18th Dec 2006 07:01
Provident Financial PLC18 December 2006 PROVIDENT FINANCIAL PRE-CLOSE UPDATE Overall, the group has traded in line with the Board's expectations in theeleven months ended 30 November 2006. UK Home Credit The UK Home Credit business has performed in line with expectations in theeleven months to November 2006. At the end of November, customer numbers wereup 0.5% on the prior year despite tighter controls over the acceptance of newcustomers. This growth reflects further gains from the marketing investment innew sales channels, including direct mail and the internet. The continuingpressure on the disposable incomes of consumers in UK Home Credit's targetmarket has seen impairment charges increase at a faster rate than revenue,consistent with the trend reported in the first half of the year. Vanquis Bank Vanquis' focus on developing and applying more rigorous underwriting criteriatogether with increasing the resources dedicated to collections, has proved tobe the right set of priorities in difficult market conditions which have seenimpairment charges rise across the industry. Customer numbers continue to growand were close to 250,000 at the end of November, assisted by internetrecruitment which has supplemented its primary direct mail sales channel. Aspreviously indicated, Vanquis is expected to report a start-up loss in 2006which is slightly greater than the guidance issued at the time of the InterimResults in September and reach breakeven in 2007. Motor Insurance Provident Insurance is trading ahead of expectations, with profits continuing tobenefit from the favourable development of claims costs. Yesinsurance.co.uk,its internet-based distribution channel launched earlier this year, is tradingwell. Yes Car Credit The collect out of the Yes Car Credit receivables book has continued to progresswell. International The international home credit businesses have, in aggregate, performed in linewith expectations and at the end of November customer numbers were up 3% on theprior year. Over the past two years, the Polish operation has had to contend with rollingout the new product to comply with the interest rate cap legislation introducedin February 2006 and also respond to the adverse trends in collections andimpairment that emerged during 2005. Management have successfully met bothchallenges and it is now pleasing to report an improvement in the quality oflending and the receivables book which is generating a significantly reducedlevel of impairment charges. The business is now investing in marketing and itsfield operations to restore profitable growth. In Hungary, the changes to administrative procedures and the status of agentsrequired by the PSZAF, the Hungarian financial supervisory authority, have beencompleted and lending recommenced on 6 December, having been temporarilysuspended on 17 October. In Mexico, customer numbers stood at almost 250,000 at the end of November, morethan double the prior year and up from 184,000 at the end of June. As stated atthe Interim Results, the current priority is building the experience of thelocal management and field operations before resuming geographic expansionthrough further branch openings. Demerger Good progress continues to be made with preparations for the proposed demergerof the international business, and full details will be provided with theannouncement of the Group's Preliminary Results for 2006 on 7 March 2007. Enquiries: MediaKevin Byram, Brunswick 020 7404 5959 Nigel Prideaux, Brunswick 020 7404 5959 Investor RelationsHelen Waggott, Provident Financial 01274 731111 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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