Section 172 Statement

The Directors confirm they have considered their obligations under S172 of the Companies Act 2006 including their duty to promote the success of the Company and how they have engaged with the following key stakeholders in the business:

Our Customers

The Company focuses on making the customer the heart of our business; and having respect for every customer and always treating customers fairly.

Advantage Finance has engaged for the past two decades in the non-prime sector of the motor finance business. This long experience has enabled Advantage to gain a significant understanding of the kind of simple hire purchase motor finance suitable for customers in lower and middle-income groups. Although decent, hardworking and well intentioned, some of these customers may have impaired credit records, which have seen them in the past unable to access rigid and inflexible “mainstream” finance products. Advantage provides transparency, simplicity, clarity and suitability to both service and product, which these customers require.

As a result, Advantage has written over 275,000 customer loans since starting trading in 1999. The loans have an average original term of just under 5 years.

The success of Advantage depends as ever upon three fundamental strengths. First, is the enduring reliability of the UK motor market.

Advantage's second strength is its experienced, sensitive and sophisticated under-writing. Backed by ever more customer historic information; Advantage uses this forensically to analyse the likely circumstances of actual and potential customers.

Advantage's third great strength is to recognise that supplying the right product to reach the customer at the right time is just part of its service. It also collects its payments responsibly. Advantage has always regarded its relationship with its customers as a partnership. This involves understanding the more sensitive and frequently changing circumstances of those in the non-prime sector. Whilst the UK labour market remains strong, rising cost of living pressures mean that well intentioned customers occasionally require knowledgeable assistance, particularly should their financial buffers reduce. Customer Agents at Advantage produce excellent results by being trained and empathetic to the needs of their customers. Collecting and default figures demonstrate this and underpin our responsibility under Consumer Duty and are integral to Advantage’s commercial success.

Our Employees

Time of change and contrasting fortune often bring out the best in people and the magnificent way our staff throughout the company have adapted to the challenges of the past year, reflect the loyalty and "family ethos" at Advantage of which we have always been proud. Those colleagues who feel in need of further support and counselling are able to access mental health services.

We ensure that all staff receive appropriate initial training and regular re-training in the field and in areas of specialism. We encourage employees to gain professional qualifications where appropriate.

In addition to regular external management and specialist training, significant use is made of the Government's apprenticeship schemes. During the last business year, 5 employees completed their level 3 Apprenticeships and we currently have a further two level 3 apprenticeships ongoing. We also supported staff to complete a number of professional qualifications during the year including AAT Level 3, CiLex Legal Executive Foundation ,Level 3 Facilities Management and Level 5 Operations/Department Management. Ongoing professional qualifications include CIPD in HR Practice Level 3 & 5, CiLex Legal Executive Advanced, Level 6 Business Management and Level 5 Operations Management.

Our average length of service at the company is 7 years, with 28% of staff having over 10 years' service. In order to better support our staff's work life balance, 34 requests for flexible working were submitted by staff and 34 of these were approved as requested. These include changes to working location, such as hybrid working, or a change to the number of hours work or their working pattern. We have a low staff turnover rate and support internal promotions and development within the business to help our staff progress and achieve their career ambitions.

The FCA Regulatory regime is now centred on our duty to the Customer. All employees within the Group are required to demonstrate appropriate knowledge and skills particularly in customer facing roles. Over 3,000 individual training courses have been completed by staff since the start of 2023, these include internally developed training and a wide range of externally provided through FLA, FCA, MBL Seminars, ACAS, .Net and SAF for example. A significant training budget is available for all staff to access training which improves their knowledge, skill and confidence within their role and for managing their teams. Monthly reviews and Annual appraisals highlight areas of training needs for all employees, along with plans for future development . Advantage Finance is also accredited Silver by Investors in People, as well as attaining a standard accreditation for Investors In Wellbeing as part of their new scheme for 2024.

