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Good afternoon, and welcome to the S&U plc Full year Results Investor Presentation. [Operator Instructions] 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 afternoon to you, sir.

Good afternoon, everybody. And can I just thank Investor Meet for this opportunity to present our results from S&U for the period of 5th of February 2026. We always like the opportunity to engage with investors, and we find this a particularly good way of engaging with our retail investors. And so many thanks to Investor Meet for that.

Just quickly going through the highlights of this year. We've had a good year. This is a year of recovery as we anticipated it would be. But overall, our profits are up by 32% to GBP 31.8 million. Both Advantage, our motor finance business, has performed very well, GBP 16.5 million to up to GBP 23.4 million profit before tax. Receivables are up to GBP 317 million. And that's part of group receivables, which have reached for the first time nearly GBP 0.5 billion, and we expect to go even higher over the next 3 years.

Aspen, our property bridging business, has produced record profits. Both have had significant improvements in their credit quality, although to be fair, both Advantage's impairment is unusually high due to a regulatory intervention and are making provision for that for last year, which wasn't required and will remain at low levels in the years to come, which obviously is good for Advantage's future profits. So with that, we're very confident about the future. We've got a big refinancing exercise going on to securitization, which will actually effectively double our capacity to fund our business over the next 3 years. And we expect that, that will result in a significant expansion of it. But I just want to emphasize to investors that we're not just going to expand because the funds are available, and we're not just going to expand because vanity rather than sanity, we're only going to expand if the lending opportunities become available. And we will be making sure that our margins reflect that.

The only other thing I would like to say is that since these results, Mr. Trump has decided that he would like to maintain his adventures throughout the Middle East. We think that, that will be resolved reasonably quickly. Even if it isn't, we don't anticipate having a very big effect on our Motor Finance business, and we anticipate that our property business, our Property Finance business can gain market share to compensate for any problems that the general residential market might experience.

So with those few words, I'm going to ask Chris Freckelton, our Group Finance Director, to go through the group financials. So if you could turn the next page, that would be really helpful.

Thanks, Anthony, and good afternoon, everybody. So starting with the income statement, our profit before tax for the year is GBP 31.8 million against GBP 24 million this time last year. So a 32% increase year-on-year. In terms of the key movements in the income statement, revenue is actually down 7% due to lower average receivables during the period and our cautious lending approach in Advantage in H1. Happily, that recovered in H2 and our revenue as a result in H2 was GBP 56 million compared to GBP 51.5 million in the first half of the year. Impairment substantially reduced from last year, reflecting better Advantage repayments, which were at an average of 90.5% of due versus 85.6% last year. We also had a debt sale in Q4, which helped the impairment charge by GBP 2.5 million. And we've continued to see excellent collection and recoveries in Aspen at GBP 188 million versus GBP 157 million last year.

In terms of other areas of the P&L, so cost of sales have increased 44%, albeit from quite a low base to more normalized levels following a return to higher advances in Advantage. Admin expenses are 31% higher than last year, and that's due to a couple of factors, one of which being higher staff costs as we invest for growth in the future. We also had additional complaints costs in Advantage from CMCs in terms of processing in the first half. And perhaps more importantly, we also recognized an FCA commission provision following the final scheme rules being announced recently of GBP 1.8 million. And then finally, finance costs have reduced due to the lower average borrowings and obviously the lower SONIA rates we've seen this year as well.

If we can turn over on to the next slide. So in terms of the balance sheet, it's a relatively simple balance sheet focused on accounts receivable, borrowings and equity. Following the recovery I mentioned in advances in H2 for Advantage, we've seen the net receivables increased 12% to GBP 317 million. And that's also assisted by the better repayments and collections performance, meaning lower provision requirements. Aspen net receivables have increased 18% to GBP 179.7 million following the very strong lending year-on-year and a more normalized level of collections and recoveries in H2. You may recall from our interim presentation that we were ahead of budget in terms of collections in H1, and that's now normalized to be in line with budget for the full year. Borrowings is the last item to call out has increased in line with the increase in the loan books and including the GBP 0.3 million of bank overdrafts we've got, represent net borrowings of GBP 241.8 million as at the balance sheet date.

So if we move on to the next slide, this is the cash flow and just tries to show the movement in the balance sheet positions more clearly by division. So overall, we've had an increase of GBP 49.5 million in net borrowings since last year. And as you can see in the tables in the middle or on the right-hand side, that's predominantly being driven by advances. As you can see in Advantage, they have increased by 66% to GBP 182 million in the year, and Aspen has increased by 18% to GBP 212 million. We've also had dividend payments of GBP 12.7 million driving funding requirements, but that has also been offset by the good collections performance that we've seen in both businesses, as I've already mentioned. From a gearing perspective, that means we end the year at 97% versus 81% in last year.

And then finally, just over on to the next slide for treasury and funding. So the net borrowings of GBP 241.8 million sit comfortably within our committed facilities of GBP 330 million. You will clearly notice that, that's GBP 50 million higher than interim, and that's following an accordion agreement with our RCF club lenders, which we secured in January this year. And then since year-end, both businesses have required additional funding to support growth, and we very much expect this to continue for the remainder of the year.

Therefore, we're currently engaged in the major securitization projects, which I'll hand over now to Jack Coombs to provide a bit more detail.

Yes. Good afternoon. Hi, we're currently pursuing securitization -- two securitizations, one for Aspen and one for Advantage. As Chairman alluded to, this is aiming obviously to give us capacity to double the level of available funding. Nevertheless, I think it's important to emphasize, as was mentioned previously, that our lending is obviously going to be driven by the right opportunities rather than by the availability of funding. And initially, what we will be doing is essentially a like-for-like refinance of our RCF facilities with the accordion thereafter providing the headroom. Essentially, these facilities will be standard securitization facilities in the sense that they will be nonrecourse either to the subsidiaries or to the group. And also these will provide a good improvement in cost of funds.

