Provident confirms losses as turnaround continues
13 October 2017
Troubled subprime lender Provident Financial confirmed that it will book heavy losses at its consumer credit business this year, but claimed that it is making progress with a turnaround plan.
A management shake-up at the firm's consumer credit business announced last month has "prevented any further deterioration in performance", Provident said.
The group's collections performance in September was 65%, up from 57% in August, whilst sales were only £6 million per week lower than last year, compared with £9 million during August.
Home credit receivables in the month stood at £316.3 million, down 33% from June 2017 and down from £489.2 million in September 2016.
It comes after a brutal few months for the firm which saw a string of profit warnings and a management reshuffle.
Manjit Wolstenholme, who took on the role of executive chairman after boss Peter Crook quit earlier this year, removed Andy Parkinson as managing director of the division as part of a review.
He was replaced by Chris Gillespie, whose efforts are providing the “foundation for delivering the necessary improvement in customer service” as part of Provident‘s recovery plan.
Ms Wolstenholme said: “Since the last update, we have moved quickly to appoint new leadership in home credit who have a deep understanding of the business and recognise the importance of the relationship between our front-line staff and our customers.
“A recovery plan has been developed and a number of actions have already been implemented to restructure the field organisation in order to provide the foundation for delivering the necessary improvement in customer service and financial performance.”
She also confirmed that the hunt for a new chief executive is under way.
As part of turnaround efforts, Provident, which has around 2.5 million customers, launched a new home credit model in July with the aim of moving from self-employed door-to-door agents to full-time “customer experience managers”.
But the lender confirmed on Friday that its pre-exceptional loss this year is likely to be in the range of £80 million to £120 million.
To compound matters, the Financial Conduct Authority is investigating a Repayment Option Plan Provident offers through its Vanquis Bank arm.