Provident Financial clarifies targets as takeover spat continues

Provident Financial told investors its performance targets should not be used to forecast profit as the company's dispute with hostile suitor Non-Standard Finance rumbled on.

The doorstep lender set out targets on 3 May alongside a trading statement. It said it was aiming for 10% return on assets and 20-25% return on equity by 2021 as well as receivables growth of 5-10% a year.

Clarifying the guidance on Tuesday, the FTSE 250 company said: "For the avoidance of doubt, the performance targets … are not intended to forecast a particular level of profit and, as a consequence, it is not possible to derive a profit figure for any future period."

Provident Financial published the targets as part of its effort to repel a £1.3bn hostile takeover by smaller rival Non-Standard Finance. The bidder said Provident had been forced to explain its targets and that its target's reporting remained unclear.

Delinquency rates at the Vanquis credit card business are rising and customer numbers at the home credit division have fallen each quarter since the end of 2017, Non-Standard said. Home credit and the Satsuma online lending business are both loss-making and there is no clear path to sustainable dividends, it added.

John van Kuffeler, NSF's chief executive, said: "Provident's ability to deliver on its promises remains uncertain: the business is not performing anywhere near its potential and 'more of the same' is not working. This is reinforced by the clarification Provident has been required to make this morning regarding its future performance targets issued only last week."

Provident's chief executive Malcolm Le May is trying to revive the company after a turbulent period that threatened its future and resulted in it crashing out of the FTSE 100 index of leading companies. Shareholders have until 15 May to accept Non-Standard's offer for the company, which Provident has criticised for lack of clarity.