I think it's just worth mentioning that the longer-term trajectory is obviously that Advantage would qualify for a public securitization. And so there are further benefits to come to the group in the years to come. So it's an exciting time. We've obviously put together a treasury team to facilitate this. And there's also insights that we're getting around the business off the back of additional data requirements that we're obviously putting together, which will hopefully improve our management reporting.

Good. Thank you.

Sure.

I'll pick it up from Slide 10.

Well done.

First, to the world of lending. You'll note there a good strong return to growth in terms of cases, volumes and quality, really unlocked by much improved credit risk capabilities a whole new scorecard, a fresh, sort of real 21st century approach to affordability and the ability to ingest much more comprehensive data sets. We accelerate through Q3, as you see on the graph, testing both our maximum operational and pricing capacity and then aligned with the festive season, it tapers off in Q4, and that steady good levels of growth continues into 2026.

Turning to Slide 11 and the other part of the business on the repayment side. Not such a build back really, just a full year significant year-on-year improvement, leveraging our established experienced team, revised structure that's been in place for many months now, bedded in all the changes you would have heard me speak about when discussing FY 2025. Repayments are up, bad debts are down, and those trends continue to improve in 2026. Really off the back of some significant investment in '24 -- latter end of '23 and throughout 2024 in upgrading our platform, training our people, investing in new technologies and of course, the improving general book quality.

Turning now to external factors such as the regulating -- regulatory space. Obviously, we're in the middle of a very important period for all motor finance lenders following the publication of the final rules as part of the FCA Commission Redress Scheme. From our perspective, look, we have a clear roadmap to execute against those plans. We feel it gives the market a clear and consistent future to work upon, and we'll be progressing that project for the remainder of this year. Looking to the table, we're delighted that our success in looking after our customers is reflected also by the findings of the Financial Ombudsman Service.

And my last point is that after a year of quite exponential growth in terms of applications and cases written, that does nothing to inhibit the service we offer our customers holding on to that super high 4.9 out of 5 Trustpilot score throughout the year.

Turning to what have we been doing specifically as far as some of the key strategic activities over the last 12 months, innovation, sustainability, a high-performance culture really underpins our strategy, refreshed and relaunched the latter end of 2025, so well underway as we sit here today. Very briefly, in Q1 last year, 4 examples I'll give you in Q1, the investment in the technology through the portal and telephony to improve access for our customers, very high levels of engagement, which we're very pleased with. In Q2, it was around the team and the environment and the premises and that project concluded very successfully, improving our capacity at our head office there at Advantage.

In Q3, it was really a focus on credit risk and affordability assessments. That was a major upgrade underpinning a lot of our growth in sustainable lending. And then lastly, we're very pleased with a very practical and scalable use of AI, building very journey-specific AI products, primarily in the customer repayment space. Three new products made a big difference as far as our operational productivity and capacity in collections. And that investment continues into 2026, turning our attention to the new business operations areas currently.

Lastly, on the next slide, really, all I'll say is the investment that pays dividends continues at a pace. We'll be very shortly expanding into new channels of distribution. We have a very clear strategy upon which we're executing. We're into already the latter stages of the Phase 2 of our AI projects and investment, benefiting, as I said before, new business operations, augmenting greatly the capacity of management and including the recruitment and onboarding of our own in-house AI engineering expertise.

And suffice to say, we've had a very positive first quarter of this year. So I'll hand over to Chris for more details about that.

Thanks, Karl. So the next 4 slides take a closer look at the Advantage book debt performance. So during the period, we've originated 18,279 deals at a higher average advance of GBP 9,935. So on the whole, better quality customers demonstrated by the higher average customer score and also the lower interest rate flat per annum. Following the introduction of the new scorecard and refinement of the affordability models in Q3, we've seen a move back to our more traditional customer base, resulting in the average customer score reducing and the interest rate flat per annum increasing from where we were during H1 to land at 13.5% over the course of the year.

Cost of sales have remained elevated to prior years, but again, have reduced since interim following the return to our more traditional customer base. We then turn over to first repayment quality. So historically, we've seen a good correlation between first payments made by customers and bad debt and outcomes after 5 years. The blue line axis here is first payments made with the red line axis is bad debts and the dotted line -- dotted red line is forecast bad debts. So as I said, following the move to a more traditional customer base, we have seen first payments decline from their recent highs when writing better quality originations since Q3 onwards, albeit that recent performance is in line with what we've experienced from the book in the past 10 years. I think important also to draw out that the dotted line in terms of bad debt forecast outcomes continue to reduce, reflecting our improved collections performance across the business.

We then turn over to repayments more generally. So this is a simple payback chart of investment by Advantage by year of origination, showing the customer advance and the cost of sales of writing that business, and that's denoted by the blue line. And then we have the customer repayment in the green line. So as you'd expect, collections are largely complete for the Jan '19 to Jan '21 cohorts with the future year's forecasted collections based on historical analysis. You will see the collections performance is expected to be lower for the Jan '23 and Jan '24 cohorts, following the challenging collections performance during the regulatory review. Happily, though, we expect that to improve for the Jan '25 and Jan '26 cohorts as you'll be able to see in the graphic there on the slide.

And then finally, just over the page on to an analysis of the book debt at each balance sheet date based on arrears status. So for the reasons we've already mentioned around better collections performance and improved lending, we have a much higher proportion of our debt in the up-to-date category at 71.8% versus 64.5% last year and far fewer accounts in the worst performing arrears buckets of 6 plus at 5.7% versus 9.3% last year. And this has continued to improve post year-end as well.

I'll now hand you over to Ed Ahrens, CEO of Aspen.

