S&U (LSE:SUS) — Preliminary Results

0:01 Good afternoon, and welcome to the S and U PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions for today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Anthony Cleomes, chairman. Good afternoon to you, sir.

0:32 Good afternoon and good afternoon, everybody. And many thanks to IMC for making it much easier and more convenient for our retail investors to talk to us. We value these opportunities a great deal. Can I, before I begin one or two comments on our results, introduce the team here, which I think you can see on the screen? On my left, immediately on my left is is Carl Verner, who's the new chief executive of Advantage Finance. We're delighted to have him on the team. He's made a flying start to his tenure as chief executive. On his left is Graham Coombs, who's my the Deputy Chairman of my brother.

1:20 On my right is Ed Aaron's, who is the very successful Chief Executive of Aspen Finance, which is our bridging finance, which is doing very well indeed. And on his right is Chris Bradford, who is our Finance Director and in charge of making sure that the ship of state, if you like, in terms of S and U is traveling smoothly, steadily and upright. So with that, I'd just like to say one or two things to investors about our results, which you will see in front of you on Page four.

2:06 Do you have that on Page four? By the way, on Page three, we've included this year, a number of testimonials from our very happy and satisfying customers, because don't forget customers together with the staff that serve them are what makes a business successful over the long term rather than just over the short term. And we very much value what they do. Right. Without further ado, moving to the highlights of this year. You'll see that there has been a hiatus in the steady sustainable growth of profitability in group. And that is despite the fact that the group continues to trade, I believe, very well in both of its motor finance and probably bridging finance divisions, at at Vantage and and Aspen.

3:06 And despite the fact that the markets in which they serve are actually both improving and robust at the moment. But the reason why there has been a hiatus in profits growth is twofold. First of all, is that the inflationary climate in this country was both more deep seated and led to higher levels of longer term interest rates than was originally anticipated. I'm not gonna be getting any political comments on that, but you can draw your own conclusions as to my view of the competence of the current, government. The second reason was the, introduction in the middle of, July of the new consumer duty, which came with it a whole series of investigations from the Financial Conduct Authority into the motor finance industry. This wasn't just advantage in the motor finance industry.

4:12 We believe the vast majority of our competitors have been subject to very similar investigation, by the FCA. And that focused on forbearance, it focused on affordability, it focused on vulnerable customers. It focused basically on that area of our business, which we've been most proud, which is the relations that we've had with our customers over what this year will be our twenty fifth anniversary. So we've got a lot of experience in this business in dealing with the customers who we value so, so much. However, because of the investigation, the FCA did set certain preconditions on how we interact and collect from customers, and these have had an effect in the quality of our commissions in the second half of the year. Hence, the prudent provisions that we've made against that and also, hence, higher costs of compliance, which although necessary, we don't anticipate will be there permanently, although part of them, obviously, will be part of our new compliance network.

5:36 So that's the reason why there has been this hiatus in profits. We don't anticipate that being in any way permanent and that we will resume our habitual sustainable growth path in profitability next year. And that's why we've maintained our dividend so far as it is sensible to do so at about 120p per share despite a drop, as I said, temporary in the earnings per share. And we anticipate that we'll bring our dividends back to normal over the next couple of years. So without that, that's the highlights.

6:24 I would like to take the first question, please. Oh, so yes. No. Sorry. I I don't apologize. The the the well, let's do the first question. Yeah. Let's do the first question. So the first question we have is from Pat who has asked, do you expect someone to take a redress exercise?

6:45 And what is your view of the overall costs? I'm happy to pick that one up. It's probably a little early as we go through this process in a similar lockstep to many other lenders. To answer that question, too much in the affirmative at this early stage. In the wider part of that question, which is around overall cost, whilst the cost of operating in this modern market never seems to reduce too much, there is I think an awful lot of opportunities to improve efficiencies across the firm going forward. So balance answer to that question. And

7:30 we have another question from Pat which is, will the lithium review and or CD increase to lead to increased headcount and overhead costs. By CD, you mean consumer duty, just for for people. And and BIPID review is business borrowers in financial difficulty. That's the acronym given to it by the FCA. So over to you, Karl. Yes. We're not envisaging significant further increase. Consumer duty is approaching in the months ahead its first anniversary. Obviously, all firms would have invested in preparation and embedding that, but it's an evolving piece of legislation that with ever improving MI and review enables us to look products and services

8:26 differently and hopefully pipes in some innovation going forwards. There may be some temporary increases as we move through the regulatory engagement and take up other opportunities before returning more to the norm, but nothing out of the ordinary would be the view as of today. I appear to have been a bit eager to get to the interactive part of the presentation. And in one sense, I think that you're going be welcomed by participants and investors. But I do think it's important that we present to you the group financials and go through quite speedily the presentation that we prepared beforehand, which actually I understand that investors have in front of them on the screen.

