Credit, Collections & Insolvency News
Provident Financial has reported pre-tax profits that are marginally ahead of market expectations as it continues to reposition and rebuild the business.
The business generated adjusted pre-tax profits of £64.8 million, compared with a £54.6 million loss in 2020.
Malcolm Le May, Chief Executive Officer, said “I am pleased to report that the Group’s financial performance in FY’21 improved significantly year-on-year and, as a result, our adjusted PBT from continuing operations was marginally ahead of market expectations. We have exited high-cost short-term credit and we are now focused on providing mid-cost credit products to over 1.6m customers.”
“2021 was a strategically important year for PFG: we commenced the rebuilding of our cards franchise following the pandemic, we established a personal loans business supported by a brand new IT platform and we closed the Consumer Credit Division (CCD) in response to changing industry dynamics. We also improved the funding mix of the Group with the issuance of a Tier 2 subordinated bond. Most importantly, we achieved all of this whilst maintaining a focus on providing our customers with the credit products they need.”
“Reflecting the improved performance of the Group, I am pleased to report that the Board is proposing a dividend of 12p per share for FY’21, which represents a pay-out ratio of adjusted continuing earnings3 of approximately 30%. Going forwards, we anticipate moving towards a pay-out ratio of adjusted earnings of circa 40% from FY’22 onwards.”
“During the first quarter of 2022, PFG has continued to see positive momentum across its three businesses quarter-on-quarter. In the credit card business, new account bookings are tracking ahead of expectations and delinquency trends remain favourable and consistent with the year-end position. In the vehicle finance business, demand from customers remains buoyant, particularly in the near-prime segment, and collections and arrears rates are stable. In the personal loans business, the pilot phases for Vanquis Bank Loans and Sunflower Loans continue to progress encouragingly. PFG remains well positioned to cope with the macroeconomic uncertainty that may arise from the current inflationary environment in the UK and we continue to support our customers through this time.”