Thanks, Chris. Aspen has had a very strong year, '25, '26, reaching new records in terms of lending, GBP 212 million as well as record repayments of GBP 188 million, as Chris mentioned earlier, whilst at the same time, importantly, maintaining the quality of our lending. And that's resulted in a record PBT of GBP 8.8 million for the year. We've expanded our product offering and continue to build our strong reputation with our brokers and wider borrower community. We see continued growth in bridging and for the future and the ongoing shortage of housing, there's plenty of stock to refurbish and invest in.

Next slide, please. This is a slide we've shown before. We look at the business over a 5-year period. Key headline here, we've reached GBP 790 million of capital lending with only 0.02% of actual capital losses, which is extremely good and representative of the quality that we're talking about in our book. Two key messages to draw out from this table. You can see that the average loan sizes have come down a little bit. This is a market-wide effect. We've actually made up for that in our business in terms of volume by doing more loans, but also our product development has helped with average loan sizes being supported upwards with some of our newer products, longer-term products. And you can see the effect of that at the bottom of the table with the 16 months of average original term. We've been managing our blended interest rates in a reducing interest rate environment for that period. But it's worth noting that our outcome yields for loans that have actually repaid typically exceeds all of our original blended yields. And from a cost of sales, you can see that we're in control of that at 1.1%.

I'll now hand you over to Jack on the next slide.

Yes. In terms of the outlook for Aspen, obviously, the level of increase in volume of deals was very strong last year. I think we expect to continue to increase the level of deals that we're doing. One thing we also saw, obviously, Ed mentioned, was a reduction in average loan size. That's really off the back of the more prime conversion redevelopment market really being weaker in the U.K. off the back, obviously, of changes in taxation and non-doms and various different things that have impacted London specifically and other more prime locations.

And obviously, we're continuing to innovate and take market share. I think that's definitely the theme for Aspen. And we've seen and we've got a question coming up later, but we've obviously seen a lot of success in the product diversification that we've undertaken in our buy-to-let and bridge-to-let direction, which obviously we can come on to the questions later on. So I won't go on about that too much. But essentially, we're obviously seeing, as Ed mentioned, the average length of the term increasing that will continue to increase this year to around 18 months. So essentially a healthy origination whereby we've always consistently lent year-on-year more than we did in the previous year. We expect this year despite the headwinds in the property market to be no different. And that combined with the longer average length of expected term used and obviously origination will lead obviously to a healthy and consistent growth. We're not necessarily seeing the level of increase in staffing being commensurate with lending.

We're seeing that our people are more experienced. And as a result, we've got good capacity within the business. And as is mentioned on the slide here, we are integrating AI into the business and using that more and more in order to ensure that we're maintaining an efficient base. But essentially, we've got good control on the valuation side of things. We've got a very low level of default position and arrears position, which is also a healthy place to be. So we feel like we've got good control. We're not going to loosen our appetite in terms of our credit appetite in any direction, particularly. But we believe that the combination of our in-house capabilities, which are pretty unique and our innovative products put us in a good place to continue the growth of the business.

Great. Okay. Well, thank you very much for that. I want to leave time for questions. I mean because obviously, the essence of this is interaction as well as presentation. I would just conclude by saying that we hope that, that presentation gives you an idea of two things. First of all, that the business in terms of its present makeup is operating well as reflected in the results. And secondly, that our ambitions are very much intact and that what we're trying to do with the refinancing process is to lay the ground for the funding we require for expansion in the future. And at the same time, over the last 2 or 3 years, we've been laying the ground operationally for an operation which can be expanded in a very successful way. And we believe that the markets that we're operating in, both in terms of the value end of the motor finance market and in terms of an underprovided housing market will, in the long term, benefit the business. And I think we're therefore in the right markets.

So with that, could we move on to questions? And I've been trying to look for the questions, but I can't quite find where they are...

That's great. Yes. So I'll read out the questions for you, Anthony, if that's okay. And the first one here says, given S&U's traditional underwriting approach in subprime, is this a strength or seen as a weakness in the market which is becoming more digital in its processing? Also, how have the improvements in collection rates been achieved?

Very good. Thank you. And over to you, Karl, for that.

Great question. The first thing, the underlying premise is that in specialist markets or nonprime, digital or digital first doesn't apply. That's absolutely correct from sort of previous years, but less so, if not in fact, not at all going forward. So the subprime or nonprime specialist market strength of experience and knowledge that we have continues going forward, but also can be hugely accelerated with the application of digital solutions. It's fundamentally no different. The tooling available to a funder to survey the market are the same regardless, whether it's the very prime to nonprime to specialists.

So in this modern world, the same digital approach will succeed. The collection rates have been achieved really after -- well, first of all, it's a very well-established experienced team that have looked after customers buying cars for an awfully long time, in their 27th year. Some of them have been there over 20 years. So first of all, the corporate memory is very strong. The upgrades and investment with a strong 7-figure scale in 2024, training, technology, resourcing, org design, those are the key pillars really as to our current performance. So long established experience, a very modern level of investment, improving book quality, they all point to the improvement in collection rates.

Perfect. And the next question is on Aspen. In relation to the Aspen buy-to-let options for developers, how well has this specific innovation been received in the market?

Yes, I'll take that. Good question. I mean it's been developing over the last couple of years. To give you a sense of that in terms of this last year that we're talking about, it represents 40% of originations for our business. So we think it's doing well, and we expect that to continue to do well in the future. It does attract high-quality developers and good quality projects. So we expect that to be the same going forward.

Just to clarify, that 40% figure relates to both the bridge-to-let and of course, to the buy-to-let element. And every single one of our buy-to-let is originated off the back of an Aspen bridge, which I think fundamentally is the route to quality here. So just to give some color to that, essentially, if you were going into the buy-to-let market and you were trying to originate debt that was on the sort of rates that obviously the group would demand, you would be going down the quality curve quite significantly. But we're not doing that because, of course, we're essentially lending to people who are undertaking conversion projects or whatever they're doing, and we have an issue with the bridge.