9:18 So without further ado, could I ask Chris Redford, our Finance Director, to address page five of the group financials? Thanks, Anthony, and good afternoon, everybody. The income statement, which some of you might have picked up from our announcement this morning, but I'll just give you some highlights. The revenue was up 12%, that's slightly better than the average book that increased during the year. Why is it slightly better because we've moved interest rates in good direction, not quite as much as other interest rates, but there has been some progress there. Impairment, Anthony touched on in the highlights, 74% up on the previous year. Aspen is a nearly nil impairment model. So this is mostly about our motor finance business.

10:08 Why is it gone up? Well, we talked in the highlights about an increase in arrears and lower customer repayments in the second half of the year. As we navigate through the cost of living crisis and also the regulatory freeze that Carl kindly talk about later, You know, we expect that to come back a little and and repayments to improve. If repayments improve, then the impairment figure should be more normalized. It is up against quite a low comparative for last year, so that was a lower than normal impairment number where where this year's number is slightly higher than normal. On the admin expenses, you can see a 22% increase on this slide. So what's behind that?

10:53 What's the story? We have had extra regulatory cost, about £1,000,000 in skilled person and Schuessman's cost arising from the current discussions with regulators and the borrowers in financial difficulty and forbearance that we're still engaged with now. That's quite a conservative figure, that million pound, because it's kind of estimating the whole cost of the exercise, some of which is still ahead of us. If we get further into the exercise during '24, '24, or '5, there may be some more cost, but we think we should have approved the bulk of it behind that admin expenses there. The other thing to say about the admin expenses this year, because it is quite a big increase, is that some of you who follow us more closely, may remember we gave our staff a couple of pay rises last year when inflation was doing something weird and wonderful in in terms of accelerating away and both as a reward and to retain our staff and and and help them with their own cost of living.

11:53 We could give them a bigger pay rise. That part of the admin expenses is probably more baked in. Finance costs, Anthony mentioned, they've doubled 7.5 to 15,000,000. Remember, we're quite a low geared finance company. So, yes, that's painful for us in the p and l, this year, but it doesn't kill us. We may benefit a bit if interest rates do start to come down. In terms of our own businesses, it's easier to reprice some of that finance cost into our shorter term book at Aspen, but obviously, it's quite a lot more difficult with the HP product advantage, which is over four, five years. And we've also got to bear in mind competition, but that's the story behind that line.

12:40 And bottom line is we made 33,600,000 profit before tax as a group versus 41.4 last year. The split is at the bottom. We've talked a bit about the relevant headwinds advantage that decreased their profit before tax this year. Aspen, I'm happy to say, continued their path of increasing profits, 4,400,000 there up to $4.8 We have proposed a final dividend of 50 p. That's down a bit on last year's 60 p. As I mentioned, we are slightly less covered on the dividend this year, but we think that's the right approach and reflects our confidence in the future. Could we move to the balance sheet, please? The balance sheet, as ever, for our business is quite a simple balance sheet. It comprises in in the main receivables, borrowings, and equity.

13:35 So what's happened on the two receivables book? Well, I've shown you there, Motive Finance of 8%, property bridging the the smaller of our two businesses of 15%, and borrowings of 14% have gone from a 195 up to 223. That's within total committed facilities of 290. So that's still a bit headroom there. And in terms of the equity, that's still even in a more difficult profit year, that's still moved in the right direction, 4% of one figure last year. If we can move to the slide on cash flow. This is the where has all the money gone slide. It's the transactions. You've got group movements in cash flow on the left hand side and what we hope are more useful presentations of the cash flow in each business, in the middle for our main business advantage and on the right hand side for Aspen so that you don't just see the movement in book debt on this cash flow. What we're showing you is how that is comprised by cash flow gone in particular way by reasons of what's happened on advances or reasons of repayments, which we break down into the different segments. So hopefully, that's useful to investors and attendees today.

