report
B5 Directors’ Responsibilities
Statement
C
Independent Auditor’s Report
to the Members of S&U plc
The Accounts
D1 D1.1 Group Income Statement
and Statement of
Comprehensive Income
D1.2 Balance Sheet
D1.3 Statement of Changes
in Equity
D1.4 Cash Flow Statement
D2 Notes to the Accounts
Five Year Financial Record
Other information
Financial Calendar
Officers and Professional Advisers
04
05
11
11
12
14
14
17
21
21
21
22
22
25
25
28
30
30
33
43
43
44
48
49
51
52
62
63
64
65
66
91
92
93
AVERAGE for the last 2 years 32.6
AVERAGE for the last 2 years 108.0
www.suplc.co.uk
01
Stock Code: SUSSTRATEGIC REPORT Strategic
Report
CONTENTS
Group at a Glance
A1
A2
Chairman’s Statement
Strategic Report and Section
172 Statement
A2.1 Strategic Review
A2.2 Business Review
A2.3 Funding Review
A2.4 Principal Risks and
Uncertainties
A3
A4
A5
A6
Statements of Viability and
Going Concern
Corporate Social Responsibility
A4.1 Employees
A4.2 Community
A4.3 Health and Safety and
Diversity Policy
A4.4 Climate Change
Section 172 Statement
Approval of Strategic Report
04
05
11
11
12
14
14
17
21
21
21
22
22
25
25
02
S&U Plc Annual Report and Accounts 2022
www.suplc.co.uk
Stock Code: SUS
03
Group at a glance
Founded in 1938, S&U’s mission is to provide Britain’s
foremost motor, property bridging and specialist finance
service. We now have over 62,000 customers and over
200 loyal and valued staff and plans for continued
sustainable growth.
Motor Finance
Property Bridging Finance
Advantage Finance has grown into one of the most
progressive and innovative motor finance companies
in the country. Through chairing the Credit and Risk
Committee and being active members of the Motor
Finance Management Committee of the Finance
and Leasing Association (FLA), we have been helping
to shape the industry, as the nation has worked to
respond to the challenges of the Covid-19 pandemic.
Based in Grimsby, Advantage employ around 180
people, and working closely with most of the motor
finance Brokers across the country, we have provided
hire purchase finance for over 200,000 customers
throughout the UK. Advantage operates within the
non-prime market sector and has built an outstanding
reputation and track record in terms of service to
our business partners and our customers. Funding
is invested wisely through a hugely experienced
management team, the majority of whom have been
with the company since its inception
22 years ago.
The response to the Covid-19 pandemic by
Advantage Finance has been remarkable. Far
from being victims, Advantage has thrived as
we have focussed on mitigating our market risk,
and by developing our systems, processes and
market appeal. The experience and quality of the
management team and loyal colleagues has shone
through in difficult external circumstances, and we
are well placed to drive Advantage as the country
re-awakens from the effects of Covid-19 and to
continue the success story of our business.”
Graham Wheeler
Chief Executive
Aspen Bridging is now entering its 6th 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 bridging loans that has a reach across
the market spanning 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 £700,000. These factors
have enabled Aspen to strengthen broker relationships,
appealing to them as a one-stop shop for their customer
bridging loan needs and positioning ourselves as a key
lender in the market. As members of the ASTL and FIBA
along with showcasing our lending propositions at key
industry events, Aspen maintains a high profile and
contributes to discussions aimed at improving, developing
and shaping the bridging the market. Aspen has continued
to expand and develop the team in line with our growth
with a team of 23 highly skilled and experienced staff.
During the year, Aspen has successfully added to our new
customer acquisition channels via new broker networks,
a dedicated broker development team and we gained
accreditation by the British Business Bank to provide
business loans on behalf of the UK Government under
the CBILS loan scheme. Aspen continues to successfully
develop the bridging business and with its future significant
contribution to the Group.
Developing our offering as we have during 2021
has enabled Aspen to reach a wider market and
strengthened our customer and broker relationships.
We take enormous pride in delivering a fast, consistent
and reliable service and we are now seeing repeat
customers coming back for more of the same!
With the talent that we have in the Aspen team,
the right product appeal in the market and a steely
determination to succeed we have here the compelling
reasons why we believe that Aspen will continue to
evolve a successful bridging lending business.’’
Ed Ahrens
Managing Director
04
S&U Plc Annual Report and Accounts 2022
A1 Chairman’s Statement
This year’s resounding results clearly show our,
and most important our loyal people’s, ability to
adapt to the economic, political and regulatory
environment and their work in preparing and
priming the Group for both the opportunities and
challenges now facing all of us, gives me a quiet but
determined confidence in S&U’s future.”
Anthony Coombs
Chairman
ANTHONY COOMBS
£47.0m
Profit before tax (“PBT”)
(2021: £18.1m)
£87.9m
Revenue
(2021: £83.8m)
In times scarred by the global
pandemic, looming environmental
disaster and now a war in Ukraine,
anyone claiming to see the future
with any certainty risks appearing a
charlatan or a fool. Hence, without
possessing any supernatural powers
of foresight, I am at least pleased
to see that my prediction last year
of “a return to S&U’s habitual levels
of success” in 2021 has indeed
now come to pass. Profit before tax
for S&U plc this year is at £47.0m
(2021: £18.1m) on Group revenue
of £87.9m (2021: £83.8m). Group
net assets now stand at a record,
£206.7m against £181.0m last year.
This excellent performance sees
earnings per share this year at
312.8p per ordinary share (2021:
120.7p) the best in S&U’s 84-year
history. The Group’s traditional
www.suplc.co.uk
financial strength, excellent
collections performance and
receivables quality, mean Group
Gearing remains at just 54.9% (2021:
54.6%). Despite the unprecedented
economic and social turmoil of the
past two years, first through Covid,
secondly its economic aftermath
and rising inflation, and third, from
the as yet unknown consequences
of the Ukrainian War, these results
show that S&U plc has emerged
stronger than ever and primed for a
new era of profitable growth.
FINANCIAL HIGHLIGHTS*
• Profit before tax (“PBT”): £47.0m
(2021: £18.1m)
• Revenue: £87.9m
(2021: £83.8m)
• Earnings per share (“EPS”): 312.8p
2021: 120.7p)
• Group net assets: £206.7m
(2021: £181.0m)
• Group gearing: 54.9%
(2021: 54.6%)
• Group Treasury: £180m of
medium-term funding against
£113.6m borrowings
• Group total collections: £294.3m
(2021: £214.3m)
• Dividend proposed: 126p per
ordinary share (2021: 90p)
* key alternative performance measurement
definitions are given in note 1.12 below
At Advantage, our Grimsby based
motor finance business, the
resilience of the business and the
strength of its relationships with its
customers is evidenced by a lower
than normal loan loss provisioning
charge for the year of £3.8m (2021:
£36.0m; 2020: £16.5m) reflecting
good collections and less utilisation
of the impairment provisions made
in the dark days of January 2021.
Thus, over the past two years of
Covid, Advantage has been able to
produce an average of over £30m
annual profit, quite remarkably just
less than 10% lower than in the
previous two years. This, despite a
20% fall in new car production and
sales over the past two years, which
has constrained supply in both
the new and used car markets and
hence constrained loan transactions.
At Aspen, our five-year-old property
bridging operation, profits have
surged ahead strongly over the past
year. Transaction numbers have
risen by nearly 70% and book quality
is at its best level ever. The reward is
a record profit for the year of £3.4m
(2021: £0.8m).
S&U’s remarkable ability to produce
consistent and long-term growth
rests on three pillars. The first is the
tenacity, hard work, imagination
and ambition of our remarkable
colleagues. All have adapted to
05
Stock Code: SUSSTRATEGIC REPORT A1 Chairman’s Statement CONTINUED
Covid’s disruption by using flexible
and hybrid working to their
advantage. Around two-thirds of
them have now returned to normal
routines of office work, and all have
embraced the real opportunities for
uninterrupted concentration and
focus that hybrid working can bring.
As Manchester City FC has so ably
demonstrated, our staff may not
always share the same pitch, but the
whole squad can interchange for the
benefit of all.
Second, they have used the
pandemic period to set in place a
raft of operational improvements
which are making both Advantage
and Aspen more competitive than
ever. New finance products have
been introduced, sales channels
diversified, both brand and digital
marketing embraced, and customer
communication automated and
made more efficient. All these and
more are proof of the vitality and
imagination of our staff, to whom,
more than ever, I pay profound and
respectful tribute.
Third, long experience has proved to
us that successful lending businesses
do not exist in a vacuum. Both the
attraction and affordability of all our
products depend not only upon the
financial health of our customers
but on prevailing economic
conditions. In turn, these depend
upon health of the British economy
and in particular the motor and
housing markets which we serve.
Currently, to put it mildly, the runes
are mixed. Whilst the labour market
remains reasonably strong with low
unemployment and rising wage
rates, high utility prices, inflation
and direct and indirect taxation
As the world reels from one crisis to
another, it is apt to remember the words
of Winston Churchill, our greatest war
leader: “I’m an optimist - it does not seem
too much use to be anything else”.
Anthony Coombs
Chairman
06
undoubtedly threaten standards of
living.
In the used car market, in which
Advantage has so successfully
operated for over twenty years, the
dichotomy is seen in the 20% fall in
new car production and sales over
the past two years, contrasted to a
robust 10% increase (at 1.361m) in
the number of used cars financed
at the point of sale (Finance and
Leasing Association). The fall in new
car sales means that residual values
for used cars remain very strong and
has resulted in a steady 9% recovery
in the used car finance market over
the past year. Happily, Advantage
has out-performed the market, with
the value of new loan advances
up 37% this year and new loan
transaction numbers up 26%.
In the housing market, of interest
to Aspen Bridging, although market
transaction numbers have remained
subdued, house prices generally
have risen over 10% over the last
year. Although the market is now
S&U Plc Annual Report and Accounts 2022 finished on a remarkable 98.25%
of due in January. They were made
possible by Advantage’s close and
harmonious customer relations,
responsible lending, the success
of a new customer payment portal
introduced last summer and, last
but not least, by the professionalism
and empathy of our customer
facing teams.
Receivables quality was also
bolstered by the strong used
car values; this meant that both
voluntary termination and bad debt
numbers, and the losses arising
from them were much lower than
anticipated back in January 2021.
Although Advantage expects that
new loan transactions will continue
to grow this year, much will depend
upon consumer confidence generally
£87.9m
Group Revenue
(2021: £83.8m)
£206.7m
Group Net Assets
(2021: £181.0)
and the economic fall-out from the
current crisis in Eastern Europe.
Their prognosis has therefore been
sensibly prudent with a return
to increased growth forecast for
the final third of this financial
year, when used car availability is
expected to have gradually returned
to more normal levels.
cooling slightly as interest rates rise
to counter inflation and to finance
two trillion pounds of government
debt, their effect on dampening
demand will be offset by the
fundamental imbalance between
housing demand and supply in
most parts of the UK. Happily, like
Advantage, Aspen has been able to
outperform the market seeing new
loan facility numbers increase by
69% over the past year.
In sum, current trends in both our
businesses remain very encouraging
with current new loans this financial
year already beating budget. It was
our anticipation of this accelerating
growth that S&U put in place an
additional £50m of medium-term
facilities last year. These now total
£180m on borrowings of £113.6m
and may be augmented within the
next financial year as further growth
occurs, and the macroeconomic
landscape becomes clearer.
ADVANTAGE FINANCE
(“ADVANTAGE”)
Following a first ever dip in profits
last year, as Covid stormed the
economy, Advantage Finance,
our motor finance business, has
produced a stunning come back
performance. Profits this year of
£43.7m are against just £17.2m
in 2021. New loan transaction
numbers, even in a market
constrained by the supply of used
cars is up by 26% on 2021. On
revenue of £78.9m, ROCE for the
business was 19.4%. Whilst it is true
that these results have benefitted
from a much lower than normal
impairment charge, this partly
reflected a superb performance
in collections as our loyal and
conscientious customers both
maintained and improved their
repayments. Monthly live collections
receipts reached a record £152.7m,
10% up on 2021. These collections
represented an average 93.21% of
due (2021: 83.26%) and the year
www.suplc.co.uk
07
Stock Code: SUSSTRATEGIC REPORT A1 Chairman’s Statement CONTINUED
For the longer term, a number of
marketing and branding initiatives
have been introduced. They will
broaden the funnel of our new
business, develop new affinity and
consolidated partnerships and open
direct channels to future customers.
Refining its renowned underwriting
ability, Advantage continues to help
customers improve their credit
ratings and to serve them with the
kind of finance product which helps
them do so. To this end Advantage
has welcomed new credit reference
providers and has partnered
with digital specialists, as well
as recruiting in-house marketing
expertise.
Again, with an eye to the future,
Advantage has this year increased its
financing of electric cars. Although
electric vehicles currently only
comprise about 3.5% of the UK car
parc, the market is growing strongly.
Indeed 28% of new vehicles sold
this year were either electric or plug
in self-charge hybrids. A working
group has been set up to track the
development of this market and we
expect to be able to introduce more
of our customers to it over the next
few years.
Aspen Bridging
Aspen, our property bridging
business set up in 2017, has
produced record results and is
fulfilling our ambitions for it.
Profit before Tax is a record £3.4m
(2021: £0.8m) and year end net
receivables have grown to £63.9m
(2021: £34.1m). New loan facility
numbers in the year rose from 80
to 135 on gross maximum LTVs at
a conservative 66% average. Loans
written were £112m this year (2021:
£43m) well above budget. Credit
quality remains good. 102 loans
were repaid last year, generating
£77m of cash (2021: £29m).
Defaults are at their lowest ever
and no actual realised losses have
been incurred this year on the loan
book. This is a testament to Aspen’s
thorough, painstaking and rigorous
approach to underwriting involving
a personal visit to every property
financed.
As the business develops, new
products have been introduced.
Loans now range up to £5m
per deal as, in the absence
of flexible mainstream bank
support, the refurbishment
and small development market
expands. Last year saw Aspen
trade very successfully within the
Government’s Coronavirus Business
Interruption Loan Scheme (CBILS).
The burgeoning Buy-to-Let market
has seen Aspen introduce a ‘Bridge
to Let’ product which is proving
attractive to smaller developers and
investors. Aspen anticipates further
lending growth this year.
Considerable investment has
been made in staff development
and recruitment. New business
development managers and Aspen’s
growing credibility within the broker
community helped produce a
record £27m gross loans in the final
quarter of 2021/22. As the business
grows, so will staff numbers and
their experience and professional
qualifications.
This year, although possibly muted
in the light of macro-economic
conditions, we expect the UK
housing market to continue to grow
both in value and in transaction
numbers. In the long term the
continued mismatch between
the demand for affordably priced
housing and a relative dearth of
supply will see that it remains so.
Aspen’s budgets and aspirations
responsibly reflect this.
Dividends
Together with Warren Buffett, the
legendary American investor, we
believe that shareholders’ rewards
08
should reflect the long-term view of
the cash thrown off by the profits
of the businesses they own. We
have reflected this at S&U in a
longstanding dividend approach
which aims at seeing dividends
twice covered. Taking the past two
years as a whole earnings per share
have averaged just over 216p thus
implying a total dividend of 126p per
ordinary share this year (2021: 90p).
Subject therefore to the approval of
shareholders at our AGM on 26 May
2022, we propose a final dividend of
57p per share (2021: 43p). This final
dividend will be paid on 8 July to
shareholders on the register on 17
June 2022.
S&U Plc Annual Report and Accounts 2022 more interventionalist, judgemental
and even “woke”. As Lord David
Frost recently pointed out on his
resignation from the government,
this has resulted in the mistaken and
dangerous assumption that profit-
making inevitably risks being at the
expense of consumers, and not for
their benefit.
All this has resulted in a tsunami
of regulation, sometimes ill-
coordinated and even contradictory,
apparently designed to remove all
risk for consumers irrespective of
circumstances. This has two serious
consequences.
First, it restricts innovation, robust
competition and therefore economic
growth. As Professor Tim Congdon
recently pointed out it is unlikely to
be a coincidence that the UK growth
rate of 3% per annum in the more
lightly regulated 1960’s, has given
way to a feeble 0.9% per annum rate
between 2019 and 2020 in these
more consumerist times.
Second, waves of new regulation,
often without any parliamentary
or even ministerial scrutiny or
oversight, have led to complication
and uncertainty. The Consumer
Credit Act, the principal legislation
for the financial services industry,
is now over 50 years old and has
been constantly overlaid with
statutory instruments, codes of
conduct and new consumer duties.
In the words of the Finance and
Leasing Association, these have
ceded control over regulation to
the regulators themselves. The
industry’s policemen have effectively
become its law makers. Now this
process risks even further confusion
by the proposed introduction of a
new Consumer Duty, which (whilst
laudably aiming for good customer
outcomes) is so subjective that it
risks, according to the Finance and
Leasing Association, giving “no
certainty on what good compliance
looks like from the outset.”
09
Funding Review
At £113.6m at year end, net
borrowings are well within our
medium-term facilities of £180m.
Whilst Advantage’s excellent debt
quality and cautious underwriting
saw it again generate cash last year,
Aspen’s growth absorbed nearly
£30m of additional funds. We
anticipate that current facilities will
give sufficient headroom for the
anticipated organic growth in both
businesses in the next year. As usual
these will be increased as required.
