4th Mar 2008 07:00
Provident Financial PLC04 March 2008 Provident Financial plc Results for the year to 31 December 2007 H I G H L I G H T S Provident Financial plc ("Provident Financial") is the market-leading providerof home credit in the UK and Ireland, with a successful, developing credit cardbusiness. It sold its insurance business and demerged its international businessduring 2007, both of which have been classified as discontinued operations. Itsprimary continuing operations consist of the Consumer Credit Division,comprising home credit and Real Personal Finance, and Vanquis Bank. Key financial results 2007 2006 Change Consumer Credit Division & Vanquis Bank: Customer numbers 1,966k 1,818k 8.1% Receivables £892.1m £793.1m 12.5% Profit before tax from continuing operations £115.2m £104.1m 10.7% Final dividend per share 38.10pTotal dividend per share (1) 63.50p (1) after adjusting for the one for two consolidation of Provident Financialshares and taking into account the 4.75p per share dividend stated at the timeof the demerger to be paid by International Personal Finance plc in respect of2007, the aggregate dividend per share for 2007 represents the same 36.50p pershare paid by Provident Financial in 2006. Highlights Consumer Credit Division • Strengthening rate of growth through the second half of 2007 with year end home credit customer numbers up 5.3% to a record 1.65 million • Reduction in impairment charge, due to strong credit management • Real Personal Finance market test now in 33 locations and progressing well • Profit growth restored, with underlying profit before tax up 1.2%* to £123.5m Vanquis Bank • Strong growth with customer numbers up 25.9% to 316,000 and average receivables up 51.7% to £117.3m • Further significant improvement in credit quality • Profitable from June, with a profit of £3.3m in the second half of 2007 • Achieved target of trading at around break even for the year with a full year loss of only £0.9m compared to a loss of £18.3m in 2006 Group • Profit before tax from continuing operations of £115.2m, representing profit growth of 16.8%* • Strong funding and liquidity positions to support continued high quality growth and strategic development * Stated after adjusting for the one-off £5.5m benefit from changes to pensionscheme members' commutation rights in 2006 relating to continuing operations Peter Crook, Chief Executive of Provident Financial, commented: "I am very pleased with the group's full year performance. During the year wehave invested in further enhancements to marketing, credit management and thetalent base, which are now driving high quality growth in both customer numbersand profit. The strength of the group's funding and liquidity positions underpin the group'smedium-term organic growth plans, as it pursues its strategy of addressing thebroader UK non-standard lending market of some 10 million consumers. Current market conditions are favourable for us, as mainstream lenders continueto tighten their lending criteria. The group has made a strong start to 2008." Enquiries: Today ThereafterMediaDavid Stevenson, Provident Financial 020 7404 5959 01274 731111Nigel Prideaux, Brunswick 020 7404 5959 020 7404 5959 Investor RelationsStuart Caldwell, Provident Financial 020 7404 5959 01274 731111 Chairman's statement 2007 has been a year of significant change at Provident Financial, with the saleof the insurance business in June followed by the demerger of the internationalbusiness as a separately listed company in July. Provident Financial's strategy is now clearly focussed on addressing the tenmillion people in the UK who make up the non-standard credit market. With almosttwo million satisfied customers served through a network of over 300 branches,modern call centres and internet sites, the group already has the largestnon-standard customer base in the UK from which to build. The non-standardpopulation is growing, as mainstream lenders retrench to the prime markets inthe face of mounting impairment and, more recently, pressures on liquidity.Consequently, the non-standard market is likely to be the domain of specialistssuch as Provident Financial. Home credit has produced excellent results in 2007. After two years ofinvestment in new sales channels and credit management, the business is nowdelivering consistently high quality growth. Customer numbers finished the yearup 5.3% at a record 1.65 million and impairment was down, a combination that hasrestored underlying profit growth and produced a profit before tax of £123.5m. Vanquis Bank, the group's fast-growing credit card operation, grew averagecustomer receivables by 51.7% in 2007 and continued to experience an improvingimpairment trend. The business moved into profit in June, and produced a profitof £3.3m in the second half, resulting in a loss of just £0.9m for the year inline with the guidance set at the start of 2007. This confirms its status as animportant participant in the UK non-standard credit card market and as animportant contributor to the group's future profits. In the medium-term, VanquisBank is expected to develop a portfolio of 500,000 customers and £300m ofreceivables, generating a post-tax return on equity of around 30%. Real Personal Finance is an unsecured direct-repayment loan product,underwritten face-to-face in the customer's home and collected by monthly directdebit, and is a natural extension of home credit. This offer is well suited tothe significant number of satisfied customers who migrate from home credit eachyear because their circumstances have improved, as well as the broadernon-standard consumer market. The pilot is progressing well and a decision onthe pace of national roll-out will be made later in 2008. Customers addressed by the group's businesses continue to experience pressureson their disposable incomes from rising food, fuel and utility bills and,therefore, tight credit management remains a main priority for 2008. At present,the group's customer base shows no evidence of distress from unemployment. Evenin the event of a more severe downturn, we believe that the group's businesseswould prove resilient. The short-term, low value loans made by the home creditbusiness and its national network of 11,600 agents, who make some 80 millionvisits to customers' homes during the course of a year, mean that ProvidentFinancial is uniquely placed to respond faster than other lenders to signs ofstrain on the way into a downturn and in resuming profitable lending during arecovery. Similarly, from the point of issue through to collection, Vanquis Bankmaintains a significantly more intensive call centre-based relationship with itscustomers than other card issuers. Alongside Peter Crook and Andrew Fisher, Chris Gillespie joined the executivemanagement team during the year to head up the Consumer Credit Division andMichael Lenora joined to head up Vanquis Bank. Chris and Michael each bring over20 years of experience in the industry and have made important new appointmentsto strengthen their divisional management