NSF counts the cost of takeover bid

Non Standard Finance (NSF) posted a pre-tax loss of £22.8 million in the six months to the end of June. The decline was driven by a £12.7m charge related to its attempt to buy rival subprime lender Provident Financial.

Profits were down 790% compared to the previous year, reported pre-tax losses dropped from the £2.5 million in the same period last year. Revenue, however, increased 16%; from £75 million to £87 million.

In the period, NSF saw its total net loan book increase 26% to £335.6 million.

NSF’s Group CEO, John van Kuffeler said “The Group delivered another good performance in the first half of 2019 with strong loan book growth and a further reduction in impairment as a percentage of revenues. We have secured a leading position in three highly attractive segments following a four-year programme of investment. During this period, Everyday Loans has doubled the size of its loan book, our Guarantor Loans Division has more than doubled and Loans at Home has grown substantially. Now this phase of significant investment is complete, we expect a greater proportion of future revenue growth to be translated into profit.”

“Whilst we believe strongly that a combination with Provident Financial plc would have accelerated the delivery of benefits for customers, employees and shareholders, each of our businesses continued to perform well during the first half. Our strategy remains unchanged and we remain on course to deliver attractive long-term returns through a combination of income and capital growth.”

“As well as fees and other deal-related costs, exceptional items in the first half also include an impairment charge for Loans at Home goodwill. Whilst Loans at Home is highly profitable, is performing strongly and is ahead of plan, the significant decline in the peer group multiples since December 2018 has prompted the impairment of the goodwill asset in the Group’s balance sheet. We are continuing to see a strong level of demand in both branch-based lending and guarantor loans while in the more mature home credit market, demand remains steady.”