Key performance indicators

The group uses a number of KPIs to assess progress against each of its strategic objectives, including both financial and non-financial measures.

These KPIs are helpful in assessing progress but are not exhaustive as management also takes account of a wide range of other measures in assessing performance.

The group has four key strategic objectives to deliver our mission which are measured through a number of financial and non-financial key performance indicators (KPIs)

  • Growing sustainable, customer-centric businesses that deliver attractive returns in non-standard markets
  • Acting responsibly and with integrity in all we do
  • Maintaining a secure funding and capital structure
  • Generating consistent and sustainable shareholder returns

Growing sustainable, customer-centric businesses that deliver attractive returns in non-standard markets

  • Deliver a target return on assets for the Group of approximately 10%. Attractive returns are available in the non-standard market to those companies that have developed tailored business models and focus on delivering good customer outcomes.
  • Are sustainable and maintain high levels of regulatory compliance at all times.
  • Have good growth potential to deliver future earnings and dividends growth.
  • Enjoy a strong market position in each division in order to develop the market in a responsible manner.
  • Have good management and cultural fit.

Adjusted profit before tax (£m)

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* Unaudited proforma as though IFRS 9 had been implemented from 1 January 2017.

The Group has reported IFRS 9 profit before tax, amortisation of acquisition intangibles and exceptional items up by 82.3% to £153.5m (2017: pro forma IFRS 9 profit before tax, amortisation of acquisition intangibles and exceptional items of £84.2m, IAS 39 profit before tax, amortisation of acquisition intangibles and exceptional items of £109.1m).

Vanquis Bank has delivered a 1.6% increase in IFRS 9 adjusted profit before tax to £184.3m (2017: pro forma IFRS 9 adjusted profit before tax of £181.4m, IAS 39 adjusted profit before tax of £206.6m), principally reflecting the benefit of operational leverage and receivables growth of 4.9%. This has been substantially offset by the continuing reduction in the revenue yield due to lower penetration of the ROP product within the customer base following the cessation of sales to new customers in April 2016 together with the continued expansion of the product offering into the near prime segment of the market through the Chrome branded credit card.

CCD has reported a reduced IFRS 9 adjusted loss before tax of £38.7m (2017: pro forma IFRS 9 adjusted loss before tax of £106.3m, IAS 39 adjusted loss before tax of £118.8m) reflecting successful implementation of the recovery plan following the significant losses caused by the poorly executed migration to the new operating model in 2017. The focus in 2019 will be on stabilising the rate of decline in the customer base and continuing to reduce the cost base.

Moneybarn’s IFRS 9 adjusted profit before tax has increased by 28.3% to £28.1m (2017: pro forma IFRS 9 adjusted profit before tax of £21.9m, IAS 39 adjusted profit before tax of £34.1m), reflecting strong growth and improved credit quality.

Group ROE (%)

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* Unaudited proforma IFRS 9 as though IFRS 9 had been implemented from 1 January 2017.

The Group’s ROA has increased to 7.5% (2017: pro forma IFRS 9 ROA of 6.9%), primarily reflecting the reduction in losses in CCD due to the implementation of the UK recovery plan in home credit and stabilisation of the business following the significant disruption in 2017. Vanquis Bank’s ROA has reduced to 10.9% (2017: pro forma ROA of 11.8%), reflecting the moderation in the risk-adjusted margin from the expected fall in the revenue yield partly offset by positive operational leverage. Moneybarn has delivered an ROA of 10.7% in 2018, up from 10.0% in 2017, reflecting the strengthening of the risk-adjusted margin due to improved credit quality partly offset by the investment in strengthening the management team and collections and customer service resource.

Group ROA (%)

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* Unaudited proforma IFRS 9 as though IFRS 9 had been implemented from 1 January 2017.

The Group’s ROE has increased to 25.0% (2017: pro forma IFRS 9 ROE of 18%, IAS 39 ROE of 16%) primarily reflecting the reduction in losses in CCD party offset by the impact of the additional equity raised as part of the rights issue in April 2018.


Acting responsibly and with integrity in all we do

  • Put our customers on a path to a better everyday life;
  • Create a working environment that is safe, inclusive and meritocratic;
  • Treat our suppliers fairly; and
  • Support our communities.