14:52 In terms of picking out some highlights, Advances were down from $186,000,000 to $175,000,000 but that was actually the second highest ever. Still a good story on Advantage and we're still investing in the business that way. In terms of the corporation tax number, you'll see on advantage even though we've made less profit, we paid a bit more corporation tax. In the background, you may be aware that the company put the rates up from 19% to 25%. This year, we've played a blended paid event, blended rate of about 24% being two months at nineteen percent and ten months at 25%. So we will get the full impact, unfortunately, the 25% next year and that affects this cash flow figure, but it also affects things like EPS.

15:41 On the right hand side in Aspen, one thing to comment on year on year, there was a big increase in both repayments, repayments beyond term. We think that's a good indicator and that it proves that people are getting exits and it helped the Aspen Bridge level. So we're we're pretty pleased with those numbers. On the left hand side, I split down why has the overall borrowings included overdraft moved from a 192 to 224. There's an 18,000,000 outflow of finance, but please remember they pay most of the dividend. So you see in the middle chart that Advantage pay £15,000,000 of the dividend, which is passed on to investors by SUS. And then on property bridge, we invested $14,000,000 in that business, and we think that's sensible, steady and sustained growth for that bridging business.

16:34 So hopefully, that picks up highlights in the cash flow. On treasury and funding, followers of the business may recall that in May 23, we we sourced an extra £70,000,000 in committed funding. So our total facility is now at $280,000,000, which I mentioned when we looked at the balance sheet. There's some maturities there. Our gearing has gone up 10% in the year, but it's still quite low for a

17:00 finance company. So although we have suffered a bit of pain with interest costs this year, we're not overly exposed to interest because more than half of the book debt is actually financed out of the stock.

17:16 Thank you for listening to summary of Group Financials. And I'll now hand over to Karl Werner, who is the CEO of Vantage Finance. Over to you, Karl. Thank you, Chris. I'll speak through mindful of lots of questions coming in. First of all, I just want to extend my thanks to everyone, the Chairman and everyone at S and U in Advantage for a very, very warm welcome. I was in the role from the February 1, where they joined the business to observe and learn till just before Christmas. I'm delighted to be part of a business that has such a clear and rich heritage, huge experience and expertise. I find it a business with a really strong, empowering and safe culture and supportive with a true commitment to customers and where customers have real visibility across everywhere within the business.

18:08 Turning our attention briefly to the results. This first slide is around new business momentum, The strong volumes and growth in average advance demonstrates that we continue after a generation of building it, the support of the market, many thousands of customers and our intermediaries. That enables us as we look to improve our written credit quality in the future to leverage that commercial momentum, is so overpowering to sharpen our capabilities with a future view to improve returns. And I'll touch on it a little bit later in a couple of areas. But we've talked about already the regulatory engagement across all of the market as well as here at Advantage as that came to pass really from H2 onwards.

19:00 I can certainly say that we are embracing that engagement for the greater good, but it does come at a cost. Turning to the next slide, which looks at our collections results from H2. A few things are happening here in the top two, which is around the cash collected and the adherence to monthly payments. We're seeing widely publicized under challenging macros increasingly biting. Expansion of our risk appetite earlier in the year and beyond much was learned as far as our credit risk capabilities concerned, but we look to amend those a little going forward as I say, right, higher quality business. And an abundance of caution, whilst we operate and focus and engage with our regulator which we do so, but also under some minor and as I say, easing minor restrictions.

20:00 The bottom two graphs illustrate both our credit risk expertise and cautionary approach to lending with lower loan to values, hence why you see actual case number of bad debts and BTs well within budget. Turning our attention to the next slide, which touches further upon regulatory engagement in our sector. You've heard already that there's an engagement that's across probably more than 50% of the market, even more so for those of us striving to support the underserved. The most commonly quoted headlines are around discretionary commissions, which Advantage is not exposed to. We maintain a watching brief.

20:46 If we look to the summary of that engagement on the left of the slide, as I say, a watching brief for the discretionary commissions, but unexpected to represent too much by way of cost or effort within the AFL. The BFIS, the market study, Anthony referenced earlier is well progressed. The industry expects that to draw to a close towards the end of the calendar year. We're making good progress, but wouldn't commit to a date for that to be concluded at this early stage. Consumer duties, I've mentioned before, sorry, Graham, is evolving and we're well progressed and engaged with everything else to do with the access to credit and financial resilience.