Governance and Regulation
The past 85 years of S&U’s existence
have obviously seen profound
changes in the financial services
www.suplc.co.uk
industry. Whilst technological
change has been at the forefront,
the most profound change has
been philosophical, and one which
could threaten the flexibility,
development and success of the
industry. Previously widely accepted
notions regarding the success of the
free enterprise system in harnessing
the energy, motivation and multiple
decisions of millions of consumers
and producers for the benefit of
all, are no longer widely held. As
Milton Friedman, and even the great
Adam Smith, lauded the ability of
markets, flexibly regulated to benefit
the common good and improve
standards of living generally,
current trends are increasingly
Stock Code: SUSSTRATEGIC REPORT A1 Chairman’s Statement CONTINUED
S&U has always put customers’
interests first. This is not only
morally good business but is
commercially vital in nurturing long-
term customer relationships and the
earnings derived from them. Indeed
S&U’s Mission Statement – “TRUST”
– encapsulates this. Fortunately,
Advantage Finance enjoys an
excellent and mutually respectful
relationship with the Financial
Conduct Authority; building on this
will necessitate a greater certainty
and clarity over what constitutes
good conduct and compliance.
More widely, S&U’s habitual
responsibilities for the world around
it are itemised in its Environmental,
Social and Governance
Responsibilities (“ESG”). How we
fulfil these, are detailed, without any
virtue signalling, in later sections
on S&U’s Corporate and Social
Responsibility and in our Section
172 Statement. Nevertheless, we
maintain our conviction that our
principal responsibilities are to
our customers, our staff and our
shareholders. This coincides with a
recent survey by Henley Strategy,
reported in the Times, which
showed that 74% of the British
public now felt that prioritising
staff and customers should take
precedence over a focus on wider
social and environmental issues.
Our pragmatic approach means that
the last year has seen recruitment
at Aspen fully reflect the ethnic
diversity of its West Midlands base;
a selection process for a new main
Board Director which involved
a majority female shortlist; the
formation of a new Group wide
working party on Eco-strategy to
oversee our response to becoming
carbon neutral by 2030, including
the promotion of Advantage’s offer
for electric vehicles. As evidence
of intent, many of the Board of
Advantage now either possess or
have ordered an electric vehicle.
Most of all, in these turbulent
and ever-changing times, we will
continue to insist that our ESG
agenda is driven by common sense
and not political fashion.
Finally, it gives me great pleasure
to welcome to our Board this year
two new members. The first is my
cousin Jack who replaces Fiann
Coombs, whom I warmly thank for
the wise contribution he has made
to our proceedings over the past
decade. As evidenced by his work
at Aspen, Jack thoroughly deserves
this recognition, will continue the
founding Coombs family’s deep
involvement with S&U and add
boundless energy and, dare I say it,
youth to our Board deliberations.
The second, and latest appointee
to the Board is Jeremy Maxwell,
whom we were delighted to appoint
earlier this year after an exhaustive
and very thorough process, and who
brings considerable talent, wisdom
and experience in marketing,
particularly in the Business to
Consumer field, at Wolseley UK,
Carpetright, B&Q, Screwfix and
Mothercare.
Current Trading and Outlook
As the world reels from one crisis
to another, it is apt to remember
the words of Winston Churchill,
our greatest war leader: “I’m an
optimist - it does not seem too much
use to be anything else”. Like all
successful businesses with a long
history, S&U recognises that it must
tailor its products and services
and trim its operational tack to its
economic, political and regulatory
environment, over which it may
have little control but to which it can
nevertheless adapt and therefore
thrive. Whilst this year’s resounding
results clearly show our, and most
important our loyal people’s, ability
to do this, their work in preparing
and priming the Group for both
the opportunities and challenges
now facing all of us, gives me a
quiet but determined confidence in
S&U’s future.
Anthony Coombs
Chairman
1 April 2022
10
S&U Plc Annual Report and Accounts 2022 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 that first, the report fully
covers areas of relevant disclosure
such as on Strategy, Employees,
Stakeholders, Suppliers, Customers,
Community and Ethics. 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 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 20 years the
remarkable success of Advantage
in producing competitive finance
products, lent responsibly with
excellent customer service has been
reflected, with the sole exception
of the Covid affected 2020/21, in a
www.suplc.co.uk
record of 21 years of consistently
increasing profits.
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 nearly 1.5m unique
applications a year and has written
over 210,000 customer loans since
starting trading in 1999. The loans
have an average original term of just
over 4 years and this medium-term
loan cycle means that motor finance
profits are normally earned over a
much longer period than just the
year of origination.
Of course, Advantage serves an
evolving motor market. Covid
related lockdowns saw new car
sales fall from 2.3m in 2019 to 1.6m
in 2020, although this recovered
slightly to 1.65m in 2021.
Overlying this have been
environmental concerns and the
Government’s Green Agenda, which
last year saw it announce a ban on
the sales of new internal combustion
engines (“ICE”) accelerated from
2035 to 2030.
The year also saw a further decline
in the public’s appetite for new
diesel engines. Sales have fallen
from 50% of all new passenger cars
in 2014 to less than 15% now. On
the other hand, sales of petrol new
vehicles rose to 58% of the total
market last year. Electric and hybrid
vehicles sold a record 440,000 cars
in 2021 up 75% on a year earlier
and now comprise a quarter of
new registrations. Undoubtedly
these trends will continue, although
the shape of the UK’s total “car
parc” will change more slowly. EV
sales will undoubtedly rise as they
become more affordable, battery
life improves and infrastructure for
charging is upgraded. Advantage’s
current estimates predict that by
2030 new registrations of petrol
vehicles will constitute about 20% of
the market, diesel will be negligible
whilst hybrid and electric sales will
take 80% of the market, 30% of
which will be EV.
However, these trends will have a
less effect on the make-up of the
UK’s car parc over the next decade.
This is estimated to reach about
50m vehicles of which 30% will be
EV. Although at present the older
and higher income profile of EV
buyers does not match that of the
Advantage customer, as EVs enter
the used car market over the next
five years, Advantage sees significant
opportunities in electric vehicle
finance. Indeed, Advantage is
developing products for this market
and has already financed some used
electric vehicles.
The first and fundamental factor in
Advantage’s success is the relative
buoyancy and resilience of the used
car market in which it operates.
Thus, although the UK’s new car
market at just 1.65m registrations
last year is down about 30% on the
levels pre-pandemic, the used car
market in which Advantage operates
has been more buoyant. Thus, in
2021 it saw 7.53m used car sales
up 11.5% on the previous year. The
second factor in Advantage’s success
relates to its own commitment
to excellence. The quality of our
relationship with introducing
brokers, dealers and our customers
is based upon a continuous and
relentless search for product and
service improvement. Successful
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Stock Code: SUSSTRATEGIC REPORT A2 Strategic Report CONTINUED
business is the result of a thousand
small improvements rather than
a very few revolutionary ones.
In recognising the importance
of its statutory obligations and
relationship with the FCA in ensuring
that customers are treated fairly,
Advantage’s care for its customers
has historically been central to
its success. Thus, this year saw
continued refinement of its already
sophisticated underwriting scoring
and affordability processes. A
new customer service portal was
launched in 2021 this is proved
very successful in improving
communications between Advantage
and its customers and also enabling
them to make on-line payments.
Our commitment to our customers
is summed up in Anita Roddick’s
phrase – “good business really is
good business.”
The third pillar of Advantage’s
success depends upon its proven
ability to adapt to a changing
economy and labour market and
the impact they may have on our
customers. Particularly during the
Covid Pandemic and the various
associated employment, expense
and payment “holiday” impacts this
has brought, non-prime customers
can find that their disposable
incomes are more unpredictable.
Advantage’s under-writing model
has been constantly refined in the
light of over 20 years of customer
service. We appreciate that the
customers life journey evolves over
their loan term. This demands that
responsible lenders continually
analyse repayment behaviour, and
then use it, within the collections
department, in dealing with and
supporting our 62,000 customers.
Whilst lending is on a fully secured
basis, debt quality at Aspen, our
property bridging lender does rely
on the experience and reliability
of the borrower as much as on
the value of the property being
financed. After a very strong mid-
year when new mortgage advances
rose to £159.8bn nationally (FCA),
as buyers chose to take advantage
of the Government’s stamp duty
holiday, the residential lending
market has cooled slightly, although
overall total lending is back to pre-
pandemic levels. The long-term
confidence in the UK housing market
which Aspen serves is further
evidenced by a 11% house price
increase in the UK during 2021.
These trends are reflected in Aspen’s
volume of loans written which
nearly trebled to £130m throughout
the year – and also in the quality
of the loan book. Pent up demand
for home ownership stimulated
by the Government’s low deposit
home ownership schemes, as well
as refurbishment opportunities
A2.2 BUSINESS REVIEW
Operating Results
within Britain’s environmentally sub-
standard housing stock, lead us to
predict a very exciting future for our
Aspen Bridging business.
“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
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. Our 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.
Revenue
Cost of Sales – Impairment
Cost of Sales - Other
Gross Profit
Administrative Expenses
Operating Profit
Finance Costs (Net)
Profit before Taxation
Taxation (note 9 in the accounts)
Profit after Taxation
Year ended
31 January
2022
£m
Year ended
31 January
2021
£m
87.9
(4.1)
(18.8)
65.0
(14.2)
50.8
(3.8)
47.0
(9.0)
38.0
83.8
(36.7)
(14.3)
32.8
(11.1)
21.7
(3.6)
18.1
(3.5)
14.6
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 1.12 to the financial statements.
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S&U Plc Annual Report and Accounts 2022 Advantage Motor Finance
− PBT £43.7m (2021: £17.2m
despite pandemic).
− New transactions at 19,747
(2021: 15,600) on record
application numbers.
− Monthly Collection receipts
at a record £152.7m – 10% up
on 2021.
− Impairment at £3.8m (2021:
£36.0m) reflecting much higher
than expected post Covid loan
quality.
− Administrative expenses
increased by 32% due to salary
and variable pay increases this
year which were low last year.
Last year also contained a historic
one-off vat refund of £0.9m.
− Excellent collections at Advantage
see borrowings reduce by £14m
despite transactions growth.
− ROCE at 19.4% (2021: 8.6%)
(note 1.12).
Advantage proved the resilience of
its business model and the quality of
its loan book and customer relations
by a rebound in profitability in the
year from £17.2m to £43.7m. This
result benefitted from a collections
performance which justified a write
back of loan loss provisions made
during the Covid lock down last year.
This recovery has been startling. Of
the 21,221 customers taking Covid
related payment “holidays” last year
just 1709 have so far been classified
as “bad debt”, representing just
1.3% of Advantage’s overall book. In
total there are 13218 post payment
holiday customers still on our live
book at the end of January 2022 and
these customers paid a remarkable
97.01% of due in January.
Alongside this excellent trading
performance, Advantage prepared
for recovery by making a number
of significant innovations and
improvements to the business. Staff
welfare was at the heart of this.
Hybrid working for those who wish
it, at two to three office days per
week has seen productivity increase
still further. No redundancies or
short-time working have been
necessary and the Company, as
well as S&U plc generally, is pleased
not to have taken a penny in
Government subsidy.
Besides the collection improvements
mentioned above, a major drive on
widening Advantage’s channels to
its market and making them more
effective has been taking place.
This has included new third-party
relationships, the recruitment of
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Stock Code: SUSSTRATEGIC REPORT A2 Strategic Report CONTINUED
marketing expertise as well as
further refinements in customer
data analytics.
Aspen Property Bridging
Finance
• PBT at £3.4m (2021: £0.8m).
• 135 deals (2021: 80) and a record
final quarter.
• Net receivables up to a record
£63.9m (2021: £34.1m).
• Book quality excellent with only 2
current default cases.
• Loan repayments of £77m
(2021: 29m).
• Gross advances at record £112m
(2021: £43m).
Aspen’s sparkling set of results,
record transactions and best ever
debt quality were delivered in a
housing market which defied the
predictions of gloom by recording
an 11% house price increase in the
year. During the first half of the
year both advances and collections
benefited from Aspen’s successful
participation in the Government’s
CBILS Covid Business Interruption
Loan Scheme, whilst the second half
saw record new loan transactions
for the period. Both loans written
throughout the year at £112m
(2021: £43m) and loans repaid
£77m (2021: £29m) were a record
for Aspen.
Aspen widened its range of
increasingly supportive and loyal
brokers, reshaped its range of loan
products and introduced a new
Bridge to Let product, designed for
the builder refurbisher with a mind
to later transition to investment.
In order to achieve and further
bolster this progress, Aspen
recruited experienced business
development managers, tightened
its processes to ensure even
stronger more robust underwriting
and still insists that every property
upon which Aspen lends for security
is personally visited by a member of
the team.
A2.3 Funding and Balance
Sheet Review
The strength of S&U’s balance sheet
is reflected in the fact that the last
year saw Group total assets grow
from £284.8m to £329.7m whilst
net liabilities to our bankers rose
by just £14.7m. As a result, gearing
remained at its customary low level
of just under 55%. Current net
borrowings of £113.6m contrasts
with S&U’s medium-term facilities
in place of £180m with its excellent,
loyal and constructive banking
partners. These were augmented
by £50m over the past financial
year and it is anticipated that with
current rates of growth these will
prove sufficient for the coming
year. As usual, as growth trends, in
what is still a very uncertain macro-
economic climate, become clearer
then facilities can be adjusted and
hopefully augmented in order to
take account of this.
A2.4 Principal Risks and
Uncertainties
Whilst Corporate Governance
guidelines, and the provisioning
insisted upon by the Financial
Reporting Council require macro-
economic forecasts, both Covid, the
recovery from it, current inflationary
trends and now a war in Europe
make this a virtually impossible
task. For instance, last year the
Office for Budget Responsibility
expected the British economy to
grow by over 7% in 2022. Current
projections for growth this year
are now just 4.8%. Current trends
in interest rates, although upward,
are in our view unlikely to be very
significant particularly since inflation
is unlikely to persist at more than
4% throughout the year. More
encouraging are the trends in the
labour market where unemployment
at 4% seems happily likely to persist.
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Against such an uncertain
background, S&U has maintained its
historically cautious attitude in its
four-year budget 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
S&U Plc Annual Report and Accounts 2022 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’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.
A2.4.3 Legal, Regulatory and Conduct
Risk
In terms of legal risk, the Group
is subject to legislation including
consumer credit legislation which
contains very detailed and highly
technical requirements. 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 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 and
by RSM.
Alan Tuplin, formerly Head of Credit,
is Chief Risk Officer of Advantage
ability of customers to repay.
The impact of Covid, uncertainty
regarding the evolution of Brexit and
now a war in Ukraine have adversely
impacted the economy during the
past two years and projected higher
levels of unemployment and cost of
living inflation including energy and
fuel costs may lead to more motor
finance repayment delinquency.
However, 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
principally 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, principally
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
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Stock Code: SUSSTRATEGIC REPORT A2 Strategic Report CONTINUED
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
what is precisely meant by these has
yet to be clearly defined.
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.
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 Chief Executive
and main Board member, Graham
Wheeler sits on the Executive
Committee of the FLA and is
regularly requested by the
Government on advice on regulatory
matters, particularly in the
environmental field.
and plays a key role in managing
and mitigating legal, regulatory and
conduct risk within Advantage. Alan
has over 20 years of experience
in non-prime motor finance and
chairs the Risk Committee at the
Finance and Leasing Association, the
industry’s trade body.
Whilst engaged in the un-regulated
sector, Aspen Bridging has
adopted procedures which are
similar to those required in the
regulated sector. This provides both
commercial discipline and a platform
for standards should Aspen widen its
products into the regulated field.
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. During Covid increased
use of technology and excellent
application by our staff has
helped the management of this
systems risk and the Company has
16
S&U Plc Annual Report and Accounts 2022 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 2022 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 2022 to consider as
required if they had a reasonable
expectation that the company 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 2022.
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.
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Stock Code: SUSSTRATEGIC REPORT CASE STUDIES
CASE STUDIES
Our Customers
Helen was fantastic, nothing
was too much trouble,
friendly and professional,
She kept us updated every
step of the way. A very
smooth, quick service.
Thank you Helen”
MR C
Mr C lives in Hampshire with
his partner and is a Mechanical
Manager. He takes home
approximately £4416 per month and
was looking for a vehicle to provide
him transport requirements in
January 2022.
Mr C was referred to us by an
existing Account Holder Mr S under
our “Refer a Friend” scheme. Mr C’s
credit profile was assessed as part
of the application, together with
his overall income and outgoings to
ensure that the proposed loan was
appropriate and affordable for his
circumstances.
Mr C’s application was approved and
after being given an indication of his
credit limit, settled on a Land Rover
Sport from a dealer of his choice.
The purchase price was £17,490
and Advantage arranged a loan
of £15,000 to be repaid over 60
months at monthly repayments well
suited to Mr C’s budget.
Once the terms had been agreed,
Advantage were able to progress
the transaction very quickly
using its new electronic signature
system which meant that Mr C was
able to complete all the relevant
documentation and purchase the
vehicle without any delay.
Mr C took the time to review his
experience on an online review site
was clearly happy with the service
he received from Advantage, leaving
a 5-star review.
