Preliminary results for the year ended 31 December 2014

Provident Financial plc is the leading non-standard lender in the UK. The group serves over 2.4 million customers and its operations consist of Vanquis Bank, the Consumer Credit Division (CCD) and Moneybarn.


Strong financial performance and dividend increase

  • Adjusted profit before tax1 up 19.5% to £234.4m (2013: £196.1m) and adjusted earnings per share1 up 18.4% to 132.6p (2013: 112.0p).
  • Statutory profit before tax up 23.1% to £224.6m (2013: £182.4m) and basic earnings per share up 21.4% to 126.5p (2013: 104.2p).
  • Return on assets2 of 15.1%, with increase from 14.2% in 2013 attributable to CCD.
  • Total dividend per share up 15.3% to 98.0p (2013: 85.0p).

Robust funding position

  • Gearing reduced to 2.4 times (2013: 3.0 times) through equity raised to fund the acquisition of Moneybarn and strong capital generation.
  • Group fully funded to May 2018 following extension of £382.5m core bank facility by a further year.

Excellent growth and greater potential in Vanquis Bank

  • UK profit before tax up by 32.8% to £151.0m (2013: £113.7m).
  • Customer and average receivables growth of 17.7% and 30.9% respectively, reflecting strong momentum from addressing the under-served non-standard credit card market.
  • Year-end UK customer numbers of 1.3m and guidance for medium-term potential size of business increased to between 1.5 and 1.8 million customers with an average balance of approximately £1,000.
  • Polish start-up loss of £10.6m (2013: £7.6m) and decision made to withdraw from pilot operation at no material cost in 2015.

Repositioning of CCD substantially complete

  • Adjusted profit before tax1 up 1.4% to £103.9m (2013: £102.5m).
  • Customer numbers and receivables reduced by 29.1% and 20.5% respectively, through execution of plan to reposition the home credit business as a smaller, but leaner, better-quality business focused on returns.
  • Significant improvements in credit quality and collections have lifted the risk-adjusted margin3 sharply from 58.9% in 2013 to 69.1% in 2014.
  • Satsuma’s online instalment lending capability now well developed and customer demand strong.

Highly encouraging start from Moneybarn

  • Adjusted profit before tax1 of £5.8m in the four months post-acquisition, in line with expectations.
  • Significant uplift in new business volumes as a result of access to the group’s funding.

Key financial results

Adjusted profit before tax1 £234.4m £196.1m 19.5%
Statutory profit before tax £224.6m £182.4m 23.1%
Adjusted earnings per share1 132.6p 112.0p 18.4%
Basic earnings per share 126.5p 104.2p 21.4%
Return on assets2 15.1% 14.2% -
Final dividend per share 63.9p 54.0p 18.3%
Total dividend per share 98.0p 85.0p 15.3%

Peter Crook, Chief Executive, commented:

“I am very pleased to announce adjusted earnings per share growth of 18.4% in 2014 and a 15.3% increase in the dividend for the year, supported by strong capital generation and the group’s robust funding position.

Vanquis Bank has produced another excellent performance with UK profits up 32.8%. Against unchanged credit standards, the business has continued to generate strong customer growth and margins through developing the under-served non-standard credit card market.

CCD delivered on its plan to at least maintain profits at 2013 levels. The repositioning of the home credit business as a smaller but leaner, better-quality, more modern business focused on returns is substantially complete whilst the Satsuma online instalment lending business has made a very encouraging start following its launch in November 2013.

The integration of Moneybarn is going extremely well and access to the group’s funding lines has assisted in a significant uplift in new business volumes.

I believe the more exacting FCA regulatory regime will raise the bar on conduct across the consumer finance industry and I am pleased to report that our businesses are at an advanced state of readiness for full authorisation.

The group has made a good start in the first two months of 2015. Vanquis Bank and Moneybarn continue to trade strongly and the home credit business has enjoyed a strong collections performance.”


David Stevenson, Provident Financial 020 7404 5959 01274 351351
Nick Cosgrove, Simone Selzer, Brunswick 020 7404 5959 020 7404 5959
Investor Relations    
Gary Thompson, Provident Financial 020 7404 5959 01274 351351
  1. Adjusted profit before tax is stated before: (i) £2.5m of amortisation in respect of acquisition intangibles established as part of the acquisition of Moneybarn on 20 August 2014 (2013: £nil) – see note 7; and (ii) exceptional costs of £7.3m, comprising £3.4m in respect of restructuring costs in CCD (2013: £13.7m) and £3.9m of costs incurred in respect of the acquisition of Moneybarn – see note 2.
  2. Adjusted profit before interest after tax as a percentage of average receivables.
  3. Revenue less impairment as a percentage of average receivables.