Finance group’s shares drop 35% after rising complaints force profit warning

Shares in Vanquis have slumped 35% this morning after the Bradford-based finance group issued a profit warning blaming rising complaints.

Vanquis said it “has been experiencing significant levels of third party complaint submissions”, although it is not part of the FCA’s car finance review into commissions and sales practices.

Reviewing the complaints is causing an increase in costs and while it said “the vast majority” are not upheld, the increased costs are expected to “materially impact” profitability this year.

Analysts had been forecasting adjusted pre-tax profits of £75m, compared with a challenging 2023 which is expected to see £25m profits confirmed when the specialist lender publishes its full-year results later this month.

Its shares were already significantly down for the year and are now trading around just one-third of its year-high price.

Today’s drop continues a long-term downward trend for the group, which used to be know as Provident Financial.

It was in the FTSE 100 less than seven years ago, but after this morning’s share price fall now has a market value of just £200m.

Vanquis specialises in non-standard finance, although has been moving away from Provident Financial’s sub-prime specialisms.

It offers credit cards and loans as Vanquis, vehicle finance as Moneybarn, and has a fintech brand, Snoop.