(Alliance News) - Provident Financial PLC on Thursday reported a sharp rise in profit, as lower costs offset falling revenue, resulting in the company upping its dividend.
The sub-prime lender recorded pretax profit of GBP128.8 million in 2019, up 32% from the GBP97.3 million seen in 2018.
Revenue slipped 8.5% year on year in 2019 to GBP998.3 million from GBP1.09 billion.
Total costs also fell though. Provident's total costs were down 13% in 2019 to GBP869.5 million from GBP994.1 million. Administrative & operating costs were down 8.9% to GBP460.6 million, and impairment charges were down 15% to GBP336.9 million. Finance costs fell 21% to GBP72.0 million.
Provident did however take a GBP23.8 million charge against 2019 relating to the costs of fending off a hostile, an ultimately unsuccessful, takeover bid from smaller peer Non Standard Finance PLC.
Provident's cost-to-income ratio worsened slightly in 2019, rising to 42.8% from 42.3% in 2018.
Provident declared a final dividend of 16.0 pence, up 60% on the year before, giving a total dividend of 25.0p - more than double the 10p distributed in 2018.
"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," Chief Executive Malcolm Le May said.
The doorstep lender subprime credit card business, Vanquis Bank, saw revenue slip 9.9% year on year in 2019 to GBP580.9 million from GBP644.9 million, as customers dropped 3.0% to 1.7 million.
Vanquis ended 2019 with a loan book of GBP28.9 million, up from GBP26.0 million at the same point in 2018.
Moneybarn, its sub-prime auto loans business, generated GBP122.0 million in revenue, up 17% on 2018. Moneybarn's customers jumped 24% to 77,000. Year-end receivables rose 21% to GBP502.1 million.
Satsuma, which provides consumer loans through its online platform CCD, saw revenue fall 14% to GBP295.4 million, as customer numbers slipped 6.8% to 522,000. Year-end receivables dropped 15% to GBP249.0 million.
Le May added: "All of our businesses have progressively tightened underwriting over the last two years and we have built good momentum entering 2020 as we continue to adapt the group to the evolving regulatory landscape and to meet our customers' needs. We are making good progress towards the medium-term financial targets set out at our Capital Markets Day in November."
Shares in Provident Financial were down 3.0% in London on Thursday mid-morning at 437.70 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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