Provident Financial plc is the leading non-standard lender in the UK. The group serves 2.4 million customers and its operations consist of Vanquis Bank, the Consumer Credit Division (CCD) comprising Provident, Satsuma and glo, and Moneybarn.

Strong group profit performance and further dividend increase
First half adjusted profit before tax1 up 17.6% to £148.9m (2015: £126.6m) and adjusted earnings per share1 up 10.7% to 77.9p (2015: 70.4p).
First half statutory profit before tax up 48.9% to £165.4m (2015: £111.1m) and basic earnings per share up 39.2% to 86.0p (2015: 61.8p).
Stable annualised return on assets2 of 15.7% (2015: 15.6%), after absorbing the impact of the 8% bank corporation tax surcharge on Vanquis Bank’s profits from 1 January 2016.
Interim dividend per share up 10.2% to 43.2p (2015: 39.2p).
Vanquis Bank profits and average receivables up by over 12%
UK profit before tax1 up 12.8% to £99.8m (2015: £88.5m).
Customer numbers and average receivables growth of 6.5% and 12.3% respectively against unchanged credit standards.
Strong lift in account booking volumes following refresh of direct mail programme in May.
UK annualised risk-adjusted margin3 of 32.4% (2015: 33.3%), in line with guidance and ahead of minimum target of 30%, with arrears remaining at record lows.
CCD returns to growth and reported profits up sharply
First half adjusted profit before tax1 up 14.5% to £43.5m (2015: £38.0m), reflecting reduced start-up losses associated with Satsuma and glo.
Robust demand has resulted in year-on-year receivables growth of 2.6%.
Continued improvement in the annualised risk-adjusted margin3 to 81.1% (2015: 78.2%) due to tight credit standards and focus on serving good-quality existing customers.
Good progress made in developing the further lending and digital capability at Satsuma.
glo guarantor loans proposition expected to be rolled-out towards the end of 2016.
Annualised return on assets2 increased to 22.3%, up from 19.7% at June 2015.
Moneybarn delivers further strong growth in new business
Adjusted profit before tax1 up 44.7% to £13.6m (2015: £9.4m), ahead of internal plans.
Significant year on year growth in new business volumes of 42.5%, reflecting access to the group’s funding and product development.
Stable annualised return on assets2 of 12.9% (2015: 12.9%).
Robust funding and liquidity position
Strong and diverse funding capacity and liquidity position, including access to retail deposits in Vanquis Bank.
Headroom, including retail deposits capacity, of £458m and group fully funded until May 2018.
Gearing of 2.3 times (2015: 2.4 times) compared with a banking covenant limit of 5.0 times.
Key financial results




Adjusted profit before tax1




Statutory profit before tax




Adjusted earnings per share1




Basic earnings per share




Annualised return on assets2




Interim dividend per share




Peter Crook, Chief Executive, commented:

“I am pleased to report that all three businesses have delivered excellent performances through the first half of the year and contributed to the strong increase in adjusted profit before tax of 17.6%. The bank corporation tax surcharge introduced on 1 January 2016 moderated the growth in adjusted earnings per share to 10.7% and is also reflected in the interim dividend increase of 10.2%.

Credit quality in all three businesses is very sound and the group is fully funded through to May 2018 reflecting the group’s substantial funding capacity and strong liquidity position.

This, together with the strong start to the second half, provides the foundation for delivering good quality growth for 2016 as a whole, continuing to deliver on the group’s medium-term growth objectives as well as trading soundly through any slowdown that may emerge from the uncertainties currently present in the UK macroeconomic outlook.”

David Stevenson, Provident Financial 020 7404 5959
Nick Cosgrove/Simone Selzer, Brunswick 020 7404 5959

Investor Relations
Gary Thompson/Vicki Turner, Provident Financial
01274 351 900

Adjusted profit before tax is stated before: (i) £3.7m of amortisation in respect of acquisition intangibles established as part of the acquisition of Moneybarn in August 2014 (2015: £3.7m); and (ii) an exceptional gain of £20.2m in respect of Vanquis Bank’s interest in Visa Europe following completion of Visa Inc.’s acquisition of Visa Europe on 21 June 2016 (2015: exceptional cost of £11.8m in respect of a business restructuring in CCD).
Adjusted profit before interest after tax as a percentage of average receivables for the 12 months ended 30 June.
Revenue less impairment as a percentage of average receivables for the 12 months ended 30 June.