Provident

PROVIDENT’S update has confounded expectations. Peer Cattles, which is in restructuring talks, warned just last week that creditors should brace themselves for heavy losses, yet Provident has managed to remain profitable – with Home Credit finally growing again – up seven per cent year-on-year.

Its statement directly reassures on the fears that have hit the shares recently – the impact of welfare cuts on customer cash flows is insignificant – the capping of benefits that family households can receive at around £500 per week will affect less than one per cent of households served by Home Credit. Its balance sheet is strong – with £300m headroom on its debt facilities, and its gearing ratio below 3.5 times.

An 8.2 per cent dividend yield this year and a ten times price to earnings ratio make the shares attractive.