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Appleby spot on I think at this point NSF should be looking in the rear mirror what they tried with Provident could happen to them.
If anyone was willing to tak3 on the debt which I doubt !
After studying JVK presentation to the city I am afraid he must think everyone is dumb ! In the home credit division he shows a slide of net loan distribution where he makes the comment (significant shortening of loan book )and shows a chart of length of loans at Dec 2015 until Dec 2019 .JVK also states significant increase in core 46 week product all colour coded for ease of following.
1.When they purchased the loan book core product was a 41 week loan 51% of loan book JVK has increased the term to 46 week more profit for them less value for the customers .
2.when purchased the longest loan was 72 weeks only 2% of loan book this was increased by the management in July 2018 to a 76 week loan and 23% of loan book.
3.Dec2019 77 week loan 8% of loan book and 63 week loan 10% of loan book still 16% more than when purchased and yet JVK brags we are shortening loan book !
4.Significant increase in 46 week core product yet Dec 17 61% Dec 18 61% Dec 19 63%
Come on JVK if you are going to show charts to the city it’s a pity they can’t understand them !
Fast food is correct you don’t lend you collect your debt out because these are sub prime debts if you don’t generally feed the customer with money ie more loans they have no real reason to keep paying the terms you ask of them.
Look at the accounts it cost 103m to run the company 27m to pay the finance costs aNd at present 45m impairments total of 175m coming out of cash flow annual.
If you don’t lend Impairments will increase month on month even collecting a buisness out is risky and not guaranteed!
On top of that the FCA are hot on giving customers every help they can if they hit problems,and with COVID-19! More customers will hit worsening financial positions.So please don’t think just because the CEO says we are in the right place in a recession THEY are not when you owe more than you have in net book debt that is primarily sub-prime.And I worked in the Industry for 21 years so know from personal experience the inner working of the buisness.
Fast food that’s the million dollar question where has the money gone ? I think fast food you already know but others don’t when this company listed the shares were £1 each how to destroy a company in five years.It now becomes obvious why the original finance officer jumped ship it’s sinking fast !
Writing is on the wall 345million debt even though 60 plus in bank it looks likely the best way to save the company is to sell off a part .
The Home Credit would be the easiest part to offload even Provident might have a go ! but more than likely Morses or IPF who have the cash.
I think the board were less than honest about why the accounts were late and used COVID-19! As an excuse.
The only saving grace about these type of buisness’s are you can always collect the cash out only in the home credits case if you don’t keep reserving the customers with loans more will default ,with no reason to pay unsecured loans.
Watch this space.
Depends what your priorities are these are unsecured loans so defaults will be high the same as Home Credit unsecured.
The FCA forbearance will stop the companies pushing the customers too hard for payment,and with the guarantor loan division just like amigo loans that will struggle
At what point is this company Bankupt !
Lost on market capitalisation another 10m now only 31m debt pile 300m plus another 300m plus of shareholder capital only worth 10% of what was paid .
Bet the fat cat directors don’t take a pay cut !
In April when the results are out they will be dire and no doubt they will use the excuse of the virus,truth is the futile attempt to buy Provident killed this company off not the virus.The virus will kill off 2020 profits it will be interesting to see if any one has the stomach to buy this fledgling buisness .I doubt it !
This company does not bode well it announced in the interims that the total borrowing was 321 million if you considered the shares started out life at £1 each and now there are 312 million in circulation,and market capitalisation is now only 42million.
If you also can’t call on your Home Credit customers for the weekly cash this company is heading one way,I would not be surprised if at the very least they sell off the Home Credit Division or they are ripe for takeover!
Watch this space
All collections in branch-based lending and guarantor loans are already remote and our staff are continuing to service our customers over the phone and online. In home credit, while our agents are no longer calling at customers' homes, they have been encouraging customers to make use of a variety of remote collections options that are now available both online and over the phone so that we can continue to make collections as planned.
Whilst it is hoped that these measures will be in place for a temporary period only and that the Group can soon return to normal business practices.
This is a post by NSF which translates to what I was saying earlier that agents can’t call on customers,and although customers could pay by card on the phone knowing the sub prime buisness well after 21 years in the sector this is company speak for the cash will fall dramatically!