And then essentially, typically, the buy-to-let element from Aspen tends to be almost like a backup but I think essentially, you've got 2 types of deals that we're replacing there. You've got one is a development exit deal, which is obviously a well-established group within bridging. And so essentially, people are not having to go and seek a development exit loan and then you are actually essentially passing on some degree of savings to the customer whilst also retaining them.

And the second option is obviously the people who are hold people, who are staying with us on the multiyear product. And essentially, one of the things that is working in our favor, the reason why people take these backup options and why they then end up converting is because, of course, you have various different time lags to do with completion of works on these projects to do with getting all of the paperwork required and then actually achieving a term exit takes many months. So the combination of that just means that as a timing -- result of timing, we actually convert about 66% on to the buy-to-let. So it's a successful niche, which helps us originate.

Good. Okay. Right. Nominations, please, Alex.

Perfect. The next question here is the drop in impairment charge was a key driver for the PBT improvement year-on-year. Is the GBP 13 million a normalized sustainable level given expected business growth in 2026?

Yes. Thank you. So I think the key thing to draw out here is the GBP 13 million this year was good performance. I think it was obviously helped by the GBP 2.5 million gain on debt sale that we did in Q4, which is we are expecting to be more of a one-off item rather than a continuing trend. So certainly, for Advantage, we'd expect the impairment to increase a little bit based on excluding that debt sale gain, albeit you're quite right to point out, we've got quite a lot of growth in the book planned, but we are expecting our cash collection performance to continue to improve from the basis that we've seen this year, hence why you don't see a big jump in the impairment charge.

If we look at Aspen, that has had probably quite an unusually low impairment charge this year, and that's because we had some really excellent collections and recoveries in H1, in particular on some of our more long-standing arrears cases. So I think that will naturally increase a little bit more to a normalized level that we saw this time last year.

Understood. The next one here is you've achieved strong growth. How do you ensure you maintain a disciplined approach to risk as volumes increase?

Well, we do that by maintaining our credit standards in both businesses. We continue refining our credit scoring. We refined our affordability. That's an advantage. And in Aspen, we are working closely as part of if anything else as part of the refinancing exercise with the banks. So in order to ensure that our underwriting criteria meet their requirements as well as our own. So for those reasons, we're maintaining our existing operations, but refining them. And we anticipate that, that will mean that the quality of our debt remains very high in both businesses. It's crucial it is because that's our main asset. I mean if you look at the assets of business, the vast majority of them are in the GBP 0.5 billion worth of receivables, and we're going to make sure that, that is maintained.

Just to put a bit of color on the Aspen, there isn't a single live CCJ on the Aspen, which is why we say it's quite prime bridging lender.

The next question here is on competition. Are you seeing any competitors pull back, creating opportunity for S&U?

And that's from Peter M. And I'd also like to couple that with Nigel A., I think he's probably talking about motor finance, particularly given the MotoNovo situation. And Nigel A., do you want to just read out Nigel A.'s question?

Of course, yes. So with MotoNovo who have 10% of the market, pulling out of the U.K., are Advantage aiming to take a slice of this market share? Is there an opportunity to buy the book off Aldermore? Linked to this, given the redress impact on Close Brothers, Lloyds, Barclays, et cetera, are we seeing organic growth from competitors adopting a more cautious stance on lending? Have we seen evidence of this in Q2 and the 2026 pipeline?

Over to Karl.

Thank you for the short questions. Let me pick them apart a little bit. Is there going to be opportunities? Yes, following the -- off the back of all we've seen in regards to regulation, FCA redress and the bills that follow that. We're still in -- we are in an uncertain period as to what the rules are. We have a relatively high degree of certainty. I'm talking at the market level here, not just Advantage as to what the costs are. What happens next on this journey, not so much. As you've seen, some are accepting of the rules and wish to execute against them. Others may not. So there could be a few more twists and turns in this story yet.

From that, obviously, therefore, you'll have some who want to double down in the market and continue to serve it strongly and others who may not, for various reasons, be in a position to do so. And obviously, we wouldn't expect us to comment against any specifics there. We are of a mind to take advantage of opportunities as and when they arise. whether they be market specific or organic growth. There's an awful lot of market for us to go for. We have about an 8.5% market share of the nonprime motor finance market. So plenty of runway. I probably wouldn't comment so much on the specifics of other vendors that are being marketed for sale. I'm sure that will take a great deal of time for that to happen.

So we went around the houses there a little bit. My apologies, Nigel. I think it's going to be a long summer before we get some real clarity as to what some of our market participants intend to do. One thing for certain, a plethora of opportunities sit before us, and they did anyway even prior to the regulatory intervention or other aspects. So we still have 92% of the market to serve from one perspective. So I hope that helps.

Could I just ask, Alex, it disappeared from my screen. The most important question has disappeared, which is from Matt H. If we can get that one back because I'd like to do that last but could we go on to Edward G. next, if you could read his as well.

Yes. So your admin costs have risen from around 13% of sales in FY 2021 to nearly 27% in the second half of FY 2026. I know this is due to various temporary costs associated with compliance. Can you give a guidance on what it would be if these one-off changes were stripped out?

Do you want to do that, Tim?

Yes, absolutely. So you're absolutely right. I mean one of the key drivers of the increase for admin expenses this year is the recognition of the FCA commission redress provision of GBP 1.8 million. So if we strip that out as trigger being more of a one-off item, the admin expenses increase would drop from sort of around 31% to closer to 22%. In terms of guidance for next year, we're not expecting a big increase in admin expenses. We're expecting that to track broadly in line with inflation.

Fantastic. And the last question, which Anthony was referring to is, what do you think the market is underappreciating about S&U today?

This, I thought, was the most important question because it impacts on the value of the business. And that's something we're all -- all of our shareholders and potential shareholders very much interested in. My view would be twofold. First of all, I think it may be that people don't appreciate that, thank God, we are now in calmer regulatory waters so far as Advantage is concerned. And that hasn't been the case for many years under both governments, Conservative and Labour.

