Provident Financial Share Discussion Threads

[losos] 22/6/2017 12:07

djderry - "in the big scheme of things I try to remind myself that it's only money."

There was also London & Scottish, not sure if that was an LSE quoted company, I think it was, but has disappeared into the mists of time now as well haha.

PFG have always been the leaders in this field, and to be fair I bet a lot of the 'collecting agents' might have wished themselves to become 'Customer Experience Managers' overnight but the two jobs are quite different and many agents will have failed the job interview, and thus be demoralised and leaving in bigger numbers than maybe management had anticipated. That's my 'take' on this news, not good, but if the CEM's produce the kind of loyalty that the directors expect then over time it should be a good move.

Bad news often comes in three's - let us hope this is the exception, I have made a small 'top up' which brings me to about the level I wanted to be vis-a-vis the overall portfolio.

[djderry] 22/6/2017 11:14

Thanks Sandbank,in the big scheme of things I try to remind myself that it's only money.

[sandbank] 22/6/2017 08:53

DJDERRY: Alas, I am not one of the "uninitiated" as far as Cattles is concerned. It's little comfort I know - but you were not alone.

Thank goodness I got out of PFG at 3218.52p in April at a modest profit - and feel as if I've dodged a bullet!

[jonwig] 22/6/2017 06:36

Citywire:

Numis has downgraded Provident Financial (PFG) after a profit warning, with the doorstep lender warning an overhaul of its home credit division was costing more than first thought.

The company said the impact of the reorganisation on collections, sales penetration and customer retention was heavier than expected.

Having previously predicted a £15 million impact on collections in the first half of the year, Provident Financial said the cost was now likely to hit £40 million. Credit issued for the five months to May was meanwhile £37 million below the same period last year.

Analyst James Hamilton downgraded his recommendation from ‘hold’ to ‘reduce’ with a target price of £23.35. The shares were down 16.3% at £23.97 at the time of writing.

‘Provident have guide that home collected credit is now expected to report a profit of £60 million for this year, down from the £115 million reported last year,’ he said.

‘The rest of the group is trading in line with internal plans but we would highlight the recent weak economic statistics such as inflation, average earnings, the services purchasing managers’ index and most importantly retail sales.’

[djderry] 21/6/2017 21:51

This is one of my bigger single company holdings.Not good news.I never sell ( or buy) on impulse but I'm wary of 'one offs' that keep repeating.Having lost many many tens of thousands in Cattles ( for the uninitiated, don't bother googling the whole sorry saga),I will be expecting much better on a 12 to 18 month view.

[fenners66] 21/6/2017 15:48

When you look at the chart above and the fall from nearly £33 it looks like some knew this was coming.

[contrarian joe] 21/6/2017 14:54

Always looked to expensive to me on valuation metrics ps 3.6,EV/EBITDA 16,£1.6bn debt, almost a certainty to be demoted from FTSE 100 come the Sept re shuffle.Sell on the 1st profit warning mantra (seems to work most of the time). hope i'me wrong for holders who have bought higher up.

[beetle juice] 21/6/2017 14:46

The question is whether alterations in the Consumer Credit Division will have negative long-term affects rather than them being sold as temporary. It is disappointing that management come out with trading statements at silly hours of the day - trying to sneak an elephant underneath the carpet - especially so close to a capital markets day and trading statement that suggested the business plan alteration was going to plan. This SHOULD reflect badly on them and large holders like Woodford I hope will give them a hard-time and hold them to account on this. For me, the inability to report these issues promptly and in a clear and bold manner possibly reflects failings in their ability to monitor their business closely and/or feel that it is acceptable for them to be a little disingenuous with shareholders - more of a reason to sell than the underlying cause of concern.

I am not going to alter my stance as an investor (yet) but it has been noted and I will be watching this more closely.

Dividend payments are on the 23rd so there _maybe_ reasonable buying strength soon as investors re-invest their dividends given the opportunity that the share price fall has provided. Today and tomorrow _maybe_ the right time to invest/add if you believe the issues are only transient.

Beetle

[fenners66] 21/6/2017 13:51

Every cloud and all that

[stewart64] 21/6/2017 13:09

There is some silver lining for me here as the fall in Prov actually justifies my general election comedy of errors in which Prov was sold on the 9th. In the first instance I loaded up on some domestic stocks on the assumption of a Tory landslide, followed by an expensive reshuffle into some internationals post election.
Although the fall in Prov has nothing to do with the election result I now find my position better than it would have been had I just sat on my hands. Because the reshuffle cost less than the subsequent fall in Prov.

Not had a great month tbh.

[robinnicolson] 21/6/2017 11:57

RBC following the conference call:

Dividend: in line with previous commentary, Provident intends to “look-through” the reduced earnings in 2017 to the extent that the earnings shortfall relates to one-off items. Further, management stated it would be willing to go below its dividend cover policy of 1.25x in 2017 – our 2017 dividend forecast currently assumes a dividend cover of 1.25x – thus, despite the reduction in earnings, Provident is unlikely to cut its 2017 dividend, in our opinion.

[biggcl] 21/6/2017 11:45

Yielding 6% here and a dividend cut most unlikely imo.Assuming a recovery to £30- in a year or less this would generate a total return of about 30%.

imho dyor

[sippguru] 21/6/2017 10:25

This was not their choice surely? The change in doorstep collection model was forced upon them as a result of legislation stopping the "self employed" who aren't actually self employed being exploited. Never have i laughed so much as watching this clueless company slowly destroy itself. Divi payer with no future and no ideas for growth. What a shame.

[deadly] 21/6/2017 09:57

got some at 2380, looks a reasonable bet for a recovery over time.

[jonwig] 21/6/2017 09:25

I hold some of the bonds, and results up to now have been quite problem-free.

Ironic that when word gets round that they haven't been good at collecting debts they'll get a lot more customers!

[wad collector] 21/6/2017 09:20

And some more at 2406. This has been a good long term hold ( for the last century) , hope the tide is not turning against their business model.

[wad collector] 21/6/2017 08:33

Bad but not that bad , I would have thought. The end of the statement is reassuring. Added a lump a 2450.

[fenners66] 21/6/2017 08:13

Serious Gap down , market did not like that news!

[fenners66] 20/6/2017 22:28

speedsgh - you were right that's not a good update.

They decided to mend something that seems like it was not broken and its going to cost at least £75m.
Make you wonder how long to get the £75m back in exceptional performance or was it just a plain mistake, or did the customer experience hold some other worries for management that they had to remove at any cost? Mis-selling
would be something they would not want to happen in the light of the Wonga experience.

[speedsgh] 20/6/2017 21:32

After hours Trading Statement released. Rarely a good sign...Trading Statement -

[stewart64] 18/5/2017 12:52

Bought back into this yesterday aften a good run earlier this year. I'd got issues with delinquencies but tbh all these problems are ongoing and short term ....bad debts quickly built up and quickly written off. The point is the debtors cycle is short, not accumulating and the model works. Few businesses boast solid growth in esrnings and profits like PF. Done well today to resist the Market slump too.

[wad collector] 18/5/2017 09:14

Xd 91p today

[wad collector] 27/4/2017 16:38

I see Woodford and Invesco now hold 37% of the shares . Don't normally take too much notice of the institutional holdings , but those are hefty holdings.
Mind you Woodford has not been exactly stellar recently.

[wad collector] 24/4/2017 15:27

£32 and rising fast ; this reminds me of the PFG of a couple of yrs ago. And yet what has changed so much in the last few months?