teams, positioning both businesseswell for future growth. The board is confident that the robust operating platform established by themanagement team, together with tight credit disciplines and the group's strongfunding and liquidity positions, will see the delivery of further high qualitygrowth in 2008. John van KuffelerChairman4 March 2008 Financial results Group Profit before tax for the year from continuing operations increased by £11.1m to£115.2m (2006: £104.1m). After taking account of the impact of a one-off pensioncredit of £5.5m in 2006, this represents an increase in underlying profit beforetax of 16.8%. The sale of the insurance business resulted in a net pre-tax profit of £69.3mand the group incurred pre-tax exceptional costs of £32.2m during 2007 (2006:£11.1m) relating to the demerger of the international business. Profit after taxfrom discontinued operations totalled £57.7m (2006: £51.6m). The group's profit for the year attributable to equity shareholders was £138.4m(2006: £124.9m). Consumer Credit Division The rate of home credit customer number growth accelerated strongly during thesecond half of 2007, with year end customers at a record level of 1.65 million,some 5.3% higher than at the end of 2006. Of the 525,000 new customers bookedduring the year, approximately 185,000 came from non-agent channels,illustrating the success of our strategy of broadening our range of recruitmentchannels. Revenue grew by a slightly slower rate, up 2.4% to £590.5m (2006: £576.7m) as agreater proportion of new customers were added in the second half of the year.However, average customer receivables increased strongly by 6.2% to £638.8m(2006: £601.3m). Emphasis has been placed on maintaining the overall quality of the receivablesbook. This has been achieved by both the use of revised credit scoring systemsfor all new customer applications, which has resulted in approximately one thirdof new customer applications being declined, and in tight management of arrears.This emphasis on quality growth led to the overall impairment charge falling by2.0%, despite a growing receivables book. Impairment expressed as a percentageof revenue in 2007 fell markedly from 31.0% to 29.7%. In an environment wherethere is continued pressure on our customers' disposable incomes, particularlyfrom rising food, fuel and utility bills, this improvement demonstrates clearlythe effectiveness of our enhanced credit management. Underlying operating costs, after excluding the one-off pension credit of £5.5min 2006, increased by 4.6% to £256.7m (2006: £245.5m), which included a furtherincrease in the level of marketing expenditure incurred to support futuregrowth. The market test of a direct repayment loan product, trading under the brand RealPersonal Finance, has progressed well during 2007. The test was expanded from 2to 20 locations in November 2007 and is currently operating in 33 locations.This business operates a separate sales force, but is otherwise fully integratedinto the existing home credit branch infrastructure. Accordingly, it is notexpected to incur a material level of start-up costs. A decision on the pace andscale of the national roll-out of Real Personal Finance will be taken during thethird quarter of 2008. Overall, underlying profit before tax from the Consumer Credit Division grew by1.2% to £123.5m (2006: £122.0m), reversing the trend of declining profitabilityseen in recent years. Vanquis Bank Vanquis Bank ended the year with 316,000 customers (2006: 251,000), an increaseof 25.9% in the year. Response rates from direct marketing campaigns and thelevel of internet applications increased during the second half of the year andthe business has benefited from a number of mainstream credit card providerspulling back from the non-standard market. Total revenue grew by 85.7% to £63.5m (2006: £34.2m) due to a combination of theincrease in customer numbers, the re-pricing of assets undertaken at the end of2006, and the impact of our "low and grow" strategy upon average customerbalances, which grew by 11.4% to £490 (2006: £440). Average customer receivablesgrew by 51.7% to £117.3m (2006: £77.3m). The group has continued the development of underwriting criteria and tougherscoring of both new customer applications and increases to existing customers'credit lines, with over 70% of new customer applications being declined. Inaddition, there has been a heavy focus on arrears management. The overall resultis a further improvement in the quality of the receivables book, with impairmentas a percentage of revenue falling sharply from 56.7% to 39.7%, which is nowclose to the planned ongoing rate of impairment. Total costs increased by just 10.7%, significantly lower than the growth in netrevenue, as the business benefited from the further increase in scale. Toaccommodate future growth, Vanquis Bank will significantly expand its callcentre facilities and will also upgrade its IT capability, which will result inthe cost base increasing at a faster rate in 2008. Vanquis Bank moved into profitability in June and made a profit of £3.3m in thesecond half of 2007. For the year as a whole, it reported a small operating lossbefore tax of £0.9m (2006: £18.3m loss). The business is now well positioned tomove forward strongly in 2008 towards its medium-term targets of achieving aportfolio of around 500,000 customers and net receivables of £300m, earning apost-tax return on equity of 30%. Yes Car Credit The collect-out of the Yes Car Credit receivables book continues to progress inline with expectations with total collections in the year amounting to £83.8m.The receivables book at the end of 2007 was £33.3m compared with £108.6m at theend of 2006. The business incurred a loss before tax in the year of £2.9m (2006:£1.5m loss). A similar loss is expected in 2008 and 2009 and full collect-out ofthe receivables book and the closure of the collections operation is expectedtowards the end of 2009. Central costs Central costs for the full year amounted to £6.5m, up from £6.0m in 2006.However, central costs in the second half of 2007 were £2.0m, down by £2.5m onthe first half, as a result of the streamlining which followed the demerger.Central interest receivable of £2.0m (2006: £2.4m) was slightly reduced on 2006and primarily represents the interest receivable on the group's surplus capitalof approximately £75m. Discontinued operations Following the sale of the insurance business on 15 June 2007 and the demerger ofthe international business on 16 July 2007, these two businesses have beenclassified as discontinued operations on the face of the group's consolidatedincome statement. Prior year comparatives have been restated accordingly. Thereis no impact on the prior year financial statements other than a change in thepresentation of the results and cash flows of these businesses to discontinuedoperations. Taxation The effective tax rate for the year from continuing operations was 29.9% (2006:29.6%), close to the UK corporation tax rate. The future tax rate is expected tobe broadly in