Provident Financial plc (‘Provident Financial’ or ‘the group’) is the leading specialist provider of credit products which provide financial inclusion for those consumers who are not well-served by mainstream lenders. The group serves 2.3 million customers and its operations consist of Vanquis Bank, Moneybarn and the Consumer Credit Division (CCD), comprising Provident home credit and Satsuma.

Group highlights

Continued good operational and financial recovery of the group underpins the Board’s 150% increase in total dividend

  • Group adjusted profit before tax up 1.6% to £162.6m (2018 (restated1): £160.1m), as the business continues to adapt to the evolving regulatory environment and successfully defended the hostile NSF bid.
  • Statutory profit before tax up 32.4% to £128.8m (2018 (restated1): £97.3m), reflecting lower exceptional costs.
  • Strategic initiatives outlined at the Capital Markets Day in November are well underway to deliver the group’s ‘Vision for the Future’ and financial targets.
  • Agreement of a £275m bilateral securitisation facility in early January 2020 to fund Moneybarn’s business flows.
  • ROP refund programme at Vanquis Bank and FCA investigation at Moneybarn both now complete.
  • Regulatory capital headroom of approximately £90m at 1 January 20204.
  • The Board proposes a final dividend of 16.0p per share (2018: 10.0p), up 60.0% on 2018.
  • Total dividend per share of 25.0p per share (2018: 10.0p), up 150% on 2018, and representing dividend cover of 1.9 times (2018 (restated): 4.9 times).

Key financial results

  2019 2018 (restated1) Change
Adjusted profit before tax £162.6m £160.1m 1.6%
Amortisation of acquisition intangibles (£7.5m) (£7.5m) -%
Exceptional items2 (£26.3m) (£55.3m) 52.4%
Statutory profit before tax £128.8m £97.3m 32.4%
Adjusted basic earnings per share4 47.3p 48.7p (2.9%)
Basic earnings per share 33.3p 27.3p 22.0%
Final dividend per share 16.0p 10.0p 60.0%
Total dividend per share 25.0p 10.0p 150.0%


Malcolm Le May, Group Chief Executive, commented:

“I am pleased with both the group’s operational and financial performance in 2019 and the momentum behind our strategic initiatives as we enter 2020. We have delivered an increase in profits as we have continued to adapt our businesses and culture to changing customer needs and the evolving regulatory environment.

As a result of our good progress and the group’s strong funding and capital positions, the Board proposes a final dividend of 16.0p per share, which represents a 150% increase in the total dividend in 2019 and a dividend cover of 1.9 times as we progress towards our dividend cover target of at least 1.4 times.

All of our businesses have progressively tightened underwriting over the last two years and we have built good momentum entering 2020 as we continue to adapt the group to the evolving regulatory landscape and to meet our customers’ needs. We are making good progress towards the medium-term financial targets set out at our Capital Markets Day in November.”

Divisional highlights

Vanquis Bank results in line with plan as it recalibrates the business model to changing regulation and customer needs

  • As expected, Vanquis Bank’s adjusted profit before tax reduced by 9.1% to £173.5m (2018 (restated1): £190.9m), primarily reflecting the previously guided reduction in ROP income.
  • Statutory profit before tax reduced by a lower amount of 2.6% to £185.9m (2018 (restated1): £190.9m), mainly due to an exceptional provision release of £14.2m (2018: £nil) in respect of the ROP refund programme.
  • New customer account bookings of 369,000, 3,000 higher than 2018 and ahead of management’s plans, despite tighter underwriting and the impact of revised affordability processes in line with regulatory requirements.
  • Improvement in the impairment rate5 from 16.0% in 2018 to 13.6% in 2019, reflecting an improvement in delinquency trends due to tighter underwriting.
  • Strong focus on cost efficiency resulted in the cost base remaining flat on 2018.
  • Refreshed and strengthened Vanquis Bank management team under the leadership of the new Managing Director, Neil Chandler, who joined the business in April 2019.