21:33 One great thing to highlight is actually what happens on the front end when it comes to customers who have caused a complaint. And as you'll see from that table across the industry, Advantage have the lowest uphold rate, which demonstrates the efforts we put in on the front end. To the next slide, a very brief summary of our efforts on consumer duty, a very engaged and highly invested process leading up to the rollout as it continues as we get towards the first anniversary. Good examples there in the pack for your information as to some of the efforts made thus far, not to mention direct quotes from our customers as to the value that we add to them and to society as a whole.

22:21 And then on to the last slide, the messages I'd highlight here would be we utilize challenges when it's time to wrestle, we do so by way to build better muscle for the future. We're refining and building upon very well established and strong foundations. A year of consolidation, yes, but one in which bodes well for our future opportunities once we're through that more internally focused and consolidation phase. I'll pass back to Chris to unpack for you in a little bit more detail the financials for AFL specifically. Thank you very much, Karl. Shared generally some slides on the metrics every half year and every year. So I'm just going to very briefly look through those, pick out a couple of highlights.

23:13 So the first slide here is the quality of the loan book and the new deals that we're putting on each year. So we've got last five years there, so you can see the trends in terms of number of loan, average advance continuing to go up. Cost of sales, £961 in the latest year for information, about £700 of that is introduced in commission. So it's a variable cost that goes straight to the broker. Some of the other costs are variable as well. So this line also contains things like consumer credit referencing costs, data cost and also some of the frontlines staff cost in terms of underwriting salespeople, etcetera. So hopefully that gives you a guide to that particular line. You will note that the interest rate went up to 16.9, so that was a nudging in the right direction this year in terms of trying to reprice what is a fairly long term book in terms of its profile.

24:11 And that interest rate was the direction against an average customer score, which in turn measure of quality that stayed reasonably stable. If we could just move to the next slide, please. This is a very interesting slide in my view. So the left hand scale and the blue line show the percent of customers that pay their first payment on time. So can you see over the years from two thousand and three twenty four that has paid somewhere between 90% and a peak 99%

24:50 of customers paying their first payment on time. So the trends are quite interesting. In the early days, have manual underwriting. So the first payments were not as good, so 90% to 95%. As we gradually automated and got more skilled at the credit risk side of things, it went up. 2013, 2014, we were attracting post credit crunch, lot of very high quality customers that paid not just their first payment on time, but continued to pay very well. It then got a bit more competitive with the rise of the Internet brokers and other lenders coming into the market. So it has settled over the last few years. Can people see the blue line at about 97% of customers paying their first payment on time?

25:36 You will note towards the right of the chart, we've got a couple of blips. So the first blip was just at the start of the pandemic, when people panicked a bit and didn't pay their first payment on time. We've also had a blip at Christmas this year, which happily for us has recovered a bit in January, but continue to monitor that as we go forward. The chart gets more interesting when you look at how it correlates again now come after five years, which is the red line. And there is quite a good correlation there between the way the first payments and the end outcome in terms of percent of bad debt after five years, which is the inverse scale on the right hand side. So that's varied between about 10% and about 30% over the years.

26:22 We've only got firm figures for that of five years ago, inherently by definition. It still seems to be correlating up to that point and dotted red line is forecast, which is less certain as it gets applied to the chart, but we still think that's a good degree of correlation between those payments and early repayments and the way each accounts end up after five years. We could move on, please.

26:50 This is a simple payback chart that we show you every year. So the blue lines are the investments we make or have made each year from January 15 up to January 24 in not just advances, but also the initial cost of sales for new loans put on in that year. And you can see what I referred to earlier that January 24 was the second biggest after January 23 in terms of our overall investment. The green lines show the more exciting things for the finance directors, it's getting the money in. We obviously have mainly finished collecting on January 15 through to January 19, so they're mainly finished. But the others, as we move up through January 20 up to January 24, they're all forecast, and we'll see whether those end outcome estimates manifest themselves or not.

