Friday December 29, 2006
CREDIT lender Provident Financial reported an increase in customer numbers at both its UK and international businesses and trading was in line with expectations.
The Bradford based company has had a tough time of late – it was parting company with chief executive Robin Ashton following problems in the Eastern European business and losses at Yes Car credit.
The group is still planning to go ahead next year with the demerger of the group's UK home credit business from its international business. It was making good progress with the proposed split and it would give further details in March.
The group's core UK home credit business reported a 0.5 per cent increase in customer numbers.
This was partly due to increased investment in new sales channels such as direct mail and the Internet.
But Provident said impairment charges had increased as a result of continuing pressure on customers' disposable income.
The group's international home credit business, which operates in Poland, Hungary and Mexico, reported a three per cent increase in customer numbers. It restarted lending in Hungary earlier this month after a temporary suspension in October.
The Polish unit, which was hit by new legislation to cap interest rates and bad debts, reported an improvement in lending quality and significantly reduced impairment charges.
Provident said its credit card business Vanquis Bank was expected to make a loss in 2006 and warned that the deficit would be slightly more than had been expected when the group updated the market in September. It is still expected to break even next year.
According to Bridgewell analyst Katrina Preston "Investors will take relief from the absence of downwards earnings guidance following another challenging year for the group."
Mr Ashton is due to step down from the board at the end of this year, but will stay on in an advisory basis until April.
He will not be replaced as the company is to split in two, and he is set to receive around £500,000 in compensation.
Mr Ashton has been chief executive since 2001 and has been with the group for more than two decades.
Provident specialises in doorstep lending, whereby agents give short-term loans to customers and call on them each week to collect repayments.
It is expected that both the UK and the international divisions will get a new chief executive and chairman, but nothing will be decided until early next year.
News Source:
http://www.yorkshiretoday.co.uk/ViewArticle2.aspx?SectionID=1299ArticleID=1936326
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