Provident on a roll despite interim losses

Shares in Provident Financial leapt yesterday after the lender said the hit from the pandemic was not as bad as first feared.

The firm said it p erformed better than expected, despite swinging to an underlying pre-tax loss of £32.6 million for the first six months of 2020, against profits of £80.4m a year earlier.

Chief executive Malcolm Le May said the first half of the year had been “the most difficult and testing in my career”.

But he told investors: “Financial and operational performance were better than expected, and therefore we have decided to repay all furlough support to the government. We believe this is the right thing to do.”

The group said it had seen some “encouraging signs of increased activity levels” since the end of June, with its car finance division Moneybarn seeing record new business in July.

Shore Capital analyst Gar y Greenwood noted: “Provident Financial has published interim results which show that the group moved into loss during the period, as expected, owing to lower revenue and higher forward-looking impairments caused by the Covid crisis.

“Nevertheless the balance sheet remains in good shape with capital headroom having materially increased since the start of the year, while the funding and liquidity position also remains strong.”

Shares in Provident closed up 38.3p, or 19.6 per cent, at 234p.

A massive rise in the price of gold, and a big jump in silver, helped results at Polymetal sparkle in the first six months of the financial year.

The miner, which extracts the precious metals in Russian and Kazakhstan, said that the gold it sold during the first half fetched 25 per cent more on average than the same time l a s t ye a r. S i l ve r p r i c es meanwhi l e jumped by 10 per cent. Despite that, shares gained just 28p to 1,980p.

The benchmark FTSE 100 index nudged up 8.59 points to close at 6,045.6.

Connor Campbell at www.spreadex.com noted: “It remained a mixed, uninspired session on Wednesday, investors choosing to sit on their hands ahead of the Jackson Hole Symposium in the second half of the week.”