Provident Financial overhauls board with dividend revival in sight

Pre-tax profit for the six months to the end of June fell to £34.6m from £73.3m a year earlier as revenue fell to £572.5m from £619.4m.

Adjusted pre-tax profit fell 24% to £74.9m. The decline was caused by Provident’s home credit business plunging to a £23.2m adjusted loss from a £4.7m profit a year earlier. The Vanquis credit card business posted a 6.1% profit increase to £97.2m.

Provident is trying to turn round its fortunes after a plunge in collections at its doorstep lending operation caused by a botched switch to mobile technology for its agents. Its governance came under scrutiny after a string of profit warnings and regulatory investigations.

The company said Patrick Snowball, a finance industry veteran, would join on 21 September and replace Stuart Sinclair as chairman.

Snowball, the former chief executive of Aviva’s UK business, will be joined by former government minister Angela Knight, ex-Barclays executive Libby Chambers and Paul Hewitt, former deputy CEO of the Co-operative Group.

The company’s shares rose more than 10% in early trading and were up 8.7% to 670.6p at 09:15 BST.

James Hamilton, an analyst at Numis who rates Provident ‘buy’, said the first half performance was very mixed as Vanquis did better than expected but the doorstep collection business disappointed.

“Home credit was worse with collections not improving in line with the management plan,” Hamilton said. “Provident has not reconnected with as many customers as planned and they are also seeing a number of customers not making full payments.”

Provident grew rapidly in the years after the financial crisis, stepping in to offer expensive credit to people turned away by banks that cut back on lending. The company joined the FTSE 100 in 2015 but fell out of the index less than two years lateras it came close to collapse. In April Provident raised £331m from shareholders to shore up its financial position.