27:43 If we can move to the next chart, please. The final metric chart that we're showing you is, the receivable position. So this is an analysis of the book at the end of January twenty twenty four versus a similar analysis at the end of January two thousand twenty three. So the sixty six thousand seven hundred and two accounts on our live book in January 24, forty seven thousand six hundred and twenty two were up to date, and you've got that as a percent of live receivables as well.

28:17 Legal and debt recovery is just follow-up debt where basically we've had the carve out, but we may still be discussing with the customer making additional payments. The value of that, what you can see is only £5,000,000 versus the lifeboat, which is the bulk of our asset in the balance sheet at £327,000,000 I'll now hand over to the CEO of Aspen Bridging, Ed Ahrens, and he'll take you through what's been happening in that business and where the focus is this year for the future. Thank you, Chris, and good afternoon to all. It's been a good result for Aspen this year, particularly in the second half of the year with strong and

29:02 balanced growth. Beginning of the year was a little bit stickier, but overall, we got to the end of the year where we wanted to get to with record number of loans out in the year. And also record number of repayments, which as Chris said earlier, is a good thing for the business. It just shows that our borrowers can actually refinance their loans and also selling properties. We've maintained the quality with only 15 of the loans beyond term out of the '1 163 of the year end. And we remain very positive about the bridging market for us and for our prospects for this year.

29:46 Just looking at the trends in the business over the years, you can see we've made a lot of progress on the cost of sales as we've become

29:54 more known in the market and with a broader base of brokers. So we're in control of the cost of sales. We're in control of the LTVs that were out there and this based on conservative valuations. We made some progress also on the blended yields, where we've been moving up the interest rates, not quite in line with the Bank of England movements, but we've passed on as much as we can sensibly and reasonably and remain competitive in the market. Otherwise, the terms remain unchanged and we expect the outcomes to be positive all around. So just moving on to the next one, thinking about 24%, 25% and just to set the context,

30:40 in terms of the marketplace, we expect the bridging market to grow by about 5% this year on the back of 4.2% last year. We expect that to be a good opportunity for us to continue to contribute growth and to the group. Otherwise, you can see that we're investing,

31:05 trying to make sure that our profile remains strong in the market, expanding some network distribution and investing in our systems and also very importantly in our people in terms of upskilling them to be able to support the level of growth that we want and the quality of the business that we want. I'll now hand you back over to Anthony. Thank you very much indeed all the participants. I'm not going to repeat what I said at the beginning, because I want to get on to questions. But I must say that the markets in which we operate and the way that we address those markets are extremely healthy at the moment. And although we have some short term challenges in terms of regulation in one of our businesses, along with everybody else in the industry, we expect to overcome those in a very constructive way, work closely with the FCA and resume our growth path

32:05 in profits. So that's the good news as far as the our investors are concerned. I've just been looking at some of the questions that have been coming in as as well as ones that have been resubmitted. There are three on gearing and on borrowing. One from Daniel g,

32:27 one from Javier b, and one from John g.

32:34 So we've got Daniel g. You can read that one out, first of all. Yes. From Daniel, we have. When you're assessing a company's leverage, how how differently do you view the leverage from Advantage versus the leverage from Aspen?

32:50 Do you have one common measure of a company's overall leverage or two separate categories in terms of debt capacity and risk? Chris, would you like to to address that one? Yeah. Thank you very much for the question, Daniel. So we try and maintain a bit of flexibility actually in terms of where we allocate group funds. So we don't separate them or view them too too differently in terms of where we are actually implying the company's debt. And if there is a better opportunity in one asset area, then we reallocate to that or we would raise extra funds probably to what we wanted to do. So I hope that answers the question. Good. Thank you. The next one is Javier B.

33:37 So are higher provisions in advantage related to economic environment or does it have more to do with the FCA regulatory issues? Yes. I can answer that one if that's alright, Anthony. So these are impairment provisions, which clearly had gone up when we looked at the income statement by 74% this year. The higher provisions in a way relate to both these features because they relate to higher levels of arrears and lower levels of repayments in the second half of the year as we described. So why do I say it relates to both? Well, the lower levels of repayments relate both to the macroeconomic environment in terms of a few customers, few more customers struggling with the cost of living crisis towards the end of the year. But it also can relate to FCA regulatory issues where as Carl described, we are being quite cautious in terms of our interpretation of the new consumer duty rules and also where we are in discussions with the regulators on borrowers and financial difficulty.

