S&U (LSE:SUS) — Interim Results for the 6 months ended 5 August 2025

0:01 Good morning, and welcome to the S and U PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses, which is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to chairman, Anthony Coombs. Good morning to you, sir. Good morning, Alex, and and good morning to all our very valuable retail investor friends. We find that these webinars are extremely valuable way of keeping in touch with the very important retail investment market.

0:54 Can I just introduce everybody on the panel? Can we go to the next slide, please, Alex? And you'll see that we've got some familiar faces, myself and my brother are probably overly familiar with you. And and Carl Varley, know, who's the chief executive of Advantage Finance, and has done a wonderful job in in reconstituting the company over the last two years. And Ed Arons, who is driving, as CEO of Aspen Bridging, the record results of that company as is Jack Coombs, who is my, on my right and who has been made chief operating officer of the of the company.

1:46 And that behooves very well for the future of the company and lines of succession along with his cousin, Richard Coombs, who is also involved in the business. And on my left, we have Chris Freckhamson, who is the is the group CFO, doing a wonderful job, and is just bedding in as the successor of Chris Redford, who is with us for many years. So, there's today's speakers. Can we move on to the next slide, please, Alex? And we concentrate on this because our staff and our customers are basically the lifeblood of our business. And we don't need the regulator really, although, obviously, they're there to be telling us how to deal with our customers because unless we deal with our customers, and we've been proving that since 1938, we don't get and make business and we don't make money either. So we're very pleased to see the kind of reception we get from our customers.

2:53 Next slide, please. And then the introduction, well, I mean, this is a very positive outcome at the half year. It was one that we we were hoping for, and we're probably anticipating to a certain extent. But we've we recognize that the past two years has seen difficulties in terms of regulation, probably in terms of the economy and the general political climate, but particularly in terms of regulation through, first of all, the BIPFID initiative, which was part of the old conservative government's initiative, which came through, under the FCA in '19 sorry, 2023.

3:42 And and then, of course, we have the court of appeal judgment, which caused further confusion with the motor finance industry, of late last year. Well, both of those are now fully have, a rearview mirror. And we'll be saying one or two things about the FCA redress scheme, which we think will be entirely benign for advantage finance in the next few slides. So very positive, backed up by an increase in profits, which we anticipate and an increase in dividend and long may that continue. Next slide, please, Alex. And these are the highlights for the six months, which reveal, one, that increase in profit at S and U, a record profit at Aspen, recovering profits at Advantage, reduced impairment charge and earnings per share, which obviously improved along with the post tax profits, and also an increase in dividend from 30p to 35p.

4:57 We'll explain later the receivables and the borrowings, but overall, again, a very positive picture. And I'm gonna pass you now over on the next slide, if you could, Alex, to Chris Freckleton, who will give you financial. Thanks, Anthony, and good morning, everyone. So starting with the income statement, our profit before tax for the period is 15,600,000 against EUR 12,800,000 last year, so a 22% increase year on year. At the bottom of the slide, you've got the divisional profits. So Advantage has increased 15% to EUR 10,800,000 and Aspen has increased significantly by 47% to $5,000,000 In terms of some of the key movements on a consolidated basis, so revenue you'll have seen have dropped by 14% year on year.

5:53 This principally is due to the contraction in the loan book, particularly in Advantage and to a lesser extent as well some of the lower margin deals we've been writing in first half due to our cautious lending approach. Impairment has reduced substantially by 57%, so back to normal levels, reflecting better repayments in advantage as we're now at 90% of live repayments as a percentage of due with it being 87% this time last year, and also excellent recoveries and collections in Aspen. So in the first half, we collected a 113,000,000, which is significantly up on the 72,800,000 we collected in the last year in the half.

6:43 And in terms of a couple of other areas, so I noticed a question in regards to admin expenses. So those have increased performance the half of And impact we in strong COVID-nineteen And in U. U. And obviously, the lowest on your rates and that we've seen in the first half as well this year. If we then turn on to the next slide, please. So this is the group balance sheet. So it's a a relatively simple balance sheet with amounts receivable, borrowings, and equity.