Moneybarn continues to deliver strong growth in new business and receivables

  • Adjusted profit before tax up 10.0% to £30.9m (2018: £28.1m), reflecting continued strong growth.
  • Statutory profit before tax up by a higher level of 19.2% to £33.5m (2018: £28.1m), due to an exceptional provision release of £2.6m (2018: £nil) following completion of the FCA investigation.
  • Demand for used cars has remained robust which, together with an improved customer experience, has resulted in strong growth in new business volumes of 30% and receivables growth of 20.6% to just over £500m.
  • Impairment rate5 broadly unchanged at 8.6% (2018 (restated): 8.7%) with underwriting tightened in response to a modest increase in defaults following the stronger than forecast growth during the year.

CCD finished 2019 strongly and is well-placed to deliver a break-even result in 2020

  • Significant reduction of 46.3% in adjusted loss before tax to £20.8m (2018: loss before tax of £38.7m), reflecting continued improvement in new customer acquisition, collections performance and cost efficiency.
  • Statutory loss before tax reduced by 48.7% to £35.2m (2018: loss before tax of £68.6m), after taking account of exceptional costs of £14.4m (2018: £29.9m) in respect of the ongoing turnaround of CCD.
  • Reduction in customer numbers and receivables beginning to stabilise, ending the year at 522,000 (2018: 560,000) and £249.0m (2018: £292.5m) respectively.
  • Reduction in the cost base of 14.1% in 2019 reflects the impact of headcount reductions and tight cost control over the last two years which has resulted in the annualised cost run rate entering 2020 at around £200m.
  • The trial of Provident Direct, a hybrid product leveraging both home credit and Satsuma capabilities, has progressed well and roll-out of the new product has commenced.


Richard King, Provident Financial: 01274 351 900
Nick Cosgrove/Simone Selzer, Brunswick: 020 7404 5959

Investor Relations     
Gary Thompson/Vicki Turner, Provident Financial: 01274 351900,

1. 2018 comparatives have been restated for: (i) the change in treatment of directly attributable acquisition costs in Vanquis Bank following a refresh of contractual terms with affiliates in 2019 – this has resulted in a £6.6m increase in 2018 profit before tax, a benefit of £10.5m to 2019 profit before tax and is expected to result in a reduction of approximately £6m in 2020 profit before tax compared with previous plans; and (ii) the changes in recognition of revenue on credit impaired receivables and treatment of directly attributable acquisition costs in Moneybarn which have resulted in a reduction in revenue, impairment and administrative and operating costs but have had no impact on Moneybarn’s profits. See note 2 to the financial information.

2. Exceptional items in 2019 represent net exceptional charges of £26.3m (2018: exceptional charges of £55.3m) comprising: (i) £23.8m (2018: £nil) of defence costs associated with Non-Standard Finance plc’s (NSF’s) unsolicited offer for the group; (ii) £19.3m (2018: £29.9m) of restructuring costs, primarily in respect of the ongoing turnaround of the home credit business in CCD following the migration to the employed operating model in July 2017; (iii) a credit of £14.2m (2018: £nil) in Vanquis Bank in respect of the release of provisions established in 2017 following completion of the refund programme in respect of ROP and a re-evaluation of the forward flow of claims that may arise in respect of ROP complaints more generally; and (iv) a credit of £2.6m (2018: £nil) in Moneybarn in respect of the release of provisions established in 2017 following completion of the FCA investigation into affordability, forbearance and termination options. Exceptional costs in 2018 also included £18.5m in respect of the refinancing of the senior bonds maturing in October 2019 and £6.9m of non-cash pension charges in respect of the equalisation of Guaranteed Minimum Pensions following the High Court judgement against Lloyds Bank PLC and others in October 2018. See note 3 to the financial information.

3. Profit after tax, prior to the amortisation of acquisition intangibles and exceptional items, divided by the weighted average number of shares in issue.

4. Regulatory capital headroom against the group’s Total Capital Requirement (TCR) of 25.5% at 31 December 2019 was approximately £117m, prior to the third year transitional impact of IFRS 9 on 1 January 2020 of £28m.

5. Impairment as a percentage of average receivables for the 12 months ended 31 December.


This announcement contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, like-for-like any such forward-looking information. This announcement is intended solely to provide information to shareholders to assess the group’s strategies and neither the company nor its directors accept liability to any other person, save as would arise under English law. The announcement should not be relied on by any other party or for any other purpose.

No statement in this announcement is intended as a profit forecast or estimate for any period. No statement in this announcement should be interpreted to indicate a particular level of profit and, as a consequence, it should not be possible to derive a profit figure for any future period from this announcement.