Shares in specialist sub-prime lender Provident Financial fell 3.67% to 1,468.00 yesterday despite posting an 11.7% increase in pre-tax profits to £181.1 million on the back of strong growth in its credit card business.
The firm has the UK’s largest home credit operation and provides small unsecured loans, typically of between £300 and £500, to more than two million customers across the UK.
The Bradford company also offers credit cards to customers who may have been precluded by mainstream lenders through its Vanquis Bank operation.
The company yesterday revealed its result for the year to December 31 with the firm enjoying a £19m uplift in pre-tax profits over its 2011 return of £162.1m.
Customer numbers in the year spiked by 8.7% to 2.74m and the total value of loans grew by 12.1% to £1.32 billion.
The company’s consumer credit division (CCD) suffered a £2.4m drag back on pre-tax profits after the amount of new loans being made were tempered by the squeeze on household budgets.
However, overall group performance was hushed ahead by a 61.3% rise to £71.3m in UK pre-tax profits made within the Vanquis Bank operation.
The company said the success of Vanquis was down to the recruitment of new customers in an “under-served” marketplace.
The firm also piloted a new operation in Poland during the year.
Chief executive Peter Crook declared an 11.9% increase in the total dividend per share from 69p in 2011 to 77.2p last year.
He said: “We have now delivered cumulative earnings per share growth of 42.9% over the last three years.
“Our performance is underpinned by the strength of our funding position and lending responsibly through very close attention to credit quality.
“This has allowed us to generate a stable stream of profits from CCD during a period when customers’ household incomes have been under pressure.”