line with the UK corporation tax rate which reduces to 28% inApril 2008. Dividends At the time of the demerger, the directors of both Provident Financial andInternational Personal Finance plc stated their intention, in the absence ofunforeseen circumstances, to pay an aggregate level of dividends per share inrespect of 2007 that is equivalent to the amount of 36.50 pence paid in respectof 2006. The board of Provident Financial is recommending a final dividend of38.10 pence per share, making a total dividend for the year of 63.50 pence whichis equivalent to 31.75 pence after taking account of the one for two shareconsolidation undertaken in July. At the time of the demerger it was expectedthat International Personal Finance plc would recommend a total dividend for2007 of 4.75 pence per share. Balance sheet and capital Amounts receivable from customers of our continuing operations increased by£23.7m to £925.4m (2006: £901.7m) reflecting strong growth from both theConsumer Credit Division and Vanquis Bank, offset by continued good progress inthe collect-out of the outstanding Yes Car Credit book. The group's funding position remains strong. Borrowings ended 2007 at £633.7m,with gearing expressed as the ratio of borrowings to shareholders' equity, afterexcluding the net pension asset, at 2.7 times, compared with our relevantborrowing covenant of 6.0 times. This results in headroom available on thegroup's current committed borrowing facilities of some £435m, which is expectedto provide ample liquidity to support the group's organic growth plans untilMarch 2010, when the £270.7m 3-year element of the bank syndication, completedin March 2007 ahead of the demerger, matures. Year end shareholders' equity stood at £295.9m (2006: £354.0m) representing21.8% of customer receivables (2006: 17.0%). Relative to our target ratio of15%, and after taking into account operational seasonality and the timing ofdividend payments, this implies surplus capital of some £75m, which has beenretained by the group in the near term to fund growth opportunities and providea sensible degree of strategic flexibility. The group's year end capital adequacy ratio was 480% of the minimum Pillar Irequirement and was well in excess of the interim capital guidance set by theFinancial Services Authority under the new Basel II regime. Consolidated income statement for the year ended 31 December 2007 Notes 2007 2006 £m £mContinuing operationsRevenue 2 669.2 654.6 Finance costs (42.1) (41.2)Operating costs (342.4) (356.0)Administrative expenses (169.5) (153.3) Total costs (554.0) (550.5) Profit before taxation 2 115.2 104.1Tax charge 3 (34.5) (30.8) Profit after taxation for the year from continuing operations 80.7 73.3 Discontinued operationsProfit after taxation for the year from discontinued operations 4 57.7 51.6 Profit for the year attributable to equity shareholders 9 138.4 124.9 Notes 2007 2006Earnings per share from continuing operationsBasic 5 40.86p 28.76p Diluted 5 40.49p 28.66p Earnings per share attributable to equity shareholdersBasic 5 70.08p 49.00p Diluted 5 69.44p 48.83p Dividends per shareProposed final dividend 6 38.10p 22.02p Total dividend in respect of the year 6 63.50p 36.50p Paid in the year* 6 47.42p 35.85p * The total cost of dividends paid in the year was £89.4m (2006: £91.4m) Consolidated statement of recognised income and expense for the year ended 31December 2007 Notes 2007 2006 £m £m Profit for the year attributable to equity shareholders 9 138.4 124.9 Exchange losses on foreign currency translations - (0.2)Cash flow hedges: - net fair value gains 1.7 0.2 - recycled and reported in profit for the year 2.8 -Actuarial gains/(losses) on retirement benefit asset 8 46.3 (0.3)Tax charge on items taken directly to equity 3 (15.2) (0.1)Impact of change in UK tax rate 3 0.8 - Net income/(expense) recognised directly in equity 9 36.4 (0.4) Total recognised income for the year attributable to equity shareholders 9 174.8 124.5 Consolidated balance sheet as at 31 December 2007 Notes 2007 2006 £m £mASSETSNon-current assetsGoodwill 3.1 3.1Other intangible assets 12.6 30.0Property, plant and equipment 28.7 58.7Financial assets:- amounts receivable from customers 7 71.8 129.5- derivative financial instruments - 2.4Retirement benefit asset 8 61.5 8.9 177.7 232.6Current assetsFinancial assets:- amounts receivable from customers 7 853.6 1,103.2- derivative financial instruments 0.7 0.3- cash and cash equivalents 23.4 438.8Trade and other receivables 19.9 30.6Insurance assets - 56.2Current tax assets - 8.1Deferred tax assets 11.4 42.9 909.0 1,680.1 Total assets 1,086.7 1,912.7 LIABILITIESCurrent liabilitiesFinancial liabilities:- bank and other borrowings (41.0) (87.4)- derivative financial instruments (12.5) (2.1)Trade and other payables (70.1) (114.1)Insurance accruals and deferred income - (328.3)Current tax liabilities (29.9) (37.3)Provisions (0.8) (1.8) (154.3) (571.0) Non-current liabilitiesFinancial liabilities:- bank and other borrowings (592.7) (933.6)- derivative financial instruments (24.3) (42.0)Provisions (2.0) -Deferred tax liabilities (17.5) (12.1) (636.5) (987.7) Total liabilities (790.8) (1,558.7) NET ASSETS 2 295.9 354.0 SHAREHOLDERS' EQUITYCalled-up share capital 9 27.2 26.5Share premium account 9 132.7 110.8Other reserves 9 0.1 5.7Retained earnings 9 135.9 211.0 TOTAL EQUITY 9 295.9 354.0 Consolidated cash flow statement for the year ended 31 December 2007 Notes 2007 2006 £m £mCash flows from continuing operationsCash generated from operations 141.9 57.6Finance costs paid (42.3) (38.2)Tax (paid)/received (15.2) 2.3 Net cash generated from continuing operating activities 84.4 21.7Net cash (used in)/generated from discontinued operating activities 4 (49.1) 22.0 Net cash generated from operating activities 35.3 43.7 Cash flows from investing activities in continuing operationsPurchases of property, plant and equipment (10.1) (15.4)Proceeds from sale of property, plant and equipment 1.7 1.1Purchases of intangible assets (3.0) (5.9) Net cash used in investing activities in continuing operations (11.4) (20.2)Net cash used in investing activities in discontinued operations 4 (242.0) (14.5) Net cash used in investing activities (253.4) (34.7) Cash flows from financing activities in continuing operationsProceeds from borrowings 332.0 172.0Repayment of borrowings (332.7) (112.6)Dividends paid to company shareholders 6 (89.4) (91.4)Proceeds from issue of share capital 22.6 3.1Purchases of own shares 9 (6.5) -Proceeds from vesting of shares 9 2.1 2.3 Net cash used in financing activities in continuing operations (71.9) (26.6)Net cash (used in)/generated from financing activities in discontinued operations 4 (126.9) 4.6 Net cash used in financing activities (198.8) (22.0) Net increase/(decrease) in cash and cash equivalents in continuing operations 1.1 (25.1)Net (decrease)/increase in cash and cash equivalents in discontinued operations 4 (418.0) 12.1 Net decrease in cash and cash equivalents (416.9) (13.0)Cash and cash equivalents at beginning of year 