And I think that the penny has now dropped that if you want growth, you've got to have proportionate -- I'm not saying no regulation, but proportionate and pragmatic regulation. Regulation which is consistent and which is predictable because if you don't get consistent and predictable regulation, you don't get investment. If you don't get investment, you don't get a growing financial services industry. So I think the penny is dropping both in government and in the regulators that, that is the case, and we'll look over the next few months to see how that is translated into pragmatic action.

And I keep on saying that there was a very good report from the House of Lords Select Committee on regulation, which dealt precisely with this topic, regulation in the financial services committee -- industry, and it made 77 recommendations. And the FCA, Nikhil Rathi, appeared before it. He's appeared recently again before it. And hopefully, those recommendations will be followed up by both government and by the regulators. Whether they are, we don't know, but it will be a good acid test of the government's commitment towards growth in the English financial services industry, which has unfortunately contracted over the last few years. So that's the first thing. We think that there's a more consistent regulatory environment.

The second thing that we want to emphasize is that obviously dependent upon the right lending opportunities, S&U is now on a growth phase. In other words, we've had 2 or 3 years where we've had to retrench to look at our operations, mainly due to external forces. Provided, and this is obviously important revenue business, provided that we have a stable macroeconomic environment, and we're talking about both national and international, then we see very, very significant opportunities for growth in the business.

To give you an indication, our 3-year plan would indicate that our receivables go from around about GBP 0.5 billion now to maybe 60% more than that, possibly even more if we have the right conditions and the right lending opportunities in the next 3 years. That is the second thing I think that the market doesn't really appreciate about us. So that's my answer. I don't know that anybody else has -- Graham, do you want to say anything on that?

I wanted to add something, which is just in support of what Anthony was saying, we've got GBP 249 million in net assets million. We've got a market cap of GBP 248 million. So we've always had a sensible provisioning policy. So the reality of what's there is solid. And so essentially, what's the market underappreciating, it's exactly as Anthony said, 0 value assignment to future growth, 0 value assignment to future cash flows. It's a pound for pound on the net asset value as if there wasn't the exciting operating future that we've got.

Very good point. Very good point.

That's great. Well, look, guys, that concludes the Q&A session. You have addressed all those questions from investors. So thank you very much indeed for that. But Anthony, before we direct investors to provide you with feedback, which one is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Well, there's an old wise man who said, 'Last words are for fools.' We've said what we want to say. And so far as I'm concerned, the most important question was the last one from Matt H. And I think I would like to direct our viewers and listeners towards that. That's the most important...

Fantastic. Thank you all once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.

Good morning, and welcome to S&U plc Interim Results Investor Presentation. [Operator Instructions] 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, and good morning to all 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.

Can I just introduce everybody on the panel. Okay, we go to the next slide please, please Alex. And you'll see that we've got some familiar faces myself and my brother overly familiar with you and Karl Werner, you know who is the Chief Executive of Advantage Finance and has done a wonderful job in reconstituting the company over the last two years. And Ed Ahrens who is driving as CEO of Aspen Bridging the record results of that company as is Jack Coombs, who is -- who is on my right and who has been named Chief Operating Officer of the companies. And that bodes very well in 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 Freckelton, who is the Group CFO, did a wonderful job and is just betting in as a successor of Chris Redford who is with us for many years.

So that's the [indiscernible]. 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 to regulate really, although obviously they're there. They will be telling us how to deal with our customers, because unless we do with our customers and we've proven that since 1938, we don't get much business, and we don't make money either. So we're very pleased to see the kind of reception we get from customers.

Next slide, please. And then the introduction well, I mean this is a very positive outcome of the half year. It was one that we were hoping for and we're probably anticipating to a certain extent. But 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 particularly in terms of regulation through, first of all, [indiscernible], which was part of the old conservative governments initiative, which came through under the FCA in 19 -- sorry, 2023 and then of course, we have the court appeal judgment which caused further confusion with [indiscernible] history or late last year. Well [indiscernible] are now pulling up 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 were highlights for the six months, which [indiscernible] that increase in profit, at S&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 33 to 35 [indiscernible]. We'll explain later the receivables and the borrowings. But overall, again, a very positive picture. And I'm going to pass you now on the next slide, if we could, Alex to Chris Freckleton, who will go through finance.

Good morning, everyone. So starting with the income statement and profit before tax for the period is GBP 15.6 million against, 12.8 million last year, so a 22% increase year-on-year. At the bottom of the slide, you saw the divisional profits. So Advantage has increased 15% to GBP 10.8 million. and Aspen has increased significantly by 47% to GBP 5 million. In terms of some of the key movements on a consolidated basis. So revenue, you have seen has dropped by 14% year-on-year, is previously due to the contraction in the loan book, particularly in Advantage and to a lesser extent as well some of the low-margin deals have been right in the first half due to our cautious spending approach. Impairment has reduced substantially by 57%. So in fact normal levels, reflecting better repayments and Advantage as we're now at 90% of [indiscernible] repayments as a percentage of June within 87% this time last year.

And also excellent recoveries in collections in Aspen. So in the first half, we collected GBP 130 million, which is significantly up on the GBP 72.8 million we collected in the last year and half. And in terms of a couple of other areas, so I know it is the question in regards to admin expenses, so those have increased year-on-year due to additional compliance costs an Advantage, which we have looked to abate in the second half. Now the CMC charging structure is in place and also heightened professional fees, which, again, we expect to abate in the second half. And then finally, I just want to [ discuss ] on finance costs. So you've seen those have reduced by 31% and that's just the case of the contraction in the loan book and obviously, the lowest on rates 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 relatively simple balance sheet with amounts receivable, borrowings and equity. As we've alluded to, Advantages had a period of consolidation, so that the loan book has reduced by 14% from GBP 326 million to GBP 279 million. Aspen on the other hand, we 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 EUR 149 million to GBP 148 million. And then borrowings have reduced 23% year-on-year, and that's just following the contraction in the loan book. I also just wanted to point out, we have GBP 3.5 million of cash at the period end in other assets in this breakdown, which means together with our borrowings of GBP 183.5 million mean our net borrowings of EUR 180 million as at the period end.

