Results for the year ended 31 December 2011

Provident Financial plc is the market-leading provider of home credit in the UK and Ireland, with a successful, growing credit card business. Its operations consist of the Consumer Credit Division and Vanquis Bank.


Strong group performance

  • Pre-tax profit up 12.2% to £162.1m (2010: £144.5m1).
  • Earnings per share up 14.0% to 89.6p (2010: 78.6p1).
  • Total dividend per share up 8.7% to 69.0p.
  • Capital generated2 of £110.1m, well in excess of dividends in respect of 2011 of £93.2m.

Very robust group funding position

  • Renewal of core bank facilities to 2015.
  • Vanquis Bank retail deposits programme running ahead of plan.
  • Group fully funded into 2015.
  • Gearing stable at 3.2 times (2010: 3.3 times).

Sound Consumer Credit Division result underpinned by improved credit quality

  • Pre-tax profit of £127.5m (2010: 53 weeks, £127.3m).
  • Credit standards tightened and growth moderated due to pressure on customers' disposable incomes.
  • Reduction in Home Credit rate of impairment to 32.1% of revenue (2010: 32.9%) resulting from continued focus on existing good-quality customers and a strong collections performance.

Strong profitable growth in Vanquis Bank assisted by favourable delinquency trends

  • Pre-tax profit up by 65.5% to £44.2m (2010: £26.7m).
  • Customer and average receivables growth of 27.0% and 35.3% respectively from continuing investment in customer acquisition programme.
  • Risk-adjusted margin3 of 35.0% (2010: 33.9%) versus minimum target of 30% with delinquency at an all-time low.
  • Generated surplus distributable capital2 of £14.8m.

Key financial results

  2011 2010 Change
Customer numbers 2.52m 2.41m 4.4%
Average receivables £1,178.9m £1,053.8m 11.9%
Profit before tax1 £162.1m £144.5m 12.2%
Earnings per share1 89.6p 78.6p 14.0%
Final dividend per share 42.3p 38.1p 11.0%
Total dividend per share 69.0p 63.5p 8.7%
Capital generated2 £110.1m £80.4m 36.9%
Dividends in respect of financial year 93.2m 84.9m 9.8%
  1. 2010 earnings stated before an exceptional cost of £2.5m.
  2. Capital generated is calculated as net cash generated from operating activities, after adding back 80% of the growth in customer receivables funded by borrowings, less net cash used in investing activities.
  3. Revenue less impairment as a percentage of average receivables for the 12 months ended 31 December.

Peter Crook, Chief Executive of Provident Financial, commented:

"I am delighted to report earnings per share up by 14.0% and announce an 8.7% increase in the dividend for the year supported by strong capital generation. The close attention to credit quality in both businesses has been the foundation of the group's good performance in a year that has seen pressure on customers' disposable incomes. Whilst this pressure continues in an employment market that is displaying some weakness, tight credit standards will remain in place.

The group's funding position has been strengthened further and is extremely robust. The group's core syndicated bank facility has recently been renewed, some 15 months ahead of its maturity date, and the retail deposits programme at Vanquis Bank is now fully established and is running ahead of plan. This means that the group is now fully funded into 2015.

As well as diversifying the group's funding base, the retail deposits programme has established stand-alone funding for Vanquis Bank as it continues to invest in developing the medium-term growth opportunity available in the non-standard credit card market.

The group has started 2012 with the benefit of very sound credit quality in both businesses. Accordingly, the Consumer Credit Division has seen a robust collections performance through the first two months of the year and Vanquis Bank has made a strong start to 2012. The group is in a position to make further good progress in 2012."

Enquiries: Today Thereafter
David Stevenson, Provident Financial 020 7404 5959 01274 351351
Nick Cosgrove, Brunswick 020 7404 5959 020 7404 5959
Investor Relations    
Gary Thompson, Provident Financial 020 7404 5959 01274 351351