18
S&U Plc Annual Report and Accounts 2022 I have had a really
pleasant experience with
Advantage. Our consultant
was extremely helpful,
polite and professional
throughout. Was kept up to
date and left fully informed
at all times. A pleasure to
do business with.”
MR V
Mr V lives in Hampshire with his
partner and works in construction.
He first took out finance with
Advantage in February 2015 and
2018 with the loans being paid off
at the end of their respective term.
In November 2022 Mr V was again
looking for financial support to allow
the purchase of a car and made a
direct approach to Advantage in
order to enquire about assistance
for his motor finance requirements,
and dealt with one of our customer
advisors working as part of the
Advantage new business team.
Mr V’s credit profile was assessed
as part of the application,
together with his overall income
and outgoings to ensure that
the proposed loan was again
appropriate and affordable for his
circumstances. Of course, Mr V’s
previous Advantage loans were also
present which both had excellent
payment history.
Mr V’s application was approved
and after being given an indication
of his credit limit, settled on a
vehicle from a dealer of his choice.
Advantage provided a £8,690 loan
to be repaid over 60 months at
monthly repayments well suited to
Mr V’s budget and around the same
as those payments made on his
previous agreement.
Once the terms had been agreed,
Advantage were able to progress
the transaction very quickly
using its new electronic signature
system which meant that Mr V was
able to complete all the relevant
documentation and purchase the
vehicle without any delay.
Mr V took the time to review his
experience on an online review
site and was clearly happy with the
service he received from Advantage,
leaving a 5-star review.
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Stock Code: SUSSTRATEGIC REPORT CASE STUDY
Our Customers
Aspen has managed to bring together
the best of both worlds; they make
sure they look after the client,
take a commercial view on the
deal and more importantly at very
competitive rate."
Broker feedback
There are hundreds of firms to
choose from for finance, however
Aspen is head and shoulders above
them all. Their efficiency and resolve
to deal with each case with care and
professionalism ensures success. You
couldn’t find a better group.”
Customer feedback
DEVELOPER SECURES INVESTMENT
PROPERTY AFTER £3,637,500 BRIDGE
ASPEN COMPLETES COMPLEX 80% LTV
FINISH & EXIT BRIDGE OF £1,260,000
• A £3,637,500 bridge at 75% LTV from Aspen has
enabled a developer to secure a desirable investment
property in Henley-on-Thames.
• The residential property was in high demand due to its
location, meaning a quick completion was required to
stay ahead of other interested parties.
• Aspen has completed a complex 80% LTV Finish & Exit
bridge of £1,260,000, comprising £960,000 to clear
an existing facility and £300,000 to finish works, on
a substantial Grade 2 listed property in Lincolnshire
undergoing heavy works.
• Comprising seven part built high-end apartments, the
case involved substantial due diligence within a very
short timeframe, including the renovation of a listed
property.
20
S&U Plc Annual Report and Accounts 2022 A4 Corporate Social Responsibility
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 47. People prosper and are
promoted within S&U purely on
merit.
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.
A4.2 COMMUNITY
S&U does not exist in a vacuum.
Our success 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. Our records
demonstrate we enjoy high levels of
customer satisfaction and 67 of only
86 complaints which reached the
Financial Ombudsman Service in the
year were decided in the Group’s
favour (2021: 44 of 74 complaints
were decided in the Group’s favour).
In the year to 31 January 2022 57%
of complaints which reached the
Financial Ombudsman Service were
related to the satisfactory quality
of the vehicle (2021: 74%) and
therefore not related to operational
issues within Advantage.
S&U supports its wider community
through charitable giving and
activities relating to fundraising.
Whilst staff are regularly involved
in their own charitable activities,
A4.1 EMPLOYEES
The challenges caused by the Covid
pandemic and the magnificent way
our staff throughout the Group have
adapted to this, reflect the loyalty
and “family ethos” at S&U of which
we have always been proud. This
loyalty has been reciprocated by
S&U by avoiding redundancy and the
Government’s furlough schemes.
This year has also seen the setting
up of staff chat rooms for those
who may feel isolated at home.
Those colleagues who feel in need
of further support and counselling
are able to access mental health
services the S&U health scheme
provides.
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 will see the two staff members
gain MRICS and LLB qualifications.
External management training is also
undertaken in the motor finance
division. As required by legislation,
we confirm that as an organisation,
we respect and recognise human
rights in all aspects of our business.
The FCA Regulatory regime is
centred on Treating Customers
Fairly. All employees within the
Group are required to demonstrate
appropriate knowledge and skills.
Annual appraisals highlight areas of
training needs for all employees and
Advantage Finance is an accredited
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
www.suplc.co.uk
21
Stock Code: SUSSTRATEGIC REPORT A4 Corporate Social Responsibility CONTINUED
S&U plc channels its philanthropic
activities through The Keith Coombs
Trust which this year celebrates
its 10th 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 KCT Trust donated a total
of £102,000 to these charities and,
to mark its 10th anniversary, S&U
is making a special donation of
£100,000 to support longer term
charitable aims in these areas.
As an independent charity, The Keith
Coombs Trust also makes financial
contributions to the arts, to sport
and in supporting the Christian
faith. It was the initial sponsor of
the new “Ballet Now,” an initiative
at the Birmingham Royal Ballet that
encourages young choreographers,
designers and composers. It
sponsors youth development at a
local cricket club and also supports
the “Leap of Faith” project which
assists the wider UK Church in
adapting to a digital future.
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, we 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. In the past year a new
building has been refurbished for
employees at Advantage which will
improve and maximise space, ensure
Covid safety and provide better
break out areas. S&U’s Head Office,
which also houses Aspen, provides
up to date, spacious and high-quality
accommodation.
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 and age of the vehicles
Advantage finances. However, it
has no direct control, nor should it
have, over the customer’s choice of
vehicle and the view on economy,
efficiency and the environment this
choice implies. Currently about 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
negligible. These proportions will
change over the next thirty years as
we detail in our comments on the
market in our Strategic Review.
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, do
reflect our customers environmental
responsibilities.
The Company is pleased to present
its initial climate change report
under the framework provided by
the Task Force on Climate Related
Financial disclosures (‘TCFD’).
22
S&U Plc Annual Report and Accounts 2022 buildings in Grimsby which will
reduce energy usage and make them
more environmentally responsible,
we will install solar panels to reduce
physical energy use where we are
able to do so and where this would
be consistent with maintaining
a good visual environment. As
we have stated above we are
encouraging employees to switch
their company vehicles, where
they possess them, to electric and
many Advantage directors were
early to switch to electric vehicles.
Again, as we state above, one in
four of our employees are working
at least in part from home. This
has been monitored by our HR
departments and has significantly
reduced commuting and the carbon
emissions for which it is responsible.
At Aspen, we monitor the changes in
EPC category that the refurbishment
schemes we finance bring about,
although of course we have no
direct control over them since this is
a matter for building regulation and
for the customer themselves.
In order to off-set those Scope one
and two emissions, which we are not
at present able to reduce to zero,
we propose a range of measures
including the tree planting measures
outlined above.
A4.4A GOVERNANCE
A climate change committee chaired
by the Chairman Anthony Coombs
and consisting of senior executives
and the Chairman of the audit
committee meets on a quarterly
basis to review the identification,
assessment and management of
climate change risks within the
Group. The Managing Directors of
both Advantage and Aspen serve
on this committee. 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.
A4.4B STRATEGY
The Group will continue to identify
opportunities to manage its scope
1 and scope 2 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 one and two emissions,
which we are not at present able
to reduce to zero, we propose a
range of measures including tree
planting. We are currently costing
planting schemes which will be both
cost effective, significantly reduce
our scope one and two emissions
and, equally important, produce
an environment in the areas where
they are planted of semi-mature
trees which significantly enhance
our landscape.
The Group is also keen to properly
identify opportunities to manage
indirect scope 3 emissions. We are
therefore investigating the best
means of measuring and attributing
our indirect scope 3 emissions
since this involves liaison with our
suppliers up and down the value
chain and changes to the emission
qualities of buildings and vehicles
that not only S&U occupies but also
that Aspen and Advantage finance.
The Group is keen to progress
these 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.
A4.4C RISK MANAGEMENT
The Group identifies climate
change risks through the climate
change 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 climate change committee
through its Chief Risk Officer Alan
Tuplin who also expertly advises
on the Group’s climate change
activity. 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.
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. For instance, substantial
changes have been made to our
23
www.suplc.co.ukStock Code: SUSSTRATEGIC REPORT A4 Corporate Social Responsibility CONTINUED
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 2021 to 31 January 2022
Scope 1 (Direct emissions)
Combustion of fuel – Petrol & diesel used by
company cars
Gas consumption
Scope 2 (Energy indirect emissions)
Purchased electricity (location based)
Total scope 1 and 2
Scope 3 (Other indirect emissions)
Water consumption
Waste
Total scope 1, 2 and 3
Company’s chosen intensity measurement:
Normalised tonnes scope 1, 2 and 3 CO2e per £m
turnover
Tonnes CO2
Year ended
31 January
2022
Year ended
31 January
2021
51
21
48
120
1
2
123
49
11
53
113
1
3
117
1.4
1.5
For the year ending 31.1.22 we achieved the target of below 2.2 normalised
tonnes per £m turnover.
For the year ending 31.1.23 we are targeting below 1.8 normalised tonnes
per £m turnover.
Obviously, what is in our more direct control is scope one direct emissions
from petrol and diesel used by company cars, gas consumption and air
conditioning and boiler systems.
More difficult to both analyse and
monitor are our indirect emissions
particularly those caused by
companies for whom we buy energy
such as our electricity and gas
supplies. Finally, we are investigating
the best means of measuring and
attributing our indirect scope 3
emissions since this involves liaison
with our suppliers up and down
the value chain and changes to the
emission qualities of buildings and
vehicles that not only S&U occupies
but also that Aspen and Advantage
finance.
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 2020
conversion factors within our
reporting methodology.
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.
24
S&U Plc Annual Report and Accounts 2022 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
39. 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 has 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 has 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
1 April 2022
www.suplc.co.uk
25
Stock Code: SUSSTRATEGIC REPORT Corporate
governance
CONTENTS
B1
B2
B3
B4
B5
C
Board of Directors
Directors’ Remuneration Report
B2.1 Report of the Board to the
Shareholders Board on
Remuneration Policy
B2.2 Annual Remuneration
Report
Governance
B3.1 Audit Committee Report
B3.2 Corporate Governance
B3.3 Compliance Statement
Directors’ Report
Directors’ Responsibilities
Statement
Independent Auditor’s Report to
the Members of S&U plc
28
30
30
33
43
43
44
48
49
51
52
26
S&U Plc Annual Report and Accounts 2022
S&U Plc Annual Report and Accounts 2022 www.suplc.co.uk
www.suplc.co.uk
www.suplc.co.uk
Stock Code: SUS
Stock Code: SUS
27
Stock Code: SUSCORPORATE GOVERNANCE B1 Board of Directors
ANTHONY COOMBS
MA (OXON)
GRAHAM COOMBS MA
(OXON) MSC (LON)
CHRIS REDFORD
ACA
CHAIRMAN
DEPUTY CHAIRMAN
GROUP FINANCE DIRECTOR
N
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.
Joined S&U after graduating from
London Business School in 1976.
GRAHAM
WHEELER
JACK COOMBS
MA (OXON) 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.
CEO ADVANTAGE FINANCE
(EXECUTIVE)
Graham brings over 35 years experience
in motor finance across consumer and
business lending, much of it in a senior
leadership roles. 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 is now in his third
year of leading its successful motor
finance subsidiary Advantage Finance.
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.
28
S&U Plc Annual Report and Accounts 2022 TAREK
KHLAT
GRAHAM
PEDERSEN
JEREMY
MAXWELL
(NON-EXECUTIVE)
(NON-EXECUTIVE)
(NON-EXECUTIVE)
N A
R
N A
R
N A
R
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.
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.
KEY
N Nominations committee
A Audit committee
R Remuneration committee
Tarek has over 25 years of experience
in financial services and he co founded
Crossbridge Capital where he is currently
Group CEO. Prior to this he held leading
roles in financial services with Credit
Suisse and JP Morgan and in journalism
with CNN and Fox. 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. Tarek was
awarded an MBE by her Majesty the
Queen in 2021.
DEMETRIOS MARKOU
FCA MBE
(NON-EXECUTIVE)
N A
R
A Chartered Accountant with over 40
years’ experience in public practice
in Birmingham and director of many
private companies. He has extensive
commercial, professional and political
experience.
www.suplc.co.uk
29
Stock Code: SUSCORPORATE GOVERNANCE
B2 Directors’ Remuneration Report
This report has been prepared to comply with Schedule 8 of The Large and Medium-
sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2008,
the Companies (Miscellaneous Reporting) Regulations 2018, 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 2022.
What a year it has been for S&U!
Accelerating lending volumes,
exceptional collections and strong
impairments performance in motor
finance, together with further
expansion of Aspen, all underpin
the incredible year for the company
during continued Covid-related
uncertain times.
Against a backdrop of a shortage of
used cars, Advantage has increased
advances by 37% and within a
competitive bridging market Aspen
has increased the annual number
of new lending facilities by 69%
and has a record lending pipeline at
the start of the new financial year.
As a result, Group profit before
tax is £46.7m for the year ended
31 January 2022 (2021: £18.1m).
The Company’s current forward-
looking Remuneration Policy was
approved with a binding vote at the
AGM on 20 May 2021 and a copy of
our full Remuneration Policy Report
is available on our website www.
suplc.co.uk. An updated long-term
incentive plan was also approved
with a binding vote at the AGM on
20 May 2021.
This year’s annual Directors’
Remuneration Report sets out how
the Remuneration Policy was applied
during the year ended 31 January
2022 and provides details of
amounts earned in respect of the
year ended 31 January 2022. It also
sets out how the Remuneration
Committee has decided the
Remuneration Policy will be
operated for the year commencing
1 February 2022.
2021/22 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.
Consumer motor finance, property
bridging markets and our customers
were significantly impacted by the
Covid pandemic and the associated
remedial actions of government,
regulators, customer employers and
business partners. Therefore, the
group profit before tax had reduced
from £35.1m to £18.1m during the
year to 31.1.21, due mainly to a
higher than normal covid-related
impairment charge. During the year
to 31.1.22, the adverse impacts of
the Covid pandemic have proven
less than anticipated thanks partly
to a more benign economy and
also due to the resilience of the
company, the hard work and
diligence of the Advantage and
Aspen teams and the leadership
of the executive team. This has
resulted in better than anticipated
collections and a much lower
than normal impairment charge
this year resulting in group profit
before tax increasing from £18.1m
to an exceptional £47.0m and
we are delighted with this result.
Loan advances, collections, early
repayment indicators and profits all
improved further during the year in
both Advantage and Aspen to help
deliver this annual profit.
Against a backdrop of a shortage of
used cars, Advantage saw 19,747
new motor finance agreements with
good early repayment patterns.
After being affected by Covid
forbearance and FCA mandated
payment holidays last year, our
collections team have continued to
work diligently to support customers
affected by the pandemic and
overall collections have recovered
to perform very strongly during the
year ended 31.1.22. Collections
have also been helped by a more
benign economy than anticipated.
Looking forward due to potential
future 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 fifth year of operation, Aspen
Bridging made 135 new loan
facilities lending over £111m. From
the 369 new loan facilities made
since its inception in 2017, Aspen
has so far received 267 repayments
and of the 102 bridging loans still
live at 31.1.22 only 2 were in default.
Lending volumes were helped in
the early part of the year by Aspen
30
S&U Plc Annual Report and Accounts 2022 successfully participating in the
government CBILS scheme and
latterly by steady growth in normal
bridging business which underpins
the further growth planned for year
end ending 31 January 2023.
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 and
Return on Capital Employed
(“ROCE”), the Remuneration
Committee judged the level at
which the annual bonus payments
should be made. Group PBT for the
year increased by 159% to £47.0m
and ROCE was 17%. This was
significantly above the ROCE target
and the PBT stretch target level
of £25.5m (equivalent to annual
growth of 41%) for which 100% of
bonus would be payable. Therefore,
the Remuneration Committee
determined that for the financial
year 2021/22 bonuses equivalent
to the maximum annual bonus
opportunity of £30,000 each would
be awarded to Anthony Coombs and
Graham Coombs and £50,000 to
Chris Redford.
It was noted by members of the
committee that the excellent
group PBT number actually
achieved during the year was a
major accomplishment during
such unprecedented times and
was a testament to the hard work,
leadership, focus and strength of
the individuals themselves, the
executive team as a whole as well
as the overall resilience of the
Company.
It is also the view of the committee
that these, and other non-financial
aspects of the company which
the individuals also contributed
to during the year, such as overall
customer satisfaction with company
products and regulatory compliance,
although more intangible,
nevertheless affect the potential
value of the company and should be
recognised.
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 2021 Chris Redford was
granted 5,000 shadow share options
under the new LTIP, as disclosed in
last year’s Directors Remuneration
Report. The Remuneration
Committee determined that 5,000 of
these shadow share options vested
with reference to performance
during the year ended 31 January
2022 based on group PBT and ROCE
performance being significantly
above the PBT stretch target level of
£25.5m.
