Provident Financial Share Discussion Threads

[evox] 09/4/2010 12:00

Drop overdone. Have rejoined after a year away from this one. I think they have done pretty well considering the environment.

[wad collector] 08/4/2010 13:26

Creeping back up to 880 , hefty divi coming up next month , happy to hold.

[wad collector] 31/3/2010 16:09

Because British company bonds are not as attractive as they were before our economy went into such debt?

[maxk] 29/3/2010 18:49

On offer through Hargreaves Lansdown


The Provident Financial 7% 2020 Corporate Bond

7% income, fixed for 10 years



Why the premium?

[wllmherk] 17/3/2010 08:50

I didn't think recent results were that bad, seems to be getting harshly punished imo. Worth a top up if it hits 830 level.

[wllmherk] 04/3/2010 22:02

Well good luck to you wad, I m sure you will be in profit soon.

[wad collector] 04/3/2010 14:10

933,Wllmherk.
But I shan't lose sleep over it ; the last 30 yrs capital growth has been spectacular, never mind the yield.My inlaws have held them so long that the annual divis exceed what thet paid for them!Not sure I'll last that long but...

[wllmherk] 03/3/2010 19:22

what did you buy in at wad ?

[wllmherk] 03/3/2010 16:29

Seems like a rather harsh sell off, especially when one considers they missed market concensus by a relatively small amount. Still Divi maintained, bought in here at 871p today so watch it plummet !

[wad collector] 03/3/2010 09:45

Bought too early... but it will go back up again.It has a reassuring century of lending behind it (Like Lloyds , Nat West ,HBOS..)

[taylor20] 02/3/2010 12:55

And another from Numis:

"Solid results
Provident delivered pre-tax profits of £130.1m vs. our forecast for £132.7m for the year to 31.12.2009 with weak customer demand and poor weather impacting the
home credit results at the end of the year. Provident continued to add quality customers and as demand returns these customers are expected to deliver profitable growth once recovery commences. Valued at 12x this years earnings with the prospect of good earnings growth we believe the shares are attractive.

Divisional review: The growth in home credit in 2010 is expected to be impacted by the weak economy and weak demand. We expect Provident to focus on smaller higher margin loans with a keen eye on costs and credit quality. The good customer growth seen over the past couple of years is expected to translate into good earnings growth once the recovery commences and the demand for credit returns with under employment falling away improving affordability. The trial of RPF was completed and RPF will be focused on lending to customers with a Provident history. Consequently the costs associated with the broker market will be removed and overall RPF is expected to deliver a profit this year opposed to the £7.7m loss recorded last year. Vanquis continues to perform very well reporting pre-tax profits growth of 77% to £14.1m. The group has a target of a receivables book of £450m by the year end 2012. With average receivables of £450m a 30% ROE and a 20% Tier1 ratio this equates to pre-tax profits of £37.5m, an increase of 167% on the 2009 profit.

Forecasts: We have downgraded our group pre-tax forecasts by 3.9% to £141.8m this year with all divisions expected to deliver growth. We forecast 9% growth in profits this year, 16% next and 21% for the year ending 31.12.2012. For any UK lender to deliver growth in profitability in 2008, 2009 with the prospect of good growth in 2010, 2011 and 2012 is a very credible performance. Provident remains a good each way bet – defensive while recession remains – a good growth story once recovery commences."

[taylor20] 02/3/2010 12:44

Another view from Collins Stewart:

"Revenues of £815m (£15m above forecast)

Provident Financial appears to be a well managed business. It has been able to grow its Home Credit revenues 4% (£28m) and its Vanquis Bank revenues 39% (£37m). Home Credit revenues were £7m below forecasts: management observe that "the Competition Commission remedy requiring early settlement rebates ... reduced revenues by £10m". This may continue.

PBT & EPS miss consensus

The Profit before tax and exceptionals was £5m below our forecast. Vanquis Bank exceeded expectations (reporting profits of £14m: we expected £11m), but Home Credit disappointed generating £128m (we expected £132m); the £10m of rebates was a major contributor. EPS excluding exceptionals was 71.4p (we expected 72.4p); EPS including exceptionals fell 5% to 67.5p.

Outlook is negative; forecasts cut 10%
"Market conditions are unlikely to improve in the near term". Management "is planning for relatively low receivables growth". We expect to cut our 2010 & 2011 EPS forecasts by 10% to 75p and 78p respectively. We expect market forecasts to be cut soon.

Dividend maintained but payout rose to 94%

Shareholders should be relieved that dividend was maintained at 63.5p. With a target payout ratio of 80%, we see no prospects of dividend growth.

No comment on impending regulations
To be fair it is difficult to comment on regulations in respect on irresponsible lending, high cost consumer credit and other issues before have re
published. The OFT will publish its findings later this month.

Shares trading at an 18 month high
We see this as a good time to sell PFG shares and 800p as a sensible target price. Investors should remember that the NAV is 200p a share."

