Provident still all out of step
Lenders issue another profit warning
SHARES in doorstep lenders Provident Financial dived yesterday after their fightback plans suffered a setback.
More than £300million was wiped off the Bradford-based business’s value as they issued yet another profit warning.
Provident – known to many customers as “The Provvy” – offer loans to people who can struggle to get money elsewhere.
They are yet to recover from a shake-up of their door-to-door lending staff in 2017 and moves to get approval from the Financial Conduct Authority for staff bonuses have been delayed.
Provident are also in the process of refunding £160million to one million Vanquis credit card customers. This follows an FCA investigation into interest charged on a repayment plan, which led to Provident being fined £2million.
The firm have also been hit by the FCA’s clampdown on high cost credit.
Provident chief executive Malcolm Le May said: “I am pleased with the progress we have made in 2018.”
He added there was a market of 10 to 12million people who “are not well served” by mainstream lenders.
The Provvy’s share price slumped 20 per cent yesterday – the worst fall since a 66 per cent plunge in late 2017 – as they said full-year profits would be at the bottom end of the £151million-to£161million range.
City brokers Cenkos said the HOUSEBUILDERS Persimmon made about £1.1billion in profit last year. Britain’s second biggest home builders – hit by a fatcat pay row – did even better than City experts had predicted.
The bumper haul – up from £977million in 2017 – comes after boss Jeff Fairburn was forced to quit. He trousered £75million profit warning was “a stumble, not a trip” but Gary Greenwood, of Shore Capital, said it was “another kick in the teeth for the investment case”.
The shares slump came a week after an MP accused Provident of using “cynical” marketing tactics over the Christmas period to push loans with an interest rate of 535.3 per cent to vulnerable customers. Rachel Reeves, of the Business Select Committee, said in a letter to the FCA that the Provident adverts tried to “tug on people’s heartstrings”. through a bonus scheme but Persimmon later admitted focus on the payout had become a “distraction” to the image of the business.
Laith Khalaf, senior analyst at broker Hargreaves Lansdown, said: “Persimmon are still selling more homes at higher prices but the rate of growth is slowing.”