431.6 444.4Exchange (losses)/gains on cash and cash equivalents - discontinued operations (0.1) 0.2 Cash and cash equivalents at end of year 14.6 431.6 Cash and cash equivalents at end of year comprise:Cash at bank and in hand 23.4 61.9Short-term deposits - 376.9 Cash and cash equivalents 23.4 438.8Overdrafts (held in bank and other borrowings) (8.8) (7.2) Total cash and cash equivalents 14.6 431.6 Reconciliation of profit after taxation from continuing operations to cashgenerated from continuing operations 2007 2006 £m £m Profit after taxation from continuing operations 80.7 73.3Adjusted for: Tax charge 34.5 30.8 Finance costs 42.1 41.2 Share-based payment charge/(credit) 1.6 (1.6) Retirement benefit charge/(credit) (note 8) 0.4 (4.6) Amortisation of intangible assets 0.5 2.2 Depreciation of property, plant and equipment 5.6 4.9 Profit on disposal of property, plant and equipment (0.1) -Changes in operating assets and liabilities: Inventories - 7.4 Amounts receivable from customers (23.7) 43.5 Trade and other receivables (2.1) 2.8 Trade and other payables 4.5 (28.0) Retirement benefit asset (3.6) (91.5) Derivative financial instruments 0.5 0.1 Provisions 1.0 (22.9)Cash generated from continuing operations 141.9 57.6 Notes to the preliminary announcement 1. Basis of preparation The preliminary announcement has been prepared in accordance with the ListingRules of the Financial Services Authority and is based on the 2007 financialstatements which have been prepared under International Financial ReportingStandards (IFRS) as adopted by the European Union and those parts of theCompanies Act 1985 applicable to companies reporting under IFRS. The preliminary announcement does not constitute the statutory financialstatements of the group within the meaning of Section 240 of the Companies Act1985. The statutory financial statements for the year ended 31 December 2006have been filed with the Registrar of Companies. The auditors have reported onthose financial statements and on the statutory financial statements for theyear ended 31 December 2007, which will be filed with the Registrar of Companiesfollowing the annual general meeting. Both the audit reports were unqualifiedand did not contain any statement under sections 237 (2) or (3) of the CompaniesAct 1985. The preliminary announcement has been agreed with the company's auditors forrelease. 2. Segment information Profit/(loss) before Revenue taxation 2007 2006 2007 2006 £m £m £m £mContinuing operationsConsumer Credit Division 590.5 576.7 123.5 127.5Vanquis Bank 63.5 34.2 (0.9) (18.3)Yes Car Credit 15.2 43.7 (2.9) (1.5) 669.2 654.6 119.7 107.7 Central - costs - - (6.5) (6.0) - interest receivable - - 2.0 2.4 Total central - - (4.5) (3.6) Total continuing operations 669.2 654.6 115.2 104.1 All of the above activities relate to continuing operations as defined in IFRS 5'Non-current Assets for Sale and Discontinued Operations'. Consistent with thetreatment in prior years, the Yes Car Credit operation has been classified aspart of continuing operations on the basis that revenue and impairment willcontinue to be generated from the loan book until it has been fullycollected-out. Revenue between business segments is not material. All of the group'soperations now operate in the UK and Republic of Ireland. A geographic analysisof revenue and profit before taxation of the international business up untildemerger is provided in note 4. Net assets/(liabilities) 2007 2006 £m £mContinuing operationsConsumer Credit Division* 209.6 176.0Vanquis Bank 28.6 32.0Yes Car Credit (41.9) (37.4)Central* 99.6 19.9 Total continuing operations 295.9 190.5 Discontinued operationsInternational* - 82.2Insurance - 81.3 Total discontinued operations - 163.5 Total group 295.9 354.0 * During 2007, the allocation of group net assets has been amended to (i)reallocate certain centrally held tax provisions to the international businessin line with the arrangements in place on demerger and (ii) adjust the statutorynet assets of the Consumer Credit Division to reflect a borrowings toreceivables ratio of 80% consistent with the treatment adopted for charginginterest to the income statement. Prior year comparatives have been restated ona comparable basis which has resulted in net assets of the internationalbusiness as at 31 December 2006 reducing by £7.0m, net assets of the ConsumerCredit Division as at 31 December 2006 reducing by £180.3m and net assets ofcentral activities as at 31 December 2006 increasing by £187.3m. 3. Tax charge The tax charge/(credit) to the income statement is as follows: 2007 2006 £m £mContinuing operationsCurrent tax 30.6 (2.6)Deferred tax 3.6 33.4Impact of change in UK tax rate 0.3 - Total tax charge for continuing operations 34.5 30.8 Discontinued operationsCurrent tax 8.1 24.4Deferred tax 2.2 0.1Total tax charge for discontinued operations 10.3 24.5 Total tax charge 44.8 55.3 The tax charge in relation to discontinued operations includes a tax credit of£0.9m (2006: £1.1m) in respect of demerger costs and a tax charge of £1.9m(2006: £nil) in respect of the profit on disposal of the insurance business (seenote 4). During the year, as a result of the change in UK corporation tax rates whichwill be effective from 1 April 2008, deferred tax balances have been remeasured.Deferred tax relating to temporary differences which are expected to reverseprior to 1 April 2008 is measured at a tax rate of 30% and deferred tax relatingto temporary differences expected to reverse after 1 April 2008 is measured at atax rate of 28%, as these are the tax rates which will apply on reversal. Thetax charge of £0.3m in 2007 represents the income statement adjustment todeferred tax as a result of this change. An additional deferred tax credit of£0.8m has been taken directly to equity, reflecting the impact of the change inUK tax rates on items previously reflected directly in equity. The tax charge/(credit) on items taken directly to equity is as follows: 2007 2006 £m £m Current tax charge on net fair value gains - cash flow hedges 1.3 0.2Deferred tax charge/(credit) on actuarial gains/(losses) on retirement benefit asset 13.9 (0.1) 15.2 0.1Impact of change in UK tax rate (0.8) - Total tax charge on items taken directly to equity 14.4 0.1 The rate of tax charge on the profit before taxation from continuing operationsfor the year is lower than (2006: lower than) the standard rate of corporationtax in the UK (30%). The differences are explained as follows: 2007 2006 £m £m Profit before taxation from continuing operations 115.2 104.1 Profit before taxation from continuing operations multiplied by the standard rate ofcorporation tax in the UK of 30% (2006: 30%) 34.6 31.2Effects of:Adjustment in respect of prior years (0.5) (4.0)Expenses not deductible for tax purposes 0.1 0.2Change in UK tax rate 0.3 -Overseas taxable dividends - 3.4 Total tax charge for continuing operations 34.5 30.8 4. Discontinued operations The demerger of the companies forming the international business was completedon 16 July 2007 and the disposal of the