The Group's Trading Update this morning is one of mixed results. Shares down 8%.
Companies: Vanquis Banking Group PLC
Troubled doorstep lender Provident Financial (LON: PFG) has released its first update for the year, which includes updates for the Group's various divisions including Vanquis Bank and Moneybarn, both of whom are under FCA investigation.
The key point from the update is that Management expects the Group's Consumer Credit Division (CCD) to report a loss of c. £120m. This is at the "upper end of guidance" given last year. This is a result of...
"...a lower than expected rate of reconnection through the fourth quarter with those home credit customers whose relationship had been adversely impacted following the poorly executed migration to the new operating model in July 2017."
Despite the lower than expected reconnection numbers, they are growing...
"Active home credit customer numbers ended the year at approximately 530,000, up from approximately 500,000 at September 2017 and home credit receivables ended December at approximately £350m, up from £316m at September 2017."
It also said Vanquis Bank Had "commenced a dialogue" with the FCA and that its ban on all new sales was still in place, whilst its CCD continues to operate "under an interim position whilst the home credit business implements its recovery plan".
The company had a forgettable 2017, issuing a string of profit warnings, its CEO quit in August, the announcements regarding FCA investigation, and the sad news its Executive Chairman Manjit Wolstenholme had passed away.
The stock currently trades at just over a quarter of its 2017 high of 3252p. In FY17 PFG is expected to report flat YoY Revenue growth and Net Profits 95% lower than in FY16.
