Provident Financial has announced its financial results for the first half of this year which indicate a fall in profits. Provident statutory pre-tax profits for the six months to 30 June of £34.6m in H1 2018, down from £73.3m in H1 2017; a drop of £38.7m. Its adjusted pre-tax profits fared better, dropping from £98.6m to £74.9m.  Adjusted pre-tax profits take into account several exceptional items during the period. This includes £3.7m of amortisation for intangibles as part of the acquisition of Moneybarn in August 2014 and an exceptional charge of £36.6m, comprising £18.1m for asset write-offs, redundancy and consultancy costs associated to implementing its home credit recovery plan and £18.5m for the 8% premium and fees paid on the redemption of 89% of the £250m senior bonds due to mature in October 2019. Revenues for the period stood at £572m, down from £619m for the same period last year

In response to the figures Malcolm Le May, Chief Executive, said “I am pleased to report good progress against the 2018 goals we set out at results back in February. The implementation of the home credit operational recovery plan is going well, we have commenced our ROP refund programme after a successful pilot, and we remain engaged in constructive dialogue with the FCA on their investigation at Moneybarn. I am confident we are well placed to make good progress on all three goals during the second half of the year and within the provisions we made in 2017.”

“Today we have also significantly strengthened the Board, another key objective, with the appointment of Patrick Snowball as Chairman, and three new non-executive directors. These appointments will add to the Board’s financial services, consumer finance, regulatory and non-executive director skill set. Operationally we have made good progress. Collections performance in home credit in the second quarter did not show the improvement we expected mainly due to lower collections from customers who were live during the poorly executed migration to the new operating model last summer. However, customers who took credit from us since then are performing in line with historic levels, indicating to me the changes we are making to our model are working. Vanquis Bank continues to perform well and in line with our expectations and has made the necessary changes required to meet the new regulatory requirements introduced by the FCA’s new rules addressing persistent debt. Moneybarn has delivered strong growth and continues to perform in line with our expectations.”
“I believe the group is well placed to champion the underserved, and through greater collaboration across our businesses we can provide them with the credit they need, when they need it, and on responsible terms. I look forward to continuing the journey of repositioning the group as the leading provider of credit to this underserved sector, and would like to thank all my colleagues for their hard work over the last six months.”