Provident Financial Share Discussion Threads

[ccnp] 29/1/2018 15:25

The increasingly obvious thing about Woody is that he is getting it wrong. That's a great pity for a man I respect. Hopefully someone in his team is hedging/shorting his investment decisions.

[smurfy2001] 29/1/2018 14:58

Well it was going in the right direction l guess he's like us you can't tell if the CEO is piloting the ship and hasn't spotted an iceberg ahead.

What to do as an investor if the CEO crashes into the iceberg especially if you've radioed in a number of times asking him to confirm there's no icebergs in vicinity.

[cc2014] 29/1/2018 14:43

I've been watching the actions of Woodford and his team for two years now and the way they trade really puzzles me.

They appear to add to losing positions over and over on any dip.

It's like they are trying to use their muscle to support the share price so that support will hold or they will create a new support level.

Only it doesn't work and bit by bit the holdings get higher and higher in percentage terms.

What puzzles me more is that the positions get large there is no way to exit the position without the market knowing except by takeover or by placing them at say a 30% discount to the prevailing price.

It just doesn't make sense to me. With all the shares in the world to choose from he seems to be involved in some which look pretty risky and aren't going in the right direction. This being one of them.

[ccnp] 26/1/2018 08:28

Whilst what you say makes sense in and of itself, there remains the small issue of operational capability.

If a manufacturing CEO got out of bed one morning and said 'insource it all NOW' and then proceeded to reduce the firm to a production facility of less than 50% of prior capacity using machines of much lower quality ................

If it had also released its high quality, very capable suppliers (who had customer details) to its principle competitors ...........................

If it also had H&S inquiries hanging over significant parts of its business with the very real threat of fines, cancellation and compensation ................

The new issue price would have to be exceedingly attractive. 300p perhaps to ensure underwriting ?

[chucko1] 25/1/2018 23:54

On the subject of the redemption yield, it is calculated as the coupons (8%) plus the principal divided by the cash price paid (70 + accrued). This number is then decompounded by the number of years remaining until maturity (1.75).

So R = (8% x 2 + 100 = 116)/ (70 + 8% x 0.25) = 1.6111^(1/1.75) - 1 = 31.3%

Not quite 35%, but the effective redemption amount is actually greater than 116 because the three semi annual coupons of 4% are reinvested at the redemption yield. So instead of 116, it is more like 120.2. Also, the maturity is closer to 1.73years. Using these numbers, R = 34.5%.

In fact, I got the number of 35% from Bloomberg bond analytics, and all I am doing is explaining a useful approximation.

That aside, such a low price would indicate a failed credit, and I fail to see how this would arise other than by an execution by the FCA - fines so large that existing shareholders would not support a rights issue to fill the gap. This is an inherently profitable business, so so long as the fines were known to be one-offs, I think a failed equity raise is very unlikely.

[gregsc] 25/1/2018 16:30

Neil Woodford bought another 1% just a couple of days ago.
Now has 23.03%

[dmf] 25/1/2018 15:37

I think Neil Woodford owns circa 20% of PFG, wonder if he will add to his holdings to average down....

[fenners66] 25/1/2018 15:23

8% 2019 PFGLN bond with a target price of 70. That would imply a yield of about 35%

I can't see 35%

A redemption yield would surely be 1 or 2 years interest + 30p for redemption so 54% +?

[chucko1] 25/1/2018 14:44

From what I have been told, JPM put out a note this morning with some various trade ideas in credit instruments. One of them was to short the 8% 2019 PFGLN bond with a target price of 70. That would imply a yield of about 35% which effectively means default. On the other hand, the equity part of JPM thinks the shares are worth 1,100p.

Good luck figuring all that out. I own some other bonds at a 8.5% yield with a 2023 maturity. This company is not going bust and this is a lower risk way of investing in PFG.

[wad collector] 25/1/2018 08:48

Dropping again sharply this am , must have gone Xd again. Oh no , that was another yr.....

[umitw] 23/1/2018 13:10

When there is no RNS from the company, the share price performs better, Lol

[frteb] 19/1/2018 19:38

At least he didn't say there or their...

[paulmurphy777] 19/1/2018 17:38

Shore as sure can be. Got they're in the end...

[dexdringle] 19/1/2018 15:30

...are you shore ?

