Provident Financial plc is the market-leading provider of credit cards to non-standard consumers in the UK and the market-leading provider of home credit in the UK and Ireland. The group serves over 2.6 million customers and its operations consist of Vanquis Bank and the Consumer Credit Division (CCD).

Strong financial performance and dividend increase
Profit before tax and exceptional items up 9.9% to £196.1m1 (2012 restated2: £178.4m).
Adjusted earnings per share up 11.6% to 112.0p1 (2012 restated2: 100.4p).
Total dividend per share up 10.1% to 85.0p (2012: 77.2p).
Very robust funding position
Core bank facility of £382.5m renewed in January 2014 with lower all-in cost than previous facility.
Gearing reduced to 3.0 times (2012: 3.2 times) through strong capital generation.
Group fully funded to the seasonal peak in 2017.
Excellent growth and returns in Vanquis Bank
UK profit before tax up by 59.5% to £113.7m (2012: £71.3m).
Customer and average receivables growth of 22.2% and 37.5% respectively, reflecting strong momentum from addressing the under-served non-standard credit card market.
Risk-adjusted margin3 of 34.2% (2012: 34.8%), above minimum target of 30% with arrears remaining at record lows.
Further development of pilot credit card operation in Poland at a cost of £7.6m in 2013 (2012: £3.3m).
Repositioning of CCD progressing well
Development and roll-out of technology to support step-change in agent and branch productivity and reinforce compliance fully on track.
Encouraging start to Satsuma online instalment lending following November 2013 launch.
Profit before tax and exceptional items of £102.5m1 (2012 restated2: £122.9m) reflecting reduction in customer numbers and receivables due to weak demand and tightened credit standards.
Cost savings of £10m delivered in second half of 2013, with a further £26m secured for 2014, including the previously announced headcount reduction of 520, at a one-off cost of £13.7m.
Key financial results
     2013    2012 (restated2)    Change
Profit before tax and exceptional items1    £196.1m    £178.4m    9.9%
Profit before tax    £182.4m    £194.0m    (6.0%)
Adjusted earnings per share1    112.0p    100.4p    11.6%
Basic earnings per share    104.2p    108.9p    (4.3%)
Final dividend per share    54.0p    48.4p    11.6%
Total dividend per share    85.0p    77.2p    10.1%
Peter Crook, Chief Executive, commented:
“I am very pleased to announce adjusted earnings per share growth of 11.6% in 2013 and a 10.1% increase in the dividend for the year which is fully supported by strong capital generation and a very robust funding and liquidity position.

Vanquis Bank has produced another excellent performance with UK profits up 60%. Credit standards have remained tight and the business continues to generate strong customer growth and margins through developing the under-served non-standard credit card market.

Good progress is being made in repositioning the home credit business as a leaner, better-quality, more modern, high-returns business whilst the Satsuma online instalment lending product has made an encouraging start following its launch in November 2013.

The group has made a good start in the first two months of 2014. Vanquis Bank has continued to trade strongly and the home credit business is seeing a consistent improvement in credit quality and collections performance.”

Enquiries    Today    Thereafter
David Stevenson, Provident Financial    020 7404 5959    01274 351351
Gill Ackers/Nick Cosgrove, Brunswick    020 7404 5959    020 7404 5959
Investor Relations          
Gary Thompson, Provident Financial    020 7404 5959    01274 351351

Profit before tax in 2013 is stated before an exceptional item of £13.7m in respect of the cost of a business restructuring within CCD. Profit before tax in 2012 is stated before an exceptional credit of £15.6m comprising: (i) a £17.7m curtailment credit in respect of the defined benefit pension scheme; and (ii) a £2.1m charge relating to the impairment of goodwill in respect of Cheque Exchange Limited, a business originally acquired in 2001 and now subsumed within CCD.
Profit before tax in 2012 has been restated from £181.1m to £178.4m following the mandatory adoption of the amended IAS 19, ‘Employee Benefits’ from 1 January 2013. The retrospective application has resulted in a £2.7m reduction in profit before tax in 2012 with a corresponding adjustment to the actuarial movement taken through the statement of comprehensive income. There has been no impact on the 2012 balance sheet.
Revenue less impairment as a percentage of average receivables for the year ended 31 December.