Davala
22 Feb 2019
Take over bid Its a done deal . Market must like it! £5.92 !
Boring_Bernie
22 Feb 2019
Take over bid Under the current circumstances, the Provi sp should rise and fall pretty much in tandem with that of NSF. The market clearly sees a benefit in NSF taking over Provi, so, as I type, NSF’s sp is up roughly 16% to ~67p, so all that’s happening is that Provi’s sp is rising to reflect that. BB
Davala
22 Feb 2019
Take over bid If the bid is only worth £5.11 why are the shares £5.69. I bought them because woodford still believes! took a punt, a little down, maybe a bigger company will do better but this does seem opportunistic as they havent really had a chance to recover
romaron
21 May 2018
Re: IC tomorrow Memory jogger there. I was fortunate in passing the 11+ and if it wasn't for the 'provvie cheque' my parents couldn't have afforded the uniform. I'm not sure if they still operate the facility. More likely that your dad's old business has disappeared and parents buy from Tesco and Primark now. Probably not many now remember the 'provvie' and most know it as Moneybarn, Vanquis or Satsuma. PFG provided a social function back then by providing affordable loans. The world is far more cut-throat today and even the term 'door-step lender' sounds archaic. There is a lot of knowledge in the DNA of PFG and I don't see a need for a 'non-standard' lender disappearing but with everybody seemingly owning a smart phone the door step lender is going the same way as the gas street lighter and Woolworths. Transition is happening at such a pace nowadays but as they say, 'what doesn't kill you makes you stronger'. I think PFG has a good future and is probably one of the cleanest lenders out there.I know Harlesden well. I used it as an alternative to the North Circular when going South of the river. Like you I never imagined I'd own shares in the Provvie.
Davala
21 May 2018
Re: IC tomorrow My dad had a little shop in Harlesden North London, selling children's wear, and he took Provident vouchers from a few customers.Do they still operate in this way or only money lenders now.I know with dad he had to pay a commission from the gross amount he received, so Provident earned from the borrowers as well as the shops where they spent the moneynever thought i would end up an investor in the company, directly and with Woodford
romaron
21 May 2018
Re: IC tomorrow Hi FRTEB, I am definitely not 'gammon' but fit the age demographic so still shout at the television from time to time. I have been on both sides of the fence with PFG. As a child growing up on a council estate they saved my family's bacon a few times. My parents always repaid the loan and the Moneybarn borrowers will consist of various types of borrowers. In this litigious age there are always T&C which PFG have been more meticulous than most. I took out a Vanquis credit card not because I needed it but to see how the process worked. I received several phone calls and spent over an hour answering questions. What annoys me is the assumption that the evil money lender is taking advantage of innocent borrowers. A percentage of borrowers are feckless whilst others are actually criminal. Of course there is always one person or families whose personal situation is dire through no fault of their own and deserve sympathy and help but the 'nanny state' includes many who put themselves there with a combination of laziness and a feeling of entitlement. I get enraged about the NHS too.Many sit on theirarses waiting for the benefits and carers to turn up. There are two in my family guilty of this but what is more concerning is that, if they want to die sooner, that is their choice but it should be conditional on them purposely not helping matters by, for example, excessive drinking, smoking, being overweight and not taking any form of exercise. If PFG isn't there to lend a vacuum will be created and filled by far worse lenders imo.I just looked at the share register. 72 percent is held by institutions holding more than 4 percent. Add in those below 4 percent and this is a company with strong institutional support who on balance aren't mugs. The FCA daily shorts showed that as at last Friday the shorts (above half percent) were 5.44. I think they may be even lower as I am suspicious of the Lansdowne partners 2.19 which seems to have been forever and was taken out at c.£15 watched it go to £26, required short covering and eventually it became a winning bet. I wonder if it is in fact a hedge against another position (never underestimate derivative inventors) ?PFG faced off the shorters back in 2010/11 when I first started investing in the company; it was at the time the most heavily shorted stock in the FTSE. A company that survived 2 World Wars is a bit more resilient than most. I also feel that even if the worse was to happen some US companies that specialise in turnarounds would make a move. Be Lucky
FRTEB
18 May 2018
Re: Hangover Thank you for your thorough analysis.
