9th May 2018 09:27
LONDON (Alliance News) - Provident Financial PLC said Wednesday that all three of its businesses performed in line with internal plans during the first quarter of 2018, and the company remains on track to deliver annual results in line with management expectations.
The home credit provider also said that central costs for 2018 are expected to increase by GBP5 million due to investments in strengthening the company's governance, oversight and collaboration of among divisions.
Provident Financial expects to pay a nominal dividend in respect of 2018 before adopting a progressive dividend policy in line with a dividend cover of 1.4 times from the 2019 financial year.
For the first quarter to March-end, Vanquis Bank - the company's credit cards unit - recorded new customer bookings of 87,000, in line with management expectations, but 35,000 lower than the comparative year-ago period due to tightening of underwriting, cessation of a contract with retailer Argos, and lower marketing activities. The unit's quarterly profits were ahead of internal plan as a result of robust margins and operational leverage, Provident said.
The Provident home credit business recorded good progress with collections shortfall narrowing to 10% at March 2018 from 12% at December 2017. Collections performance is expected to return to historic levels during the first half of 2019, Provident said.
Headline collections of the home credit business through the first quarter was 70%, down from 78% reported for the month of December 2017, purely reflecting the normal seasonal reduction, the company said.
First-quarter new business volumes at the company's car finance unit Moneybarn showed year-on-year growth of over 10% and customer numbers at the end of March stood at 53,000, up 24% on March 2017.
Provident Financial's common equity Tier 1 ratio, after GBP300 million proceeds from a previously announced rights issue, was 29.8% compared with the group's revised minimum capital requirement of 25.5%.
Shares in the company were trading 7.7% higher at 691.09 pence Wednesday morning.
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