Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Noted PFG registered a trademark recently called Snowflake. This must be part of the mid-range products the CEO mentioned in the last update. Sounds like they are making moves behind the scenes...Good to see
There wasn't an existential threat for CCD until very recently so there was a misguided view it could be taken back to profit. No chance really but my view is the leadership of CCD was poor, Chris Gillespie was past it and the chief risk officer apparently had a hand in the bungled restructure years ago and somehow has remained in post damaging it further by mismanaging risk as complaints soared. They convinced the group all was well and things could be steadied until Hamish Paton got in there and realised want was going on. For the complaints, I read into this before investing again recently - essentially Provident rolled over loan after loan on many customers and the checks didn't increase as the values did, the continued use of this credit should have triggered more checks under the rules but they didn't bother as the customers paid. Unfortunately payments were often from other credit providers or meant real hardship.
Thanks for the reply fireant and I apologise to the board as I was mistaken. The FCA do have those powers for investment firms even if the parent company is not regulated however not firms such as PFG. That said they could still oppose the scheme, make life difficult for the group and open the door to legal action where there is precedent for parent companies being liable for the actions of a subsidiary. I am invested here so not striking fear for fears sake - we don't know the full impact on the group yet and to suggest (as some have) that this is a slam dunk is not correct either.
There is a lot of misinformation on here. The FCA have the power to order that the group adequately fund redress for the subsidiary or can take action against the group, also Vanquis and Moneybarn will still be regulated by the FCA even after this. It's not like Amigo as Amigo would just go bust where as PFG group has much deeper pockets.
My guess is it could be the FCA challenging Amigos SOA in court. If they do the same to PFG it could potentially cause more redress to be covered by the group even though CCD has been put to sleep
Some good points, I think it'll be sound as a group for at least 10 years but as soon as holiday companies and more retail companies start to latch on to Klarna the sub prime credit cards days are numbered. Its so easy, you can sign in using Facebook and often spread the cost for free, without any rigmarole. It just depends whether the regulators catch up with them before the tipping point.
CCD to be binned (no surprise) at a cost of £100m and 2100 colleagues to go through consultation. Hope the market doesn't react to the news negatively, 100m is less than 2 years losses the way CCD is so its a positive. Also sure that 2100 staff isn't all of them so there must be a belief in this other product mentioned and plans to save some jobs at least. Liquidity at 1bn and head room of 100s of million also strong - as is the move to synergies the business to be product led. Not bad all things considered, thoughts with the staff but for investors may be a value buy today, DYOR
I thought that. Two things are apparent here, firstly the FCA dropped a ball by disclosing those projections and secondly the absolute contempt Malcolm has for the regulator. I am shocked by this '**** you' response however I'm hoping it shows misplaced confidence.
This is a great question. I topped up after the news as it basically said the main group was insulated from problems at CCD, I.e. there is no way the wider group can be liable for its complaints redress. Is there anyone on here who knows more than me that can explain how strong that is? Do the FCA have any powers to force liability for CCD complaints onto the wider group as they surely won't like capping redress at a time when the group is in huge profit and well capitalised etc? If this happens is the group at risk of administration?
Good post Romaron. I have actually added to my holding after this news. I have no inside information but I have been reading debt camel / FOS decisions before I bought in again. This tells me that Provident (Home Credit and Satsuma) did not have better governance than Amigo and seemingly lent repeatedly to people who probably shouldn't have been lent to. Its not the lending per se it seems to be when its loan after loan that causes the problem, when its one or two the ombudsman side with Provident. FOS seem to be going back to 2007 when issuing refunds but Provident appear to go back less. In a nutshell its unsustainable and they will have to hold their hands up at some point. I still bought in as this division has only been a drain on the group for the last 4 years and this brings some finality to it. The only real risk is that obvious contradiction from the group (well capitalised, hundreds of mill in reserves etc) against the home credit part (at a loss, administration) - i.e. Will the FCA and or administrators accept that the group can be flying high with cash to burn whilst short-changing relatively low income customers who have been mis-sold to.
No. The arm that sells these loans is only a small part of the group whose main income is on the near prime credit card market. The group is insulated from the toxicity of the CCD part.
Try again using some form of understandable punctuation
The reaction of the market is understandable but the news isn't that bad, I never realised they could put CCD into administration without the rest of the group. Bad news for the people involved but from an investment perspective it protects the profitable divisions. Only three ways out, administration or liquidation of CCD or scheme accepted. Either way not bad, ill be looking to invest when this bottoms out. DYOR.
Can understand this. I'm holding as I can't sell at this price with my average, it has to be a long term hold for me. I do think there is long term value here if the board concentrate on the profit making divisions and like the article says the headroom and some other fundamentals are sound.
No one will buy it with liability for the back book, I bet its in the billions of risky historical loans. Someone may buy current loans for pennies in the pounds if they decide to cease activity. They should cut their losses now and close it, its very staff heavy so the savings on staff and income for collecting out or selling the remaining book would actually be a boost for the profitable arms. I said before this share is priced well even if CCD didn't exist
Interesting note by Canaccord just now. I realise the board have been given permission to delay results but the fact that they have decided to exercise it when many haven't is concerning. The silence is deafening.
What Business update, you mean more recently than November?
Anyone know why the delay? I'm invested in four financial services firms and the other threes results are due before the end of Feb?
I am a holder and my view on CCD is it is finished. The book has been shrinking for years and it hasn't turned a profit since 2017. No sensible investor holds based on hope that CCD returns to form. It'll either bumble along making a few £s or they'll collect it out. Either way the customers are still there and they'll turn to more digital providers, like personal loans with Vanquis. For me this is still value based on the group despite CCD.
I am a holder and my view on CCD is it is finished. The book has been shrinking for years and it hasn't turned a profit since 2017. No sensible investor holds based on hope that CCD returns to form. It'll either bumble along making a few £s or they'll collect it out. Either way the customers are still there and they'll turn to more digital providers, like personal loans with Vanquis. For me this is still value at 2.50 based on the group despite CCD.