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It is interesting to note that NSFmake noises about the quality of the Provident Home credit divisions management team,but fail to say they took over a very profitable Loansathome4U Home credit division made redundant the successful management team put in thier own senior management team led by Mark Bardsley and within a year sacked 11 out of the 12 they put in place including CEO Bardsley.
The company they bought had 32 million assets they overpaid 50 million paying 82 million,the old company made 6million profit each year consistent and how much has NSF made in this division 1-5 million each year !
Look at the accounts in depth this is a cheeky offer they don’t have the trackrecord to succeed.
There was a court case today on Pimlico Plumbers owner Charlie Mullins,who self employs his plumbers he lost although he will appeal. If this case is upheld which is likely it will vindicate The home credit division descion to employ the agents,it is a nightmare for all other home credit company�s ie :Morses,Non standard Finance ect. The FCA will be watching with interest because they never liked self-employed agents on commission to collect money or sale into existing customers. It was always the biggest fear HC had when I was a director although not for Provident.
I watch the posts with interest and the only note caution I would say is even when the results are announced the coming year will have its challenges.The FCA will fine and or make Provident make good any money that needs to be paid back to customers in Moneybarn & Vanquis. This is anyone�s quess but could be from 200 to 300 million,this will diminish reserves of the company.Also the FCA are looking at home credit and high cost credit,with regards to the reloaning of customers accounts before the current balance is paid off.If this pratice is stopped it will hurt all home credit company�s bottom line,I say this with knowledge of the home credit industry because I was a director in one of the top four for twenty years. I still think when this year is over and all bad news has filtered through,and the home credit is a much streamlined company,that Provident within three years will returned to being very good value. The share price in the long term will I am sure be hitting the �15 share,but not in the near future.
Drspace name calling people who post something you don't agree with is pointless,results speak for themselves and the home credit division is dire.They have got rid of the CEO,head of compliance and more recently head of marketing and agent building. These were all part of JK dream team,so it does not take a rocket scientist to work out they got it badly wrong in the first 18 months.They will never do well unless the inpairment comes down from the 15% they have to a modest 6-7%,the business model can only work within the gross profit it has to work with. If you only have a 40% margin how will you ever make money when your expenses are 25m impairment 15m and your turnover is around 80m ? These are facts in a home credit model the previous owners worked within this model and produced consistent profits year on year ! Which is why NSF payed over the top for them.
Not sure what the previous Drspace is looking at but the results are anything but solid ! If you look at the home credit alone impairment 15m the past owners reported 5m per year,expenses 25m past owners 17m reported. The player in this company is Everyday loans who look to be progressing well Provy will have no competition from a badly run home credit company who cannot control its debt or expenses. And don't forget they put a dream team of management in and have changed the lot in 12 months again !
Nsf today put a notice noting that the number 1 player Provident intends to Employ all agents in the future,and that they intend to keep all agents self employed. In practice sounds good but HRMC might have other plans to be self employed their must be no control,Loansathome4u made over 40 employed agents redundant last Christmas and then gave them self employed contracts on the SAME areas.Proving no difference ! Loansathome4u will in time have to follow suit no matter what they think today !
Not good news for the future of the home credit division Provident the number 1 player in this sector has announced plans by July of this year to propose Employing all 2500 agents instead of self-employment. For Loansathome4U with 750 agents this would increase weekly costs from commission to Employment by around 30% taking into account minimum wage and Employers N.I contributions. And that's not taking into account the cost of holiday pay .Surely this has been triggered by the need for a F.C.A licence.Any viewpoints
Only 18 months into the purchase of the Home Credit division Loansathome4U and the MD M.Barrdsley who the chairman John Van Kuffeler gave great Kudos to is put on garden leave. Does that mean the profits are not the 6 million the previous management hit year in year out.? Looks like some big excuses about to come out.Always worrying when a winning formula is changed !
Their investor day announcement does not read well for the home credit purchase spent a lot of money increasing agent numbers,now consolidating and reducing by 90 ! What a waste of shareholder money.