Provident Financial (PFG) lifted underlying pre-tax profits by over 11 per cent last year, mainly due to impressive growth at Vanquis Bank, the non-standard lender's credit card operation. Profits in that business soared 61.3 per cent to £71.3m, boosted by a 30 per cent increase in customer numbers to 899,000.
Demand for non-standard credit remains strong in the UK, so Vanquis was able to maintain strict lending criteria which left arrears at a record low. The business has been expanding overseas, too, and spent £3.3m on a pilot credit card operation in Poland, which so far has attracted 9,000 customers and receivables of £1.8m. A firm conclusion to the pilot scheme is expected by June and expenditure of a further £3m has been earmarked.
The group's consumer credit division, which operates through a network of collection agents, did well to deliver pre-tax profits of £125m - barely changed from £127.5m the year before. Customer numbers were flat at 1.83m, but the squeeze on disposable income meant that credit extended to existing customers was relatively subdued, easing 2.5 per cent from a year earlier. However, tight credit standards and a solid collection performance meant that the ratio of impairments to receivables rose only slightly.
Analysts at Numis are forecasting 2013 EPS of 115.9p, up from 102p in 2012.
| PROVIDENT FINANCIAL (PFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,445p | MARKET VALUE: | £2.0bn | |
| TOUCH: | 1,445p-1,447p | 12-MONTH HIGH: | 1,526p | LOW: 1,064p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 271p | |||
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 751 | 129 | 70.9 | 63.5 |
| 2009 | 816 | 126 | 67.5 | 63.5 |
| 2010 | 866 | 142 | 76.7 | 63.5 |
| 2011 | 911 | 162 | 89.6 | 69.0 |
| 2012 | 980 | 197 | 110.4 | 77.2 |
| % change | +8 | +21 | +23 | +12 |
Ex-div: 22 May Payment: 21 Jun | ||||