Graham Wheeler
Graham was appointed to the Board
on 29 September 2020 after a
year as CEO of our main operating
subsidiary company Advantage
Finance Limited.
The Committee have considered
Graham’s management of the
Advantage Finance team in light
of the significant challenges in
consumer motor finance arising
from Covid and the associated
environment, and the outstanding
Advantage profit result of £43.7m
for the year ended 31 January 2022.
The Committee judged the level at
which the annual bonus payment
should be made. For the financial
year 2021/22 a bonus of £50,000
was awarded to Graham Wheeler.
In May 2021 Graham Wheeler was
granted 5,000 shadow share options
under the new LTIP, as disclosed in
last year’s Directors Remuneration
Report. The Remuneration
Committee determined that
5,000 of these shadow share
options vested with reference to
performance during the year ended
31 January 2022 with reference to
the underlying profit performance of
Advantage and achievement against
the profit and ROCE based targets
set for that year.
Jack Coombs
The Remuneration Committee
welcomes Jack Coombs to the
S&U Board. Jack was appointed to
the Board on 14 April 2021 after
4 years as an executive director of
our growing operating subsidiary
company Aspen Bridging Limited.
Jack is a major shareholder in
S&U plc.
The Committee have considered
Jack’s significant contribution to
the successful start-up and sensible
growth of Aspen Bridging including
excellent growth during the year
ended 31 January 2022 helping
Aspen Bridging achieve a record
profit before tax of £3.4m. The
Committee judged the level at which
the annual bonus payment should
be made. For the financial year
2021/22 a bonus of £10,000 was
awarded to Jack Coombs.
31
www.suplc.co.ukStock Code: SUSCORPORATE GOVERNANCE B2 Directors’ Remuneration Report CONTINUED
Key remuneration decisions
and related matters for the
year ending 31 January 2023
Salary increases, annual bonus
and LTIP
After company profits were
significantly impacted by Covid,
salaries for executive directors
for the yearend ended 31 January
2022 were frozen at the same level
as year ended 31 January 2021.
This was in line with pay review
decisions for the wider workforce.
The Remuneration Committee has
now agreed salary increases for
the year ended 31 January 2023
in the range 3.75% to 5.5% except
where exceptional circumstances
merited a higher increase, as
noted below. After a review of
market comparables and after his
exceptional performance in his first
two full years as CEO of Advantage
Finance, two years which coincided
with the Covid pandemic, it was
decided to award Graham Wheeler
a salary increase of 20% for year
ended 31 January 2023. After
his excellent performance as an
executive director of our growing
Aspen Bridging subsidiary and
their record recent performance
and profitability, it was decided to
award Jack Coombs a salary increase
of 10% for the year ended 31
January 2023.
For the year ending 31 January
2023, where the performance
targets set are achieved, the annual
bonus has been set at £50,000 for
Anthony Coombs, Graham Coombs,
Graham Wheeler and Chris Redford
and has been set at £25,000 for Jack
Coombs. Where the performance
targets set are exceeded, the
Remuneration Committee has
the discretion to pay an increased
annual bonus and the maximum
amount payable will not exceed
the maximum limits stated in the
Remuneration Policy. The annual
bonuses will continue to be assessed
against stretching divisional and
group Profit Before Tax (PBT) targets
and Return on Capital Employed
(ROCE). 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
6,000 shadow share options under
the new LTIP to Graham Wheeler,
subject to achieving certain
Advantage PBT and ROCE targets for
the year ending 31 January 2023.
The Committee also intends to
grant 6,000 shadow share options
under the new LTIP to Chris Redford,
subject to achieving certain group
PBT and ROCE targets for the year
ending 31 January 2023.
The combined incentive potential
between the annual bonus and LTIP
(including shadow share options)
for each director will not exceed
the exceptional circumstances limit
of 200% of salary as set out in the
Remuneration Policy.
For the year ending 31 January
2023, the Remuneration Committee
considers that the significant
shareholding held by Anthony
Coombs, Graham Coombs and Jack
Coombs similarly provides adequate
alignment to shareholders.
Fees for the non-executive directors
have now been increased by 4.2%
to £37,000 and for the senior non-
executive director increased by 4%
to £39,000 for the year ended 31
January 2023. Fees had previously
been frozen for the year ended 31
January 2022 at the same level as
for year ended 31 January 2021.
The Remuneration Committee
believes that an element of the
executive remuneration should be
linked to non-financial KPI’s that
align with the Company’s purpose
and long-term strategy, particularly
around the Company’s governance
structures and environmental
impact. As a first step in the process
of developing such a strategy, the
Company has prepared a Company
Mission Statement, which is
published at page 1. which describes
the organization’s values and its
overall intention and serves to
communicate purpose and direction
to employees, customers, vendors
and shareholders. The Remuneration
Committee is now considering how,
for the year ending 31 January
2024 and beyond, the Company
can link a material element of the
executive remuneration to such
non-financial goals in a way that
is clear and measurable. Ensuring
clear line of sight between the
company’s activities and its
company mission, we believe, will
help employees develop ownership
and accountability and develop
a culture which rewards not only
the achieving of financial targets
but also related to the company’s
corporate purpose.
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 26 May 2022.
Tarek Khlat
Chairman of the Remuneration
Committee
1 April 2022
32
S&U Plc Annual Report and Accounts 2022 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 2022 was £43,200
charged on a time and materials
basis including guidance on the
2021 remuneration policy and new
LTIP. 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 48 of
this Annual Report.
B2.2 ANNUAL
REMUNERATION REPORT
This section covers how the
remuneration policy was
implemented in the year ending 31
January 2022. 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 members of
the Remuneration Committee are
Mr Graham Pedersen, Mr Demetrios
Markou, Mr Jeremy Maxwell and Mr
Tarek Khlat, who are all independent
non-executive directors. Biographical
details of these directors are
set out on pages 28 and 29. 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.
www.suplc.co.uk
33
Stock Code: SUSCORPORATE GOVERNANCE B2 Directors’ Remuneration Report CONTINUED
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 2022, together with comparative figures for the year ended 31
January 2021:
Anthony Coombs
£000
Graham Coombs
£000
Chris Redford
£000
Graham Wheeler*
£000
Jack Coombs*
£000
Executive Directors
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
Salaries and fees
Allowances and
benefits
Pension Contribution
Total Fixed
Bonus
Shadow Share
Incentive
Total Variable
Total
360
79
0
439
30
0
30
469
360
75
0
435
15
0
15
450
345
35
0
380
30
0
30
410
345
35
0
380
15
0
15
395
232
22
34
288
50
137
187
475
232
26
34
292
25
0
25
317
250
16
25
291
50
137
187
478
83
7
8
98
25
0
25
80
1
12
93
10
0
10
123
103
0
0
0
0
0
0
0
0
* Graham Wheeler was appointed a director of S&U Plc on 29 September 2020, and so only a part year remuneration is shown in the single figure table for 2020/21.
Jack Coombs was appointed a director of S&U plc on 14 April 2021 so only a part year remuneration is shown in the single figure table for 2021/22.
Demetrios Markou
£000
Fiann Coombs
£000
Graham Pedersen
£000
Tarek Khlat
£000
Jeremy Maxwell*
£000
Non-executive
Directors
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
Salaries and fees
37.5
37.5
11.8
35.5
35.5
35.5
35.5
35.5
Total
37.5
37.5
11.8
35.5
35.5
35.5
35.5
35.5
1.4
1.4
0
0
* Jeremy Maxwell was appointed a director of S&U Plc on 17 January 2022, and so only a part year remuneration is shown in the single figure table for 2021/22.
34
S&U Plc Annual Report and Accounts 2022
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
Annual Bonus
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 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 31.
The Remuneration Committee determined that no part of any bonus paid for the year ended 31
January 2022 would be deferred.
Share incentive
plans ( LTIP)
For the year ended 31 January 2022 figures for the value of options vesting under the share
incentive plans have been calculated as follows:
• Stretch PBT and ROCE based performance targets for the year to 31 January 2022 were met
in full; accordingly, the Remuneration Committee determined that 100% of the 5,000 LTIP
shadow share options granted to Graham Wheeler vested in respect of performance in the
year to 31 January 2022 and 100% of the 5,000 shadow share options granted to Chris Redford
vested in respect of performance in the year to 31 January 2022. Both these vested shadow
share options are subject to continued employment until May 2024 and will not normally be
exercisable until May 2024. The minimum amount of these shadow share options which could
have vested is nil.
Although both the above LTIP options are subject to continued employment, the value of the
shares vesting by reference to performance to 31 January 2022 is shown above based on the
three-month average share price to 31 January 2022 (£27.38).
In accordance with the Companies (Miscellaneous Reporting) Regulations 2018, it is estimated
that 1% of the value of the LTIP value which will vest at the end of the period closing 31
January 2022 is attributable to share price growth over the period starting on the date of
grant and ending on 31 January 2022. This is calculated based on an award of 5,000 potential
shadow share options which were each granted at a face value at date of grant of £134,000
(£26.80 share price) and at 31.1.22 had a face value of £135,000 (£27.00 share price).
We intend to grant further shadow share options in May 2022 based on the value of 5,000
shares in S&U. These awards will be subject to a performance period which will commence
on 1 February 2022 and will end on 31 January 2023 and the earliest they can be exercised
is three years from date of grant. The share price at the start of the performance period was
£27.00; if the share price were to increase by a further 50% between May 2022 and May 2025,
then the share price of the award would have increased to £40.50, representing an increase in
the face value of the award of £67,500, based on 5,000 S&U shares.
For the year ending 31 January 2021 comparative figures:
No share options or shadow share options were granted in this year. In the first quarter of
the financial year, Chris Redford waived his right to the 7,500 LTIP share options disclosed in
last year’s Directors’ Remuneration Report and so these 7,500 LTIP share options were not
granted. These share options would have been subject to usual employment and performance
conditions and those performance conditions for the year ended 31 January 2021 would not
have been met.
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 2022).
www.suplc.co.uk
35
Stock Code: SUSCORPORATE GOVERNANCE
B2 Directors’ Remuneration Report CONTINUED
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 2022,
the base salaries of Anthony Coombs, Graham Coombs, Graham Wheeler and Chris Redford were frozen at the same
level as year ended 31 January 2021, effective from 1 February 2021.
For the year ending 31 January 2023, the Remuneration Committee has now agreed salary increases in the range
3.75% to 5.5% except where exceptional circumstances merited a higher increase, as noted below. This was in line
with the wider workforce. After a review of market comparables and after his exceptional performance in his first two
full years as CEO of Advantage Finance, two years which coincided with the Covid pandemic, it was decided to award
Graham Wheeler a salary increase of 20% for year ended 31 January 2023. After his excellent performance as an
executive director of our growing Aspen Bridging subsidiary and their record recent performance and profitability, it
was decided to award Jack Coombs a salary increase of 10% for the year ended 31 January 2023.
The table below shows the base salary increases awarded in the year:
Executive director
Anthony Coombs
Graham Coombs
Chris Redford
Graham Wheeler
Jack Coombs*
Base salary as at
31 January 2022
£000
Base salary for year to
31 January 2023
£000
360
345
232.5
250
100
373.5
358
245
300
110
Increase
%
3.8
3.8
5.4
20.0
10.0
* Jack Coombs was appointed a director of S&U plc on 14 April 2021 so only a part year’s remuneration is shown in the single figure table.
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 4.2% to £37,000 with effect from 1 February 2022. The basic senior non-executive fee
was increased by 4.0% to £39,000 with effect from 1 February 2022. 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
Basic fee
Additional fee for Demetrios Markou as Senior Independent Non-executive director
2020/21
£000
35.5
2
2021/22
£000
35.5
2
2022/23
£000
37
2
36
S&U Plc Annual Report and Accounts 2022 Annual bonus
For the year ending 31 January 2022, 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 ending 31 January 2022 together with the Group PBT targets and details of the actual bonus
earned.
Anthony Coombs
Graham Coombs
Chris Redford
Graham Wheeler
Jack Coombs
Performance targets
Group PBT target
(£22.9m) and ROCE
target
Advantage Finance PBT
and ROCE target*
Aspen Bridging PBT
and ROCE target*
Maximum annual bonus
opportunity year ending
31 January 2022
£000
Bonus pay-out % of
maximum
%
Actual bonus earned for
the year ending
31 January 2022
£000
30
30
50
50
N/A
100
100
100
N/A
N/A
30
30
50
50
10
* 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.
Based on performance in the year ended 31 January 2022 bonuses of £30,000 each were deemed payable to
Anthony Coombs and Graham Coombs, bonuses of £50,000 each to Graham Wheeler and Chris Redford and a
bonus of £10,000. Actual Group, Advantage and Aspen PBT and ROCE were well above the stretch targets and the
committee also considered the extent to which both financial and individual performance targets had been met and
in determining these bonuses.
Annual bonus in 2022/23
For the year ending 31 January 2023, where the performance targets set are achieved, the annual bonus has been
set at £50,000 for Anthony Coombs, Graham Coombs, Graham Wheeler and Chris Redford and set at £25,000 for
Jack Coombs. Where the performance targets set are exceeded, the Remuneration Committee has the discretion
to pay an increased annual bonus and the maximum amount payable will not exceed the maximum limits stated in
the Remuneration Policy. The annual bonus will continue to be assessed against stretching Group and divisional PBT
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 shadow share options under the 2021 LTIP in May 2021 at a notional nil
exercise price, subject to achieving specified Advantage PBT and ROCE targets for the year ended 31 January 2022.
Chris Redford was awarded 5,000 shadow share options under the 2021 LTIP in May 2021 at a notional nil exercise
price, subject to achieving specified Group PBT and ROCE targets for the year ended 31 January 2022.
No other shadow share options were envisaged to be granted to S&U directors and none were granted during the
year ended 31 January 2022.
www.suplc.co.uk
37
Stock Code: SUSCORPORATE GOVERNANCE B2 Directors’ Remuneration Report CONTINUED
Awards vesting based on performance in respect the year ended 31 January 2022
Details of awards vesting on performance in respect of the year ended 31 January 2022 have been included in the
notes to the single figure tables on page 34.
Awards for 2022/23
The Committee intends to grant 6,000 shadow share options under the 2021 LTIP to Graham Wheeler, subject to
achieving certain Advantage PBT and ROCE targets for the year ending 31 January 2023. The Committee also intends
to grant 6,000 shadow share options under the 2021 LTIP to Chris Redford, subject to achieving certain group PBT
and ROCE targets for the year ending 31 January 2023.
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 Group PBT targets on a
retrospective basis.
Anthony Coombs
Bonus
Shadow share options
Graham Coombs
Bonus
Shadow share options
Chris Redford
Bonus
Graham Wheeler
Bonus
Shadow share options
Shadow share options
Jack Coombs*
Bonus
Shadow share options
Vesting schedule
2022
2023
£30,000
£50,000
–
–
£30,000
£50,000
–
£50,000
5,000
£50,000
5,000
–
£50,000
6,000
£50,000
6,000
£10,000
£25,000
–
–
* Jack Coombs was appointed a director of S&U plc on 14 April 2021 and so only a part year’s remuneration is shown in the single figure table.
For the year ending 31 January 2022, 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 2021/22 (this section is subject to audit)
During the year the Group made contributions into a defined contribution scheme on behalf of Graham Wheeler
and Chris Redford or pays a salary supplement in lieu. None of the directors have accrued benefits under the defined
benefit scheme.
Director
Chris Redford
Graham Wheeler
Jack Coombs*
Defined contribution
or salary supplement
in lieu
£000
Percentage
of Salary
%
34
25
12
14.5
10.0
15.0
* Jack Coombs was appointed a director of S&U plc on 14 April 2021 and so only a part year’s remuneration is shown in this table.
38
S&U Plc Annual Report and Accounts 2022
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.
S&U PLC
FTSE SMALL CAP
900
800
700
600
500
400
300
200
100
0
x
e
d
n
I
n
r
u
t
e
R
2
1
0
2
/
1
0
/
1
3
3
1
0
2
/
1
0
/
1
3
4
1
0
2
/
1
0
/
1
3
5
1
0
2
/
1
0
/
1
3
6
1
0
2
/
1
0
/
1
3
7
1
0
2
/
1
0
/
1
3
8
1
0
2
/
1
0
/
1
3
9
1
0
2
/
1
0
/
1
3
0
2
0
2
/
1
0
/
1
3
1
2
0
2
/
1
0
/
1
3
2
2
0
2
/
1
0
/
1
3
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:
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
Single figure of
remuneration
£000
Annual bonus (% of
maximum opportunity
for the year)
%
Long term incentive (%
of maximum number of
shares for the year)
%
450
450
427
412
387
402
394
390
370
445
100
20
33
40
0
50
100
100
100
50
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
71
www.suplc.co.uk
39
Stock Code: SUSCORPORATE GOVERNANCE
B2 Directors’ Remuneration Report CONTINUED
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 pay for
executive directors for the year ended 31 January 2022 compared to the wider workforce.