This will affect all Home Credit Company’s.
You misread Provident have announced in the February accounts that HRMC are looking at all companies that use self employed agents to collect.
Provident are ahead of the curve and already employed all agents and took the hit on profit under the supervision of the FCA,who will insist on using the Provident model of Employment of agents as well as the HRMC.
Forgot to add that Morses like Provident is a very well run company and if Carp10 is correct and Morses collect 30% on card they collect over 2 million a week so after 30% card still leaves them with 1.5 million face to face collections per week.
For people who just invest and don’t know the mechanics of Home Credit these buisness’s have always worked because of the face to face interactions,they are probably the last buisness’s that still call on a weekly basis to customers that is why they have lasted so long.
But the buisness model has to change with cash becoming less popular and if you read Provident’s latest accounts the HRMC are looking at the model of self-employed agents ,these company’s will be forced to Employ agents in the not too distance future and Provident have already done this and took the hit.
Watch this space !
It takes a good banking IT system to allow Offices to take card payments and it is well regulated but even if Provident took 30% on card out of 6million cash collected each week still leaves 4.2 million EACH week in face to face transactions.
Plus don’t forget these are UN secured loans sub-prime when money is tight the last thing a lot of customers will be thinking of paying is Home Credit.
Plus multiple customers use all the companies at same time with multiple loans.
They only tested the market late 2019 in one area and are rolling out this year 2020 95% of all money collected in the Home Credit Division will still be cash each week or month.
What everyone needs to understand is that home credit division depends on agents collecting payments face to face weekly.I now am retired in Spain but previous worked in senior management in this sector although not Provident.
Uk will have to follow soon Spain’s and Italy example of closing pubs and restaurants and non essential retail.And like Spain confine people to homes except to visit supermarkets and pharmacies.
So there would be no way agents could collect money because of restrictions and social distancing,and in this sector sub-prime the customers in the main do not keep the money when they miss.This in turn creates arrears which do not recover,agin the cash collected falls through the floor and creates problems for the company.
This is not limited to Provident ie;NSF and Morses will also be affected.
Profit warning now the operating manager gone Mike Palmer plus one of thie Divisional Managers gone today what next for this failing Home credit company.
My prediction is Home Credit will be sold off at a great loss to the 82million it was bought for well done JVK you sure know how to ruin a buisness!
Well the cats out of the bag coded message for it’s not as good as we expected along with two of the four original Directors stepping down now.
Along with the ridiculous attempt to take over Provident which will have an exceptional cost this year of around 12 million this company is on the way out ! Don’t be surprised if they try to catapult the Home Credit Division out for a heavy loss on what they paid of 82 million.
Wait and see already shares showing a 72% loss since inception.
I find it hard to believe that you can still pay dividends when you are posting a 25m loss !
How ever you dress the figures up with this loss the company has not made a profit in the 4 years it has been in operation,lost 65% of its valuation since conception shares standing around the 34 mark.
And when the Inland Revenue hit the Home Credit with having to employ the 892 self employed agents which it will just like Provident did then that section of The buisness can’t make a profit.Good buy at 82 m Mr JFK.
You are living in the past with how good Provident Home Credit was the game has changed you just don’t see it OR do you and that is why you want to spin off the Home credit.Your profit for that division was better in the first six months getting towards what it was when you bought it but you have double the branches and 300 agents more So productivity per agent is poor compared to the time you bought it.Time to move on JFK let someone younger run the company.
Funny I was right Woodford sells 5% of stock in Provident more to follow in coming weeks.
Well Mr Kuffeler you and your board should be ashamed of yourselves you have cost shareholders of Provident circa 22 million and NSF 10 million plus which will mean no dividends paid out for this years trading.I can’t see Woodford and co being happy with that !
He was foolish to back you and will properly end up selling his stock because of the bad publicity,serves you all right and if you were decent you would resign !
Well done Provident board for sticking it out onward and upward
Well Mr Kuffeler you and your board should be ashamed of yourselves you have cost shareholders of Provident circa 22 million and NSF 10 million plus which will mean no dividends paid out for this years trading.I can’t see Woodford and co being happy with that !
He was foolish to back you and will properly end up selling his stock because of the bad publicity,serves you all right and if you were decent you would resign !