7:36 As we've alluded to, Vantage has had a period of consolidation so that the loan book has reduced by 14% from 326,000,000 to 279,000,000. Aspen, on the other hand, have had a minor reduction despite very strong lending during half one, and that's due to the aforementioned excellent collections and recoveries. So we've seen a slight reduction from 149,000,000 to 1 and 48,000,000. And then borrowings have reduced 23% year on year, and that's just following the contraction in the loan book. And I also just wanted to point out we have 3,500,000 of cash at the period end in certain other assets, in this breakdown, which means together with our borrowings of a 183,500,000, mean our net borrowings are a 180,000,000 as at the period end.

8:31 Then move on to the next slide, please. So this is the group cash flow, and it helps to show where has all the money gone and also provides a bit more color around the movements in the balance sheet positions. If we start on the left hand side left hand side of the slide, you will see we've had an overall reduction in net borrowings of 12,300,000 from a 192,000,000 to a 180. And that's reflecting the better collections and repayments performance across the two businesses, offset by £8,500,000 of dividends that we've paid in the first half. You'll notice gearing has reduced year on year from a 103% to 75%, and from year end where it was around about 81%.

9:23 If we then look at the divisional cash flows, so looking at Advantage in the middle, that has reduced by 13,900,000 in the first half. And one of the key movements there is, the dividend. So in the first half, we didn't ask advantage to contribute to the Greek dividend with the ongoing uncertainty around the Supreme Court decision. Now that has clarified and to answer this point that the sky is brighter, we have resumed paying dividends from advantage to the group in the second half. And then finally, just on Aspen, so that on the right hand side has had a reduction in funding requirement of 5,800,000 during the period Despite, as I mentioned, the good advances you will see there, we've advanced a 106,400,000 in comparison to 92,500,000 last year.

10:18 However, those settlement repayments and repayments beyond term and really improves the cash position in the first half. If we then move on to the next slide, please, around treasury and funding. So as I mentioned, our net borrowings are 180,000,000 sit comfortably within our committed facilities of $280,000,000. There's been no change on those during the first half and and obviously provides us significant headroom for future growth. And I just wanted to point out as well that since the period end, both businesses have had an increase in funding requirements, with advantages lending volumes increasing, and we actually had a record lending month in September.

11:04 And equally, Aspen lending has has also been improving significantly. Those excellent collections and recoveries have started to fall more in line with year to date expectations, which is helping to build the books as well. I'll now hand you over to Jack Coombs, COO, to talk you through our funding review. Good morning. Thank you very much, Chris. I think it's just important obviously to explicate that we're obviously in a position where receivables have come down over relatively substantial period of time across the group. And I think that the reality is that that doesn't reflect the momentum that the business currently has.

11:50 And just to put a little bit of flavor behind what Chris was mentioning, In terms of September, Aspen lent over $20,000,000 and Advantage wrote over 2,200 deals. Obviously, we are open to the opportunities that are ahead of us, I think, in terms of both markets. And I think, obviously, just looking at the Aspen numbers very briefly, we've got slightly longer terms coming through into our business and we've also we increased the lending run rate during this half year by 15%. We had a lot of repayments at slightly higher level than we had expected. And I think ultimately, as people can't repay us twice, we will be seeing a slightly slower level of repayment in H2 and that will and already is driving the growth in the business.

12:53 So, with both businesses having a positive outlook and as Anthony has said, being geared for growth in the sense that we are actually low geared, there are opportunities ahead of us. We are exploring the funding, as Chris mentioned. And we will be looking for more efficient and more cost effective options. And that will certainly be helping us to deliver both benefits to the bottom line, which I'm sure all of our shareholders will appreciate. And also the capacity to take opportunities as they arise for the group. And we're very, very much certain that, that will be the case over the coming months and years.