Customer satisfaction (%)

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Customer satisfaction of 86% for Vanquis Bank (2017: 87%), 87% for Provident home credit (2017: 85%), a Feefo score of 4.7 out of 5 for Moneybarn (2017: 4.7 out of 5) and a Reviews.co.uk score of 4.7 out of 5 for Satsuma (2017: 4.8). The improvement in customer satisfaction at Provident home credit reflects a significant improvement in customer service as a result of the successful implementation of the recovery plan during 2018.

Community investment (£m)

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Invested a total of £1.7m in various community programmes, money advice programmes and social research (2017: £2.6m).


Maintaining a secure funding and capital structure

  • Maintain borrowing facilities which, together with Vanquis Bank’s retail deposits programme, meet contractual maturities and fund growth over at least the next 12 months.
  • Maintain a CET 1 ratio for the Group of 25.5% together with headroom in excess of £50m.
  • Continue to diversify the Group’s sources of funding

CET 1 ratio (%)

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The Group’s CET 1 ratio at 31 December 2018 is 29.7% compared with a fully loaded regulatory capital requirement of 25.5%. This provides headroom of c.£100m, and is consistent with the Board’s risk appetite of maintaining headroom in excess of £50m.

Funding headroom (£m)

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Headroom on the Group’s committed debt facilities was £327.4m at 31 December 2018. This is sufficient to fund contractual debt maturities and projected growth in the Group until May 2020, when the Group’s syndicated revolving bank facility matures, assuming Vanquis Bank is fully funded by retail deposits.


Generating consistent and sustainable shareholder returns

  • Generate sustainable growth in profits and dividends to deliver increasing shareholder returns.
  • Adopt a progressive dividend policy whilst maintaining a dividend cover of at least 1.4x.

Adjusted earnings per share (p)

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* Unaudited proforma as though IFRS 9 has been implemented from 1 January 2017.

IFRS 9 adjusted basic earnings per share of 46.6p (2017: pro forma IFRS 9 adjusted basic earnings per share of 36.8p, IAS 39 adjusted basic adjusted profits per share of 45.7p) increased by 26.6%, reflecting the increase in earnings partly offset by the impact of the rights shares issued in April 2018 and a higher effective tax rate.

Total shareholder return (TSR) (%)

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Annual total shareholder return of -11.1% in 2018 (2017: -65.3%), reflects some stabilisation in the Group’s share price following the rights issue in April 2018.

Dividend per share/dividend cover

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Consistent with the commitment at the time of the rights issue, the Group is proposing a final dividend of 10p per share in respect of 2018 (2017: nil) which results in a dividend cover of 4.7 times (2017: nil). If approved at the AGM on 21 May 2019, this will be paid on 21 June 2019 to shareholders on the register on 24 May 2019.

KPI descriptions:

Adjusted profit before tax – Profit before tax, the amortisation of acquisition intangibles  and exceptional items.

Return on assets (ROA) – Adjusted profit before interest after tax as a percentage of average receivables.

Return on equity (ROE) – Adjusted profit after tax as a percentage of average equity. Equity is stated after deducting the Group’s pension asset, net of deferred tax, and the fair value of derivative financial instruments.

Customer satisfaction – The percentage of customers surveyed who are satisfied with the service they have been provided with.

Community investment – The amount of money invested in support of community programmes, money advice programmes and social research.

Adjusted basic earnings per share – Profit after tax, excluding the amortisation of acquisition intangibles and exceptional items, divided by the weighted average number of shares in issue, adjusted for the rights issue from 1 January 2017.

Total shareholder return – The change in the group’s share price, together with any dividend returns made to shareholders.

Dividends per share – The total dividend per share, comprising the interim dividend per share paid and the proposed final dividend per share.

Dividend cover – Adjusted basic earnings per share divided by dividend per share.

Customer satisfaction – The percentage of customers surveyed who are satisfied with the service they have been provided with.

CET 1 ratio – The ratio of the Group’s regulatory capital to the Group’s risk-weighted assets measured in accordance with CRD IV.

Funding headroom – Committed bank and debt facilities less borrowings on those facilities.