Advantage are proud to be accredited Living Wage employer and continue to ensure our employees receive a reward and remuneration package reflective of their skills and role which aligns with industry standards.

The company's policy is to give full and fair consideration to applications for employment by disabled persons, having regard to the nature of their employment. Suitable opportunities and training are offered to disabled persons in order to provide their career development. It goes without saying that a company based on a family ethos has no truck with discrimination of any kind – except of course on the basis of performance. As required by legislation, we confirm that as an organisation, we respect and recognise human rights in all aspects of our business.

Formal reviews of performance take place annually and all operations are reviewed on a monthly basis. We encourage staff to make suggestions for constructive change within the Company.

Our Business Partners

Advantage Finance continuously seeks to nurture and improve key business relationships with our key introducing brokers, dealers and key suppliers.

Key actions taken demonstrating how we do this are set out in our strategic report above. The outcomes of these key actions are reflected in the positive feedback and high retention rates for our partners and in the steady, sustainable and successful growth of Advantage Finance in the past two decades.

Our Investors and Funding Partners

We are 100% owned by our parent Company S&U plc and funding is organised on a Group basis. S&U's significant family management shareholdings means an identity of interest between shareholders and the management of the Group and together with help from trusted advisers, the Group maintains close relationships with investors, analysts and also with long term funding partners. The outcomes of this funder engagement help the strong balance sheet and treasury position of the Group and Advantage.

Our regulators and other statutory bodies

Advantage Finance has a strong compliance culture which is overseen by management and the Audit Committee with help from our internal auditors RSM.

During the year, RSM have continued to provide internal audit services for Advantage Finance. An agreement, overseen by the Audit Committee, has now been entered into with RSM who will be responsible for regular internal audits of Advantage's Regulatory Controls, Customer Compliance, Risk Management and Governance Policy and Procedures.

Our Community and Our Environment

The Company does not exist in a vacuum. Our success depends upon our understanding of the customers we serve. Where this may not be the case, we have well established policies for any who may wish to complain, routed to our Complaints Department. We are proud to enjoy high levels of customer satisfaction. Last year our FIFO rating was 4.7 out of 5. In year to 31 January 2024, 357 out of 424 (84%) complaints were decided by the Financial Ombudsman Service in Advantage's favour (year to 31 January 2023: 55 out of 66 or 83%) and these levels of favourable complaint adjudications for Advantage represent the highest level versus peers in the non-prime motor finance sector. Like any group of people who cherish our environment both for our own sakes and for those of succeeding generations, Advantage Finance supports the Government's Green Finance Strategy and is taking measures to reduce our carbon footprint and minimise and then eliminate carbon emissions so far as we are able directly to control them.

This means that, we need to monitor and reduce those areas of emissions which we can most directly control in order to achieve net zero status by 2030.

Both for commercial and climate change reasons, the Board monitors the type, age and stated emissions of the vehicles we finance. The proportion of fully electric vehicles, principally on the grounds of their significant cost, is at present negligible.

The majority of the company cars made available to qualifying employees are now electric vehicles. Charging points are made available to those employees at the company premises.

Advantage continued supporting their local charities by becoming a Corporate Partner of Women's Aid. We donated over 1500 items to their Christmas Collection drive and the company matched that with a cash donation. During the year, the staff and the business also supported Macmillan, Not Home Alone and Andy's Man Club.

Health and Safety and Diversity Policy

Advantage Finance takes its responsibilities towards the health, safety and good working environment of its employees very seriously. However, in the finance field it is not engaged in the kind of processes which compromise health and safety for either our staff or our visitors. Nevertheless, it seeks to provide a congenial and productive working environment.

It therefore goes without saying that in a Company where family values are so prized, and where staff turnover is so low, that workers are always treated fairly without any form of discrimination. Recruitment and promotion decisions, whilst reflecting the social and racial makeup of the areas in which we operate, are always based on ability and aptitude, not according to any racial or gender stereotypes.