13:39 With that, I'll hand over now to Karl for your advantage. Thank you, Jack. Turning the page, we'll get straight to lending. And you'll see there are strong recovery, more customers, higher volumes, better quality, lending now more closely aligned to our risk appetite based, I'm pleased to say, upon a new scorecard major project that was delivered successfully in q two of this year and the very latest affordability tool set, which has made a, you know, a significantly positive difference following the one six six engagement, which we managed to embed in the first half of this year. Average advance is improving to what we see as sort of market norms. That's easily accessible scale to our business as well as absorb a higher rate of fixed cost.

14:31 I'm pleased that we've delivered in H1 the performance we promised and forecast at the year end six months ago. And as Chris rightly referenced and Jack also, the run rate is accelerating through the end of Q2, especially to help with those year on year comparisons and especially as we get into H2, which will show a much more favorable picture one hopes as we progress through the second half of the year. I'm also pleased to highlight an improvement upon already very strong Trustpilot score that's compiled of a great many reviews over 5,000 to now sort of continue to be industry leading at 4.9 out of five, which demonstrates the value that we represent to our customers and to wider society.

15:23 If we turn the page now and look to the other part of the business, which is managing customers in line through the arrears journey if they experience that. Also, a much improved picture as well. I'm sure we'll all appreciate improvements obviously take a little longer to materialize in the world of repayments, but we're better in terms of repayment percentages, write off customers in arrears. You'll see some slides a little later on that will actually show you a six month comparison for each arrears category, which is very positive, averaging a 10% improvement across the board. How we've done that? The the right sort of resourcing, investment in our people, some very significant technological investments that made us much more efficient and much more productive.

16:15 And we see a team growing in confidence and experience, and they're certainly paying dividends. I'll reference only a couple of the graphs that you see in front of you. On your top left, that is the amount that we expect in repayments per month than what we receive. You'll see a large draw on that as we went through the one six six for the last eighteen months or so, and then successfully concluding that satisfactorily has enabled us assisted with a slightly better and improving quality focus time goes on to achieving those expectations. And also in the bottom left, I'm pleased, even though you again, you can see a peak, a bubble if you like of write offs post 166, which we always expected.

17:06 We're now under budget in that regard for most of h one. If we turn the page of regulatory matters, obviously, an awful lot happening in our space, especially over the last sort of twenty four, forty eight hours. I won't get into the weeds necessarily of that, Maybe to echo what you've heard already from Chris and Anthony that we're in things. But I would add we're in a very good position, thanks to the longevity of our business that the first requirement from our regulator is to have control over your customer records going back to 2007. So we're in a great position there. Secondly, to be able to manipulate data to plan for different scenarios and potential redress strategies.

17:53 So we're in a great position there. Thanks to the hard work of our team back at head office in the credit risk and risk departments. They've done an exemplary job, which we shared with the regulator, and it's met with their, you know, very a number of compliments. And early analysis suggests that we have reasons to be to be confident and optimistic, but we will, of course, you know, abide by the wishes of the regulator and the market to engage widely in the consultation process. So it'd be worth for those inquiring minds, happy to answer questions, but the picture won't really be that much clearer until early in the New Year. Turning to our customers, which are actually what it's all about, of course. We've had a really busy period of investment and delivering some innovation, probably delivered more major changes over the last six months than for some, you know, considerable period of time.

18:52 Some of the highlights I would reference there is the upgraded self-service portal for our customers, which went live and had very high levels of engagement, a whole new tool set for credit risk, sport card, and affordability, new premises, which expanded our capacity by over 30%, and we're seeing that all translates into better outcomes, hence the Trustpilot score. And you'll see shortly on the other slide also our complaints measurement. You know, I think wise words were said, look after your people. They'll look after your customers. We're certainly saying that come come true. And then on the next slide, my final slide, I think, is just a quick reference of those product launches, four major ones in the first half, more to follow in H2.

