Provident Financial sees 2019 profits in line after solid Q4 at Vanquis Bank
Doorstep lender Provident Financial said on Wednesday that 2019 profits were set to meet market expectations following a solid performance from Vanquis Bank in the fourth quarter.
The company, which saw off a takeover attempt by smaller rival Non-Standard Finance last year, said results in the final quarter of the year were "in line with internal plans", with Vanquis Bank results "modestly above" expectations due to favourable delinquency and tight cost control.
Moneybarn continued to deliver "attractive" receivables growth, although its performance was "modestly below" the company’s expectations due to higher impairment, primarily reflecting the stronger-than-forecast growth in the year.
Provident’s consumer credit division finished the year "well" and delivered results in line with plan, it said. As a result, it now expects to 2019 profits to meet market expectations. Consensus views are for profit before tax, amortisation of acquisition intangibles and exceptional items of between £155m and £166m.
The company also said it had agreed a bilateral securitisation facility with NatWest Markets to fund Moneybarn business flows. The new facility provides up to £100m of initial funding and is expected to grow to £275m over the next 18 months.
Chief executive officer Malcolm Le May said the bilateral securitisation facility reduces the group's funding costs and supports its medium-term growth ambitions.
"We are well placed entering 2020 to continue to meet our customers' needs and deliver against the targets set out at our capital markets day in November," he said.