Element
Year to 31.1.22
Base salary
Allowances and benefits
Bonus
Year to 31.1.21
Base salary
Allowances and benefits
Bonus
Anthony
Coombs
Graham
Coombs
Chris
Redford
Graham
Wheeler
Jack
Coombs
Wider
Workforce
%
0.0
5.3
100.0
1.4
60.0
(40.0)
%
0.0
0.0
100.0
1.5
0.0
(40.0)
%
0.0
(15.4)
100.0
3.1
(10.3)
(19.4)
%
0.0
n/a
100.0
n/a
n/a
n/a
%
n/a
n/a
n/a
n/a
n/a
n/a
%
3.0
n/a
186.9
6.1
n/a
(42.0)
Anthony Coombs received benefits and allowances of £79,000 in the year ending 31 January 2022 and £75,000 in the
year ending 31 January 2021. Anthony Coombs earned a bonus of £30,000 for the year ending 31 January 2022 and
earned a bonus of £15,000 for the year ending 31 January 2021.
Graham Coombs received benefits and allowances of £35,000 in the year ending 31 January 2022 and £35,000 in the
year ending 31 January 2021. Graham Coombs earned a bonus of £30,000 for the year ending 31 January 2022 and
earned a bonus of £15,000 for the year ending 31 January 2021.
Chris Redford received benefits and allowances of £22,000 in the year ending 31 January 2022 and £26,000 in the
year ending 31 January 2021. Chris Redford earned a bonus of £50,000 for the year ending 31 January 2022 and
earned a bonus of £25,000 for the year ending 31 January 2021.
Graham Wheeler was appointed a director of S&U plc on 29 September 2020 and so remuneration data is only
available, in part, for the year ending 31 January 2021.
Jack Coombs was appointed a director of S&U plc on 14 April 2021 and so remuneration data is only available, in part,
for the year ending 31 January 2022.
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.
40
S&U Plc Annual Report and Accounts 2022 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 2021 and 31 January 2022. Given the nature of the Group’s business, the other significant
outflows for the Group are loan advances and dividends payable.
2021
2022
300
250
200
150
100
50
0
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 2022.
Statement of directors’ shareholding and share interests
The table below details the beneficial shareholdings and share interests of the directors as at 31 January 2022.
Anthony Coombs
Graham Coombs
Chris Redford
Graham Wheeler
Jack Coombs
Non- executive directors
Demetrios Markou
Graham Pedersen
Tarek Khlat
Jeremy Maxwell
Type
Shares
LTIP
Shares
LTIP
Shares
LTIP
Shares
LTIP
Shares
LTIP
Shares
Shares
Shares
Shares
Owned
Outright
1,277,609
1,635,457
14,000
–
1,677,147
4,500
–
–
–
Unvested
subject to
performance
conditions
Unvested
not subject
to further
performance
conditions
Vested but
unexercised
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total at
31 January
2022
1,277,609
–
1,635,457
–
14,000
3,500
–
–
1,677,147
–
4,500
–
–
–
In addition to the above holdings, Grevayne Properties Limited, a Company beneficially controlled by Anthony
Coombs and Graham Coombs, hold 318,323 Ordinary Shares.
The 3,500 share options referred to above are held under the old LTIP scheme – there are no direct share interests
arising under the new LTIP 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 2022 and the date of this report.
www.suplc.co.uk
41
Stock Code: SUSCORPORATE GOVERNANCE B2 Directors’ Remuneration Report CONTINUED
Shareholder vote on the 2021 Remuneration Report and 2021 Remuneration Policy (this section is
not subject to audit)
The table below shows the voting outcome at the 20 May 2021 AGM for the 2021 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”
Annual Report on Remuneration 2021
Remuneration Policy 2021
5,676,346
5,672,786
% of votes
cast
96.52
96.46
Number
of votes
“Against”
204,907
208,467
% of votes
cast
Total Number
of votes cast
3.48
3.54
5,881,253
5,881,253
Number
of votes
“withheld”
228
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 1 April 2022 and signed on its behalf by:
Tarek Khlat
Chairman of the Remuneration Committee
1 April 2022
42
S&U Plc Annual Report and Accounts 2022 B3 Governance
B3.1 AUDIT COMMITTEE
REPORT
Role and Responsibilities
The Audit Committee is a committee
of the Board of 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).
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 Pedersen, Mr J Maxwell, Mr
D Markou and Mr T Khlat, who
are all independent non-executive
directors. Biographical details of
these directors are set out on pages
28 and 29. The Committee is chaired
by Mr D Markou. Meetings are held
not less than twice a year normally
in conjunction with the interim and
full year financial reports issued in
September and March. The external
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
www.suplc.co.uk
2022 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
2022 Financial Statements were as
follows:
Impairment of receivables – Motor
Finance – see also accounting policy
1.4 on page 66
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
validating 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
1.3 on page 66
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;
c) The work performed by
management and by Mazars
as part of their external audit,
including their challenge of
the assumptions used by
management; and
d) The findings in light of current
trading experience and expected
future trading experience.
As our Property Bridging Finance
business is currently less material
there were no issues and areas of
judgement considered significant by
the Committee in relation to Aspen
Bridging.
43
Stock Code: SUSCORPORATE GOVERNANCE B3 Governance CONTINUED
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 first
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.
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 auditors’ 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 6 to the accounts. Overall the
fees paid to the external auditor for
non-audit services were £25,000
(2021: £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
44
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 managements
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.
Demetrios Markou
Chairman of the Audit Committee
1 April 2022
B3.2 CORPORATE
GOVERNANCE
2018 saw the revision by the FRC
(Financial Reporting Council) of
the UK Corporate Governance
Code, together with the issue of an
accompanying Guidance on Board
Effectiveness. These update the
Provisions of the Code and the way
in which they should be applied in
supporting the code’s Principles.
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 page 1. Family investment and
management has over the past 84
years been reflected in ambition
for growth and for new markets
buttressed by a conservative
approach to risk, to treasury
S&U Plc Annual Report and Accounts 2022 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 31 January
2022 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
www.suplc.co.uk
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 in S&U, the
identity of interest between
management and shareholders and
the consequence 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
Managing Director 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
Nominations 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.
Demetrios Markou has 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.
This experience as a Chartered
Accountant is particularly important
during the adoption of evolving
accounting standards in TCFD and
other areas and as the company
consolidates its recent growth.
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. 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.
It is noteworthy that the
appointment of Jeremy Maxwell
was conducted in a professional and
robust manner with the engagement
of a recruitment company searching
extensively a range of potential
applicants for the newly created
role to oversee the Group’s digital
marketing initiatives. This exercise
45
Stock Code: SUSCORPORATE GOVERNANCE B3 Governance CONTINUED
resulted in a final selection of five
potential candidates: three females
and two males. One female and one
male candidate were invited to an
orientation visit to the operations
of Advantage Finance in Grimsby
and Jeremy Maxwell was ultimately
considered the most engaged
and appropriate candidate for
appointment. Through the robust
nature of this recruitment process
it is demonstrable that the S&U
Group is fully committed to ensuring
that gender balance on the Board
is achieved wherever possible
while adhering to the core business
principles of appointing the right
person for the role.
The appointment of Jack Coombs,
as an Executive Director, was
considered appropriate given both
his significant family shareholding
and the additional business and
accounting skills – he is a chartered
accountant -that he brings to the
Board. Jack’s brother Fiann Coombs
retired from the Board in May 2021
having served 19 years as a director
of S&U plc.
The Nominations Committee,
chaired by Mr. G Pedersen,
comprises the independent non-
executive directors and Anthony
Coombs, Group Chairman. Audit and
Remuneration Committees are made
up of the four independent non-
executive directors and chaired by
Demetrios Markou and Tarek Khlat
respectively.
Effectiveness
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 Jack
Coombs and Jeremy Maxwell
to the Board, both of which
appointments enhance the relevant
skills and experience of the Board
and help succession planning.
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, Graham
Wheeler, Jack Coombs, Graham
Pedersen, Tarek Khlat and
Demetrios Markou being eligible
offer themselves for re-election at
the next Annual General Meeting.
Tarek Khlat, Graham Pedersen,
and Demetrios Markou are non-
executive directors and the
Chairman has determined their
performance to be both effective
and committed. Jeremy Maxwell
was appointed to the Board on 17
January 2022 and offers himself for
election at the next Annual General
Meeting.
The Company Secretary Chris
Redford 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
11 to 25, 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 51 and those
of the auditor on page 58.
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.
46
S&U Plc Annual Report and Accounts 2022 the nature and value of non-audit
services performed during the year.
The value of non-audit services is
disclosed on page 73 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 12 women hold 33% of
senior management positions and
women hold 64% of other employee
positions and during the year no
female directors served on the
Board. Currently 24 men hold 67%
of senior management positions and
men hold 36% of other employee
positions and during the year eight
male directors served on the Board.
The Company had 10 employees of
which two are women and eight are
men including six S&U plc Directors.
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
www.suplc.co.uk
47
Stock Code: SUSCORPORATE GOVERNANCE B3 Governance CONTINUED
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 2022 is shown in the
table below:
Meeting Attendance
Board Nominations Remuneration
Audit
Number of meetings
AMV Coombs
GDC Coombs
D Markou
G Pedersen
T Khlat
JP Maxwell (appointed 17.1.22)
F Coombs (retired 20.5.21)
J EC Coombs (appointed 14.4.21)
TG Wheeler
CH Redford
6
6
6
6
6
6
n/a
3
4
6
6
2
2
n/a
2
2
2
n/a
n/a
n/a
n/a
n/a
1
n/a
n/a
1
1
1
n/a
n/a
n/a
n/a
n/a
3
n/a
n/a
3
3
3
1
n/a
n/a
n/a
n/a
Fiann Coombs and Jack Coombs had full Board attendance in their part
year as S&U Board Directors. Jeremy Maxwell was appointed on 17 January
2022 and therefore there were no Board meetings during the year ended
31 January 2022 which he could have attended and only one committee
meeting which he did attend.
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 30.
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 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 Company and its employees has
under-pinned S&U’s 84-year history. Both its size, with currently over 180
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 2022 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 provision
9 of the code with its appointment
of the Chairman in 2008, “a clear
rationale for the action” is also set
out above.
Graham Pedersen
Chairman of the Nominations
Committee
1 April 2022
48
S&U Plc Annual Report and Accounts 2022 B4 Directors’ Report
The directors present their Annual
Report and the audited financial
statements for the year ended 31
January 2022 and for the period up
to the date of signing these accounts
on 1 April 2022.
The names of 9 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 28. After 19 years of
excellent service, Fiann Coombs
did not put himself forward for
re-election for the AGM on 20 May
2021 and retired from the Board
on that date. Jack Coombs, one of
the two founding directors of Aspen
Bridging and a major shareholder
in S&U plc was appointed to the
Board on 14 April 2021. Jeremy
Maxwell was appointed to the
Board as a non executive director
on 17 January 2022. Jeremy brings
broad expertise in digital innovation,
marketing, commercial development
and customer experience from
over 25 years in the retail and B2B
distribution industries. All other
directors served for the full year to
31 January 2022.
No political donations were made
during the year (2021: £nil).
DIVIDENDS
Dividends of £12,263,000
(2021: £13,098,000) were paid
during the year.
After the year end a second interim
dividend for the financial year of
£4,372,000 being 36.0p per ordinary
share (2021: 25.0p) was paid to
shareholders on 11 March 2022.
The directors now recommend
a final dividend, subject to
shareholders approval of 57.0p per
share (2021: 43.0p). This, together
with the interim dividends totalling
69.0p per share (2021: 47.0p)
already paid, makes a total dividend
for the year of 126.0p per share
(2021: 90.0p).
SUBSTANTIAL
SHAREHOLDINGS
At 1 April 2022, 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
in the Directors’ Remuneration
Report above):
No of
ordinary
shares
% of
Ordinary
share
capital
Shareholder
Jennifer Coombs
461,885
Wiseheights Limited 2,420,000
3.8%
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 19. 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.
After the required tender process,
Mazars were appointed as auditors
to the group and the company at
the AGM in May 2021 to replace
Deloitte LLP who resigned as
planned at the end of their term.
We thank Deloitte for their excellent
service and welcome David Allen
and Mazars LLP as our external
auditors.
www.suplc.co.uk
49
Stock Code: SUSCORPORATE GOVERNANCE B4 Directors’ Report CONTINUED
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
Chris Redford
Company Secretary
1 April 2022
POST BALANCE SHEET
EVENTS
There are no significant post balance
sheet events to 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.
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 21.
50
S&U Plc Annual Report and Accounts 2022 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 group financial
statements in accordance with
international accounting standards
in conformity with the requirements
of the Companies Act 2006 and
International Financial Reporting
Standards (IFRSs) adopted pursuant
to Regulation (EC) No 1606/2002
as it applies in the European
Union. The financial statements
also comply with International
Financial Reporting Standards
as issued by the IASB. 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 for
that period. In preparing these
financial statements, International
Accounting Standard 1 requires that
directors:
• properly select and apply
accounting policies;
• present information, including
accounting policies, in a manner
that provides relevant, reliable,
comparable and understandable
information;
• provide additional disclosures
when compliance with the
specific requirements in IFRSs
are insufficient to enable users
to understand the impact of
particular transactions, other
events and conditions on the
entity’s financial position and
financial performance; and
• assess the company’s ability to
continue as a going concern.
The directors are responsible for
keeping adequate accounting
records that are sufficient to
show and explain the company’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 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
International Financial Reporting
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
Chris Redford
Group Finance Director
1 April 2022
www.suplc.co.uk
51
Stock Code: SUSCORPORATE GOVERNANCE
C 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 2022 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 a summary of significant accounting policies.
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 2022 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 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, as described on
page 17, by reviewing supporting and contradictory evidence in relation to these key assumptions and assessing the
directors’ consideration of severe but plausible scenarios. This included assessing the viability of mitigating actions
within the directors’ control;
• Testing the accuracy and functionality of the model used to prepare the directors’ forecasts;
• Assessing the historical accuracy of forecasts prepared by the directors;
• Engaging in regular discussions with the directors regarding the status of negotiations in respect of new financing
options;
52
S&U Plc Annual Report and Accounts 2022 • 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;
• Assessing and challenging key assumptions and mitigating actions put in place in response to the impact of the
Covid-19 pandemic;
• 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.
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 matters in forming our opinion above, together with an overview of the principal
audit procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
www.suplc.co.uk
53
Stock Code: SUSCORPORATE GOVERNANCE C Independent Auditor’s Report to the
Members of S&U Plc CONTINUED
Key Audit Matter
How our scope addressed this matter
Our audit procedures included, but were not limited to:
• Understanding and evaluating the control environment
over the ECL model;
• Testing and challenging the key assumptions of the PD,
LGD and SICR and the staging applied and forward-
looking assumptions and probability weighting;
• Critically assessing the methodology for determining
•
the SICR criteria and independently testing a sample of
loans for appropriateness of staging;
Independently challenging the macroeconomic
variables, economic scenarios and their probability
weighting. We involved our in-house economist in this
process;
• Assessing the integrity of the data used in the
calibration of the PD and LGD;
• Critically challenging the appropriateness and
reasonableness of the post model adjustments,
and independently recalculating the post model
adjustments applied to take account of the impact of
the COVID-19 pandemic on the ECL; and
• Testing and challenging the key assumptions and
application of ECL loss modelling used for CBILS loans.
Our observations
Based on the audit procedures performed, we found the
resulting estimate of the loan impairment provision to be
reasonable.
Impairment of amounts receivable from customers
(Advantage Finance Limited and Aspen Bridging
Limited) (2022: £92.1m, 2021: £92.9m)
Refer to note 1.4 for the accounting policy, note 1.11 for
details of the key sources of estimation uncertainty and
note 14 for relevant disclosures.
The estimation of expected credit losses (‘ECL’) on
amounts receivable from customers is complex and
inherently judgmental due to the use of subjective
assumptions and a high degree of estimation.
The most significant areas where we identified greater
levels of management judgement are:
• Staging of loans and the identification of Significant
Increase in Credit Risk;
• Key assumptions in the model including probability
of default (“PD”) and loss given default (“LGD”)
including the present value of future cash flows from
collateral; and
• Use of macro-economic variables reflecting a range
of future scenarios.
The continuation of the COVID-19 pandemic in the UK
during the year under audit, and the accompanying
government interventions including furlough, payment
holidays and changes to the ability to repossess vehicles,
together with the strengthening of the used car market
during the pandemic have resulted in post model
adjustments being applied to the Advantage Finance
Limited (‘Advantage’) ECL modelling. The government’s
interventions had ended by the Group’s financial year
end but the full effect of them coming to an end was
not considered by the Group to have been observed and
fully understood resulting in the continued use for post
model adjustments.
In addition, Aspen Bridging Limited (‘Aspen’) has
participated in the Coronavirus Business Interruption
Loan Scheme (‘CBILS’) to provide financial support to
smaller businesses in the UK. This represents a new
lending category for the Group on which to assess ECL
requirements. CBILS loans should, however, be covered
up to the first 80% of any loss by the British Business
Bank under the terms of the scheme.
The range of reasonable outcomes could be greater than
materiality for the financial statements as a whole.
54
S&U Plc Annual Report and Accounts 2022 Key Audit Matter
How our scope addressed this matter
Revenue recognition – Constant periodic rate of return
assessment as per IFRS 16 / effective interest rate
assessment as per IFRS 9 (Advantage and Aspen) (2022:
£87.9m, 2021: £83.8m)
Refer to note 1.3 for the accounting policy and note 3 for
relevant disclosures.