companies forming the insurance businesswas completed on 15 June 2007. Accordingly, these businesses have been presentedas discontinued operations in accordance with IFRS 5. There is no impact on theprior year financial statements other than a change in the presentation of theresults and cash flows of these businesses to discontinued operations. There isno impact on the prior year balance sheet. The profit after taxation attributable to discontinued operations can beanalysed as follows: 2007 2006 £m £m Profit after taxation for the year from the trading activities of the international 13.4 31.2businessDemerger costs, net of tax credit (31.3) (10.0) (17.9) 21.2 Profit after taxation for the year from the trading activities of the insurance business 8.2 30.4Profit after taxation on disposal of the insurance business 67.4 - 75.6 30.4Profit after taxation for the year from discontinued operations 57.7 51.6 The profit after taxation for the year from the trading activities of theinternational business can be analysed as follows: 2007* 2006 £m £m Revenue 207.4 365.3Finance income 3.8 7.2 Total income 211.2 372.5 Finance costs (16.1) (28.6)Operating costs (74.6) (161.3)Administrative expenses (101.4) (136.4) Total costs (192.1) (326.3) Profit before taxation for the year from trading activities 19.1 46.2Tax charge (5.7) (15.0) Profit after taxation for the year from trading activities 13.4 31.2 * Represents six and a half months trading under the group's ownership up until16 July 2007. The revenue and profit before taxation for the year from the trading activitiesof the international business can be further analysed into the followinggeographical segments: Profit/(loss) before Revenue taxation 2007 2006 2007 2006 £m £m £m £m Central Europe 187.1 338.6 34.5 65.7Mexico 18.7 26.4 (7.7) (9.7)Romania 1.6 0.3 (2.0) (2.4)UK and Republic of Ireland - - (5.7) (7.4) Total 207.4 365.3 19.1 46.2 The net assets of the international business on demerger were £165.9m. As thedivestment was accounted for as a demerger in the form of a dividend in specie,there was no gain or loss recognised in the income statement. There was no taxcharge/credit arising as a result of the demerger. Demerger costs of £32.2m (2006: £11.1m) comprise costs incurred in connectionwith the demerger of the international business. The costs comprise £7.2m (2006:£1.1m) of advisors fees, £6.1m (2006: £5.3m) of accounting and legal fees, £6.3m(2006: £nil) of share-based payment costs (see note 9), £4.5m (2006: £nil) ofbonus costs, £2.2m (2006: £3.2m) of IT separation costs, £1.4m (2006: £nil) ofimpairment costs in respect of intangible assets, £0.1m (2006: £1.0m) of costsincurred in establishing IPF's headquarters and £4.4m (2006: £0.5m) of othercosts. A tax credit of £0.9m arose in respect of demerger costs (2006: £1.1m). The profit after taxation for the year from the trading activities of theinsurance business can be analysed as follows: 2007* 2006 £m £m Revenue 61.8 160.9Finance income 7.4 18.1 Total income 69.2 179.0 Operating costs (49.0) (120.1)Administrative expenses (8.4) (17.9) Total costs (57.4) (138.0) Profit before taxation for the year from trading activities 11.8 41.0Tax charge (3.6) (10.6) Profit after taxation for the year from trading activities 8.2 30.4 * Represents five and a half months trading under the group's ownership up until15 June 2007. Included within operating costs is a credit of £13.9m (2006: £42.7m) in respectof the release of provisions for prior year claims. All of the above insurance activities relate to activities in the UK andRepublic of Ireland. The profit after taxation on disposal of the insurance business can be analysedas follows: £m Sales proceeds 170.5Termination of interest rate swaps (6.9)Section 75 pension contribution (note 8) (3.4)Disposal costs (8.1)Tax recovered from purchaser 2.0 Net cash consideration 154.1 Retirement benefit curtailment credit (note 8) 2.9Share-based payment charge (note 9) (0.6)Increase in retirement benefit asset following Section 75 pension contribution (note 8) 3.4Net assets on disposal (90.5) Profit before taxation on disposal of the insurance business 69.3Tax charge (1.9) Profit after taxation on disposal of the insurance business 67.4 The interest rate swaps were held to hedge the interest rate risk on theinvestment funds held by the insurance business. These swaps were terminated ondisposal at a cost of £6.9m. The Section 75 pension contribution represents a reduction in consideration forthe payment of £3.4m of pension contributions into the group's defined benefitpension schemes by the insurance business following disposal. The group'sretirement benefit asset has increased by a corresponding amount (see note 8). Disposal costs of £8.1m comprise professional fees and the cost of bonuses forthe senior management team of the insurance business. The tax recovered from the purchaser of £2.0m represents an adjustment to theconsideration to reflect tax relief obtained by the purchaser. The retirement benefit curtailment credit of £2.9m arises as a result of thereduction in the group's projected defined benefit obligation following theinsurance business employees ceasing to be active members of the group's pensionschemes (see note 8). A deferred tax liability of £1.9m has been recognised on the pension curtailmentcredit and the Section 75 pension contribution. The share-based payment charge of £0.6m represents the crystallisation of theshare options of the insurance business management team as a result of thedisposal (see note 9). No tax liability arises on the disposal of the insurance business due to theavailability of the Substantial Shareholdings Exemption. The cashflows from discontinued operations were as follows: International Insurance business business Total 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £m(Loss)/profit after taxation from discontinuedoperations (17.9) 21.2 75.6 30.4 57.7 51.6Adjusted for:Tax charge 4.8 13.9 5.5 10.6 10.3 24.5Finance costs 16.1 28.6 - - 16.1 28.6Finance income (3.8) (7.2) (7.4) (18.1) (11.2) (25.3)Share-based payment charge/(credit) 6.6 (0.4) - 0.1 6.6 (0.3)Cash settlement of share-based payments (note 9) (3.8) - - - (3.8) -Retirement benefit (credit)/charge (note 8) - (0.2) 0.1 (0.7) 0.1 (0.9)Amortisation of intangible assets 1.6 - 8.6 22.2 10.2 22.2Depreciation of property, plant and equipment 4.3 7.2 0.3 0.5 4.6 7.7Impairment of intangible assets 1.4 - - - 1.4 -Profit on disposal of property, plant and equipment (0.4) (0.1) - - (0.4) (0.1)Profit on disposal of insurance business - - (69.3) - (69.3) -Changes in operating assets and liabilities:Amounts receivable from customers (24.3) (7.0) - - (24.3) (7.0)Trade and other receivables (3.9) (0.5) (0.2) (1.2) (4.1) (1.7)Insurance assets - - (23.4) (11.7) (23.4) (11.7)Trade and other payables 7.3 15.3 1.0 (1.3) 8.3 14.0Insurance accruals and deferred income - - (6.8) (30.9) (6.8) (30.9)Retirement benefit asset (0.1) (6.1) (0.3) (11.7) (0.4) (17.8)Derivative financial instruments (1.0) (0.8) - - (1.0) (0.8) Cash (used