19:46 We're really pleased with how successful they've been, whether it be the self employed product, accessibility and engagement with the portal and others. Changes to our website have been especially well received. And also worth noting, have more in regards to broadening distribution and give us broader market access and better optionality of where we source our business in the future. And also, you know, dipping our tone with a very sensible test project in the world of AI, is focused in two specific areas to improve customer servicing. So we're excited about that and we look forward to writing an even stronger story in H2.

20:33 And with that, I'll hand back over to Chris. Thanks, Karl. So the next three slides take a closer look at advantages of book debt performance. This focuses on originations during the period. You'll see that we've written just over 7,100 deals with higher average advances, as Carl mentioned, of 9,916 to better quality customers, and that's demonstrated by the better customer score at 929 for this period, but also the the lower interest rate flat per annum, reducing to 13%. So following the introduction of the used scorecard, as Karl mentioned in a pricing review, we expect some movement back towards our traditional customer base in the second half, which will hopefully reverse some of that margin reduction we've seen in H1 whilst obviously supporting the higher volumes that we've seen in August and September.

21:31 And I just wanted to comment on the cost of sales. So there has been an increase on cost of sales during this period on these deals, and that predominantly relates to broker commissions with some of our brokers receiving higher commissions with better quality or higher advanced lending. Then turn over the page on to first repayment quality. So we've historically presented this as there's been strong correlation between first payments made by customers and the bad debt and outcomes after five years. So the blue line and blue axis is first payments made, and then the red line and access is bad debts, with the dotted line being expected bad debts and the old line being actual.

22:18 So as Carl mentioned, following the regulatory engagement, we're seeing first repayments continuing to recover. And with this alongside the quality of the originations, we've written over the period, our expectations of bad debt and outcomes, are starting to improve as you can see in the far right hand side of the graphic with the dotted red line trailing up towards lower bad debts expected going forward. Then if we go on to the next slide, please. So this is analysis of the book debt at the period end versus the year end based on the real status. And for the reasons already discussed around better collections performance and improving lending to higher quality customers, We have more debts up to date at the period end at 68.9% versus 64.5% at year end.

23:16 And we also have fewer accounts in six plus arrears at 7.6% of the book versus 9.3% last year end. And we expect this to continue improving in second half of the year. I'll now pass you on to Ed, CEO of Aspen to discuss their H1 call. Thanks, Chris, and good morning to everybody. So in terms of Aspen, it's been a very good start to the year. As has been said, record profits for the half year, underpinned by quality loans and projects that we've been funding, and especially strong repayments and recoveries in H1. So record lending has also been mentioned. But in terms of the number of loans for the half year, that's up 28% on the previous year.

24:09 Net receivables at 147.8%, but obviously we started H3 strongly and we've grown since and we expect that to continue the rest of the year. Record repayments, which is feeding to overall turnover and profit are up significantly half years year on year. And like I've said before, it's always good to see that in a lending business that you're actually getting your funds back. It's a good sign that our borrowers are able to refinance and also sell, which are the two key exit strategies that they have. So overall trends, stable environment, UK property transactions are up and it always helps to have slightly lower interest rates, particularly when people are looking to refinance and we see that continuing this year. Good quality book, stable with only 14 loans overdue at the half year period.

25:11 And I think really the main message from an outlook perspective is that the bridging market is large relative to us, our size and we've got plenty of opportunity and we expect that to continue to grow. So over to the next slide, please. So I'd like to just sort of highlight a new point right at the top and this really speaks overall to the quality of the book over time a historic book as well as our current book. So since that launch in 2017, we've lent out $730,000,000 of capital, of which only 0.02% or less than £150,000 we've experienced as actual capital loss. And I think that sends a very strong message to both our capability and our quality.