Can we move on the next slide, please. So this is the group cash flow, and it helps to show if we're aware of all the money is gone and also provide a bit more color around the movements in the balance sheet positions. If we start on the left-hand side of the slide, you will see we had an overall reduction in net borrowings of GBP 12.3 million from GBP 192 million to EUR 180 million.

And that's reflecting the better collections and repayments performance across the two businesses, offset by GBP 8.5 million of dividends that we've paid in the first half. You'll note that gearing has reduced year-on-year from 103% to 75%, and from year-end, where it was around about 81%. If we then look at the divisional cash flows, so looking at Advantage in the middle, that has reduced by GBP 13.9 million in the first half. And one of the key movements there is the dividends. So in the first half, we didn't ask Advantage to contribute with great dividends and with the ongoing uncertainty around the Supreme Court decision.

Now that has clarified to Anthony's point that the skies are brighter. We have resumed paying dividends from Advantage to the group in the second half. And then finally, just on Aspen to that. On the right-hand side, had had a reduction in funding requirement of GBP 5.8 million during the period despite, as I mentioned, with good balances, you will see there advanced GBP 106.4 million in comparison to GBP 93.5 million last year. However, those settlement repayments and repayments beyond term and really improves the cash position in the first half.

If we move on to the next slide, please, around treasury and funding. So as I mentioned, our net borrowings of GBP 180 million sit comfortably within our committed facilities of GBP 280 million. There's been no change on those during the first half and obviously provides us significant headroom for future growth. And I just wanted to point out rather since the period end, both businesses have had an increase in funding requirements with advantageous lending volumes increasing, and we actually had a record lending month in September. And equally absent lending 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; and he will talk you through our funding.

Good morning. Thank you very much, Chris. I think it's just important, obviously, to okay. We're obviously in a position where receivables have come down over a 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. And just to put a little bit of flavor behind what Chris was mentioning in terms of September, Aspen lent over GBP 20 million and Advantage wrote over 2,200 deals. Obviously, we are open to the opportunities that are ahead of us. I think in terms of lease 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 will see -- we increased the lending run rate during this half year by 15%. We have 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. So with both businesses having a positive outlook and as Anthony 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 a more efficient and more cost-effective option. And that will certainly be helping us to deliver both our benefits to the bottom line, which I'm sure all of our shareholders would appreciate and also the capacity to take opportunities as they arise for the group, and we're very much certain that, that will be the case over the coming months and years.

So with that, I'll hand over now to Karl for 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, a major project that was delivered successfully in Q2 of this year and the very latest affordability tool set, which has made a significant positive difference following the 166 engagement, which mostly embed in the first half of this year.

Average advance is improving through what we see is sort of market norms. It adds easily accessible scale to our business as well as absorb a higher rate fixed cost. I'm pleased that we've delivered in H1, the performance we promised and forecast at the year-end 6 months ago.

And as Chris rightly referenced, and Jack also the run revenue 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 little more favorable picture one out 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, so now sort of to continue to be industry-leading at 4.9 out of 5, which demonstrates the value that we represent to our customers and to wider society.

If we turn the page now and look to the other part of the business, which is managing customers in life through the [ arrears ] journey if they experience that, also a much improved picture, 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 and arrears. You'll see some slides a little later on. They'll actually show you a 6-month comparison for injuries category, which is very positive, averaging a 10% improvement across the board.

Have we done that? The right to resourcing, investment in our people some very significant technological investments that made us much more efficient and much more productive. And we see a team growing in confidence and experience in the certainly paying dividends. I'll reference any of -- couple of 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 received. You'll see a large draw on that as we went through the 166 for the last 18 months or so. And then successfully concluding that satisfactory has enabled us persistent with a slightly better and improving quality focus time goes on to achieving those expectations. And also in the bottom end, I'm pleased, even though again, you can see a peak bubble, if you like, of write-offs post 166, which we always expected, we're now under budget in that regard for most of H1.

If we turn the page on regulation matters. Obviously, there is awful lot happening in our space especially in the last sort of 24, 48 hours. I won't get into the weeks necessarily of that maybe to echo what you've heard already from Chris and Anthony that we're in -- but I would add we're in a very good position thanks to the longevity of our business that the first requirement from our regulators is to have control over your customer records going back to 2007, we're in a great position there.

Secondly, to be able to manipulate data to and the different scenarios and potential [indiscernible] packages. 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 have done an exemplary job, which we shared with the regulator, is met with a number of compliments. And early analysis suggests that we have reasons to be confident and optimistic. But we will, of course, but by the wishes of the regulator in the market to engage widely in the consultation process. So it'd be worth for those inquiring minds, I'm happy to answer questions, but the picture won't really be that much clearer until being the new year.

Turning to our customers, which are actually what it's all about, of course, we had a really busy period of investments and delivering some innovation, probably delivered more major changes over the last 6 months, than -- therefore, some considerable period of time. Some of the highlights I would reference there is the upgraded self-service for our customers, which went live and had very high levels of engagement, a whole new tool step for credit risk, scorecard and affordability, new premises, which expanded our capacity rate of 30%. And we're seeing all translate into better outcomes, hence, the Trustpilot score, and you'll see shortly on the other slide also our complaint measurement. I think it's wise words said look after your people, they look after your customers. We're certainly seeing that can come through.

And then on the next slide, my final slide, I think, is just a quick reference of those product launches, 4 major ones in the first half, more to follow in H2. 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 we have more in regards to broadening distribution and give us broader market access and better optionality for where we source our business in the future and also dipping our time with a very sensible test project in the world of AI, which is focused in 2 specific areas to improve customer servicing. So we're excited about that, and we look forward to writing an even stronger story in H2. And with that, I'll hand back over to Chris.