in)/generated from discontinuedoperations (13.1) 63.9 (16.3) (11.8) (29.4) 52.1Finance costs paid (17.7) (28.8) - - (17.7) (28.8)Finance income received 6.1 7.2 7.1 18.7 13.2 25.9Tax paid (13.1) (18.2) (2.1) (9.0) (15.2) (27.2) Net cash (used in)/generated from discontinuedoperating activities (37.8) 24.1 (11.3) (2.1) (49.1) 22.0 Purchases of property, plant and equipment (9.9) (17.4) (0.7) (0.5) (10.6) (17.9)Proceeds from disposal of property, plant andequipment 2.2 3.5 0.4 - 2.6 3.5Purchases of intangible assets - - (0.3) (0.1) (0.3) (0.1)Proceeds from disposal of insurance business, net ofcash and cash equivalents disposed of* - - (189.0) - (189.0) -Net cash demerged with international business (44.7) - - - (44.7) - Net cash used in investing activities indiscontinued operations (52.4) (13.9) (189.6) (0.6) (242.0) (14.5) Proceeds from borrowings 54.8 53.7 - - 54.8 53.7Repayment of borrowings (181.7) (49.1) - - (181.7) (49.1) Net cash (used in)/generated from financingactivities in discontinued operations (126.9) 4.6 - - (126.9) 4.6 Net (decrease)/increase in cash and cash equivalentsin discontinued operations (217.1) 14.8 (200.9) (2.7) (418.0) 12.1 * The proceeds from disposal of the insurance business, net of cash and cashequivalents disposed of, comprises net cash consideration received of £154.1m(2006: £nil) less cash and cash equivalents of £343.1m (2006: £nil). 5. Earnings per share Basic earnings per share (EPS) is calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number of ordinaryshares outstanding during the year, excluding own shares held, which aretreated, for this purpose, as being cancelled. For diluted EPS, the weighted average number of ordinary shares in issue isadjusted to assume conversion of all dilutive potential ordinary shares. Forshare options and awards, a calculation is performed to determine the number ofshares that could have been acquired at fair value (determined as the averageannual market share price of the company's shares) based on the monetary valueof the subscription rights attached to outstanding share options and awards. Thenumber of shares calculated as above is compared with the number of shares thatwould have been issued assuming the exercise of the share options and awards. Reconciliations of basic and diluted EPS for continuing operations, the totalgroup and discontinued operations are set out below: 2007 2006 Weighted Weighted average average number of Per share number of Per share Earnings shares amount Earnings shares amount £m m pence £m m penceEPS from continuing operationsShares in issue during the year 197.9 255.6Own shares held (0.4) (0.7) Basic EPS from continuing operations 80.7 197.5 40.86 73.3 254.9 28.76Dilutive effect of share options and awards - 1.8 (0.37) - 0.9 (0.10) Diluted EPS from continuing operations 80.7 199.3 40.49 73.3 255.8 28.66 EPS attributable to equity shareholdersShares in issue during the year 197.9 255.6Own shares held (0.4) (0.7) Basic EPS attributable to equityshareholders 138.4 197.5 70.08 124.9 254.9 49.00Dilutive effect of share options and awards - 1.8 (0.64) - 0.9 (0.17) Diluted EPS attributable to equityshareholders 138.4 199.3 69.44 124.9 255.8 48.83 EPS from discontinued operationsShares in issue during the year 197.9 255.6Own shares held (0.4) (0.7) Basic EPS from discontinued operations 57.7 197.5 29.22 51.6 254.9 20.24Dilutive effect of share options and awards - 1.8 (0.27) - 0.9 (0.07) Diluted EPS from discontinued operations 57.7 199.3 28.95 51.6 255.8 20.17 The demerger of the international business on 16 July 2007 was effected by adividend in specie of the company's shareholding in the international businessfollowed by a one for two consolidation of the shares of Provident Financialplc. In accordance with IAS 33 'Earnings per Share', the weighted average numberof shares outstanding in 2007 has been adjusted for the reduction in the numberof ordinary shares from the date the dividend in specie was recognised.Accordingly, no adjustment has been made to the opening number of shares in 2007or the prior year comparatives used in the above calculations. As a result ofthis requirement, and the consequent impact on EPS from continuing operations,the directors have elected to show an adjusted EPS from continuing operationsafter restating the weighted average number of shares in issue in both 2006 and2007 to take account of the one for two share consolidation as though it hadoccurred on 1 January 2006. In addition, in order to show the EPS generated bythe group's underlying operations, the directors have elected to restate centralcosts from £6.5m to £4.0m in 2007 and from £6.0m to £4.0m in 2006 to reflect theactual cost of running the central corporate function following demerger. Areconciliation of basic and diluted EPS from continuing operations to adjustedbasic and diluted EPS from continuing operations is as follows: 2007 2006 Weighted Weighted average average number of Per share number of Per share Earnings shares amount Earnings shares amount £m m pence £m m penceBasic EPS from continuing operations 80.7 197.5 40.86 73.3 254.9 28.76Share consolidation adjustment - (67.6) 21.26 - (127.3) 28.69Central costs adjustment, net of tax at 30% 1.8 - 1.39 1.4 - 1.09 Adjusted basic EPS from continuingoperations 82.5 129.9 63.51 74.7 127.6 58.54 Diluted EPS from continuing operations 80.7 199.3 40.49 73.3 255.8 28.66Share consolidation adjustment - (67.6) 20.79 - (127.3) 28.38Central costs adjustment, net of tax at 30% 1.8 - 1.36 1.4 - 1.09 Adjusted diluted EPS from continuingoperations 82.5 131.7 62.64 74.7 128.5 58.13 6. Dividends Pence per share 2007 2006 £m £m2005 final - 21.37p - 54.42006 interim - 14.48p - 37.02006 final - 22.02p 56.4 -2007 interim - 25.40p 33.0 -Dividends paid 89.4 91.4 The 2007 interim dividend of 25.40p per share was based on the number of sharesin issue following the one for two share consolidation which took place on 16July 2007 in conjunction with the demerger of the international business. Thedividend per share amounts in respect of 2005 and 2006 were based on the sharesin issue prior to the share consolidation. The directors are recommending a final dividend in respect of the financial yearended 31 December 2007 of 38.10p per share which will amount to a dividendpayment of £50.0m. If approved by the shareholders at the annual generalmeeting on 8 May 2008, this dividend will be paid on 20 June 2008 toshareholders who are on the register of members at 16 May 2008. This dividend isnot reflected in the balance sheet as at 31 December 2007 as it is subject toshareholder approval. 