26:07 So looking at some more of the other trends, you can see that we mentioned the number of new loans for the half year to half year up 28%. Average gross advances are slightly down. I think that's really more of a market situation, but we expect that we'll continue to monitor that through the rest of this year. Gross receivables, although 1.51%, as Jack mentioned, we've grown strongly, and Chris said, in the most recent months, and we expect to continue to grow that for the rest of the year. Cost of sales, we're in control of that. You can see that it's been pretty stable over the last few years. Historically, when we first started, it was about 2%, but obviously, as our reputations got we've got better known, got lots more broker relationships.

26:57 We've managed to keep control of those costs steady on the LTVs and also on the blended yields. I mean, they've come down certainly compared to the full year last year, but that reflects the environment in terms of the lower rates, the BOE rates, and thus maintaining a strategic positioning, but also protecting our margin in the market. And just to draw your attention to the average term in terms of months, you can see the effect of our new products that we'll come on to shortly, having in terms of extending our loan average terms length and that will help us grow the book over time. So turning to the next slide, please.

27:45 So yes, a year of progress, good progress, but there's still lots to do. We continue to focus on credit quality as we always have done and focusing on good quality borrowers as well as good projects. And 21% of our loans have come from existing customers, which is very good. We're always looking to expand our channels and we'll continue to progress that through the rest of this year to take on more opportunities, potentially more brokers and more loans. And we've always got oversight in terms of market risk management, including obviously property values, what's going on from in the market relative to refinance rates and fraud prevention.

28:33 In terms of investments, we've done a lot delivered a lot of projects. There are lot more to go. But obviously, focus is on speed of delivery, improving our capability of doing more products at the same time, and also making it more efficient from a consumer perspective. And last but certainly not least is our investment in our staff. We obviously, provide and offer the opportunity for vocational professional qualifications. We think it's important to upscale our employees and pleased to say that 17 out of our staff have actually qualified already now and are about to qualify, and we will continue to make that investment this year and in the years to come.

29:23 And on that note, I'd like to hand you across to Jack. He'd like to say a few more things about that slide. Thanks very much, Ed. I think in bridging, obviously, the benefit of writing very good clean business is obviously seen in terms of the impact on quality of debt. It also brings a challenge, and the challenge is the the level of repayment that you receive and the rate at which the money that you've lent comes back at you, then to the best customers, they pay you back swiftly. So what we have identified in our new products is opportunities where we can work with that high quality of customer that we've we've focused on Aspen on on in in longer term products.

30:10 And we have fortunately won the bridging and commercial award for product of the year for our new Bridge to Let and buy Select products. And, obviously, in Aspen, everything is preceded by Bridge. That is that is fundamental to the way we run our business, and that's very much gonna remain our focus. And one of the benefits to yourselves as investors of that is that we are always lending our funds, retaining our interest, which means that we're charging on the gross loan and we're paying on the debt, which means that there there's always a good rate of return. That's also in turn creates an opportunity for us to work with customers on longer term solutions whilst not compromising rates of return.

30:59 And that has been one of the driving factors behind where where the growth is will be coming from in the business. So alongside that, we've also moved into dual representation with having recently appointed two additional firms to our solicitor panel. So we're very excited about the direction of travel, and we're certain that Aspen will be delivering good results both this year and in coming years. And with that, I'll hand over to Graham. Good morning. Well, I think the the seven from what Carl and and Ed and Jack have said is that, you know, the last year, we we have not been idle in establishing new initiatives and changes to the business, which will make us more competitive offer a better quality service, and, hopefully, to improve our profitability as a consequence.

31:54 You know, at Aspen, Aspen is a in in a business which has got lots of potential for growth. It was traditionally, a really part of the flipping market, which is basically offering short term loans to people who hadn't who needed money quickly as a result of purchasing an auction, for example. That's now being extended into the development sphere into into the sphere where people are exporting capital from, you know, parts of the world and want and want, you know, short term, funding to facilitate that. And and we've so so the so the macroeconomic climate for for bridging is extremely good. In in in in terms of advantage, advantage obviously went through a pretty traumatic period as a result of FCA intervention.