Thanks, Karl. So the next 3 slides take a closer look at Advantage book 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 Karl mentioned, of GBP 9,916, the better quality customers, and that's demonstrated by the better customer score at 929 for this period, but also the lower interest rate flat per annum reducing to 13%. So following the introduction of the new store, as Karl mentioned, in a pricing review, we expect some movement back towards our traditional customer base in the second half, which hopefully reverse some of that margin reduction we've seen in H1 obviously supporting the higher volumes that we've seen in August and September.

And I just wanted to comment on cost of sales. So there has been an increase on cost of sales during this period on these deals and that predominately to broker commissions with some of our brokers receiving higher commissions of 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 a strong correlation between first payments made by customers and the bad debt and outcomes after 5 years.

So the blue line and blue axis is first payments made and then the red line and axis is bad debts with the dotted line being expected that bad debt and the old line being 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.

If we go to the next slide, please. So this is an analysis of the book debt at the period end versus the year-end based on a [indiscernible] and for the reasons already discussed around better collections performance and improving lending to higher-quality customers, we have more debt up to date at the period end at 68.9% versus 64.5% at year-end. And we also have fewer accounts in 6-plus arrears at 7.6% of the book versus 9.3% last year-end. And we expect this to continue improving in the second half of the year. I'll now pass you on to Ed, CEO of Aspen to discuss the H1 performance.

Thanks, Chris, and good morning to everybody. So in terms of Aspen, been a very good start to the year. That has been said, record profits for the half year, underpinned by quality loans and projects that we've been at 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. Net receivables of GBP 147.8 million, 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 leading to overall turnover and profits are up significantly half years year-on-year. And like I 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 environments, U.K. 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. 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 any point right at the top, and this really speaks overall to the quality of the book over time and our historic book as well as current book. So since the launch in 2017, we've lent out GBP 730 million of capital of which only 0.02% or less than GBP 150,000 we've experienced with actual capital loss. And I think that sends a very strong message to both our capability and our quality.

So looking at some more of the other trends, you can see that we mentioned a 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 for 151, as Jeff 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 we've got better known, got lots more broker relationships, 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 us 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. So yes, a year of progress, good progress, but there's still a lot 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 managements, including obviously property values, what's going on from -- in the market relative to refinance rates and fraud prevention.

In terms of investments, we've done a lot -- delivered a lot of projects. There are a lot more to go. But obviously, our 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 upskill our employees. And pleased to say that 17 out of our staff have actually qualified already now and/or are about to qualify, and we will continue to make that investment this year and in the years to come. And on that note, I'd like to hand you across to Jack, I'd like to say a few more things about that slide.

Thanks very much, Ed. I think in Bridging, obviously, the benefit of writing a 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 level of repayment that you receive and the rate at which the money that you've comes back to the best customers pay back swiftly. So what we have identified in our new products, the opportunities where we can work with that high quality of customer that we've focused on Aspen on in longer-term products.

And we have fortunately won the Bridging and Commercial award for Product of the Year for our new Bridge-to-let and buy-to-let products. And obviously, in Aspen, everything is preceded by Bridge. That is fundamental to the way we run our business, and that's very much going to 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's always a good rate of return.

That also in turn, creates an opportunity for us to work with customers on longer-term solutions whilst not compromising rates of return. And that has been one of the driving factors behind where the growth will be coming from in the business. So alongside that, we've also moved into dual representation with having recently appointed 2 additional firms to our list of panel. So we're very excited about the direction of travel, and we are certain that Aspen will be delivering good results both this year and the coming years. And with that, I'll hand over to Graham.

Good morning, well I think the -- to add little more to what Karl and Ed and Jack said, is last year, there is no [ deniable ] in establishing new initiatives and changes to the business to make us more competitive, but offer better quality service and hopefully to improve our profitability as a consequence.

Aspen is in a business which has got lot of potential growth, it was traditionally really part of the flipping market, which is basically offering short-term loans to people who needed money quickly, this was out of [indiscernible] for example. That's now being [indiscernible] into the sphere where people exporting capital from other parts of world and short-term funding to facilitate that. [indiscernible]. In terms of Advantage [indiscernible] period as a result of intervention and obviously inhibited the ability to change or improve that business. That's now is [indiscernible] and in the past and [indiscernible] and has made changes which is going to improve our competitiveness dramatically, first of all in terms of the underwriting and the quality of underwriting and secondly in terms of [indiscernible] offering to the market and also in terms of our ability to collect debt whether we improve the product of the collecting departments or improve [indiscernible] or the ability of the customers themselves to interact independently of us. So all these things speak well for enhanced business and more profitable business.

Excellent. Well, thank you very much 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. I think they are extremely good questions and ones we want to address. The first one is from Mr. J. Martin, who is a shareholder. Thank you very much for your kind words on getting through the markets and regulatory turmoil kind of. Our view of distribution strategy probably remains the same, although Karl, I think is going to have 1 or 2 things to say about expanding the distribution strategy of Advantage. And I think he's also going to talk about some the competition in the market because obviously, there are certain players who have withdrawn we take Advantage of that. So over to you Karl on that.

Great question. Thank you for it. So I'll deal with it in distribution strategy is to broaden it and there are lots of places that people in our marketplace seek vehicles and the funding that they need for that. We've been a single channel, single product and it's worked well, and we'll continue to make sure that channel that we have and the product that we offer is always evolves and fit for purpose while broadening out into other channels, including the sort of the dealership retail markets and the aggregators.

Obviously, the world is evolving and changing, and we should be rightly represented where the customer is seeking our services. So that's probably the best way to answer that part of it can be broader and we will be -- are we better placed than our competitors? Well, yes, I could certainly have a guesstimate as to Supreme Court. But fundamentally, motor finance is a large and has been proven itself immensely consistently sustainable.

