Provident Financial's first half profit increases

23rd Jul 2013 14:52

Provident Financial, which provides credit in the UK and Ireland, saw its first-half pre-tax profit before restructuring costs increase 7.0 per cent to 76.5m pounds ahead of the prior year.Adjusted earnings per share grew 7.9% to 43.5p reflecting the reduction in the statutory rate of UK corporation tax from 24% to 23% on April 1st.Customer numbers rose 5.5% to 2.7m and average receivables jumped 13.3% to £1.4bn.The company achieved annualised capital of £116.7m, in excess of dividends payable of £108.3m.Provident increased its interim dividend by 7.6% to 31.0p per share.Chief Executive, Peter Crook, said its Vanquis Bank operation helped to drive results with UK profits up over 70%."The business continues to generate strong customer growth and margins through developing the under-served non-standard credit card market whilst continuing to apply tight credit standards," he said.It offset a slump in the company's Consumer Credit Division which experienced weaker demand from the home credit customer base.A rise in day-to-day living costs put pressure on household disposable incomes and reduced confidence. "In view of lower activity levels, action has already been taken to reduce the cost base which will benefit the financial performance of the business in the second half and beyond," Crook added.In an effort to reduce costs, the company has slashed 170 jobs at an exceptional restructuring cost of £4.5m. It is expected to deliver cost savings of £10m in the second half.Shares were up 2.52% to 1,628p at 15:09 on Tuesday.RD