32:50 And, obviously, that inhibited their ability to, you know, to change and to improve their business. That's now if abated in the past, And Karl is very much aware of the and has made changes, which is going to improve our competitiveness dramatically. First of all, in terms of the underwriting and the quality of our underwriting. Secondly, in terms of the type of products that we're offering to the market. And also in terms of our ability to collect debt, whether it be improve the productivity of the collecting department or improve their effectiveness or the ability of the customers themselves to interact independently of us.

33:37 So all these things, you know, speak well for for for for for for, you know, much enhanced business and a more profitable business. Excellent. Well, thank you very much to to all our speakers. I hope that's been helpful to our investors and our audience. But we're now going to move on to the questions that have been submitted. And I think they're extremely good questions and ones we want to address. The first one is from Mr. Martin, Jay Martin, who's a shareholder. And thank you very much for your kind words on getting through the markets and regulatory turmoil. Very kind of you.

34:26 Our view of of distribution strategy probably remains the same. Although, Carl, I think he's gonna have one or two things to say about expanding the distribution strategy of of of of advantage. And I think he's he's he's always gonna talk about some the competition in the market because, obviously, there are certain players who have withdrawn from the market. Secure trust is one of them. And and, obviously, we wanna take advantage of that. So over to you, Carl, on that. Thank you, Ashley. A great question. Thank you for it. So I'll deal with it in part. View of distribution strategy is to to broaden it. There are lots of places that people in our marketplace seek vehicles and the funding that they need for that.

35:19 We've been a single channel, single product, and it's worked terribly well, and we'll continue to make sure that channel that we have and the product that we offer is always evolves and and and can fit the purpose while broadening out into other channels, including the sort of the dealership, retailer markets, and the aggregators. You know, obviously, world's evolving and changing, and we should be rightly represented, you know, where the customer is is seeking our services. So that's probably the best way to answer that part of it. It it can be broad, and we will be. Are we better placed with our competitors? Well, yeah, I mean, I could certainly, you know, have a guesstimate as to post supreme court, but, you know, fundamentally, motor finances are large and has been proven itself immensely, consistently sustainable.

36:12 So the short but, you know, correct answer to that question is, yes, we are well placed and to win greater share and boost the value to shareholders, we just want to make sure that we plot that course carefully to ensure that it's sustainable over the longer term. So certainly, I think the market is coming to us and following the FCA consultation, all I'll say on that is those in the non prime spheres will probably be feeling more optimistic today than they were prior to the publication of that consultation. But there's much still to engage with as I mentioned earlier. Thank you, Carl. I think that answers the question from Matt on the withdrawal of Secure Trust from the Vodafone, how that should impact our business. I think it also answers the question number three, from Eduardo on the our view of the competitive pricing, environment and, on the regulated pressure and the sanctions on discussion and commissions and how they've eliminated or weakened our competitors, although Carl may have something to say, on on on that one.

37:33 I think I'd like to move on to some of the questions that have been raised relating to the funding review. One is from from Paul who who who asked on that. And also, Matt wants to talk about that, particularly in relation to the fixed rate debt and the likes of continued rise in bond yield. And I know that I think Eduardo is interested in that as well. So what I'm gonna do is ask Chris, first of all, and then our our chief operating officer, Jack, to to to comment on those funding review. Thanks, Anthony. Good question. So, yeah, we we currently have a revolving credit facility, which is linked to Sonia. So we, you know, we are beholden to how that moves. We don't have any hedging in place, and so it directly impacts our our finance charge.

38:36 In terms of the the funding review, we're we're clearly looking at different structures of finance other than revolving credit facilities. And hopefully, I'm I'm slightly better terms in terms of those finance charges. And therefore, we are hoping to see an improvement in terms of the finance cost line and then also through to the to the bottom line as well. But we're, you know, we're hoping to conduct that review during the second half of this year and and then be able to come back to the market with a with a view on what our funding structure may look like going forward, not only to to improve sort of the profitability and and cost side of of our current funding, but also support the growth ambitions across the group as well.

