Non-Standard Finance losses widen after failed Provident Financial bid
By Michele Maatouk
Date: Tuesday 20 Aug 2019
(Sharecast News) - Lender Non-Standard Finance reported a widening of its pre-tax losses on Tuesday as it was hit by costs associated with a failed £1.3bn bid for larger rival Provident Financial.
In the half year to 30 June, pre-tax losses widened to £22.8m from £2.6m in the same period a year ago as the group took an exceptional charge of £25.3m. This includes fees and costs associated with the Provident offer of £12.7m, and a £12.5m writedown on the value of its Loans at Home business.
Normalised revenue rose 12% during the half to £88.3m, reflecting "strong" growth in both branch-based lending and guarantor loans, which the company said more than offset a small drop in home credit.
The total loan book grew 26% to £335.6m as guarantor loans rose 53%, and NSF lifted its dividend by 17% to 0.7p a share.
NSF said that since the end of June, it has continued to experience strong loan book growth in branch-based lending and guarantor loans, while demand in the more mature home credit market remains steady.
Chief executive John van Kuffeler said: "Whilst we believe strongly that a combination with Provident Financial would have accelerated the delivery of benefits for customers, employees and shareholders, each of our businesses continued to perform well during the first half. Our strategy remains unchanged and we remain on course to deliver attractive long-term returns through a combination of income and capital growth.
"As well as fees and other deal-related costs, exceptional items in the first half also include an impairment charge for Loans at Home goodwill. Whilst Loans at Home is highly profitable, is performing strongly and is ahead of plan, the significant decline in the peer group multiples since December 2018 has prompted the impairment of the goodwill asset in the group's balance sheet. We are continuing to see a strong level of demand in both branch-based lending and guarantor loans while in the more mature home credit market, demand remains steady."
At 0950 BST, the shares were up 0.3% at 33.70p.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN