Provident Financial to take £20m H1 hit; sees trading in line

However, the company said it would take a one-off exceptional charge of about £20m in the first half of 2017 relating to redundancy, retention and training costs associated with the transition of the home credit business to a new operating model.

Provident said collections performance since February had been impacted by uncertainty within the field organisation as it moved to the new operating model.

It said this would hit net short-term trading by up to £10m for 2017 as a whole, comprising a shortfall in contribution of approximately £15m in the first half of the year followed by the anticipated benefits of cost savings in the second half of the year of £5m.

At Vanquis Bank, first quarter new account bookings of 122,000 were up 45% year on year. Customer and receivables grew 12% and 14% respectively.

In the consumer credit division (CCD), receivables ended the first quarter around 3% higher than March 2016. Customer numbers were 6% lower at 755,000, reflecting normal seasonal reduction, Provident said.

Within CCD, the transition of the home credit's operating model and work to further enhance Satsuma's digital capability were progressing in line with plan, Provident said.

The Satsuma unit was reported a rise in customer numbers to 60,000 from 55,000 and receivables up to £21m from £18m.
Moneybarn's new business volumes grew year-on-year by 20% with customer numbers up 29% to 43,000 and receivables jumping 33% to £322m.