Profits grow at Provident as collections rise

SHARES in subprime lender Provident Financial closed more than five per cent lower yesterday despite its profits rising 11 per cent in 2010.

Growing demand for loans and better debt collection pushed pre-tax profit to £144.5m from £130.1m in 2009, while earnings per share also gained ten per cent to 78.6p, from 71.4p in 2009.

Profits at Provident’s credit card division Vanquis soared 89.4 per cent last year, to £26.7m from £14.1m in 2009, as its customer numbers grew by 28 per cent. Profits also rose slightly to £129m in its home credit arm after a pick-up at the end of 2010.

But the market had expected a higher profit result after the group, which lends to below-average earners, said its results would be better than forecasts. Its shares ended down 5.18 per cent at 979.5p.

Chief executive Peter Crook said it was “well placed to continue to deliver good quality growth” in 2011.