25th Feb 2014 10:54
LONDON (Alliance News) - Subprime lender Provident Financial PLC Tuesday said its annual pretax profits fell by 6.0% even as revenues grew, driven by strong trading at its Vanquis Bank.
In a statement, Provident Financial said it made a GBP182.4 million pretax profit for calendar 2013, compared with GBP194.0 million in 2012. Revenue increased by 10% to GBP1.08 billion, but costs rose by 16% to GBP786.0 million.
After stripping out exceptional items, however, the FTSE 250 company's pretax profits rose by 10% to GBP196.1 million.
The exceptional items dragged 2013 results down by GBP13.7 million, as a result of the restructuring within the subprime lender's Consumer Credit Division, while the 2012 figures were boosted by GBP15.6 million as a result of a gain related to the firm's pension scheme.
Trading was boosted by Vanquis Bank, which lends to people who want to improve their credit rating, but Provident Financial said that its Consumer Credit Division had been hurt by difficult trading conditions, saying demand for credit remains weak because of lower customer numbers, "very low home credit customer confidence" and "persistent pressure on household incomes" from inflation.
Chief Executive Peter Crook said Provident Financial has made a "good start" in the first two months of 2014, with Vanquis Bank continuing to trade strongly and the home credit business seeing a "consistent improvement".
"Vanquis Bank has produced another excellent performance with UK profits up 60%. Credit standards have remained tight and the business continues to generate strong customer growth and margins through developing the under-served non-standard credit card market," Crook said in a statement.
"Good progress is being made in repositioning the home credit business as a leaner, better-quality, more modern, high-returns business whilst the Satsuma online instalment lending product has made an encouraging start following its launch in November 2013," Crook added.
Provident Financial increased its total annual dividend by 12% to 85.0 pence from 77.2 pence.
Shares were Tuesday quoted at 1,872.00 pence, up 9.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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