7. Amounts receivable from customers 2007 2006 £m £mContinuing operationsConsumer Credit Division 749.0 695.6Vanquis Bank 143.1 97.5Yes Car Credit 33.3 108.6 Total continuing operations 925.4 901.7 Discontinued operationsInternational - 331.0 Total group 925.4 1,232.7 Analysed as:- due within one year 853.6 1,103.2- due in more than one year 71.8 129.5 925.4 1,232.7 Of the amounts receivable from customers due within one year, £853.6m (2006:£790.8m) relates to continuing operations and £nil (2006: £312.4m) relates todiscontinued operations. Of the amounts receivable from customers due in morethan one year, £71.8m (2006: £110.9m) relates to continuing operations and £nil(2006: £18.6m) relates to discontinued operations. The impairment charge in respect of amounts receivable from customers reflectedwithin operating costs can be analysed as follows: 2007 2006 £m £mContinuing operationsConsumer Credit Division 175.3 178.8Vanquis Bank 25.2 19.4Yes Car Credit 6.7 22.6 Total continuing operations 207.2 220.8 Discontinued operationsInternational* 46.0 103.1 Total group 253.2 323.9 * The 2007 impairment charge for the international business represents theimpairment charge for the six and a half months trading under the group'sownership up until 16 July 2007. 8. Retirement benefit asset The group and company operate a number of UK-based pension schemes. The twomajor defined benefit schemes are the Provident Financial Senior Pension Scheme('the senior pension scheme') and the Provident Financial Staff Pension Scheme('the staff pension scheme'). The schemes cover 72% of employees withcompany-provided pension arrangements and are of the funded, defined benefittype providing retirement benefits based on final salary. Following a full groupreview of pension scheme arrangements during 2005, from 1 April 2006 memberswere provided with a choice of paying higher member contributions to continueaccruing benefits based on final salary or paying a lower member contributionand accruing benefits based on a percentage of salary which would be revaluedeach year. The most recent actuarial valuations of scheme assets and the present value ofthe defined benefit obligation were carried out as at 1 June 2006 by a qualifiedindependent actuary. The valuation used for the purposes of IAS 19 'EmployeeBenefits' has been based on the results of these valuations which have beenupdated by the actuary to take account of the requirements of IAS 19 in order toassess the liabilities of the schemes as at the balance sheet date. Schemeassets are stated at fair value as at the balance sheet date. The net retirement benefit asset recognised in the balance sheet of the group isas follows: 2007 2006 £m £m Equities 249.5 254.5Bonds 22.6 22.1Fixed interest gilts 34.8 1.1Index-linked gilts 53.8 20.7Cash and money market funds 105.0 169.5 Total fair value of scheme assets 465.7 467.9Present value of funded defined benefit obligations (404.2) (459.0) Net retirement benefit asset recognised in the balance sheet 61.5 8.9 The amounts recognised in the income statement are as follows: 2007 2006 £m £m Current service cost (6.7) (7.6)Interest cost (22.6) (21.0)Expected return on scheme assets 28.8 27.5 Net charge before past service and curtailment credits (0.5) (1.1)Past service credit - 2.2Curtailment credit 2.9 4.4 Net credit recognised in the income statement 2.4 5.5 Following the disposal of the insurance business on 15 June 2007, the relevantemployees of the insurance business ceased to be active members of the group'spension schemes. Accordingly their benefits are no longer linked to futuresalary increases and therefore the projected defined benefit obligation relatingto them is less than that anticipated prior to the disposal. The reduction inthe projected defined benefit obligation of £2.9m has been recognised as acurtailment credit in the consolidated income statement in the year ended 31December 2007. This amount has been included within the profit on disposal ofthe insurance business (see note 4). The remaining net (charge)/credit has beenincluded within administrative expenses and comprises a charge of £0.4m (2006:credit of £4.6m) in respect of continuing operations and a charge of £0.1m(2006: credit of £0.9m) in respect of discontinued operations. During 2006, changes to the rules of the pension schemes and to the tax applyingto pension scheme benefits meant that in most cases members of the pensionschemes would be able to take a larger proportion of their benefits in the formof a cash lump sum at retirement. Due to the terms under which members' pensionsare converted into cash lump sums, in the year ended 31 December 2006 thesechanges led to a £2.2m past service saving relating to deferred members of thepension schemes and a £4.4m curtailment saving relating to active members of thepension schemes. Of the total credit to the income statement of £6.6m, £5.5mrelated to continuing operations and £1.1m related to discontinued operations. Movements in the fair value of scheme assets were as follows: 2007 2006 £m £mFair value of scheme assets at 1 January 467.9 331.1Expected return on assets 28.8 27.5Actuarial gains on scheme assets 0.1 7.1Section 75 contribution on disposal of insurance business 3.4 -Assets relating to international business on demerger (31.3) -Contributions by the group 4.0 109.3Contributions paid by scheme participants 3.0 3.5Net benefits paid out (10.2) (10.6) Fair value of scheme assets at 31 December 465.7 467.9 The Section 75 contribution on disposal of the insurance business of £3.4m isthe statutory pension debt arising as a result of the insurance business ceasingto participate in the group's pension schemes following sale. It was calculatedin accordance with Section 75 of the Pensions Act 1995. The demerger agreement between the group and International Personal Finance plc(IPF) provided that the employees of the international business could continueto participate in the group's defined benefit pension schemes for a certainperiod following demerger. As the group and the international business are nolonger under common control, the group's defined benefit pension schemes meetthe definition of a multi-employer plan in accordance with IAS 19. Accordingly,the net retirement benefit asset relating to the international business of £3.5mwas removed from the group's balance sheet at the date of demerger as part ofthe dividend in specie. The net retirement benefit asset comprised the fairvalue of scheme assets of £31.3m and the present value of the defined benefitobligation of £27.8m. The full transfer of the assets and the defined benefitobligation relating to the international business to a newly established IPFscheme is expected to take place in the first half of 2008. In January 2006, the group made an additional special contribution of £102.2m inorder to ensure that the defined benefit pension schemes were fully funded basedon the June 2005 deficit position. Movements in the present value of the defined benefit obligation were asfollows: 2007 2006 £m £m Defined benefit obligation at 1 January (459.0) (436.7)Current service cost (6.7) (7.6)Interest cost (22.6) (21.0)Past service credit - 2.2Curtailment credit 2.9 4.4Liabilities relating to international business on demerger 27.8 -Contributions paid by scheme participants (3.0) (3.5)Actuarial gains/(losses) on scheme liabilities 46.2 (7.4)Net benefits paid out 10.2 10.6 Defined benefit obligation at 31 December (404.2) (459.0) The principal