Listed credit provider tightens its belt as economic uncertainty bites
Consumer credit provider Non Standard Finance (NSF) has forecast lower than anticipated profits for 2019, despite this figure still being expected to be “well ahead” of 2018’s profits.
The Leeds-based company, which failed in its failed £1.3bn bid to take over Provident Financial earlier this year, said it is aware the economic outlook is more uncertain than at any point in the last 10 years.
In a trading update released today, the business said it was taking steps to ensure each of the Group’s businesses are well-positioned to manage future headwinds.
The update adds: “Trading overall in the quarter to 30 September 2019 has been softer than expected with solid performances by both branch-based lending and home credit, offset by lower volumes in guarantor loans.
“As a result, it is expected the Group’s normalised full year operating profit in 2019 will be lower than expected but still well ahead of 2018.
“The Board of NSF is focused on ensuring the Group is well-positioned for the next recession, whenever it comes, drawing upon the significant experience of its directors in guiding similar lending businesses through previous recessions.
“By widening risk-adjusted margins, tightening score-cards and moderating loan book growth as well as by having long-term credit facilities in place, the Board believes NSF is now in a strong position to continue to make good progress should a meaningful downturn occur. “
NSF says its normalised operating profit for 2019 is expected to be between 10% to 13% lower than current consensus of analyst forecasts.
And it states that its Board is moderating the Group’s medium-term targets for loan book growth, while continuing to target 20% return on assets across all three divisions.
In a separate announcement also issued today, the business confirmed that Nick Teunon, Group chief financial officer, will step down from the Board in March 2020. He will be replaced by Jono Gillespie, current deputy CFO.
