11th Aug 2021 11:58
(Alliance News) - Provident Financial PLC on Wednesday reported a wider first-half loss but said its future holds a little more clarity, as the closure of its Consumer Credit Division business as well as the Covid-19 vaccination drive make progress.
Shares in Provident soared 7.2% to 329.40 pence each in London on Wednesday morning.
The Bradford-based subprime lender saw its pretax loss for the first half of 2021 widen to GBP44.2 million from GBP28.1 million a year ago.
Revenue sunk 25% to GBP195.6 million from GBP261.1 million.
Provident said: "As the UK remained under lockdown restrictions during January and February 2021, the financial year began with the group's businesses focusing on collections from customers and maintaining operational resilience. Demand for credit cards was subdued and consumer expenditure was lower year-on-year by some 20%.
"However, as restrictions eased in March, consumer activity increased, and this was reflected by improving credit card expenditure and demand for vehicle finance growing sequentially from February."
Provident decided again to forgo an interim dividend as its "focus remains on preserving capital" as the company closes its Consumer Credit Division business. It hasn't made a payout since the 2019 interim dividend.
In March, Provident announced the closure of CCD and then placed the business into a managed run-off in May.
Prudential said: "The last 18 months have been extremely challenging for customers, colleagues, and the wider economy. However, the sanction of the scheme and closure of CCD, coupled with the Covid-19 vaccination programme, should provide clarity around the future of [the company]."
"During the second half of 2021, the group will continue to evolve into a specialist bank, providing mid-cost credit products to financially underserved customers. Our core products will be credit cards, vehicle finance and unsecured personal loans. As a result, Provident Financial will no longer serve the high-cost segment of the credit market," the company added.
By Greg Roxburgh; [email protected]
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