Tuesday, 22 August 2017

Shares in Provident Financial plunge on new profit warning



Shares in Provident Financial lost two thirds of their value on Tuesday after the doorstep lender issued its second profit warning in three months.

 

The FTSE 100 company now expects to make losses of £80m to £120m after its debt collection rates fell to 57%, compared with a 90% rate in 2016.


Bradford-based Provident recently changed the way it collected its loans, replacing self-employed agents with "customer experience managers".


Its chief executive has resigned.


The company has some 2.5 million customers, many of whom would not qualify for a standard bank loan and are therefore categorised as "sub-prime".
Tuesday's 66% fall left Provident shares at just 598.5p. Three months ago they were worth £31 apiece.


Invesco Asset Management and Woodford Investment Management own about 40% of the group between them.


Neil Woodford, of investment at Woodford Investment Management, said he was "hugely disappointed" but believed that it would ultimately get back on track.


"This business has been around for more than a century and I believe it will be around for many decades to come," he added.




BBC     News.