Provident Financial (PFG) is more or less back on track after prolonged dealings with the Financial Conduct Authority. New management is to be installed at Vanquis Bank, while significant progress has been made in identifying the amount of redress to be paid over issues at its Moneybarn car loan business.
Adjusted pre-tax profits for the year to December 2018 jumped by 82.3 per cent to £154m and, following a balance sheet boost from last year’s rights issue, the final dividend payment was reinstated. Turnover was a little lower, but headline profits benefited from a drop in impairment charges and operating costs.
The Vanquis Bank refund programme is virtually complete, and a number of refinements have now been introduced, including reducing cash interest rates and various measures to keep customers better informed. Adjusted profits at Vanquis edged up 1.6 per cent to £184m, although tighter underwriting meant new customer accounts fell from 437,000 in the previous year to 366,000. On the plus side, the impairment rate was flat at 16.3 per cent. In the consumer credit division, pro-forma adjusted losses narrowed from £106m to £38.7m following implementation of the recovery plan, while at Moneybarn profits rose by 28.3 per cent to £28.1m.
Analysts at Numis are forecasting adjusted 2019 pre-tax profits of £167.4m and EPS of 47.4p, rising to £239m and 72.6p in 2020.
| PROVIDENT FINANCIAL (PFG) | ||||
| ORD PRICE: | 566.6p | MARKET VALUE: | £ 1.44bn | |
| TOUCH: | 565-567p | 12-MONTH HIGH: | 722p | LOW: 482 |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 275p | LEVERAGE: | 4.9 | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
| 2014 | 1.08 | 225 | 82.3 | 63.8 |
| 2015 | 1.11 | 274 | 99.4 | 78.2 |
| 2016 | 1.18 | 344 | 119 | 86.4 |
| 2017 | 1.20 | -123 | -53.5 | nil |
| 2018 | 1.12 | 91 | 25.2 | 10 |
| % change | -6 | - | - | - |
| Ex-div: | 23 May | |||
| Payment: | 21 Jun | |||
| *Adjusted for 17-for-24 rights issue in April 2018 | ||||