actuarial assumptions used at the balance sheet date were asfollows: 2007 2006 % % Price inflation 3.40 3.10Rate of increase in pensionable salaries 4.97 4.68Rate of increase to pensions in payment 3.40 3.10Discount rate 5.70 5.10Long term rate of return - equities 7.85 7.85 - bonds 4.70 5.10 - fixed interest gilts 4.50 4.50 - index-linked gilts 4.25 4.50 - cash and money market funds 5.90 5.25 - overall (weighted average) 6.59 6.62 The mortality assumptions used in the valuation of the defined benefit pensionschemes are based on the mortality experience of insured pension schemes andallow for future improvements in life expectancy. The group continues to use thePA92 series of standard tables combined with the medium cohort improvementfactors for projecting mortality. In more simple terms, for members of the staffscheme it is assumed that members who retire in the future at age 65 will liveon average for a further 21 years if they are male and for a further 24 years ifthey are female. For members of the senior scheme it is assumed that members whoretire in the future at age 60 will live on average for a further 29 years ifthey are male and for a further 32 years if they are female. If assumed lifeexpectancies had been one year greater for both schemes, the retirement benefitasset would have reduced by approximately £18m (2006: £20m). An analysis of amounts recognised in the consolidated statement of recognisedincome and expense (SORIE) is as follows: 2007 2006 £m £m Actuarial gains on scheme assets 0.1 7.1Actuarial gains/(losses) on scheme liabilities 46.2 (7.4) Total gain/(loss) recognised in the SORIE in the year 46.3 (0.3) 9. Consolidated statement of changes in shareholders' equity Called-up Share share premium Other Retained capital account reserves earnings Total £m £m £m £m £m Balance at 1 January 2006 26.5 107.7 5.5 177.7 317.4 Exchange losses on foreign currency translations - - (0.2) - (0.2)Cash flow hedges - net fair value gains - - 0.2 - 0.2Actuarial losses on retirement benefit asset - - - (0.3) (0.3)Tax (charge)/credit on items taken directly to equity - - (0.2) 0.1 (0.1) Net expense recognised directly in equity - - (0.2) (0.2) (0.4)Profit for the year - - - 124.9 124.9 Total recognised (expense)/income for the year - - (0.2) 124.7 124.5 Issue of share capital - 3.1 - - 3.1Treasury shares adjustment - vesting of shares - - 2.3 - 2.3Share-based payment adjustment - credit to the incomestatement - - (1.9) - (1.9)Dividends - - - (91.4) (91.4) Balance at 31 December 2006 26.5 110.8 5.7 211.0 354.0 Balance at 1 January 2007 26.5 110.8 5.7 211.0 354.0Cash flow hedges:- net fair value gains - - 1.7 - 1.7- recycled and reported in profit for the year - - 2.8 - 2.8Actuarial gains on retirement benefit asset - - - 46.3 46.3Tax charge on items taken directly to equity - - (1.3) (13.9) (15.2)Impact of change in UK tax rate - - - 0.8 0.8 Net income recognised directly in equity - - 3.2 33.2 36.4Profit for the year - - - 138.4 138.4 Total recognised income for the year - - 3.2 171.6 174.8 Issue of share capital 0.7 21.9 - - 22.6Treasury shares adjustments:- purchases of own shares - - (6.5) - (6.5)- vesting of shares - - 2.1 - 2.1- transfer of treasury shares reserve - - 2.6 (2.6) -Share-based payment adjustments:- share-based payment charge - - 8.8 - 8.8- cash settlement in respect of share-based payments - - (3.8) - (3.8)- transfer of share-based payment reserve - - (5.7) 5.7 -- deferred tax on share-based payment reserve transfer - - - (0.8) (0.8)Dividends - - - (89.4) (89.4)Demerger of international business - dividend in specie - - - (165.9) (165.9)Transfer of foreign exchange reserve on demerger ofinternational business - - (6.3) 6.3 - Balance at 31 December 2007 27.2 132.7 0.1 135.9 295.9 The demerger of the international business on 16 July 2007 was effected by adivestment in the form of a dividend in specie. The dividend in specie amountsto the net assets of the international business on demerger of £165.9m. The transfer of £2.6m from the treasury shares reserve to retained earnings in2007 represents the shortfall between the cash cost of own shares purchased lessthe proceeds from vesting of shares in respect of the QUEST which no longerholds any shares in the company. The share-based payment charge in 2007 includes: • £0.6m arising as a result of the crystallisation of executive share options and Save As You Earn options of the insurance business management team following the disposal of that business on 15 June 2007. The amount has been included within the profit on disposal of the insurance business which forms part of discontinued operations (see note 4). • £6.3m arising as a result of the crystallisation of executive share options and Save As You Earn options of group employees following demerger of the international business. This amount has been included within demerger costs which forms part of discontinued operations (see note 4). The share-based payment charge arising on demerger of the international businessincludes a charge of £3.8m in respect of executive share options which werecancelled and settled in the form of cash compensation. As group net assets havereduced by £3.8m following the outflow of cash, a corresponding debit of £3.8mhas been made to the share-based payment reserve. Following the issue of shares to satisfy share-based payments during 2007, atransfer of £5.7m has been made from the share-based payment reserve to retainedearnings. The foreign exchange reserve represented the cumulative exchange gains/losses onretranslating the opening net assets of the international business. Followingdemerger of the international business, the total of this reserve, amounting to£6.3m, has been transferred to retained earnings. Information for shareholders 1. The shares will be marked ex-dividend on 14 May 2008. 1. The final dividend will be paid on 20 June 2008 to shareholders on the register at the close of business on 16 May 2008. Dividend warrants/ vouchers will be posted on 18 June 2008. 2. The 2007 annual report and financial statements together with the notice of the annual general meeting will be posted to shareholders on or around 2 April 2008. 3. The Provident Financial Company Nominee Scheme ('the scheme') enables shareholders who are eligible, namely individuals, to take advantage of the CREST system for settling transactions in shares in the company by means of a low-cost dealing service. It includes a dividend reinvestment scheme for those who wish to use this facility. Shareholders who wish to take advantage of the scheme should contact the company's registrar, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, telephone: 0871 664 0300 (calls cost 10p per minute plus network extras) to request an information pack. The registrar's website is http://www.capitaregistrars.com/. 4. The annual general meeting will be held on 8 May 2008 at the Marriot Hollins Hall Hotel and Country Club, Hollins Hill, Baildon, Shipley, West Yorkshire, BD17 7QW. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PFG.L