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Provident Finance Prelims

Practical discussions about equity High-Yield Portfolios (HYP) for income
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
idpickering
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Provident Finance Prelims

#35000

Postby idpickering » February 28th, 2017, 7:17 am

"Strong financial performance and dividend increase

· Adjusted profit before tax1 up 14.1% to £334.1m (2015: £292.9m) and adjusted basic earnings per share1 up 9.2% to 177.5p (2015: 162.6p).

· Statutory profit before tax up 25.7% to £343.9m (2015: £273.6m) and basic earnings per share up 19.8% to 181.8p (2015: 151.8p).

· Return on assets2 of 15.3%, reduced from 16.1% in 2015 due to the impact of the 8% bank corporation tax surcharge on Vanquis Bank profits which became effective from 1 January 2016.

· Total dividend per share up 12.1% to 134.6p (2015: 120.1p), supported by strong capital generation."

And later;

"Dividends

The proposed final dividend per share has been increased by 13.0% to 91.4p (2015: 80.9p) which, together with the 10.2% increase in the interim dividend, represents a 12.1% increase in the total dividend per share to 134.6p (2015: 120.1p). Dividend cover for 2016, prior to the amortisation of acquisition intangibles and exceptional items, is 1.32 times (2015: 1.35 times) and is consistent with the group's stated target of maintaining annual dividend cover of at least 1.25 times. The increase in the full-year dividend is supported by the group's growth in earnings and strong capital generation."

http://www.investegate.co.uk/provident- ... 00119886X/

disc - I hold.

Dod1010
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Re: Provident Finance Prelims

#35013

Postby Dod1010 » February 28th, 2017, 8:19 am

Thanks Ian. I do not hold and not sure I could bring myself to buy as I am not sure of its ethics but it certainly makes an excellent HYP share.

Dod

toofast2live
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Re: Provident Finance Prelims

#35036

Postby toofast2live » February 28th, 2017, 9:49 am

It is eminently "ethical", lending to those who otherwise would be excluded, or in the teeth of loan sharks. In that respect it is a damn site more ethical than the big international banks which plunged the whole world into recession in 2008, the repercussions of which are still being felt by the millions of old people who have earned no interest on their savings for the past few years, in order to subsidise low mortgages for an overheated housing market.

For those who monitor such things it would be interesting to see a comparison of returns from a "Saints" and "Sinners" HYP.

Minesadouble
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Re: Provident Finance Prelims

#35037

Postby Minesadouble » February 28th, 2017, 9:49 am

I do hold and am a little surprised that the SP didn't move sharply up on that dividend announcement.
Priced in and expected I suppose. I'm probably quids in as I intend to add to my holding over the summer, along with Greene King.
I don't understand the ethical question that some posters raise on PFG at all. I understand that PFG lend to the sub prime demographic, but assuming those people are mentally able and need access to credit and that PFG provide it responsibly and legally I don't see the problem.
The obvious alternatives are far worse - less reputable lenders and all that entails.
Ethical debate not for this Board though.
Welcome any PFG HYP Practical comments on Dividend and Value.

Dod1010
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Re: Provident Finance Prelims

#35043

Postby Dod1010 » February 28th, 2017, 10:21 am

I appreciate that ethical debates are not for this Board. Just a brief comment that was all. In the light of toofast2live's comments though, I will certainly take a closer look. It looks like a great HYP share and I do hold the tobaccos!

Dod

idpickering
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Re: Provident Finance Prelims

#35057

Postby idpickering » February 28th, 2017, 10:57 am

Dod1010 wrote:I appreciate that ethical debates are not for this Board. Just a brief comment that was all. In the light of toofast2live's comments though, I will certainly take a closer look. It looks like a great HYP share and I do hold the tobaccos!

Dod



On this, I think it's a good thing that those unable to gain access to credit can turn to PFG as an option. Also, there is the human touch in that the person from the "Provie" is knocking on their door. I can imagine such human contact is welcome, and it assists in the recipients welfare.

I do intend to top up my holdings before the ex div date in May.

Ian.

Ian.

pendas
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Re: Provident Finance Prelims

#35076

Postby pendas » February 28th, 2017, 11:51 am

I first purchased in 2006, selling in 2013 with a total return of 128%, 17.7% annualised.

Repurchased in ISAs in 2013 and now showing a total return of 101%, 24.8% annualised based on the repurchase price.

The dividends have increased nicely over the years as well as the capital but the share is now 27th on my top up sheet, being at 1.5x median so I won't be adding to it.

77ss
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Re: Provident Finance Prelims

#35087

Postby 77ss » February 28th, 2017, 12:21 pm

Dod1010 wrote:I appreciate that ethical debates are not for this Board. Just a brief comment that was all. In the light of toofast2live's comments though, I will certainly take a closer look. It looks like a great HYP share and I do hold the tobaccos!

Dod


I think you should look again.

We could all wish for a world in which there were no sub-prime borrowers, but that is just not realistic.

The customer numbers alone (2.4 million) should tell you that the company is meeting a very real need.

NeilW
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Re: Provident Finance Prelims

#35144

Postby NeilW » February 28th, 2017, 2:55 pm

The important bit

"The directors are recommending a final dividend in respect of the financial year ended 31 December 2016 of 91.4p per share (2015: 80.9p) which will amount to an estimated dividend payment of £132.9m (2015: £117.8m). If approved by the shareholders at the annual general meeting on 12 May 2017, this dividend will be paid on 23 June 2017 to shareholders who are on the register of members at 19 May 2017"

Dod1010
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Re: Provident Finance Prelims

#35256

Postby Dod1010 » February 28th, 2017, 9:55 pm

[/quote]

I think you should look again.

We could all wish for a world in which there were no sub-prime borrowers, but that is just not realistic.

The customer numbers alone (2.4 million) should tell you that the company is meeting a very real need.[/quote]

There will always be sub prime borrowers and I don't deny that they (PF) are meeting a real need. I just feel that the profit they consistently turn in means that they are rather taking advantage of the situation. I would not feel comfortable about it any more than I would about buying BAE I am sorry to say. Can't say why because I don't know.

I would prefer that a large proportion of the 2.4 million would learn to stand on their own two feet. But this is getting into the realms of ethics, not the investment case for buying PF.

Dod


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