Provident Financial full-year profits in line with expectations
Provident Financial on Wednesday said it expects full-year results to be in line with expectations driven by strong growth in its Vanquis Bank.
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Vanquis Banking Group 20
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The bank, which is part of the British financial services group, saw an increase of 17.7% in customers to 1.3m during the year.
As a result, the group's profit before tax, amortisation of acquisition intangibles and exceptional costs is expected to be of £232m.
Its consumer credit division (CCD) profits were in line with 2013, but Provident said it had a reduction in customer numbers and receivables of 29% and 20% respectively due to a strengthening in the risk-adjusted margin to 69% and cost reductions.
Chief executive Peter Crook said: "I am pleased that the group is expected to report 2014 results in line with market expectations.
"Vanquis Bank and CCD have both traded well through the final quarter of the year and Moneybarn has made a very good start under the group's ownership. Our funding position remains strong."
Shore Capital analysts said: "We anticipate that business momentum will remain strong given falling UK unemployment, falling inflation, new product launches, continued operating efficiency improvements and the benefit of the recent MoneyBarn acquisition.
"While we have the utmost respect for management and are confident in their ability to deliver on the growth strategy, we believe that the valuation is now reflective of this positive outlook. As such, we reluctantly downgrade our recommendation to Hold (from Buy)."
Shares were down 0.47% to 2,515p on Wednesday at 12:37.