Non-standard Finance shares fall to new low after profit warning

DOORSTEP lender Non-standard Finance has slashed profit forecasts after a slump in its guarantor lending arm, sending shares tumbling to a record low.

The London-listed company blamed one of its Buckinghamshire-based offices for the disappointing quarterly performance, with annual operating profits now expected to fall short of market forecasts by as much as 13pc.

It comes after the company failed in an attempt to buy much larger rival Provident Financial earlier this year, amid fears it could seek to exploit thousands of vulnerable borrowers.

Consolidation of the guarantor loan division’s activities into a single location in Trowbridge will now be fasttracked to help fix the problem.

However, bosses warned that the economic outlook for the company was more uncertain than at any point in the past decade. As a result, the company expects loan book growth in its branchbased business to be between 10pc and 15pc in the medium term, down from previous estimates of 20pc. Growth in guarantor loans is expected to range between 15pc and 20pc compared to previous targets of 30pc.

Nick Teunon, chief financial officer, will also step down in March to make way for Jono Gillespie, the deputy finance chief.

Analysts at Peel Hunt said that revised estimates were “clearly disappointing”, but added that growth targets had looked for some time”.

Shares in Non-standard Finance, which were worth 66p at the start of the year, closed down 17.6pc at 26.6p.

A new major shareholder could push for a break up of the company as a possible solution. Alchemy, which specialises in investing in distressed companies and owns 19pc of NSF, is

“overly ambitious understood to be preparing to push the company’s board to offload its personal credit business, Loans at Home.

NSF previously offered to ditch the division to get the regulatory approval for its ill-fated Provident takeover.

An NSF spokesman said it “always welcomed” views from shareholders, but said Alchemy had yet to approach it about a potential sale.