Provident Finance Trading Statement

[idpickering]

· A home credit business recovery plan has been developed under new leadership to re-establish relationships with customers, stabilise the operation of the business and improve collections performance. Progress to date is in line with the recovery plan and is consistent with the guidance provided on 22 August 2017 of a pre-exceptional loss for the Consumer Credit Division (CCD) in a range of between £80m and £120m for 2017 as a whole.



· Vanquis Bank has delivered further good growth through the third quarter of the year against credit standards that have recently been tightened, recognising the uncertainties faced by the UK economy.



· Satsuma has continued to make further good progress.



· Moneybarn has continued to enjoy a good flow of new business volumes with margins continuing to reflect the additional impairment on business written prior to the tightening of underwriting in the second quarter.



· Cash resources and funding capacity amounted to £236m following repayment of the 2012 retail bonds on the maturity date of 4 October 2017.



· Vanquis Bank continues to work with the Financial Conduct Authority (FCA) in relation to the investigation into the Repayment Option Plan (ROP).



· The Board confirms that a full-year dividend will not be paid.



· The search for a new Chief Executive is underway.

https://www.investegate.co.uk/provident ... 00024978T/

[idpickering]

Here's an item from TMF on this stock;

Why I’d buy Provident Financial plc shares after 15% rebound

Time to buy?

Post-shock forecasts are suggesting a 65% fall in earnings per share this year, which is pretty drastic. But the share price fall looks to have already accounted for that, leaving us with a forward P/E multiple of 15. That’s close to the FTSE 100‘s long-term average, and many will see it as too high for a company that’s in financial trouble.

But Provident’s troubles genuinely do seem to be short term to me, and I really don’t see any long-term problem. In fact, analysts are already predicting an earnings recovery for 2018 — at 103p, EPS would still be well below recent years’ levels, but it would drop that P/E to only around nine.

The dividend is expected to come back in 2018 at 37p, far below 2016’s 135p, but that’s still a 4% yield on today’s price.

http://www.fool.co.uk/investing/2017/10 ... 5-rebound/

[toofast2live]

Interesting article in IC last week on PFG. Reckons cash flow was and is poor.

[pendas]

From what I've read, many of the self employed collectors whose services were terminated now work for other companies and have taken PFG's customers with them.

[idpickering]

From what I've read, many of the self employed collectors whose services were terminated now work for other companies and have taken PFG's customers with them.

Good for them. Although no other company of that ilk comes to mind to be honest.

Ian.

[idpickering]

Provident Financial stems losses from home credit business

Provident Financial has begun to staunch the blood flow at its doorstep lending business after two profit warnings earlier this year, though analysts were divided as to whether the non-standard lender is out of the woods yet.

For the full year the sub-prime lender still expects to make losses of £80-120m before exceptional costs from its CCD home credit business but said recent management changes "have prevented any further deterioration in performance".

https://www.digitallook.com/news/news-a ... 11982.html

[Hypster]

From what I've read, many of the self employed collectors whose services were terminated now work for other companies and have taken PFG's customers with them.

Good for them. Although no other company of that ilk comes to mind to be honest.

Ian.

I read about one such company, Morses Club, in a paper copy of the FT a couple of weeks ago. I just tried to search for it online but it requires a subscription. However, there's a similar article in the Guardian. It says how they are doing the opposite of Provident by increasing their number of self-employed agents. Most of the new staff coming from, you guessed it, Provident Financial.

https://www.theguardian.com/business/20 ... cash-loans

[77ss]

I read about one such company, Morses Club.....

Reasonable yield too - 4.7%.

But with a market cap of £173m, I don't suppose it will be on too many HYPers' shopping lists.

[monabri]

From SimplyWall Street (Morses Club)

It offers small cash loans between £100 and £1000. The company offers consumer credit through self-employed agents, as well as online channels. It operates 98 branches

Solid track record with high growth potential and pays a dividend.

Future "performance" looks promising

Divi 4.75% increasing next year to 5.7%

Significantly overvalued (factor 6) at the current share price (based on IMHO optimistic Free cash flow calcs)

Mkt Cap £177 million

617 employees (135 in Feb 2015)

Woody Owns a small chunk (but he also owns a far bigger chunk of PFG percentage wise!)