Recognising income under IFRS 16 for leases on a
constant yield basis and IFRS 9 for loans on an effective
interest rate (EIR) basis are complex areas that involve
judgement.
The majority of revenue is system generated but to
convert that to a constant yield / EIR basis requires
management judgement in relation to the inclusion of
directly attributable costs/fees and associated cash flows
that require to be spread over the life of the products,
with accounting entries generated using complex
spreadsheets models.
Given the degree of judgement involved in relation to
fees directly attributable to each customer agreement
we identified that there is a potential fraud through
possible manipulation of this balance.
Our audit procedures included, but were not limited to:
• Assessing the design and implementation and testing
the operating effectiveness of key controls over the
constant periodic rate of return on the net investment
calculations and over the effective interest rate
calculations, including changes to the models and
where applicable spreadsheet controls;
• Where interest models are automated, testing the
related general IT controls and the data input feeds
and source systems;
• Where interest models are manual, testing the
effective interest rate computation for the full
portfolio;
• Testing the accuracy and completeness of data inputs,
including interest rates, outstanding loan balances
and directly attributable cost/income by agreeing
them to the underlying documentation and source
systems; and
• Testing and challenging key accounting judgement on
the recognition of directly attributable fees and costs.
Our observations
Based on the audit procedures performed, we found the
resulting estimate of revenue recognition on a constant
yield and effective interest rate basis to be reasonable
and consistent with the requirements of IFRS 9 and
IFRS 16.
www.suplc.co.uk
55
Stock Code: SUSCORPORATE GOVERNANCE C Independent Auditor’s Report to the
Members of S&U Plc CONTINUED
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
£2.4m
How we determined it
5% of profit before tax (‘PBT’)
Rationale for benchmark
applied
We determined materiality using PBT as we considered this to be the most appropriate measure 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 £1.4m, which represents 60% of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them misstatements identified
during our audit above £71,000 as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
PARENT COMPANY MATERIALITY
Overall materiality
£0.7m
How we determined it
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
Reporting threshold
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 £0.4m, which represents 60% of overall materiality.
We agreed with the directors that we would report to them misstatements identified
during our audit above £22,000 as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
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, the two trading components, Advantage and Aspen, together with the parent company, were subject to
full scope audit performed by the group audit team. This provided 100% coverage of group revenue, PBT, total assets
and net assets.
56
S&U Plc Annual Report and Accounts 2022 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.
www.suplc.co.uk
57
Stock Code: SUSCORPORATE GOVERNANCE C Independent Auditor’s Report to the
Members of S&U Plc CONTINUED
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 17;
• 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 17;
• Directors’ statement on fair, balanced and understandable, set out on page 50;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on
page 17;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems, set out on page 46; and;
• The section describing the work of the audit committee, set out on page 43.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on page 51, 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: Financial
Conduct Authority (‘FCA’) regulations and 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;
58
S&U Plc Annual Report and Accounts 2022 •
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 meetings of the Board of Directors and the Audit Committee held during 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 revenue recognition
(which we pinpointed to the existence and accuracy assertions), and significant one-off or unusual transactions.
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; and
• 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 one year, covering the year ended 31 January 2022.
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
Tower Bridge House, St Katharine’s Way, London, E1W 1DD
1 April 2022
www.suplc.co.uk
59
Stock Code: SUSCORPORATE GOVERNANCE The
accounts
CONTENTS
D1
D1.1 Group Income Statement
and Statement of
Comprehensive Income
D1.2 Balance Sheet
D1.3 Statement of Changes in
Equity
D1.4 Cash Flow Statement
D2 Notes to the Accounts
Five Year Financial Record
Financial Calendar
Officers and Professional
Advisors
62
63
64
65
66
91
92
93
60
S&U Plc Annual Report and Accounts 2022
S&U Plc Annual Report and Accounts 2022 www.suplc.co.uk
www.suplc.co.uk
Stock Code: SUS
Stock Code: SUS
61
D1 The Accounts
D1.1 Group income Statement
For the year ended 31 January 2022
From continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Finance costs (net)
Profit before taxation
Taxation
Profit for the year attributable to equity holders
Earnings per share
Basic
Diluted
Statement of
Comprehensive Income
Group
2022
£000
Note
Profit for the year attributable to equity holders
Actuarial loss on defined benefit pension scheme
(6)
Total Comprehensive Income for the year
37,976
Items above will not be reclassified subsequently to the Income Statement.
37,982
26
Notes
3
4
6
7
2
9
11
11
2022
£000
87,889
(22,891)
64,998
(14,208)
50,790
(3,772)
47,018
(9,036)
37,982
312.8p
312.7p
2021
£000
83,761
(50,969)
32,792
(11,096)
21,696
(3,568)
18,128
(3,482)
14,646
120.7p
120.7p
Group
2021
£000
14,646
(9)
14,637
Company
2022
£000
10,113
(6)
10,107
Company
2021
£000
12,719
(9)
12,710
62
S&U Plc Annual Report and Accounts 2022 D1.2 Balance Sheet
As at 31 January 2022
Company Registration No: 0342025
ASSETS
Non-current assets
Property, plant and equipment
Investments
Amounts receivable from customers
Trade and other receivables
Deferred tax assets
Current assets
Amounts receivable from customers
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Bank overdrafts and loans
Trade and other payables
Current tax liabilities
Lease liabilities
Accruals
Non-current liabilities
Borrowings
Lease liabilities
Financial liabilities
Total liabilities
NET ASSETS
Equity
Called up share capital
Share premium account
Profit and loss account
Total equity
Notes
12
13
14
15
18
14
15
16
17
16
20
19
Group
2022
£000
2,455
–
181,614
–
120
184,189
141,301
1,739
–
143,040
327,229
(2,568)
(4,347)
(926)
(174)
(774)
(8,789)
(111,000)
(243)
(450)
(111,693)
(120,482)
206,747
1,718
2,301
202,728
206,747
Group
2021
£000
Company
2021
£000
Company
2021
£000
2,713
–
170,591
–
109
173,413
110,319
1,106
1
111,426
284,839
(1,295)
(2,763)
(593)
(169)
(658)
(5,478)
(97,500)
(382)
(450)
(98,332)
(103,810)
181,029
1,717
2,301
177,011
181,029
199
1
–
152,000
35
152,235
–
33,701
–
33,701
185,936
(3,147)
(654)
(116)
(66)
(221)
(4,204)
(111,000)
(17)
(450)
(111,467)
(115,671)
70,265
1,718
2,301
66,246
70,265
256
533
–
130,000
49
130,838
–
41,079
1
41,080
171,918
(783)
(205)
(212)
(63)
(206)
(1,469)
(97,500)
(83)
(450)
(98,033)
(99,502)
72,416
1,717
2,301
68,398
72,416
The parent company’s profit for the financial year after taxation amounted to £10,113,000 (2021: £12,719,000)
These financial statements were approved by the Board of Directors on 1 April 2022.
Signed on behalf of the Board of Directors
AMV Coombs
Chairman
C Redford
Group Finance Director
www.suplc.co.uk
63
Stock Code: SUSTHE ACCOUNTS
D1.3 Statement of Changes In Equity
For the year ended 31 January 2022
Called up
share capital
£000
Notes
Share
premium
account
£000
1,715
–
–
–
2
–
–
–
1,717
–
–
–
1
–
–
–
1,718
2,301
–
–
–
–
–
–
–
2,301
–
–
–
–
–
–
–
2,301
19
25
18
10
Called up
share capital
£000
Notes
Share
premium
account
£000
1,715
–
–
–
2
–
–
–
1,717
–
–
–
1
–
–
–
1,718
2,301
–
–
–
–
–
–
–
2,301
–
–
–
–
–
–
–
2,301
8
Profit
and loss
account
£000
175,458
14,646
(9)
14,637
–
75
(61)
(13,098)
177,011
37,982
(6)
37,976
–
39
(35)
(12,263)
202,728
Profit
and loss
account
£000
68,720
12,719
(9)
12,710
–
72
(6)
(13,098)
68,398
10,113
(6)
10,107
–
39
(35)
(12,263)
66,246
Total
equity
£000
179,474
14,646
(9)
14,637
2
75
(61)
(13,098)
181,029
37,982
(6)
37,976
1
39
(35)
(12,263)
206,747
Total
equity
£000
72,736
12,719
(9)
12,710
2
72
(6)
(13,098)
72,416
10,113
(6)
10,107
1
39
(35)
(12,263)
70,265
Group
At 1 February 2020
Profit for year
Other comprehensive income for year
Total comprehensive income for year
Issue of new shares in year
Cost of future share-based payments
Tax charge on equity items
Dividends
At 31 January 2021
Profit for year
Other comprehensive income for year
Total comprehensive income for year
Issue of new shares in year
Cost of future share-based payments
Tax charge on equity items
Dividends
At 31 January 2022
Company
At 1 February 2020
Profit for year
Other comprehensive income for year
Total comprehensive income for year
Issue of new shares in year
Cost of future share-based payments
Tax charge on equity items
Dividends
At 31 January 2021
Profit for year
Other comprehensive income for year
Total comprehensive income for year
Issue of new shares in year
Cost of future share-based payments
Tax charge on equity items
Dividends
At 31 January 2022
64
S&U Plc Annual Report and Accounts 2022 D1.4 Cash Flow Statement
For the year ended 31 January 2022
Net cash (used in)/generated from operating activities
Cash flows (used in)/from investing activities
Proceeds on disposal of property, plant and equipment
Purchases of property, plant and equipment
Net cash (used in)/from investing activities
Cash flows from/(used in) financing activities
Dividends paid
Issue of new shares
Decrease in investments in dormant companies
Receipt of new borrowings
Repayment of borrowings
(Decrease)/increase in lease liabilities
Net increase in overdraft
Net cash generated from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year
Cash and cash equivalents comprise
Cash and cash in bank
Notes
22
Group
2022
£000
(2,094)
93
(377)
(284)
(12,263)
1
–
25,000
(11,500)
(134)
1,273
2,377
(1)
1
–
Group
2021
£000
32,940
103
(1,215)
(1,112)
(13,098)
2
–
4,000
(25,000)
318
1,295
(32,483)
(655)
656
1
Company
2022
£000
(4,047)
Company
2021
£000
32,561
–
(24)
(24)
(12,263)
1
531
25,000
(11,500)
(63)
2,364
4,070
(1)
1
–
9
(3)
6
(13,098)
2
–
4,000
(25,000)
(54)
783
(33,367)
(800)
801
1
–
1
–
1
There are no cash and cash equivalent balances which are not available for use by either the Group or the Company
(2021: £nil).
www.suplc.co.uk
65
Stock Code: SUSTHE ACCOUNTS D2 Notes to the Accounts
Year ended 31 January 2022
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 the back cover 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
As a listed Company 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
International Financial Reporting Standards (IFRS) as adopted by the United Kingdom. We have also prepared
our S&U plc Company financial statements in conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards (IFRS) as adopted by the United Kingdom. The financial statements
have also been prepared in accordance with International Financial Reporting Standards as issued by the IASB.
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 2022. 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.
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.
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 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.
1.4 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.
The directors assess on an ongoing basis whether there is objective evidence that a loan asset or group of loan
assets is impaired and requires a deduction for impairment. A loan asset or a group of loan assets is 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.
66
S&U Plc Annual Report and Accounts 2022 1. ACCOUNTING POLICIES (CONTINUED)
Key assumptions in ascertaining whether a loan asset or group of loan assets is 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.
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
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. 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 historic 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 a result of the uncertainty over the performance of customers who were granted a payment holiday as part
of the Government and FCA support measures as a result of the Covid pandemic and have also either requested
a second payment holiday or have had a previous payment delinquency, we have assessed these customers to
have a significant increase in credit risk and they are therefore included in Stage 2. This is why the volume of
customers in Stage 2 increased at 31 January 2021. However, if a customer’s payment holiday finished more than
12 months ago and they are unimpaired 12 months later then an account will not be in stage 2 as the customer’s
post payment holiday record now indicates low risk at the reporting date. This is why the volume of customers
in stage 2 reduced at 31 January 2022. As we do not have historical data for such customers, we made an
assumption on the loss rates associated with such customers by reference to relevant Stage 3 loss rates. Further
sensitivity over this estimation uncertainty is provided in note 1.11.
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 2022 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 and the value of our motor finance security. To
factor in such uncertainties, management has included an overlay for certain groups of assets to reflect this
macroeconomic outlook, based on estimated unemployment, inflation and used vehicle price levels in future
periods. Further sensitivity over this estimation uncertainty is provided in note 1.11.
www.suplc.co.uk
67
Stock Code: SUSTHE ACCOUNTS D2 Notes to the Accounts CONTINUED
Year ended 31 January 2022
1. ACCOUNTING POLICIES (CONTINUED)
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 2022 and those used at 31 January 2021.
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 or repaid 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.
1.5 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
Fixtures and Fittings -Computers
Fixtures and Fittings - Other
Motor Vehicles
2% per annum straight line
20% per annum straight line
10% per annum straight line or 20% per annum reducing balance
25% per annum reducing balance
Freehold Land is not depreciated.
1.6 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.
1.7 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.
1.8 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. 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.
68
S&U Plc Annual Report and Accounts 2022 1. ACCOUNTING POLICIES (CONTINUED)
1.9 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.
1.10 Investments
Investments in subsidiaries held as non-current assets are stated at cost less provision for any impairment.
1.11 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. As a result of the uncertainty over the performance of customers
who were granted a payment holiday as part of the Government and FCA support measures and have also either
requested a second payment holiday or have had a previous payment delinquency, we have assessed these
customers to have a significant increase in credit risk and they are therefore included in Stage 2. However, if a
customer’s payment holiday finished more than 12 months ago and they are unimpaired 12 months later then an
account will not be in Stage 2 as the customer’s post holiday payment record now indicates low credit risk at the
reporting date.
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 1.4 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.
www.suplc.co.uk
69
Stock Code: SUSTHE ACCOUNTS D2 Notes to the Accounts CONTINUED
Year ended 31 January 2022
1. ACCOUNTING POLICIES (CONTINUED)
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:
Weighting
Q1 2022
Q1 2023
Q1 2024
Q1 2025
Upside
(30%
increase)
Downside
(30 %
decrease)
Severe
(50%
increase)
5%
2.66%
2.94%
3.22%
3.50%
40%
4.94%
5.46%
5.98%
6.50%
5%
5.70%
6.30%
6.90%
7.50%
Weighted
4.29%
4.75%
5.20%
5.65%
Base
50%
3.80%
4.20%
4.60%
5.00%
Inflation rates have not previously been factored into the macroeconomic overlay but at 31 January 2022 we
have included them due to the extraordinary increases currently forecast for the next 12 months period and
the potential impact on our customers and their repayments. The Group considers four probability-weighted
scenarios in relation to inflation rate: base, upside, downside and severe scenarios as follows:
Weighting
Q1 2022
Q1 2023
Q1 2024
Q1 2025
Upside
(30%
increase)
Downside
(30 %
decrease)
Severe
(50%
increase)
5%
3.99%
3.64%
1.47%
1.12%
40%
7.41%
6.76%
2.73%
2.08%
5%
8.55%
7.80%
3.15%
2.40%
Weighted
6.44%
5.88%
2.37%
1.81%
Base
50%
5.70%
5.20%
2.10%
1.60%
An increase by 0.5% in the weighted average unemployment rate would result in an increase in the impairment
loss by £856,687. A decrease by 0.5% would result in a decrease in the impairment loss by £856,687. An increase
by 0.5% in the weighted average inflation rate would result in an increase in the impairment loss by £401,572. A
decrease by 0.5% would result in a decrease in the impairment loss by £401,572.
1.12 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 declared for the financial year dividend by the dividend
per ordinary share declared for the same financial year.
v) Group gearing is calculated as the sum of Bank Overdrafts plus Borrowings less cash and cash equivalents
divided by total equity.
vi) Group collections are the total monthly collections, settlement proceeds and recovery collections in motor
finance added to the total amount retained from advances, customer redemptions and recovery collections in
property bridging.
70
S&U Plc Annual Report and Accounts 2022 2. SEGMENTAL ANALYSIS
Analyses by class of business of revenue and profit before taxation from continuing operations are stated below:
Class of business
Motor finance
Property bridging finance
Central costs net of central finance income
Revenue
Profit before taxation
Year ended
31.1.22
£000
78,898
8,991
–
87,889
Year
ended
31.1.21
£000
79,553
4,208
–
83,761
Year ended
31.1.22
£000
43,682
3,414
(78)
47,018
Year
ended
31.1.21
£000
17,198
813
117
18,128
Analyses by class of business of assets and liabilities are stated below:
Class of business
Motor finance
Property bridging finance
Central
Assets
Liabilities
Year ended
31.1.22
£000
Year ended
31.1.21
£000
Year ended
31.1.22
£000
Year ended
31.1.21
£000
262,458
64,426
345
327,229
250,207
34,271
361
284,839
(131,012)
(59,606)
70,136
(120,482)
(144,036)
(32,213)
72,439
(103,810)
Depreciation of assets for motor finance was £427,000 (2021: £417,000), for property bridging finance was
£21,000 (2021: £18,000) and for central was £81,000 (2021: £86,000). Fixed asset additions for motor finance
were £337,000 (2021: £1,198,000), for property bridging finance were £16,000 (2021: £14,000) and for central
were £24,000 (2021: £3,000).