[wad collector] 02/3/2010 11:19

Spoke to soon ;it pinged up 20p in the one minute it took me to sell BP and buy another 550 of these! Still , happy to hold even if i don't unload them later this week.

[wad collector] 02/3/2010 10:50

Yeah, I too am tempted to do some short term trading - it is a safe long term hold to fall back on and 918p seems cheap.

[taylor20] 02/3/2010 09:51

Tempted to trade the range, with the safety net of the dividend yield.

From Charles Stan.

"Full year profits are at the lower end of consensus expectations. A resilient performance from HCC was diluted by slower progress at RPF while Vanquis maintained its risk adjusted margin above 30% (although impairment increased again slightly). Market conditions are expected to remain tough in 2010 before we expect profit growth to pick up in 2011; we retain our "Add".

Prelims to 31 December – The group has reported adjusted PBT of £130.1m (2008: £128.8m) as compared to our forecast of £132.7m and a consensus range of around £129m - £138m. Adjusted EPS was 71.4p (2009: 70.9p) while the group has declared an unchanged final dividend of 38.1p, giving a total for the year of 63.5p and equating to a yield of c.7%. Funding remains robust with £331m of headroom at 31 December 2009. The group has recently entered into forward starting arrangements which extend syndicated bank facilities totalling £380m to May 2013.

Resilient performance from HCC – Divisional profits were flat at around £129m with customer growth picking up slightly (5.1% for full year vs 3.9% in H1) while average customer receivable growth slowed (7.7% for the full year vs 9.8% in H1). We expect this trend to continue, with receivables growth closer to customer growth in 2010, which we forecast to remain at around 5%. Impairment was 32.2% (2009: 30.5%) and compares to our forecast of 31.7%. Profit growth here in 2010 is likely to be more driven by cost savings than the top-line.

Real Personal Finance brand abandoned, as speculated – RPF incurred losses of £7.7m (2008: £2.7m), higher than expectations while noting that Provis has not split out RPF in the past. The leads from outside the HCC branch network (which were forecast to account for 50% of the total) have been of low quality and consequently, overall volumes have been below expectations. This direct repayment product will simply become an extension of HCC under the Provident Direct or Greenwood Direct brands and as a result these start-up losses will not continue into 2010.

Profits at Vanquis slightly higher than our expectations – Vanquis PBT was £14.1m vs our expectation of £12.2m although the impairment continued to rise to 47.0% vs 44.8% in H1 (annualised), and 40.4% in 2008. However the risk adjusted margin remained in–line with the group's target of 30% highlighting the robustness of the model and ability to risk price. We see good growth prospects here in 2011.

Reiterate Add recommendation – The shares are likely to be slightly weaker today having had a good run recently. Growth will continue to be cautious in 2010, but we continue to see Provident as well placed over the medium term."

[wad collector] 02/3/2010 09:28

Full Year

Highlights
Group
· Profit before tax and exceptional costs up GBP1.3m to GBP130.1m (2008:
GBP128.8m).
· Careful management of the balance between growth, impairment and costs in
both divisions supported by tighter underwriting criteria.
· Balance sheet strength and liquidity enhanced further through GBP250m
10-year senior public bonds issued in October 2009 and recent extension of
banking facilities totalling GBP380m to May 2013.
· Substantial year end banking headroom of GBP331.0m (2008: GBP251.2m) and
sound gearing ratio of 3.3 times (2008: 3.2 times).
· Full-year dividend of 63.5p per share maintained.



Solid results but the City was obvioulsy expecting more judging by todays 40p fall.
I shall continue to squander the dividend.

[ploppy nobkin] 22/1/2010 08:05

Not writing much new business is bound to affect future income. How are they going to replace that?

Cattles (CTT) had to do similar, but were in a much worse state. Their shares have been suspended for some time and the company is by no means in a healthy state.

[wad collector] 21/1/2010 14:31

Is that good or bad?

[ploppy nobkin] 21/1/2010 11:50

From MyIntroducer.com: "Provident Pull from Unsecured Market".

See

[wad collector] 21/1/2010 09:45

Looks like it's going to breach a tenner soon.Ahh, capital growth as well as great yield ; I LOVE this one.

[wad collector] 22/12/2009 10:11

I like the look of the chart today - are we going to see a tenner by the New Year?Frankly I don't care much as I shall hold onto these for a long time.The quietness of the BB says a lot .

[wad collector] 07/12/2009 17:15

Provident been around 128 yrs , take a bit more than a Panorama type program to sink this ship I suspect.Borrowers have very short memories when they borrow cash , and Prov are by no means the worst of the bunch.If the share price drops tomorrow I shall add!
I just keep admiring the yield.

[milliecusto] 07/12/2009 12:11

channel 4 8 o'clock tonight,dispatches slaughter pfg and brighthouse.

[brain smiley] 17/9/2009 10:45

looking good. Hopefully going to break out of the 720- 940 trading range. ALot of blue sky above that.

[james111] 25/8/2009 11:15

Flying again today, I am very content sitting here. I am on a good divi and medium to long term has more upside than down. If I sold wouldnt know where to put it !