Provident Financial (LON: PFG) shares surged on Wednesday morning despite the group posting a £28m pre-tax loss for the first six months to the end of June.
The loss was compared to a £43.1m profit for the same period in 2019 – however, the doorstep lender still performed ahead of expectations amid the pandemic.
Revenue fell from £501.5m last year to £445.5m. Amid the pandemic, the group has said that it will not pay out its interim dividend (H1’19: 9.0p per share) and aims to continue payouts when operational and financial conditions normalise.
“The first six months of this year have been the most difficult and testing in my career. However, I am very pleased with how well the Group has responded to the challenges brought about by Covid-19, and how effectively we have operated. We are reporting an adjusted loss before tax for the period of £32.6m, this result is better than our initial view of Covid-19’s potential impact on our businesses. Pleasingly, within this number Vanquis Bank and Moneybarn were both profitable,” said the chief executive, Malcolm Le May.
“Looking forward, our strong financial position will mean that we can keep helping, and responsibly lending to, our customers, many of whom are key workers, as we, and they, face the challenge of furlough support ending and unemployment rising in the coming months. Provident Financial has performed robustly in the first half of the year because we focused on our customers, colleagues and strengthening our balance sheet for the challenges the pandemic would bring.”
“In fact financial and operational performance were better than expected, and therefore we have decided to repay all furlough support to the government. We believe this is the right thing to do, and on behalf of customers have also advocated the government should support wider funding for the sector. Our market will grow due to the pandemic, but at present it appears the supply of credit into the market is decreasing, which cannot be a good outcome for customers, nor a public policy one for the UK,” he added.
Provident Financial shares (LON: PFG) are trading 12.93% at 221.00 (0856GMT).