The net finance credit for central costs was £2,506,000 (2021: £2,577,000), for motor finance was a cost of
£4,394,000 (2021: £5,381,000) and for property bridging finance was a cost of £1,884,000 (2021: £764,000).
The tax credit for central costs was £24,000 (2021: £48,000), for motor finance was a tax charge of £8,408,000
(2021: £3,265,000) and for property bridging finance was a tax charge of £652,000 (2021: £169,000).
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.
www.suplc.co.uk
71
Stock Code: SUSTHE ACCOUNTS 3. REVENUE
Interest and other income from motor finance hire purchase loans
Interest and other income from property bridging loans
Total revenue
All Group revenue relates to revenue with external customers.
4. COST OF SALES
Loan loss provisioning charge – motor finance
Loan loss provisioning charge – property bridging finance
Total loan loss provisioning charge
Other cost of sales – motor finance
Other cost of sales – property bridging finance
Total cost of sales
5.
INFORMATION REGARDING EMPLOYEES
The monthly average number of persons employed by the Group
in the year was:
Motor finance
Property bridging finance
Central
Total Group average number of employees
Group
2022
No.
173
17
10
200
The monthly average employed by the Company was 10 (2021: 11).
Staff costs during the year (including directors):
Wages and salaries
Social security costs
Pension costs for defined contribution scheme
Total Staff Costs
Group
2022
£000
9,133
928
391
10,452
2022
£000
78,898
8,991
87,889
2022
£000
3,805
315
4,120
17,266
1,505
22,891
2021
£000
79,553
4,208
83,761
2021
£000
35,995
710
36,705
13,586
678
50,969
Group
2021
No.
Company
2022
No.
Company
2021
No.
166
13
11
190
Group
2021
£000
7,626
866
361
8,853
–
–
10
10
–
–
11
11
Company
2022
£000
Company
2021
£000
1,402
209
37
1,648
1,280
205
37
1,522
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 historic defined
benefit pension plan the details of which are contained in note 26 of these notes to the accounts.
72
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 6. OPERATING PROFIT
Operating profit from continuing operations is after charging:
Depreciation and amortisation:
Owned assets
Staff costs
Cost of future share-based payments
(Profit)/Loss on sale of fixed assets
The analysis of auditor’s remuneration is as follows:
Fees payable to the Group’s auditor for the audit of the Company’s annual accounts
Fees payable to the Group’s auditor for other services to the Group
The audit of the Company’s subsidiaries
Total audit fees
Audit related assurance services
Other services
Total non-audit fees
Total
7. FINANCE COSTS (NET)
31.5% cumulative preference dividend
Lease Liabilities
Bank loan and overdraft
Interest payable and similar charges
Interest receivable
Total Finance Costs (net)
8. PROFIT OF PARENT COMPANY
2022
£000
529
10,441
39
13
2022
£000
30
128
158
25
–
25
183
2022
£000
142
17
3,613
3,772
–
3,772
2021
£000
520
8,853
75
(13)
2021
£000
30
115
145
25
–
25
170
2021
£000
142
13
3,455
3,610
(42)
3,568
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 £10,113,000 (2021: £12,719,000).
www.suplc.co.uk
73
Stock Code: SUSTHE ACCOUNTS 9. TAX ON PROFIT BEFORE TAXATION
Continuing Operations
Corporation tax at 19.0% (2021: 19.0%) based on profit for the year
Adjustment in respect of prior years
Deferred tax (temporary differences - origination and reversal)
2022
£000
9,129
(47)
9,082
(46)
9,036
2021
£000
3,523
35
3,558
(76)
3,482
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.
Profit on ordinary activities before tax from continuing operations
Tax on profit on ordinary activities at standard rate of 19.0% (2021: 19.0%)
Factors affecting charge for the period:
Expenses not deductible for tax purposes
Effects of other tax rates and temporary differences
Prior period adjustments
Total actual amount of tax
2022
£000
47,018
8,933
56
94
(47)
9,036
2021
£000
18,128
3,444
42
(39)
35
3,482
The Finance Act 2016 included legislation to reduce the main rate of UK corporation tax from 20% to 19% from
1 April 2017 and to 17% from 1 April 2020. The rate reduction to 17% was subsequently reversed by the Finance
Act 2020, such that the main rate of UK corporation tax remains at 19%. 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.
10. DIVIDENDS
2nd Interim dividend paid for the year ended 31/1/2021 – 25.0p per Ordinary share (36.0p)
Final dividend paid for the year ended 31/1/2021– 43.0p per Ordinary share (50.0p)
1st Interim dividend paid for the year ended 31/1/2022 – 33.0p per Ordinary share (22.0p)
Total ordinary dividends paid
6% cumulative preference dividend paid March and September
Credit for unpresented dividend payments over 12 years old
Total dividends paid
2022
£000
3,033
5,222
4,008
12,263
12
(12)
12,263
2021
£000
4,363
6,067
2,669
13,100
12
(14)
13,098
A second interim dividend of 36.0p per ordinary share for the year ended 31 January 2022 was paid on 11 March
2022 totalling £4.4m and the directors are proposing a final dividend for the year ended 31 January 2022 of
57p per ordinary share totalling £6.9m. The final dividend will be paid on 8 July 2022 to shareholders on the
register at close of business on 17 June 2022 subject to approval by shareholders at the Annual General Meeting
on Thursday 26 May 2022.
74
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 11. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share from continuing operations is based on profit after tax of
£37,982,000 (2021: £14,646,000).
The number of shares used in the basic eps calculation is the weighted average number of shares in issue
during the year of 12,142,928 (2021: 12,129,768). There are a total of 5,500 dilutive share options in issue
(2021: 17,000) and taking into account the appropriate proportion of these dilutive options the number of
shares used in the diluted eps calculation is 12,145,096 (2021: 12,134,619).
12. PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 February 2020
Additions
Disposals
At 31 January 2021
Additions
Disposals
At 31 January 2022
Accumulated depreciation
At 1 February 2020
Charge for the year
Eliminated on disposals
At 31 January 2021
Charge for the year
Eliminated on disposals
At 31 January 2022
Net book value
At 31 January 2022
At 31 January 2021
Freehold
land and
buildings
£000
Motor
vehicles
£000
Fixtures and
Fittings
£000
Right to
Use
£000
1,299
454
–
1,753
76
–
1,829
199
86
–
285
109
–
394
1,435
1,468
507
187
(198)
496
71
(154)
413
256
88
(109)
235
66
(86)
215
198
261
1,581
147
(165)
1,563
192
(152)
1,603
1,026
219
(164)
1,081
195
(114)
1,162
441
482
308
427
–
735
38
–
773
106
127
–
233
159
–
392
381
502
Total
£000
3,695
1,215
(363)
4,547
377
(306)
4,618
1,587
520
(273)
1,834
529
(200)
2,163
2,455
2,713
Included in the above is land at a cost of £22,000 (2021: £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.
www.suplc.co.uk
75
Stock Code: SUSTHE ACCOUNTS 12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Company
Cost
At 1 February 2020
Additions
Disposals
At 31 January 2021
Additions
Disposals
At 31 January 2022
Accumulated depreciation
At 1 February 2020
Charge for the year
Eliminated on disposals
At 31 January 2021
Charge for the year
Eliminated on disposals
At 31 January 2022
Net book value
At 31 January 2022
At 31 January 2021
Freehold
land and
buildings
£000
Motor
vehicles
£000
Fixtures and
Fittings
£000
Right to
Use
£000
Total
£000
42
–
–
42
–
–
42
11
1
–
12
–
–
12
30
30
120
–
(41)
79
–
–
79
86
8
(36)
58
5
–
63
16
21
241
3
–
244
24
–
268
129
27
–
156
26
–
182
86
88
251
–
–
251
–
–
251
84
50
–
134
50
–
184
67
117
654
3
(41)
616
24
–
640
310
86
(36)
360
81
–
441
199
256
Included in the above is land at cost of £22,000 (2021: £22,000) which is not depreciated.
76
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 13. INVESTMENTS AND RELATED PARTY TRANSACTIONS
Company
Shares in subsidiary companies
At historic cost less impairment
2022
£000
1
2021
£000
533
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
Advantage Finance Limited (03773673)
Aspen Bridging Limited (10270026)
Principal activity
Motor finance
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), Cash Kangaroo Limited (08435795) and Wilson Tupholme Limited
(00101451).
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 26. During the year the Group made charitable donations amounting of £102,000 (2021: £94,500) via
the Keith Coombs Trust which is a related party because Messrs GDC Coombs, AMV Coombs, D Markou and
CH Redford are trustees. The amount owed to the Keith Coombs Trust at the year-end was £nil (2021: £nil).
During the year the Group obtained supplies at market rates amounting to £3,508 (2021: £3,693) 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 £10,000,000 (2021: £12,650,000).
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 2022 the Company was owed £185,589,931 (2021: £171,025,884) by other Group undertakings as
part of an intercompany loan facility and owed £nil (2021: £nil). All related party transactions were settled in full
when due.
www.suplc.co.uk
77
Stock Code: SUSTHE ACCOUNTS 14. AMOUNTS RECEIVABLE FROM CUSTOMERS
Motor finance hire purchase
Less: Loan loss provision motor finance
Amounts receivable from customers motor finance
Property bridging finance loans
Less: Loan loss provision property bridging finance
Amounts receivable from customers property bridging finance
Amounts receivable from customers total
Analysis by future date due
– Due within one year
– Due in more than one year
Amounts receivable from customers
Analysis of security
Loans secured on vehicles under hire purchase agreements
Loans secured on property
Other loans not secured (motor finance where security no longer present)
Amounts receivable from customers
Analysis of overdue
Not impaired
Neither past due nor impaired
Past due up to 3 months but not impaired
Past due over 3 months but not impaired
Impaired
Past due up to 3 months
Past due over 3 months and up to 6 months
Past due over 6 months or default
Amounts receivable from customers
Group
2022
£000
350,517
(91,481)
259,036
64,525
(646)
63,879
322,915
141,301
181,614
322,915
254,933
63,879
4,103
322,915
285,892
–
–
25,137
3,943
7,943
322,915
2021
£000
339,349
(92,583)
246,766
34,475
(331)
34,144
280,910
110,319
170,591
280,910
242,039
34,144
4,727
280,910
236,602
–
–
30,312
5,717
8,279
280,910
The credit risk inherent in amounts receivable from customers is reviewed as per note 1.4 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 1,688 vulnerable or Covid impacted payment deferral customers who although not in arrears at
31 January 2022 were assessed from a review of internal data to have a significant increase in credit risk (2021:
6,298). Under IFRS9 therefore these customers although not in arrears are included in Stage 2 at 31 January 2022
with an increased impairment provision.
78
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 14. AMOUNTS RECEIVABLE FROM CUSTOMERS (CONTINUED)
Analysis of loan loss provision and amounts receivable from customers (capital)
Not credit impaired
Credit
impaired
Stage 1:
Subject to 12
months ECL
£’000
Stage 2:
Subject to
lifetime ECL
£’000
Stage 3:
Subject to
lifetime ECL
£’000
(22,129)
(446)
(22,575)
(2,769)
–
(2,769)
Not credit impaired
(66,583)
(200)
(66,783)
Credit
impaired
Stage 1:
Subject to 12
months ECL
£’000
Stage 2:
Subject to
lifetime ECL
£’000
Stage 3:
Subject to
lifetime ECL
£’000
(14,367)
(313)
(14,680)
(12,759)
–
(12,759)
(65,457)
(18)
(65,475)
Total
Provision
£’000
Amounts
Receivable
£’000
(91,481)
(646)
(92,127)
350,517
64,525
415,042
Total
Provision
£’000
(92,583)
(331)
(92,914)
Amounts
Receivable
£’000
339,349
34,475
373,824
Stage 1:
Subject to 12
months ECL
£’000
Stage 2:
Subject to
lifetime ECL
£’000
Stage 3:
Subject to
lifetime ECL
£’000
13,603
(5,051)
6,302
1,251
–
(174)
14,680
(3,144)
11,212
8,068
–
(173)
22,575
51
11,502
1,219
12,721
–
(13)
12,759
(7,462)
112
(7,350)
–
(2,640)
2,769
50,676
17,014
5,719
22,733
8,891
(16,825)
65,475
(2,775)
6,177
3,402
10,197
(12,291)
66,783
Total
Provision
£’000
64,330
23,465
13,240
36,705
8,891
(17,012)
92,914
(13,381)
17,501
4,120
10,197
(15,104)
92,127
As at 31 January 2022
Motor finance
Property bridging finance
Total
As at 31 January 2021
Motor finance
Property bridging finance
Total
Loan loss provisions
At 1 February 2020
Net transfers and changes in credit risk restated
New loans originated
Total impairment charge to income statement
Amounts netted off revenue for stage 3 assets
Utilised provision on write-offs
At 31 January 2021
Net transfers and changes in credit risk
New loans originated
Total impairment charge to income statement
Amounts netted off revenue for stage 3 assets
Utilised provision on write-offs
At 31 January 2022
www.suplc.co.uk
79
Stock Code: SUSTHE ACCOUNTS 15. TRADE AND OTHER RECEIVABLES
Amounts owed by subsidiary undertakings
Other debtors
Prepayments and accrued income
Group
Company
2022
£000
–
300
1,439
1,739
2021
£000
–
168
938
1,106
2022
£000
185,590
11
100
185,701
2021
£000
171,025
5
49
171,079
The amounts owed by subsidiary undertakings in the Company’s balance sheet are stated net of impairment and,
other than £127.0m of intercompany receivables from Advantage Finance Limited (2021: £130.0m) and £25.0m
of intercompany receivables from Aspen Bridging Limited (2021: £nil), 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. The carrying value of trade and
other receivables is not materially different to their fair value.
16. BORROWINGS INCLUDING BANK OVERDRAFTS AND LOANS
Bank overdrafts and loans – due within one year
Bank and other loans – due in more than one year
Group
Company
2022
£000
2,568
111,000
113,568
2021
£000
1,295
97,500
98,795
2022
£000
3,147
111,000
114,147
2021
£000
783
97,500
98,283
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 2022:
– a facility for £5 million (2021: £5m) which is subject to annual review in June 2022.
– a facility for £2 million (2021: £2m) which is subject to annual review in March 2022.
Total drawdowns of these overdraft facilities at 31 January 2021 were £998,921 (2021: £1,294,713).
S&U plc had the following revolving credit facilities available at 31 January 2022:
– a facility for £60 million (2021: 60m) which is due for repayment in March 2024.
– a facility for £20 million (2021: £25m) which is due for repayment in March 2025.
– a facility for £50 million (2021: £25m) - £25m of which is due for repayment in March 2024 and £25m of which
is due for repayment in April 2026.
S&U plc had the following term loan facilities available at 31 January 2022:
– a facility for £50 million (2021: £25m) - £25m of which is due for repayment in March 2028 and £25m is due for
repayment in March 2029.
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 2022 was £3,147,713 overdrawn
(2021: £783,244). A maturity analysis of the above borrowings is given in note 21.
80
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 17. TRADE AND OTHER PAYABLES
Trade creditors
Other creditors
Group
Company
2022
£000
641
3,706
4,347
2021
£000
397
2,366
2,763
2022
£000
151
503
654
The carrying value of trade and other payables is not materially different to the fair value.
18. DEFERRED TAX
Group
At 1 February 2020
Credit/(debit) to income
Credit to equity
At 31 January 2021
Credit/(debit) to income
Charge to equity
At 31 January 2022
Company
Accelerated
tax
depreciation
£000
Share based
payments
£000
Shadow
Share
Options
£000
(89)
3
–
(86)
(47)
–
(133)
102
17
(61)
58
4
(35)
27
81
56
–
137
89
–
226
Accelerated
tax
depreciation
£000
Share based
payments
£000
Shadow
Share
Options
£000
At 1 February 2020
Credit to income
Charge to equity
At 31 January 2021
Credit to income
Charge to equity
At 31 January 2022
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.
(13)
4
–
(9)
11
–
2
47
17
(6)
58
4
(35)
27
–
–
–
–
6
–
6
2021
£000
139
66
205
Total
£000
94
76
(61)
109
46
(35)
120
Total
£000
34
21
(6)
49
21
(35)
35
The Finance Act 2016 included legislation to reduce the main rate of UK corporation tax from 20% to 19% from
1 April 2017 and to 17% from 1 April 2020. The rate reduction to 17% was subsequently reversed by the Finance
Act 2020, such that the main rate of UK corporation tax remains at 19%. 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.
www.suplc.co.uk
81
Stock Code: SUSTHE ACCOUNTS 19. CALLED UP SHARE CAPITAL AND PREFERENCE SHARES
Called up, allotted and fully paid
12,145,260 Ordinary shares of 12.5p each (2021: 12,133,760)
200,000 6.0% Cumulative preference shares of £1 each
Called up share capital
2022
£000
1,518
200
1,718
2021
£000
1,517
200
1,717
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.
The 11,500 shares issued during the year relate to issues under the Company’s historic LTIP 2010 scheme – see
also note 25.
