16th May 2007 12:00
Provident Financial PLC16 May 2007 Provident Financial plc AGM Statement and Trading Update 16 May 2007 John van Kuffeler, Chairman of Provident Financial plc, made the followingstatement at today's Annual General Meeting. UK home credit UK home credit has made a positive start to 2007, with continued year-on-yeargrowth in both customer numbers and receivables. Impairment levels remainstable despite pressures on customers' disposable incomes, due to the benefitsof tight credit management and improvements to the arrears processes introducedduring 2006. Vanquis Bank Vanquis Bank has generated further growth in customer numbers and receivableswhich, when combined with the re-pricing of credit lines undertaken towards theend of 2006 and tight credit management, are yielding the anticipated benefits.We continue to expect that the business will trade at around breakeven for 2007as a whole. International The International home credit division has made a strong start to 2007 acrossall markets. In Central Europe, Poland is performing well. The strong improvement in creditquality seen during the latter part of 2006 has continued, and the investment inexpanding the agent force during the last quarter of 2006 has resulted in areturn to customer growth during the last three months. In Mexico, the main focus has been to improve the quality of the business beforere-commencing the branch network expansion. Nonetheless, customer numbers haveexpanded strongly from the existing infrastructure. It is also pleasing toreport that across the Puebla region we are seeing an improved collectionsperformance, aided by stronger controls over new credit issued and significantlyimproved staff retention which is now at Central European levels. Guadalajara,the second region under development, continues to perform well. We continue toexpect Mexico to move to profitability in 2009. The Romanian pilot continues to perform satisfactorily and plans for a nationalroll-out are being developed. Motor insurance As announced on 9 May, the company has agreed the sale of Provident Insurancefor a consideration of approximately £170m, which will give rise to anexceptional gain of approximately £70m, with completion expected in June oncethe necessary regulatory clearances have been obtained. Group outlook and demerger The good start to 2007 and improved trading outlook for both the UK andInternational businesses provides a strong platform for the proposed demerger ofthe International business. As previously reported, full details of the demerger, including the intendedcapital structures of the UK and International businesses following thedemerger, will be included in the Circular and Prospectus. We anticipate thatthese documents will be published very shortly after the completion of the saleof Provident Insurance which, as noted above, is expected in June. Enquiries: MediaDavid Stevenson 01274 731111 Investor RelationsStuart Caldwell 01274 731111 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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