39:24 I mean, I think, yeah, I'm just adding to that. I think ultimately, as I mentioned before, we are we are in a in a low gear position, which is which is excellent. We're we're also in a declining base rate environment. As Chris said, that's currently passing through on our existing structures. Obviously, there is opportunity to reduce cost of funds through exploring other forms of funding. And that's certainly something that we are committed doing to generate the savings that we believe will put us in the best position both to maintain a good net interest margin and also to put us in the best position to take opportunities as they arise.

40:18 I think certainly, we will be generating some results in this direction, which is that is our aim. So I think we're pretty determined in that side. I think in terms of, know, I think, Matchy has also mentioned fixed rates. I think as as we've mentioned, we're not we're not currently fixed on our funding. I think anything that we did in that direction in the future would obviously be looking carefully to to match it to whatever lending we are doing. So that's certainly the approach that we'll be taking. Yes. We obviously do better deals on fixed rate debt than we are currently on our existing RCF facilities.

41:06 Obviously, that's the whole point of the exercise as as Matt appreciate. And what I wanna move on to now is the very important questions. And and Jack mentioned the net interest margins, but which mainly relate, I suspect, to to advantage on margins and portfolio mix. And this is something that's been raised by a number of investors. First of all, Eduardo mentioned, how do you think the shift in the portfolio mix between towards clients and credit qualities and longer loan durations will affect ROCE?

41:52 And secondly, looking ahead, do you feel more comfortable with this new mix? And third, how how does the cost pressures we've seen on loan sales costs from brokers and on clean processing costs? How do we see that going forward? And what measures you can see to offset these pressures without in any way preempting, what Carl is saying? I think it's important that Eduardo knows and and and the other investors who have asked about this, what our general position is on on margins and on client mix. I mean, we recognize the market does evolve.

42:40 We think it's important that we step back into the market vis a vis a lower margin product, possibly on a temporary basis. How temporary that will be, time will tell. We do recognize that our comparative advantage as a finance business is indeed in the people who may be less than perfect in terms of their credit ratings. And as a result, we could we we we look at what advantage of what is called the the golden nuggets in terms of people who have been badly credit rated by the industry and therefore, are actually better than some of their credit ratings would would hint at.

43:29 So so so we're very much wanting to see a slight shift back towards our more traditional customer base, whilst at the same time maintaining the kind of excellent progress we're making in terms of new business at Advantage. So in a sense, we want a bit of our cake and eat it. We want to want to make sure that we we we do that. So that's the the the the of the rates review that we are having shortly with Advantage. And we're sure that it will actually produce increasing business with the same time, the kind of margins and the kind of ROCE that I think Eduardo quite rightly refers to in his first question. But having said all that, without hopefully preempting too much what Karl said, and would you, Karl? That's an important introduction.

44:27 Thank you. Great questions, Eduardo. I can see them on the screen, I'm going to take them in order, but be pretty brief without just sort of repeating everything that Anthony mentioned there. So your first one is around the shift in the portfolio mix and affecting return. So I have nothing more to add than what Anthony said as far as our returns strategy and plans for the medium to longer term. What I would add is we define our mix and share it with you, whether it be tier mix or otherwise according to our definition. So when we change that as we have done this year with a new scorecard, it amends the definition. So to give you an example, what you would have seen in the old mix as a lower tier, higher risk, the new scorecard, because you get a lot of swaps out when you change scorecards with better data. I won't get too into the weeds of how this works.

45:17 You will actually now actually, that lower risk score that would have suggested we would have written, you know, with a fairly high risk appetite was actually tier a. So my point on when investors are trying to read what is this firm's risk appetite, it is a complicated picture, and you need to understand where they are with rating their own cohorts. The mix, arguably, we were overweight three or four years ago in the highest poorest performing quality tiers. The adjustment for that is only twenty percent. So it's not a whole scale shift to the top of the scorecard, and it's a scorecard that is defined by us is what I would add.