meisterx
18 May 2018
Hangover nm
FRTEB
18 May 2018
Re: IC tomorrow Last two paragraphs of the article (why do ii chop long posts?) : " Admittedly, there is some regulatory uncertainty over Moneybarn, which is still under investigation by the FCA over the adequacy of creditworthiness assessments, as well as the treatment of customers in default or arrears with forbearance and due consideration, and the provision of information about termination processes. Management took a £20m provision against the expected cost of the investigation last year.Provident has been through the wringer during the past 18 months, but it looks as though it is putting its house in order. Its balance sheet is sturdier, home credit collections are rebounding and loan growth is forecast to re-emerge at Vanquis. What’s more, management expects to reinstate dividends this year, after 2017’s hiatus, and adopt a progressive dividend policy from 2019. According to Numis Securities' forecasts, the payout could hit 56.9p in 2020, equivalent to an 8.4 per cent yield. The shares' price-to-forecast earnings multiple also looks cheap by historic standards and, while far from a given, Numis's prediction of a recovery in return on equity from 13 per cent this year to 29 per cent by 2020 (driving EPS to 81.2p) points to the serious recovery potential on offer. " ---------- ---------- ---------- ---------- ---------- ---------- ---------A good article. Thanks for posting. I think that's a very good overall view of the business and future potential. I hold a sizeable chunk of PFG - bought after the sp fell off a cliff, and I took up my full rights. I intend to hold long term as I think this is a solid recovery play and will see a significant revaluation upwards within the next 12 to 18 months along with a (stated) nominal dividend this year followed by a significant increase in divis next year and beyond. As per the article above, Numis are forecasting a dividend yield of 8+% by 2020. As an income seeker I think PFG is a very strong buy at these levels for those with a little patience.
r21442
17 May 2018
IC tomorrow 2017 was an annus horribilis for Provident Financial (PFG), but we think the group has reached an inflection point. Following its rights issue earlier this year, which boosted its regulatory capital level, the sub-prime lender’s balance sheet is in a more robust position. Home credit collections are steadily improving and expected to return to historic levels next year. What’s more, it has reached settlement with the Financial Conduct Authority over its sale of repayment option plans (ROP), removing a major source of uncertainty hanging over Vanquis Bank. The shares are trading at less than nine times blended consensus forecast earnings for 2019, a discount to its five-year historical average of 13 times. We reckon there's enough value on offer to risk buying into this high-profile recovery play.The calamity that ensued when management decided to reorganise Provident Financial's home credit business torpedoed pre-tax profits last year and the balance sheet. Customer collections and sales nosedived when self-employed agents were replaced with full-time employees, which was partly because software used to schedule collections was chucking out inaccurate data. However, following a management overhaul, this business has been gradually improving its performance, which is being reflected in a rebound in collections. During the first quarter of this year, the headline collections performance was 70 per cent, up from 57 per cent in August 2017 and 65 per cent in September. That’s against an historically more normal rate of 90 per cent at December 2016.The new management team expects the business to start to break even during the second half of this year and be profitable next year. Analysts at Shore Capital forecast pre-tax losses for the consumer credit division – which also includes online lender Satsuma – to narrow to £25.4m this year, from a hefty £119m in 2017, and turn to a pre-tax profit of £16.5m in 2019.The sub-prime lender is now in a position to grow its loan book after it shored up the balance sheet by raising £300m in net proceeds from a rights issue in April. That capital was raised to cover costs associated with its ROP settlement with the FCA, which totalled £172m, including customer balance reductions and cash settlement. It also restored the group’s common equity tier one ratio to back above its regulatory minimum, after it was dented by the losses associated with the consumer credit division last year. At the end of March its CET1 ratio stood at 29.8 per cent, above a regulatory minimum of 25.5 per cent, equivalent to about £120m in surplus capital. That’s consistent with historic levels, management says. The outlook for Vanquis Bank also looks brighter this year. Not only has the group settled with the FCA over the sale of 'repayment option plans' (ROPs), removing a large amount of uncertainty over its prospects, but it has been making progress in growing customer numbers. They were up almost 8 per cent year on year to 1.72m during the first quarter. Meanwhile profits were a little ahead of management expectations with the annualised risk margin tracking ahead of full-year guidance. That built on an 11 per cent rise in customer numbers and 15 per cent growth in receivables last year.However, analysts expect loan growth to be flat this year, partly due to tightening of underwriting standards and the impact of potential new FCA regulation on credit card customers in persistent debt, expected to be introduced this year. Management reckons this will affect future credit card application acceptance rates and its ability to offer credit-line increases. As a result, Shore Capital analysts expect Vanquis’s pre-tax profits to decline slightly this year, but to rise steadily during the following two years, reaching a record high of £210m by 2020. Admittedly, there is some regulatory uncertainty over Moneybarn, which is still under investigation by the FCA over the adequacy of creditworthiness assess
Davala
09 May 2018
Re: Positive update Stop loss kicked into the horizon.Maybe I stepped in a few weeks too soon but it’s hard to buy at the bottom and sell at the top
FRTEB
09 May 2018
Re: Positive update The recovery has already begun! Business is now steadily improving and in line with previous guidance. Sp up almost 8% as I type. I anticipate a steady but boring grind up in the sp over the coming months. A nominal dividend towards the end of this financial year before a return to a progressive dividend policy with 1.4x cover should see (late to the party) income seekers jumping onboard. IMHO now is the time to invest while the sp is still at relatively low levels - it's not hard to imagine the sp being double what it is now within a couple of years.
r21442
09 May 2018
Positive update Hopefully kick-starts the recovery?
Davala
04 May 2018
Re: Hoping for the recovery! This is only going south Ive set a stop loss at £6some u win....
meisterx
04 May 2018
Re: Hoping for the recovery! Rights hangover