34:41 So both of those two things played a part, I think, in the increase in our impairment charge this year. Good. Thank you, Chris. Javier, he he also asked a question about gearing and and borrowing. Could you read that one out, please? So from the outside, it seems like you're you've increased your leverage at the worst time. Given that returns come lower than expected, are you still comfortable with your current gearing level? Well, okay. I'll just sure. I'll answer that, and then Chris can can come in as you want to. Yes, we are. Otherwise, we wouldn't have we wouldn't have gone there. It's it's well below our current bank funding and and longer term funding covenants.

35:29 We always believe that a business of such as ours is dependent on its collections, and that is a very good measure of its success. And with the exception of maybe recent collections at Advantage, which I've explained to investors, our collections history is very strong indeed and has rebounded slightly earlier this year. So yes, I'm happy with the level of gearing. Obviously, our gearing is only there to support either the investment in the business, And we do that because we see good opportunities or rewards for our shareholders in terms of dividends. And those are rewards that are well earned and hopefully appreciated and will continue.

36:21 Chris, do want to add anything there? No, I totally agree. We try and look at the gearing and the borrowings level that is following the asset opportunity. Now in this case, as Javier mentioned, returns have come lower than expected. So yes, we did expect slightly higher returns when we decided to push the level of borrowings and gearing upwards during the year, but we're still comfortable with the current gearing level. And as I said earlier, I think it's relatively low for a finance group. Thank you. Thank you. There was a question which was pre submitted on algorithms and their use in underwriting, which I thought was an interesting question.

37:10 The trouble is I don't have the name towards the top. So yeah. So this one was from from Jane. It says, given recent advances in AI, do you see algorithms being used to underwrite colleagues? Yes. We already do. Many lenders do. And I'm as I say, it's early days of my time within the business, but it's it's capabilities that have been built in house and, you know, quite deep and extensive do use a high degree of automation from what some may term as as AI. But if anything that serves the customer quicker, widens access is gonna be embraced, and AI is is one of those. So there's a number of initiatives both specifically within Advantage and across the industry that will make much more of that. But as I say, we are already highly automated from a credit risk perspective already.

38:14 I think we will just expand a bit on the return on capital employed query. And obviously, that's pretty critical as you say when we're increasing our capital investment. We didn't really Yes. We went to explicit on that. We are constantly pushing to improve our capital return on capital employed, impairments and other kind of interventions near the line. And we are conscious, particularly at Aspen that we're looking for a capital return capital employed, certainly well in excess of 10%, and that's actually improving year on year. And an advantage that we'd like to return to return capital employees of over 20% in the housing days, but, unfortunately, competition seems to stop that. And now we're looking for a minimum of 13% and hopefully heading north into that.

39:02 Excellent. I'm glad we actually addressed that because I think they're putting on return on equity, but then we've answered the Geary point as well. So I think covered that. But thanks, Graham, for that. We also have an interesting question from Dominic C on forbearance, which I think we ought to address. And that's over to you, Carl, if you want to read that one out. Does the increase in forbearance mean you're simply not collecting from some overdue loans where you previously have negotiated and reduced payments amounts, which which then impacts on the borrower borrower's credit record? If so, are these loans more likely to fail, hence, the increase in provisions? I mean, there's the short answer to that is is no. We we're we're not doing that.

39:54 But the increase in forbearance is again coming back to both time, effort, information and engagement. So there are a broader list of things that constitute good forbearance, broader opportunities, sometimes over perhaps a slightly longer period of time than previously. And I'm talking as an industry here, not specifically in regards to advantage. The clear outcome is to make sure that there's a the right outcome for both the the the lender and the and the customer in equal measure. So I don't see the negative in anything sort of referred to within that question.

40:42 And could we also address Damian's sorry to call you Dominic, Damian, that's my writing. Damian's other question, which is just below it there. With the reduction in products that you're willing to sell in current FCA environment, is this likely to start this or permanent change, which reduces your addressable market for motor clients? It does not. I mean, you're quite right, Damien. You would have seen some product sales from other providers. The most recent ban, but yet sort of one month extension currently for GAAP sales, but that impacts both lenders and intermediaries as a good example of the reduction in products. It may well be in other areas, list of closed products is growing.

