PFG.L Share News (PFG)

(Sharecast News) - Doorstep lender Provident Financial posted an uptick in annual profit on Thursday, hiked its dividend and said it was well placed to return the business to breakeven in 2020.
In the year to 31 December 2019, adjusted pre-tax profit edged up 1.6% to ?162.6m, while statutory pre-tax profit was up 32.4% to ?128.8m, reflecting lower exceptional costs.

At credit card business Vanquis Bank, adjusted pre-tax profit was down 9.1% to ?173.5m, mostly due to the previously guided reduction in repayment option plan income. Statutory pre-tax profit fell 2.6% to ?185.9m, mainly due to an exceptional provision release of ?14.2m in respect of the ROP refund programme.

New customer account bookings at Vanquis were up 3,000 from 2018 to 369,000, ahead of management's plans, despite tighter underwriting and the impact of revised affordability processes.

Pre-tax profit at Moneybarn - the car lending segment - rose 10% to ?30.9m , reflecting "continued strong growth", Provident said. Statutory pre-tax profit increased 19.2% to ?33.5m due to an exceptional provision release of ?2.6m following completion of the Financial Conduct Authority investigation.

Chief executive Malcolm Le May said: "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 we progress towards our dividend cover target of at least 1.4 times."

Le May said Provident was making "good progress" towards the medium-term financial targets set out at the capital markets day in November.

At 1035 GMT, the shares were down 3% at 437.70p.