So the short, but correct answer to that question is, yes, we are well placed 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 SA consultation, all I'll say on that is those in the none 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, Karl. I think that answers the question from Matt on the deal to trust from the move clients, how does actually effect our business. I have you also answers the question number three, from Eduardo, on our view of the competitive pricing environment and on the regulatory pressure on the section on discretionary commissions, and how they eliminated or our competitors or Karl may have something to say on that one. I think I'd like to move evolves for the questions that are being raised relating to the funding review. One is from Paul, who has asked on that. And also Matt wants to talk about that, particularly in relation to the fixed rate debt and the like of continued rise in bond yields. And I know that I think Eduardo in interested in that as well. So what I'm going to do is ask Chris, first of all, and then our Chief Operating Officer, Jack, to comment on that funding review.

Fantastic, good question. So yes, we currently have a revolving credit facility, which is linked to [indiscernible]. So we are beholden to how that moves. We don't have any hedging in place and so it directly impacts our finance charge. In terms of the funding review, we're clearly looking at different structures of finance other than revolving credit facilities. And hopefully, on 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 bottom line as well. But we're hoping to conduct that review during the second half of this year and then be able to come back to the market with a view on funding structure may look like going forward maybe to improve the profitability and cost side of our current funding, but also support the growth ambitions across the group as well.

I think. Yes. Just adding to that, I think ultimately, as I mentioned before, we are in a low-geared position, which is excellent. We're also in a declining base rate environment. As Chris said, that's currently costing truly on our existing structures. Obviously, there is opportunity to reduce cost of funds through exploring our performance 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, but to maintain a good net interest margin and also to put us in the best position to opportunities as they arise.

I think certainly means we will be generating some results in this direction, which is -- that is our right. So I think we're pretty determined in that side. I think in terms of I think [ Martin ] has also mentioned fixed rates I think, as we've mentioned, 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 match it to whatever lending we are doing. So -- and that's the approach that will be taking.

And we obviously do better on fixed rate debt than we are currently on existing percentage, hopefully in the exercise and that appreciates. What I want to move on to now is the very important questions and Jack mentioned net interest margins, which mainly relate, I suspect to Advantage on margins and portfolio mix. And this is something that's been raised by a number of investors. First of all, the Eduardo mentioned how do you think the shift in the portfolio mix between -- towards credit and longer loan durations will affect ROCE. And secondly, looking ahead, do you feel more comfortable with this new mix? And third, how does cost pressures we've seen on low sales from brokers claim processing costs, how do we see that going forward?

And what measures are you to offset these pressures without in any way preempting what is saying, I think it's important that Eduardo knows and the other investors who have asked about this what our general position is on margins and on client mix. I mean we recognize the market does evolve. We think it's important that we step back into the market vis-a-vis a lower margin products possibly on a temporary basis how temporary that will be, well time will tell. We do recognize that our comparative advantage finance business is indeed with people who may be less in terms of their credit ratings.

And as a result, we look at what advantage always called the golden nuggets in terms of people who have been badly credit rated by the industry and therefore are actually better than some of the credit ratings would -- 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 make sure that we do that. So that's the point of the review that we are having shortly with Advantage. And we're sure that it will actually produce increasing business at the same time the kind of margins and the kind of ROCE, I think Eduardo quite rightly refers to in his first question. But having said all that, without preempting too much what Karl said, over to you Karl.

Well skip the introduction -- thank you. Great question, 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. 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 remains the definition. So to give you an example, what you would have seen in the old mix as a lower tier, higher risk new scorecards because you get a lot of slots when you change scorecards with better data. I won't get too into the weeds of how this works. We will actually now actually that lower risk score that would have suggested we would have written 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 is a complicated picture and you need to understand where they are with rating their own cohorts. The mix, arguably, we were overweight 3 or 4 years ago in the highest post performing quality tiers. The adjustment for that is only 20%. 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.

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 suggests that it's going to 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 going to be quite volatile. Our competitor area in the specialist market. People like it. It's of a size of in excess of GBP 2.5 billion studied by the likes of Deloitte and others say it's only going to get larger. And post consultation, you will have people now that, that's settled show eager interest. 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, a 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 of 2023 and 2024 affordability in [indiscernible]. And we have baked in and deal with some of those costs, which Chris referenced earlier.

Maybe at the risk of being overly optimistic and reading quickly the consultation exercise, our traffic of complaints 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 -- is turning in our favor in H2 and beyond. So 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.

Thank you, Karl. I think that actually addresses the point by Mr. presubmitted that is which is presubmitted, about administrative expenses. I mean we are very conscious, let me just make it absolutely clear, return on capital employed, which obviously has a time aspect as well as a margin aspect. Because it is related to [indiscernible]. And you can take it that. We're continually looking at expenses and it is a very important part [indiscernible] return on capital employed. So I think with that relatively general, general admission, I think we can deal with that particular question. Are there any more questions there, Alex?

No, you have addressed all the questions. 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.

Anthony before I redirect investors to provide you with a feedback, which is particularly important for the company. Can I just please ask you for your closing comments.

Well, I think my closing comments would be that in 2 ways. First of all, we're confident about the future. 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 just to the market and possibly some of the trends that we've been talking about where in Aspen and Advantage. But many thoughts work we are doing ourselves internally.

And I must take my hat off to the gentlemen around the table who run these businesses. They've not been in any way pulled off by regulatory pressures in actually improving the operational functioning of the businesses. Whether we talk about Myadvantage, the new portal changes direction process, continuing reviews of products and exactly the same thing as Jack said in Aspen where we won new product of the year.

We're training our staff better quality staff than we had before. All these things don't just happen. They have been worked out very hard indeed. And I'm delighted with what we've been doing in that area. And I'm absolute certain that the more you put in, the more you get out and that will be reflected in our results in the future. 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 I'm sure 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.