Provident Financial delivers sold performance

LENDER Provident Financial today said it had produced a “solid” performance after reporting a slight dip in pre-tax profits last year.

The Bradford-based home credit group saw a 1% rise to £130.1m in profit before tax and exceptionals but pre-tax profits were down 2.4% to £127.5m from £128.8m in the 12 months to December 31 with the company saying that demand for credit was tempered by the increasingly cautious behaviour of customers during the peak fourth-quarter period, exacerbated by weather conditions in December..

Basic earnings per share were down 4.8% at 67.5p from the previous 70.9p and it is holding its full year dividend at 63.5p.

The company said its Consumer Credit Division had seen a growth in home credit customer count of 5.1%.

The credit quality of the receivables book remained sound, assisted by investment in field collections capacity at the start of the year.

The group’s Vanquis Bank operation saw pre-tax profit  up 76.3% to £14.1m, with the business on track to deliver its medium-term target of a 30% post-tax return on equity by the end of 2010.

Group year-end receivables grew 7.1% to £1.14bn from £1.06bn.

Chief executive Peter Crook said: “I am pleased with the solid performance we delivered in 2009. We carefully positioned our businesses for turbulent market conditions well ahead of time and, as a result, we were able to maintain the flow of credit to our customers whilst keeping tight control over impairments and costs.

In 2009, customer satisfaction levels remained high, with a measure of 94% in our home credit business being a strong endorsement of how much customers value our service.

“Our funding position and balance sheet have recently been strengthened further, leaving us well placed to continue this approach and deliver good quality growth in market conditions that are unlikely to improve this year.

“Looking beyond 2010, the fall-out from market turmoil reinforces the medium-term opportunity to build a leading position in the UK non-standard consumer lending market.”