46:03 Looking ahead, are we comfortable with this new mix? It's pretty early. It's a few months old. The analysis that we do, and we have exceptional analytical tools from a financial perspective, suggest that it's gonna make a healthy return. So on that basis, yes. But there are, as always, with a forward looking and proactive business such as ours, a desire to do better. How do I view the competitive pricing environment? I think it's gonna be quite volatile. Our competitor area in the specialist market, people like it. It's of a size of in excess of 2,500,000,000. Studies by the likes of Deloitte and others say it's only gonna get larger. And post consultation, you will have people now that that's settled show eager interest.

46:53 So the names of the competitors may change, but the number of them will probably increase in the months and years ahead. Has the regulatory pressure and sanctions on discretionary commissions eliminated many competitors? Yes. So quick answer to that. But this early in the consultation, it's very difficult to be more specific on that. And then lastly, and as Anthony mentioned, the question around sort of cost pressures mainly emanating from claim processing costs. For us, one takeaway I would have is the advantage story was one really in 2023 and 2024 affordability in Bifid. And we have baked in and dealt with some of those costs, which Chris referenced earlier.

47:40 May at the risk of being overly optimistic and reading, you know, quickly the consultation exercise are traffic of complainants relating to commission, which is where it is now, and less so affordability is likely to drop off, especially as the regulator continues to make concerted efforts in regards to the activities of CMCs. So that's still present in H1. I think the wind is turning in our favor in H2 and beyond. So in the short answer would be, I don't foresee any additional cost pressure in regard to sales costs or anything relating to processing costs from a regulatory perspective. I hope that was helpful.

48:26 Excellent. Thank you, Carl. And I think that actually addresses the the point by mister pre submitted. I don't know who that is. Missus pre submitted about administrative expenses. I mean, we are very conscious, let me just make it absolute play, of return on capital employed, which obviously has a time aspect as well as a margin aspect because, obviously, it's it's it's related to both. And and and you can take it that we're continually looking at administrative expenses because, obviously, it's a very important part a component of return on capital employed.

49:11 So so I think with that rather general, general admonition, I think, I think I think, we can we can deal with that particular question. Are there any more questions there, Alex? No. You have addressed all the questions there, so thank you very much to you all for addressing all these questions. And, of course, we will publish these responses on the Investor Meet company platform post meeting. But, Anthony, before I redirect investors to provide you with their feedback, which I know is particularly important to the company, could I just please ask you for a few closing comments? Thank you, Alex. Well, I think my closing comments would be that in two ways. First of all, we're confident about the future, and I think that these results are evidence that, we're going to deliver what we're confident, about. And the second point I would make is that the reason for that is, related, yes, to the market and possibly some of the trends that we've been talking about both in Aspen and at Advantage, but mainly because it's the work that we're doing ourselves internally.

50:19 And I must take my hat off to to to the gentleman around the table who run these businesses. Businesses. You know, they they've not been in any way put off by regulatory pressures in actually improving the the operational functioning of their businesses. Whether we talk about my advantage, the new portal there, changes to the collections, privileges, continuing reviews of product. And exactly the same thing as Ed and Jack have said, in Aspen where we won product of the of the year. We're training our staff. We've got better quality staff than we ever had before. All these things don't just happen. They have you worked out very hard indeed. And I'm I'm delighted with what we've been doing in that area. And I'm absolutely certain that the more you put in, the more you get out, and that will be will be reflected in our results in the future.

51:16 So thanks very much indeed for coming. We really do appreciate these opportunities to talk to our retail investors, and many thanks indeed. That's great. Thank you all once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete and ensure will be greatly valued by the company. On behalf of the management team of S U PLC, we would like to thank you for attending today's presentation, and good morning to you all.