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Provident Financial pulls guidance, suspends dividend

By Michele Maatouk

Date: Friday 27 Mar 2020

Provident Financial pulls guidance, suspends dividend

(Sharecast News) - Doorstep lender Provident Financial was under the cosh on Friday after it pulled its forward guidance and cancelled its dividend due to the Covid-19 pandemic.
The company said there was "no discernible impact" from the outbreak on credit issued, credit quality or collections in the first 11 weeks of 2020.

However, it is continuing to assess the impact of the measures recently announced by the government, together with its own actions on forbearance where it helps customers in difficulty to manage their repayments over an extended time frame.

"We expect both our credit issued and collections performance to be adversely impacted during this period of uncertainty," it said, adding that it's too early to quantify the potential financial impact. As a result, it has withdrawn forward guidance for 2020.

Provident said it has introduced a temporary pause on face-to-face visits in its home credit business, as per government guidelines, while customer experience managers are maintaining relationships through phone, SMS and online.

Given current uncertainty, the company has decided to cancel the 16p per share final dividend. This will preserve ?40m.

Chief executive Malcolm Le May said: "The impact of Covid-19 on the wider UK economy and our own financial performance clearly remains uncertain. However, the decisive actions we are taking, together with our strong capital and liquidity positions, mean that I remain confident in the group's medium-term opportunity."

At 0850 GMT, the shares were down 12% at 222.30p.

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