Provident Financial plans to pay an exceptional dividend

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The bosses at Provident financial group are considering the advisability of distributing an exceptional dividend to their investors in a context of improving the group’s financial performance.

The company, which withdrew its dividend at the height of the pandemic, said it plans to distribute 30% of its profits as dividends if economic conditions continue to improve.

The subprime lender said customer demand reached pre-pandemic levels in the three months leading up to the end of September.

Dividend? Provident Financial Group bosses wonder whether to pay their investors an exceptional dividend

Provident said an analysis of data from its clients indicated that the end of the leave “is likely to have a smaller impact on unemployment than previously thought.”

Customer spending increased 20% from the previous year and 5% from September 2019, the group said.

Managing Director Malcolm Le May said: “The group’s business performance in the third quarter improved significantly due to more favorable macroeconomic conditions reducing the impact of IFRS 9 accounting combined with customer demand for credit returning to levels of ‘before the pandemic.

“Subject to these improvements continuing on a similar trajectory through the end of the year, the board would consider declaring an ordinary dividend of approximately 30% of the current adjusted PBT1 for fiscal year 21. . “

Peel Hunt analysts said: “Provident Financial Group’s 3Q21 transaction update indicates higher loan demand, better-than-expected credit trends and improved dividend forecasts.

“We see this update as positive for both earnings estimates and stock ratings. We will update our perspective on the assessment shortly. ‘

Provident Financial shares are currently up 1.07% or 3.40 pence to 320.00 pence at the moment. A year ago, the share price was 203.60 pence, marking an increase of around 56% from a year ago.

In August, Provident said its statutory losses hit £ 44.2million in the first six months of this year.

But, excluding its consumer credit division, the group’s adjusted profit jumped to £ 63.5million from £ 4.9million the year before.

More than four million of the lender’s clients can seek compensation after the High Court gave the green light to the group’s repayment plan in August.

Affected Provident clients who have been sold unaffordable loans by the subprime lender will need to register through an online portal in order to initiate their claims.

Claims must be made before 5 p.m. on February 28, 2022.

The Compensation Plan applies to borrowers who have been sold unaffordable loans between April 6, 2007 and December 17, 2020 from any of Provident’s personal credit brands.

These are Provident, Satsuma Payday Loans, Greenwood, which was a home lender that has been missing since 2014, and Glo, which is a brand of loan guarantor.

In March, Provident announced the plan of arrangement for its Consumer Credit division, and in May, it announced the closure and management of the liquidation of the division.

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