Profit warning wipes £320m from Provident Financial’s market value
Shares at Provident Financial, the Bradford-based subprime lender, dropped by nearly 20% in trading yesterday – wiping £320m from its market value.
The drop came after the firm said it expected its full year results for 2018 to be on the “lower end” of market expectations. This is the latest blow for the lender, which despite losing 80% of its value in the last three years after being hit by crisis, had started to build its share price up again. Last year, it was looking to implement an turnaround plan.
In an update on trading for the financial year ending 31 December this week, the company said profits are anticipated to be at lower end of the range of market expectations of £151m to £166m.
Provident Financial noted that its subsidiary, Vanquis Bank, had delivered further customer and receivables growth although impairment has been modestly higher than expected.
During the fourth quarter, Vanquis Bank secured new account bookings of 76,000, which was 17,000 lower than the last quarter of 2017. Total new account bookings for 2018 were 366,000, which was also 71,000 lower than the prior year.
Despite this, customer numbers ended the year at 1,773,000, representing year-on-year growth of 3.1%.
The company’s vehicle finance business, Moneybarn, also continued to deliver strong growth with demand and used car prices remaining strong. As a result, fourth quarter new business volumes showed year-on-year growth of 21%. Customer numbers ended the year at 62,000, representing year-on-year growth of approximately 24%,
