Online retail group increases provision for PPI claims
Manchester-based online retailer N Brown will have to make up to £30m available to meet a flurry of late PPI claims, it said today.
This will lead to an increase in its full year net debt guidance.
In a statement to the stock exchange today it said that, in line with the wider industry, it saw a significant increase in PPI information requests and complaints (PIRs) in the final days leading up to, and including, the August 29 deadline for claims.
In August N Brown received more than 10 times the average volume of PIRs seen in the months prior to this with around 110,000 in the month and more than 40,000 in the final week before the deadline.
Within the volume of PIRs, the group received an influx of previously unseen, and, therefore, unprovided for, PIRs from the Official Receiver.
These requests relate to parties who took out PPI insurance before entering bankruptcy and the Official Receiver has made claims in order to make payments to creditors. It said: “We are examining the validity of these claims.”
The group has paid out £108m in financial redress to date, which incorporates the additional provision the group made of £22.6m in the second half of the previous financial year to cover claims up to the August 29 deadline.
It said this morning: “The group is currently working through all additional PIRs now received, and although it is not possible to be precise about the final outcome, the group now believes it will be necessary to make an additional provision in the range of £20m to £30m in its half year results for the six months to August 31.
“As a result, our full year net debt guidance is anticipated to increase from £440m-£460m to £460m-£490m.”
It said it will continue to work through the PIRs received following the deadline for submission of claims and will provide an update, including the size of provision, in its half year results for the six months ended August 31, on October 10.
