Provident Group has announced that Chief Executive Officer Peter Crook has resigned. In a statement which issued a profit warning. The doorstep lender says it expects to make losses of £80m to £120m as its debt collection rates have dropped to 57% compared with a previous rate of 90% in 2016.

The statement said: The new home credit operating model, which involves employing full-time Customer Experience Managers (CEMs) to serve customers rather than using self-employed agents, was deployed on 6 July 2017. This followed a period of higher operational disruption than planned between the announcement of the proposed structural changes on 31 January 2017 and deployment of the new operating model. The impact of higher than expected agent attrition and reduced agent effectiveness on collections performance and sales resulted in the announcement on 20 June 2017 that forecast pre-exceptional profits from CCD would be reduced to around £60m.

The primary objectives set for the third quarter of 2017 were to embed the new operating model and to progressively restore customer service and collections performance to acceptable levels in preparation for the seasonal peak in lending during the fourth quarter. The rate of progress being made is too weak and the business is now falling a long way short of achieving these objectives. Collections performance and sales are both showing substantial underperformance against the comparable period in 2016. The routing and scheduling software deployed to direct the daily activities of CEMs has presented some early issues, primarily relating to the integrity of data, and the prescriptive nature of the new operating model has not allowed sufficient local autonomy to prioritise resource allocation during this period of recovery.

Collections performance is currently running at 57% versus 90% in 2016 and sales at some £9m per week lower than the comparative weeks in 2016. The extent of this underperformance and the elongated period of time required to return the performance of the business to acceptable levels invalidates previous guidance. The pre-exceptional loss of the business is now likely to be in a range of between £80m and £120m.

In response, a thorough and rapid review of home credit’s performance is underway to secure the turnaround of the business. The trading performance of Vanquis Bank, Moneybarn and Satsuma remain in line with internal plans. Manjit Wolstenholme will assume the role of Executive Chairman.

Manjit Wolstenholme, Executive Chairman, said “I am very disappointed to have to announce the rapid deterioration in the outlook for the home credit business. Protecting the group’s capital base through withdrawing the interim dividend and in all likelihood the full-year dividend is the appropriate response to maintain the highly valuable franchises of Vanquis Bank, Moneybarn and Satsuma. My immediate priority is to lead the turnaround of the home credit business.”