41:33 We are is a very large market. We are very good at motivating applications within it. So I don't and we have a singular product really in higher purchase currently. So I don't think the direction of travel is a further reduction in product. I think quite the opposite in the years ahead. Just to make it plain, Damian, we didn't actually or not recently offer a cap product. We I think used to, but that was I think ten years ago. We finished doing that in 2015. Yeah. So we haven't really reduced our product range in that regard, and we don't intend to. And indeed, we intend to maintain our addressable market for motor finance across the piece. There may well be a small contraction, first of all, regulatory reasons.

42:31 We wanna make sure that the way that we're dealing with customers who may be seen as more vulnerable is as it should be, and I'm actually certain it is, but nevertheless, we wanna demonstrate that to the FCA. But we still want to offer the full suite of products to the full breadth of our customer base in the longer term. So I hope that answers Damian C's question. There's another question that I saw came up on electric vehicles, which I thought was interesting. It was a pre submitted question. So I don't know who is from. Yes. So this one is from Roger.

43:17 And it says, how will the potential continued reduction in the value of EVs have on the company? It's a great question. Obviously, a lot of people are interested in this space. I think all vehicle values over the, you know, multiyear viewpoint can appear quite volatile. Over the more recent times. We've seen more volatility in used car prices for EVs, but that will tend to as always bottom out and level out over the longer period. It's going to be a good long time until the used car part becomes EV to a point of being interested and having an impact on any lender with an average age of vehicles or six or seven years old at the point of execution.

44:05 So very, very little is the short answer on that. But I would say also the volatility in pricing will even out over the longer term anyway. So I don't think the volatile price reduction for used EVs will have a negative impact for anybody. We are much less exposed to that because that's not our market currently with where the used car park is today. Excellent. Excellent. And can I ask next, go to a pre submitted question, which is which is that one? Yes. No. The one about Aspen. Oh, yes. Given the success of Aspen since its founding in 2017, what are your views on its long term contribution to the group?

44:50 Over to you, Ed. Well, obviously, from an Aspen perspective, we see a great opportunity to continue to provide to the group a diversified product, an additional stream of business in a market that is expected to grow in which we currently hold a smaller share of a relatively large market, not compared to the mainstream mortgage market, certainly in the bridging market. And also the bridging market and that type of lending and borrowing is not provided by mainstream lenders. We don't see that changing anytime soon. And therefore, we continue to do what we're doing and bringing on quality customers and quality projects, we see a great long term future contributor to the group.

45:43 Yes, I mean, I would just take the opportunity, I don't know what my brother wants to say something, but that we're very pleased indeed with the progress that's been made at Aspen since we founded 2017. And we think it's got great potential. One, we're pleased that obviously profitability is risk every year. We've obviously injected quite a lot of capital into it, and my brother has already mentioned, return on capital employed, and we want to see that improve. But it will improve as the business grows and economies of scale become more accessible. Secondly, we were very pleased about the amount of business that they're generating and the kind of credibility that they're generating in the broker market, which is mainly broker led.

46:29 We're also very pleased, however, that there are more Aspen Direct, as we call it, introductions into the business, which obviously mean that we are getting to repeat customers. And repeat customers only come back to you if you're developing an excellent reputation. And the final thing that I would say we're pleased about is the improvement in efficiency, because we do monitor on a quarterly basis productivity, in other words, deals per member of staff, deals per particular part of the business, the underwriting business, the collections business and so on. And those are improving all the time. And I think we've really got a very serious business in prospect for what Aspen are doing very well indeed.

47:23 Right. I'm trying to see the next one that we ought to be looking at. Keep going. Keep going. Apologies for everybody's oh, I'm looking at this on the screen. Keep on going. Yeah. One that bell rocky and return. Is that the room key? Number eight might be. Yes. I think we've already covered that, but think I mean, are there any new questions that are coming along? Do I understand? The last one was from John about gearing. So that's one of the Yeah. Which is one we've already covered, I think. Gearing. So I think, actually, we've covered all the front.

48:11 There's no point in just answering questions that haven't been asked. You know, this is meant to be interactive for women as precisely what we are making it. Can I just say to our MC, very valuable as far as we're concerned and hopefully valuable so far as your viewers and listeners are concerned? Perfect. And thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure you'll be greatly valued by the company. On behalf of the management team of S U PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.