[paulmurphy777] 19/1/2018 08:14

Think Feb 27th will be material in more ways than one, if they need to sure up the balance sheet it will be done before then imo

[ccnp] 19/1/2018 08:11

This is a day traders share now. With strong brown undies

[umitw] 18/1/2018 23:02

Wad r u on different planet ?It lost 50% recently!

[wad collector] 18/1/2018 20:59

No , because Bitcoin mostly goes up.

[umitw] 18/1/2018 13:07

PFG share price is a bit like Bitcoin! LOL

[smurfy2001] 18/1/2018 11:01

Personally trading this not investing feels like they have a long road ahead. Still waiting to see where this settles.

Still shorted heavily so might be able to ride some of the volatility.

[umitw] 17/1/2018 16:05

Fitch: PFG Trading Update Highlights Challenges of Business Model Repair17 Jan 2018 14:22(The following statement was released by the rating agency)LONDON, January 17 (Fitch) Provident Financial plc's (PFG) trading update released yesterday demonstrates that initiatives put in place to stabilise the company's home credit business model are still work in progress, Fitch Ratings says. Fixing the problems resulting from the troubled rollout of a revised operating model in summer 2017 is one of the key challenges PFG faces, alongside the ongoing Financial Conduct Authority (FCA) investigations into its VanquisBank (Vanquis) and Moneybarn subsidiaries.Fitch placed PFG's Long-Term Issuer Default Rating on Rating Watch Negative (RWN) on 24 August 2017 to reflect the home credit and Vanquis issues, which were supplemented by announcement of the separate Moneybarn inquiry in December 2017.PFG states that its home credit business is expected to report a pre-exceptional loss for 2017 of around GBP115 million, within an overall pre-exceptional loss for its consumer credit division (CCD) of GBP120 million. This is at the top of the GBP80 million-GBP120 million guidance given in the company's August 2017 profit warning and is attributed to a lower-than-expected level of reconnection in 4Q17 with customers whose relationship with the company was damaged during the implementation of the new operating model. This reduced the degree to which the company could write back impairments recognised earlier in the year, and,Fitch notes, could also negatively impact the rate at which PFG is able to rebuild its earnings stream from new profitable home credit lending in 2018.Customer numbers did increase by approximately 30,000 during 4Q17, and December home credit collections performance of 78% shows a positive trend from 65% inSeptember and 57% in August, but remains below the 90% level cited by the company as a 2016 comparative in its August profit warning.The GBP5 million of the CCD loss outside home credit relates to PFG's smaller online business, Satsuma, prompted by higher-than-expected credit impairments.Beyond CCD, PFG states that Vanquis and Moneybarn have both traded satisfactorily through 4Q17, and that each has commenced dialogue with the FCA with a view to reaching a resolution to their respective investigations. At 31December 2017 the company had cash resources of GBP34 million (excludingVanquis's regulatory liquid asset buffer) and headroom on committed debt facilities of GBP66 million, while scheduled maturities in 2018 totalled GBP35 million.In its 24 August 2017 rating action commentary Fitch identified restoration of home credit's collections performance and conclusion of the Vanquis FCA investigation as key triggers in resolving the RWN. The agency also noted that, depending on the pace at which these issues progress, the resolution of the RWN could be accompanied by a Negative Rating Outlook before a Stable Outlook is attained.Key drivers to PFG's IDR remain the company's leading shares in three complementary strands of the UK specialised lending market, where the weaker-than-average credit profile of the customer base is mitigated by wide lending margins and moderate leverage. Earnings prior to tax, exceptional items amortisation of acquisition intangibles and central costs for 2016 totalledGBP351 million, of which GBP115 million was derived from CCD. Funding benefits from diversification of sources, including access to retail deposits throughVanquis.Negative rating sensitivities remain the extent of any permanent damage to PFG's home credit franchise (resulting in a revenue mix more concentrated on Vanquis's near-prime credit card business), an outcome to the FCA investigation intoVanquis which has adverse financial or reputational consequences for PFG, significant deterioration in asset quality, a rise in leverage above management's stated appetite, and an increase in the confidence sensitivity of the company's funding. The IDR could be affirmed if the FCA investigations are completed without material damage to the company and home credit demonstrates stabilisation of its franchise and recovery in its earnings.Contact:David PierceDirector

[umitw] 17/1/2018 15:07

Here is hoping that there will be amicable decision with FCA.That will make the share price recover to £9-10.