Morses last update

http://www.londonstockexchange.com/exch ... 44000.html

[Wizard]

From what I've read, many of the self employed collectors whose services were terminated now work for other companies and have taken PFG's customers with them.

How could PFG management have been so stupid, arrogant or indeed both not to see that coming? Remarkable example of how sometimes management don't see what would seem to be the most obvious risks in a plan and develop mitigation in advance. Staggering.

Terry.
(Never held PFG)

[idpickering]

From what I've read, many of the self employed collectors whose services were terminated now work for other companies and have taken PFG's customers with them.

Good for them. Although no other company of that ilk comes to mind to be honest.

Ian.

I read about one such company, Morses Club, in a paper copy of the FT a couple of weeks ago. I just tried to search for it online but it requires a subscription. However, there's a similar article in the Guardian. It says how they are doing the opposite of Provident by increasing their number of self-employed agents. Most of the new staff coming from, you guessed it, Provident Financial.

https://www.theguardian.com/business/20 ... cash-loans

Thanks for that Hypster, and good luck to those employees that have moved across.

Ian.

[monabri]

As a holder in PFG I do not share the same sentiments of "good luck to all the new Morses employees" !

I'm hoping that PFG will get their act together and sort out the problems. The problems are fixable and it seems in the last month or two since Crook's departure progress has been made.

I personally don't see what the issue is with the scheme where loans can be deferred at a cost? Will the FCA really issue a £300 million fine - what is wrong with allowing people to defer making a payment on a loan ....at a cost?

At the moment PFG sits alongside CLLN and Interserve in my HYP with significant capital losses and no dividends.

[kempiejon]

At the moment PFG sits alongside CLLN and Interserve in my HYP with significant capital losses and no dividends.

Is that right pfc have now scrapped dividends? I don't have that bit of information I thought it was a reduction from 22 to 12 cents.

[kempiejon]

At the moment PFG sits alongside CLLN and Interserve in my HYP with significant capital losses and no dividends.

Is that right pfc have now scrapped dividends? I don't have that bit of information I thought it was a reduction from 22 to 12 cents.

[idpickering]

At the moment PFG sits alongside CLLN and Interserve in my HYP with significant capital losses and no dividends.

Is that right pfc have now scrapped dividends? I don't have that bit of information I thought it was a reduction from 22 to 12 cents.

From my opening post above;

The Board confirms that a full-year dividend will not be paid.

https://www.investegate.co.uk/provident ... 00024978T/

[kempiejon]

Ian, Monabri that's my mistake I've confused my TIDMs PFG and PFC. Provident have indeed scrapped the dividend it's Petrofac that has halved theirs. Clearly this is the provident thread.

[idpickering]

Ian, Monabri that's my mistake I've confused my TIDMs PFG and PFC. Provident have indeed scrapped the dividend it's Petrofac that has halved theirs. Clearly this is the provident thread.

No stress kempiejon. Good luck to you guys who're hanging on it there.

Ian.

[idpickering]

Rather than starting a new thread I elected to put this item from TMF, which may be of interest to HYP PFG holders, here;

Why I’d buy FTSE 100 turnaround stock Provident Financial plc ahead of Barclays plc

A turnaround with teeth

If I were to invest in a financial stock today, I’d be much more likely to take a punt on subprime lender Provident Financial (LSE: PFG). The company’s shares have shed nearly 70% of their value over the past year due to a pair of profit warnings issued this summer on poor trading in the company’s core doorstep lending business.

http://www.fool.co.uk/investing/2017/11 ... clays-plc/

[monabri]

The article goes on to say

"While I won’t be buying shares of Provident Financial until the state of its consumer credit division is clearer, I see much more capital appreciation prospects from this turnaround story than I do in Barclays"

My capital losses on both Interserve and Provident make Carillion seem only "quite bad".

IRV seemingly has no idea on it's cost to completion on the last of it's EfW programmes and PFG were just plain incompetent.

[Wizard]

The article goes on to say

"While I won’t be buying shares of Provident Financial until the state of its consumer credit division is clearer, I see much more capital appreciation prospects from this turnaround story than I do in Barclays"

So maybe a better article title would be Why I won't be buying either Provident Financial plc or Barclays plc

Terry