Provident Financial increases dividend as it posts a rise in profit
Provident Financial has proposed a 60 per cent increase in its final dividend has it posted a rise in profit.
The figures
Group profit before tax rose 1.6 per cent to £162.2m
Basic earnings per share increased 22 per cent to 33.3p, while adjusted EPS fell 2.9 per cent from 48.7p to 47.3p.
Provident’s division Moneybarn’s profit before tax up 10 per cent to £30.9m. Vanquis Bank’s profit before tax fell 9.1 per cent to £173.5m, reflecting the previously guided reduction in ROP income.
Provident Financial’s has proposed an increase in its final dividend to 60 per cent to 16p, up from 10p in 2018. The total dividend per share is up 150 per cent to 25p.
Why it’s interesting
Provident’s vehicle financing arm Moneybarn posted a 10 per cent increase in profit as demand forused cars remained robust. Earlier this month Moneybarn was handed a £2.8m fine which concluded the latest in a line of investigations into its sales and business practices.
Provident said its customer numbers have now started to stabilise at just over 500,000 and added that a pick up in collections were now expected to offset impairment trends in 2020.
The wealth manager said it is setting out to return its consumer credit division to profitability after suffering a wrongly executed restructuring in 2017.
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What Provident Financial said
Chief executive Malcolm Le May said:
I am pleased with both the group’s operational and financial performance in 2019 and the momentum behind our strategic initiatives as we enter 2020. We have delivered an increase in profits as we have continued to adapt our businesses and culture to changing customer needs and the evolving regulatory environment.
As a result of our good progress and the group’s strong funding and capital positions, the Board proposes a final dividend of 16.0p per share, which represents a 150% increase in the total dividend in 2019 and a dividend cover of 1.9 times as of 16.0p per share, which represents a 150% increase in the total dividend in 2019 and a dividend cover of 1.9 times as