20. FINANCIAL LIABILITIES
Preference Share Capital
Called up, allotted and fully paid
3,598,506 31.5% Cumulative preference shares of 12.5p each (2021: 3,598,506)
2022
£000
450
2021
£000
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.
21. 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 2022 the Group’s indebtedness amounted to £113,568,000 (2021: £98,795,000) and the
Company’s indebtedness amounted to £114,147,000 (2021: £98,283,000). The Group gearing was 54.9%
(2021: 54.6%), 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 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 2022 of £69.0m (2021: £32.5m). 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 2022 was estimated to be
25% (2021: 27%). The average effective interest rate of financial liabilities of the Group at 31 January 2022 was
estimated to be 4% (2021: 4%). The average effective interest rate on financial liabilities of the Company at
31 January 2022 was estimated to be 4% (2021: 4%).
82
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 21. FINANCIAL INSTRUMENTS (CONTINUED)
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 1.4. 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 2022 (2021: 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 0.5% and a 1% 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 0.5% higher/lower and all other variables were held constant, the Group’s:
• profit for the year ended 31 January 2022 would decrease/increase by £0.4million (2021: decrease/increase by
•
£0.4million). This is mainly attributable to the Group’s exposure on its variable rate borrowings.
total equity would decrease/increase by £0.4million (2021: decrease/increase by £0.4million). This is mainly
attributable to the Group’s exposure on its variable rate borrowings.
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 2022 would decrease/increase by £0.9million (2021: decrease/increase by
•
£0.8million). This is mainly attributable to the Group’s exposure on its variable rate borrowings.
total equity would decrease/increase by £0.9million (2021: decrease/increase by £0.8million). This is mainly
attributable to the Group’s exposure on its variable rate borrowings.
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 2022 the Group gearing level was 54.9%
(2021: 54.6%) 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.
www.suplc.co.uk
83
Stock Code: SUSTHE ACCOUNTS 21. FINANCIAL INSTRUMENTS (CONTINUED)
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 (2021: £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 just under 55% results in a
positive liquidity position.
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
Less
than 1 year
£’000
141,301
–
–
141,301
–
(2,568)
(174)
–
–
(2,742)
138,559
57,566
–
–
57,566
–
–
(128)
–
–
(128)
195,997
124,048
–
–
124,048
–
(61,000)
(115)
–
–
(61,115)
258,930
–
–
–
–
–
(50,000)
-
(450)
–
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
Less
than 1 year
£’000
110,319
–
1
110,320
–
(1,295)
(169)
–
–
(1,464)
108,856
52,879
–
–
52,879
–
(25,000)
(161)
–
–
(25,161)
136,574
117,712
–
–
117,712
–
(72,500)
(221)
–
–
(72,721)
181,565
No fixed
maturity
date
£’000
–
4,314
–
4,314
(206,747)
–
-
–
(6,047)
Total
£’000
322,915
4,314
–
327,229
(206,747)
(113,568)
(417)
(450)
(6,047)
(50,450)
208,480
(212,794)
–
(327,229)
–
No fixed
maturity
date
£’000
–
3,928
–
3,928
(181,029)
–
–
–
(4,014)
Total
£’000
280,910
3,928
1
284,839
(181,029)
(98,795)
(551)
(450)
(4,014)
–
–
–
–
–
–
–
(450)
–
(450)
181,115
(185,043)
–
(284,839)
–
Group
At 31 January 2022
Financial assets
Other assets
Cash at bank and in hand
Total assets
Shareholders’ funds
Bank overdrafts and loans
Lease liabilities
Financial liabilities
Other liabilities
Total liabilities and
shareholders’ funds
Cumulative gap
Group
At 31 January 2021
Financial assets
Other assets
Cash at bank and in hand
Total assets
Shareholders’ funds
Bank overdrafts and loans
Lease liabilities
Financial liabilities
Other liabilities
Total liabilities and
shareholders’ funds
Cumulative gap
84
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 21. FINANCIAL INSTRUMENTS (CONTINUED)
Company
At 31 January 2022
Other assets
Cash at bank and in hand
Total assets
Shareholders’ funds
Bank overdrafts and loans
Financial liabilities
Lease liabilities
Other liabilities
Contingent liabilities
Total liabilities and
shareholders’ funds
Cumulative gap
Company
At 31 January 2021
Other assets
Cash at bank and in hand
Total assets
Shareholders’ funds
Bank overdrafts and loans
Financial liabilities
Lease liabilities
Other liabilities
Contingent liabilities
Total liabilities and
shareholders’ funds
Cumulative gap
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
Less
than 1 year
£’000
–
–
–
–
(3,147)
–
(66)
–
–
(3,213)
(3,213)
–
–
–
–
–
–
(17)
–
–
(17)
(3,230)
102,000
–
102,000
–
(61,000)
–
–
–
–
(61,000)
37,770
50,000
–
50,000
–
(50,000)
(450)
–
–
–
(50,450)
37,320
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
Less
than 1 year
£’000
–
1
1
–
(783)
–
(63)
–
(511)
(1,357)
(1,356)
25,000
–
25,000
–
(25,000)
–
(66)
–
–
(25,066)
(1,422)
105,000
–
105,000
–
(72,500)
–
(17)
–
–
(72,517)
31,061
–
–
–
–
–
(450)
–
–
–
No fixed
maturity
date
£’000
33,936
–
33,936
(70,265)
–
–
–
(991)
–
Total
£’000
185,936
–
185,936
(70,265)
(114,147)
(450)
(83)
(991)
–
(71,256)
–
(185,936)
–
No fixed
maturity
date
£’000
41,917
–
41,917
(72,416)
–
–
–
(623)
–
Total
£’000
171,917
1
171,918
(72,416)
(98,283)
(450)
(146)
(623)
(511)
(450)
30,611
(73,039)
(511)
(172,429)
(511)
The cash flows payable under financial liabilities are analysed as follows:
Group
At 31 January 2022
Bank overdrafts and loans
Trade and other payables
Tax liabilities
Accruals and deferred income
Borrowings
Lease liabilities
Financial liabilities
At 31 January 2022
Repayable
on Demand
£’000
Less
than 1 year
£’000
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
2,568
–
–
–
–
–
–
2,568
–
4,347
926
774
–
174
–
6,221
–
–
–
–
–
128
–
128
–
–
–
–
61,000
115
–
61,115
–
–
–
–
50,000
–
450
50,450
Total
£’000
2,568
4,347
926
774
111,000
417
450
120,482
www.suplc.co.uk
85
Stock Code: SUSTHE ACCOUNTS 21. FINANCIAL INSTRUMENTS (CONTINUED)
Group
At 31 January 2021
Bank overdrafts and loans
Trade and other payables
Tax liabilities
Accruals and deferred income
Borrowings
Lease liabilities
Financial liabilities
At 31 January 2021
Company
At 31 January 2022
Bank overdrafts and loans
Trade and other payables
Tax liabilities
Accruals and deferred income
Borrowings
Lease liabilities
Financial liabilities
At 31 January 2022
Company
At 31 January 2021
Bank overdrafts and loans
Trade and other payables
Tax liabilities
Accruals and deferred income
Borrowings
Lease liabilities
Financial liabilities
At 31 January 2021
Repayable
on Demand
£’000
Less
than 1 year
£’000
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
1,295
–
–
–
–
–
–
1,295
–
2,763
593
658
–
169
–
4,183
–
–
–
–
25,000
161
–
25,161
–
–
–
–
72,500
221
–
72,721
–
–
–
–
–
–
450
450
Repayable
on Demand
£’000
Less
than 1 year
£’000
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
3,147
–
–
–
–
–
–
3,147
–
654
116
221
–
66
–
1,057
–
–
–
–
–
17
–
17
–
–
–
–
61,000
–
–
61,000
–
–
–
–
50,000
–
450
50,450
Repayable
on Demand
£’000
Less
than 1 year
£’000
More than
1 year but
not more
than 2 years
£’000
More than
2 years but
not more
than 5 years
£’000
More
than 5 years
£’000
783
–
–
–
–
–
–
783
–
205
212
206
–
63
–
686
–
–
–
–
25,000
66
–
25,066
–
–
–
–
72,500
17
–
72,517
–
–
–
–
–
–
450
450
Total
£’000
1,295
2,763
593
658
97,500
551
450
103,810
Total
£’000
3,147
654
116
221
111,000
83
450
115,671
Total
£’000
783
205
212
206
97,500
146
450
99,502
86
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 22. RECONCILIATION OF OPERATING PROFIT TO NET CASH FROM OPERATING ACTIVITIES
Operating Profit
Finance costs paid
Finance income received
Tax paid
Depreciation on plant, property and equipment
Loss/(profit) on disposal of plant, property and equipment
(Increase)/decrease in amounts receivable from customers
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in accruals
Increase in cost of future share based payments
Movement in retirement benefit asset/obligations
Net cash used from operating activities
23. FINANCIAL COMMITMENTS
Capital commitments
Group
2022
£000
50,790
(3,772)
–
(8,749)
529
13
(42,005)
(633)
1,584
116
39
(6)
(2,094)
Group
2021
£000
21,696
(3,610)
42
(6,662)
520
(13)
20,840
367
(363)
57
75
(9)
32,940
Company
2022
£000
Company
2021
£000
7,584
(146)
2,652
(93)
81
–
–
(14,622)
449
15
39
(6)
(4,047)
10,190
(147)
2,724
(14)
86
(4)
–
19,583
32
48
72
(9)
32,561
At 31 January 2022 the Group had £122,707 capital commitments contracted but not provided for (2021: £nil).
At 31 January 2022, the Company had no capital commitments contracted but not provided for (2021: £nil).
24. CONTINGENT LIABILITIES
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 2022 was £nil (2021: £511,469).
www.suplc.co.uk
87
Stock Code: SUSTHE ACCOUNTS 25. SHARE BASED PAYMENTS
The Company operates a Long Term Incentive Plan (LTIP 2010) and full details of the share options outstanding
during the year are shown below:
LTIP 2010
Outstanding at beginning of year
Granted during the year
Lapsed during the year
Exercised during the year
Expired during the year
Outstanding at end of year
Exercisable at end of year
Number
Of Share
Options
2022
17,000
–
–
(11,500)
–
5,500
–
Number
Of Share
Options
2021
30,667
4,000
(4,000)
(13,667)
–
17,000
5,000
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 £23.56 (2021: £16.39).
The weighted average remaining contractual life of the outstanding share options is 2 months (2021: 5 months).
The Group recognised total share-based payment expenses for LTIP of £39,000 in the year to 31 January 2021
(2021: £75,000).
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).
88
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 26. 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 2019. At that valuation it was assumed that the appropriate post retirement discount rate was 1.36%
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 2022. 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 2023 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 2019 and updated to 31 January 2022 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):
Rate of increase in salaries
Pension increases:
Pre-97 Pension
Post 97 Pension
Discount rate
At year end
31 January
2022
At year end
31 January
2021
Na
0.0%
4.0%
2.1%
Na
0.0%
3.2%
1.1%
Mortality assumption for 31 January 2022 comes from the S3PA tables with CMI-2020 1.25% long term trend and
for 31 January 2021 mortality assumption was from the S2PA tables with CMI-2019 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:
Equities
Bonds
Cash/Other
Total market value of assets
Proportion
held at
31 January
2022
Proportion
held at
31 January
2021
62%
22%
16%
100%
45%
27%
28%
100%
www.suplc.co.uk
89
Stock Code: SUSTHE ACCOUNTS 26. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)
The amount included in the balance sheet arising from the Group’s obligations in respect of its defined benefit
schemes is as follows:
Fair value of plan assets
Present value of defined benefit obligations
Surplus before restriction
Restriction on Surplus
Pension asset
The amount recognised in the income statements during the year
Current service cost
Interest on obligation
Expected return on plan assets
Expense recognised in the income statement
Opening net (asset)
Expense
Contributions paid
Actuarial loss
Closing net (asset)
The expense credit in both years is shown within administrative expenses.
Movement in present value of obligation
Present value of obligation at 1 February
Interest cost
Current service cost
Benefits paid
Actuarial (gain)/loss on obligation – assumptions
Actuarial loss on obligation – experience
Present value of obligation at 31 January
Experience adjustment on scheme liabilities
Actuarial (gain)/loss as percentage of scheme liabilities
Movement in fair value of plan assets
Fair value of plan assets at 1 February
Expected return on plan assets
Contributions
Benefits paid
Actuarial gain on plan assets
Fair value of plan assets at 31 January
Experience adjustment on assets
Actuarial (gain)/loss as percentage of scheme assets
Jan 22
£000
1,141
(483)
658
(658)
0
Jan 21
£000
1,100
(536)
564
(564)
0
Jan 22
£000
Jan 21
£000
–
6
(12)
(6)
–
(6)
–
6
0
–
7
(16)
(9)
–
(9)
–
9
0
Jan 22
£000
Jan 21
£000
536
6
–
(41)
(28)
10
483
2%
1,100
12
–
(41)
70
1,141
538
7
–
(41)
21
11
536
2%
1,123
16
–
(41)
2
1,100
6%
0%
90
D2 Notes to the Accounts CONTINUEDYear ended 31 January 2022S&U Plc Annual Report and Accounts 2022 Five Year Record (Unaudited)
Continuing Operations Only
Revenue
Cost of Sales
Impairment
Administrative Expenses
Operating profit
Finance Costs (net)
Profit before taxation
Taxation
Profit for the year
Assets employed in all operations
Fixed assets
Amounts receivable and other assets
Liabilities
Total equity
Earnings per Ordinary share
Dividends declared per Ordinary share
Group gearing
2018
IAS39
£000
79,781
(17,284)
(19,596)
(9,923)
32,978
(2,818)
30,160
(5,746)
24,414
1,931
263,262
265,193
(112,377)
152,816
203.8p
105.0p
68.7%
2019
IFRS9
£000
82,970
(15,751)
(16,941)
(11,177)
39,101
(4,541)
34,560
(6,571)
27,989
2,062
278,751
280,813
(115,446)
165,367
233.2p
118.0p
65.3%
2020
IFRS9
£000
89,939
(19,872)
(17,220)
(12,863)
39,984
(4,850)
35,134
(6,252)
28,882
2,108
303,973
306,081
(126,607)
179,474
239.6p
120.0p
65.7%
2021
IFRS9
£000
83,761
(14,264)
(36,705)
(11,096)
21,696
(3,568)
18,128
(3,482)
14,646
2,713
282,126
284,839
(103,810)
181,029
120.7p
90.0p
54.6%
2022
IFRS9
£000
87,889
(18,771)
(4,120)
(14,208)
50,790
(3,772)
47,018
(9,036)
37,982
2,455
324,774
327,229
(120,482)
206,747
312.8p
126.0p
54.9%
“Group Gearing” is calculated as the sum of Bank Overdrafts plus Borrowings less Cash and Cash Equivalents divided
by Total Equity.
www.suplc.co.uk
91
Stock Code: SUSTHE ACCOUNTS Financial Calendar
ANNUAL GENERAL
MEETING
ANNOUNCEMENT OF
RESULTS
26 May 2022
Half year ending 31 July 2022
Year ending 31 January 2023
27 September 2022
March 2023
PAYMENT OF DIVIDENDS
6% Cumulative Preference Shares
30 September 2022 &
31 March 2023
31.5% Cumulative Preference Shares
31 July 2022 & 31 January 2023
Ordinary Shares – 2021/22 final
8 July 2022
– Ex dividend date
– Record date
16 June 2022
17 June 2022
– 2022/23 first interim
November 2022
– 2022/23 second interim
March 2023
ANNUAL GENERAL MEETING ARRANGEMENTS
The Annual General Meeting will take place on 26 May 2022 – 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
92
S&U Plc Annual Report and Accounts 2022
Officers and Professional Advisors
DIRECTORS
A M V Coombs MA (Oxon)
G D C Coombs MA (Oxon) MSc (Lon)
C H Redford ACA
T G Wheeler
J E C Coombs MA (Oxon) ACA
D Markou MBE FCA
G Pedersen
T Khlat
J P Maxwell
(Chairman)
(Deputy Chairman)
(Group Finance Director)
(CEO Advantage Finance)
(Director)
(Non-executive)
(Non-executive)
(Non-executive)
(Non-executive)
SECRETARY
C H Redford ACA
REGISTERED OFFICE
2 Stratford Court
Cranmore Boulevard
Solihull
West Midlands
B90 4QT
Tel: 0121 705 7777
BANKERS
HSBC Bank plc
130 New Street
Birmingham
B2 4JU
Natwest Bank
250 Bishopsgate
London
EC2M 4AA
REGISTRARS
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).
FINANCIAL PUBLIC RELATIONS
Newgate Communications
14 Greville Street
London
EC1N 8SB
SOLICITORS
DLA
Victoria Square
Birmingham
B2 4DL
STOCKBROKERS
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
AUDITOR
Mazars LLP
Statutory Auditor
Tower Bridge House
St Katherine’s Way
London E1W 1DD
INTERNAL AUDITOR
RSM Risk Assurance Services LLP
6th Floor 25 Farringdon Street
London
EC4A 4AB
www.suplc.co.uk
93
Stock Code: SUSOTHER INFORMATION S
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2
2
2 Stratford Court
Cranmore Boulevard
Shirley
Solihull
West Midlands
B90 4QT
T: 0121 705 7777
Registered in England No. 342025
www.suplc.co.uk