Provident Financial Share Discussion Threads

[ccnp] 04/8/2017 18:28

Even non accountants will hopefully understand the concept that the 20% interest is carried as a future, unrealised income (Debtors).

The neat bit is that when a loan defaults, the entirely fictitious, mythical amount of all the interest and charges, plus hypothetical costs assocaited with servicing the loan are booked as a loss and offset the overall tax liabiity.

[penycae] 04/8/2017 15:18

NY Boy - you're not on your own. Most of the contributors here appear to be LTBH and are pretty p*ssed off with management and current performance.
I looked in just after the big drop, because I have had a number of years experience dealing with this company.
It's trying to scale down its doorstep lender image, and offering plastic to those with impaired credit. I like the story, and am trading (BTFD!) this regularly on sb's.
I apply the profits to buy paper.
The thread is full of sensible, well researched people. The idiots have yet to arrive, but they'll be over soon.
There's a huge gap to fill.......

[ny boy] 04/8/2017 13:40

Ok, I'll just make the dosh on my own 😁

[ny boy] 04/8/2017 12:40

No traders in today, or just lurking in the background getting excited 😁

[ny boy] 04/8/2017 10:29

Wow that's a buy for me lowest chart support 2070p ex div in 26 Oct 43.2p, pay 30 nov.

[ny boy] 04/8/2017 10:18

What's the story here, fallen from 3200 only a few months ago, value here yet, anyone sniffing around for a bottom or still catch a falling knife stuff?

I will check chart support levels

[spob] 04/8/2017 10:11

please don't take anything to heart

i'm just poking around

i don't know much about PFG

[spob] 04/8/2017 10:07

current annual dividend payment is £200 million

[spob] 04/8/2017 10:04

So where does the CASH come from to pay dividends :)

[losos] 04/8/2017 09:34

spob - "would you not expect that initial cash outflow to unwind as old loans are cleared"
No, the basis of the home credit (or door step lender) is to make another loan (to the same customer) thus retaining them as a customer, just like Minerve's 'box maker' always wants to sell you another box !!!

[fenners66] 03/8/2017 19:59

If your money is made on lending money to people then your "stock" is actually cash.

As with most businesses its far better to run with minimal stock - make lots but get it out of the door.

[minerve] 03/8/2017 14:32

Yes, on a per customer base it would be eventually returned (hopefully) but overall, in a growing customer base, then you are hopefully constantly lending more and more money - risk managed of course.

[spob] 03/8/2017 13:51

Okay but looking at PFG over a long time frame would you not expect that initial cash outflow to unwind as old loans are cleared

I mean PFG have not just started trading

[minerve] 03/8/2017 13:19

spob

I am no accounting expert but it is because of the nature of the business. If I sell you a box I would normally recover the costs of making the box plus some profit. So cashflow is positive. If I loan you £100 and you pay me £20 interest, my earnings are high but my cash flow is negative. Very simple analogy but may help.

[spob] 03/8/2017 12:48

hmmmm.... deafening silence

is that my answer :)

[ccnp] 03/8/2017 10:20

An interesting post.

I hold last years ISA in the HL Select UK Income Shares which has a 3.7% stake. Their fund blog keeps making positive noises about PF

hxxp://www.hl.co.uk/funds/hl-funds/hl-select/hl-select-uk-income-shares/blog

[spob] 03/8/2017 01:20

Any comments on cashflow and free cashflow for PFG ?


cashflow doesn't come anywhere near to reported/adjusted earnings

and for the last decade free cash flow has never come close to covering the dividend


so what's the story ?

is this just an accounting quirk for this particular type of company ?


it just doesn't look right to me


My past experience has always told me to be very wary of companies where cash flow doesn't at least resemble reported earnings


perhaps someone with more knowledge of this company can shed some light

comments please ......


TIA

[losos] 01/8/2017 17:14

stewart64 - "But may be for once I might be rewarded for doing the thing you absolutely shouldn't."

Will be all the sweeter if it works out for you (Which I hope it does)

Wad Collector - A flawed 'old fashioned model' may well be the doorstep collection side but as others have said the Vanquis bank is doing well. Despite the attraction of the internet many millions still prefer the doorstep collection model. I think they like the idea that they don't have to remember anything 'cos the man from the Provi will always call and tell them.

[stewart64] 01/8/2017 09:31

Well it may have been stupid catching the falling knife at 20.72 yesterday but my thoughts of having Imperial Brands in reserve would have failed too. That boat left this morning +2% also.

Not saying that both boats wont retreat. But may be for once I might be rewarded for doing the thing you absolutely shouldn't.

[stewart64] 01/8/2017 09:31

Well it may have been stupid catching the falling knife at 20.72 yesterday but my thoughts of having Imperial Brands in reserve would have failed too. That boat left this morning +2% also.

Not saying that both boats wont retreat. But may be for once I might be rewarded for doing the thing you absolutely shouldn't.

[wad collector] 31/7/2017 18:13

Still can't decide if this is a solid old business going at a song , or a flawed old-fashioned model on the wane.
Sitting on a small paper loss after making some big profits here in the past. I shall sit on hands for the moment.

[stewart64] 31/7/2017 17:55

Added 325 at £20.72 this afternoon. Should have probably waited because I did have Imperial Brands also a falling knife in reserve had I missed the boat on Prov.

The money had originted from IB sold at the death last night 4:29 pm. into yesterday's rally.

[pnetol] 31/7/2017 13:46

S&U looking a bit week today which is not ideal for us.

[losos] 31/7/2017 12:34

stewart64 - "she took me for a couple grand"

Wow, bet that left a nasty taste!!! Once bitten twice shy.

A lot of these types around now, just shows that living in 2017 ain't nice.

[penycae] 29/7/2017 12:26

Not sure its the "market" putting this in play at the moment. It's trying to find a floor.
AQR increasing its short position is upsetting the algos. This will probably take some time to stabilise, then one of those "special situations" will develop. I'm still holding long. Not going to add just yet, but I have no doubt that the gap created in June will fill. That's when the money will be made.
Nothing wrong with this Company's business plan. It's a sub prime lender, been around a long time. Seen better times, but hey........