Provident Financial Share Discussion Threads

[umitw] 12/9/2017 15:33

Wouldn't be great if PFG Sp closed @850p..!

[umitw] 12/9/2017 13:34

All these price spikes today, what does it mean?

[fenners66] 12/9/2017 10:41

That volume chart looks like the silhouette of the worlds tallest building....
wonder how many lives were lost building it.

[umitw] 12/9/2017 10:08

M&G offloaded, who's buying the shares?

[glenkaz] 11/9/2017 23:10

This share saved my life love ❤️ it love you guys ❤️ Not in but comiback! .'sooooon 🤡✌A039;

[glenkaz] 11/9/2017 22:26

🤡✌A039; love ❤️

[umitw] 11/9/2017 17:36

Well another good day for the share price.

[glenkaz] 11/9/2017 12:50

Thanks cg! Glad you guys are on the move! 🤡✌A039;

[ccnp] 11/9/2017 12:33

tax implications of conflating costs to service the non performant loans
P&L and balance sheeet implications
impact of any covenants on loans
HR issues and cost premium on rehiring exited staff - not overlooking the fact that the good ones already have new jobs

I still want to know if any professional advice was given on the reorg and if there is scope for suing someone.

The writedown will be my determinant for buying. Does the CEO have the authority to clear out the deadwood and their historical costs? Who is going to head up Delivering this. Without leadership change, any plan lacks credibility

[cg8riverside] 11/9/2017 12:07

XLMedia breakout underway....oh and bought back in PFG today at 830p. Going to be holding on now. Forgive me for talking up my own book but XLM is off and running after stellar results. So much more to come there. Glenkaz get your cash in XLM at these levels and you'll get back every penny of your losses in due course. You've kept me amused recently, many thanks and good luck to you.

[walbrock82] 11/9/2017 09:55

The following is an insightful illustration and example of how Provident Financial business makes their money.

Illustration – Simple

Let’s say a customer borrows £1,000 at 45% APR and has to pay a £50 fee for this arrangement. Assuming the person pays it back in one year (keeping it simple), the payment is as follows:

£1,000 (Original amount borrowed);
£50 (Arrangement fee);
£450 (Interest).

This means Provident Financial report gross interest income of £500.
Remember Provident Financial incurs expenses from these loans. Let say the £1,000 lend cost them the following in expenses:

Borrowing rates at 5% of £1,000 = £50;
Staff costs at 15% of £1,000 = £150;
Other costs like system upgrade, utility bills, insurance, auditor fees, bonuses, etc. make up for another £50 from £1,000.

N.B.: The above is for illustration purposes only and not based on Provident’s financial accounts.

So, annual operating costs total £250. Therefore, Provident Financial makes £250 in profit from this arrangement.


Illustration 2 – More business like

Illustration 1 explains the lenders model and how it makes money. One thing missing from that is the default rate or the non-performing loans or the impairment charge (whichever name you chose). And is the % of customers unable to afford to pay back their loans and interest.
Let’s say Provident’s impairment rate is 15% meaning out of 100 customers, 15 of them are unable to meet their obligations (fully or partially).

(How much profit does Provident makes if every customer pays?)
So, if Provident lends out £1,000 to 100 customers, then total lent is £100,000 and profits made comes to £25,000. (See illustration 1)

(How does 15% impairment rate affect profits?)
Well, 15 customers equal to £15,000, so it will reduce profits to £10,000. The impact is substantial because instead of a profit margin of 25%, it now makes 10%.

To add more layers, what if, out of the 15 customers, seven was able to pay back half the loans, £500. It adds £3,500 to the existing £10,000 profit.
Hope the above is resourceful and valuable in your understanding of Provident’s business model.

For the full version, you can find it exclusively here:

[babazurie] 11/9/2017 09:13

Just like Irma

[umitw] 11/9/2017 08:01

Tides has changed finally!

[master rsi] 10/9/2017 23:08

SUNDAY TELEGRAPH - Lucy Burton, financial services editor - 10 SEPTEMBER 2017

Provident seeks to turn the clock back in last-ditch bid to revive doorstep business

PFG - Provident Financial is planning sweeping changes to its controversial doorstep lending business in an ­attempt to reverse a disastrous restructure that led to a pair of crippling profit warnings.

The struggling company is trying to stabilise itself following a botched rejig of its salesforce earlier this year. It is ­rearranging its home credit division, urging former agents to come back on a part-time contract and setting a fresh hiring target, sources told The Sunday Telegraph.

An overhaul aimed at swapping 3,800 part-time agents for 2,500 full-time ones caused debt collections to fall this year as a number of staff left or moved to rivals. The failed reshuffle forced the company to issue its second profit warning in two months and also triggered the shock exit of its chief executive.

The company’s shares plunged more than 66pc as investors digested the news last month, with the business warning that it could make losses of ­between £80m and £120m in its home credit division following the change in how it collected loans.

Chris Gillespie, who was put in charge of the home credit unit last month, said in a memo to staff on Sept 1 that his “direction of thinking” was to introduce four UK divisions instead of two, up the number of regional managers from 12 to 22, and hire 450 part-time agents. “People are watching us closely,” he told employees.

[glenkaz] 09/9/2017 11:54

The big money moves this one 🤡✌A039;

[glenkaz] 09/9/2017 11:20

Reason most who hold here don't post on thease boards! Mainly you get a lot of chat on aim stocks that are rising or falling!

[fhealey] 09/9/2017 09:03

I find it strange that the share price, between 15.00 and 16.30, rose 25p and yet there was only 1 comment made on this board. Makes you wonder about the bona fide nature of the usual posters and what their true motives are. Or am I being paranoid?

[glenkaz] 09/9/2017 08:26

Wish I did nice recovery guys! Been in indivior great recovery there! And pfc this week! Now out of those and in cash! Looking at you buy one you get one free! For a recovery on Monday! Gla holders here 🤡✌A039;Buy on fear! Is working very nicely ATM! Hard work beating up shorts 💪🤡 lol! Hope you get great news soooon! 🤡👍

[umitw] 08/9/2017 15:50

Glenkaz must be buying!:-)

[umitw] 08/9/2017 15:33

What's this spike is for..?

[fenners66] 08/9/2017 13:47

walbrock interesting post (read the article) Woodford has started believing his own propaganda clearly...

[umitw] 08/9/2017 12:23

Walbrock82Thanks

[walbrock82] 08/9/2017 12:12

On Woodford - He got lazy and believed they were looking after his interest.
To blame the business environment is crazy because the stock market has been rising.

He even invested in RM2 International, the most advanced wood pallet "re-invention" and that business loses "tens of millions" of dollars a year. Now, it is waiting for further external funding.

P.S. I did some research on RM2 if you are interested

The problem is he got lazy or made research more complicated than it should be. You don't see Terry Smith of Fundsmith making headlines and struggling to make positive returns!

[walbrock82] 08/9/2017 12:00

Umitw,
Given that debt is their business. Calculating their enterprise value isn't appropriate. You will need to redefine enterprise value, which I haven't a clue because of too many moving parts.

[bargainbob] 07/9/2017 13:04

Suspect the price to come under pressure here is glenkez is no longer buying GLA