Friday 8 March 2019 9:07 am

Non-Standard Finance targets Provident takeover despite rejected bid

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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Sub-prime lender Non-Standard Finance is continuing to target a takeover of troubled rival firm Provident despite its offer being rejected, the company revealed in its full-year results this morning.

The figures

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Revenue increased 47 per cent to £158.8m from 107.7m in the 12 months to the end of December last year.

The firm saw pre-tax loss narrow to £1.5m from £13m the previous year, and the loss per share shrink from 3.26p to 0.54p.

Non-Standard Financial said its dividend per share was 2.6p, up 18 per cent from 2.2p the previous year.

The total net loan book increased 29 per cent to £310.3m across the firm’s branch-based lending, guarantor loans and home credit divisions.

Why it’s important

The firm made an offer to acquire rival firm Provident Financial at the end of last month, but was rejected by the company.

However, in its full-year results today Non-Standard Finance made it clear that it would continue to pursue the £1.3bn deal, which has received the backing of prominent shareholders.

The company said today that it has received undertakings to accept the offer and letters of intent to accept the offer for 49.4 per cent of Provident’s issued share capital.

“NSF intends to capitalise on its operational and commercial success by acquiring and transforming Provident to unlock substantial value for all shareholders of, and stakeholders in, both Provident and NSF,” the company said.

“The offer, once complete is expected to create a well-balanced group with leading positions in some of the most attractive segments of the nonstandard finance sector.

As part of the proposed deal, Non-Standard Finance will complete a demerger of its home credit business Loans at Home to win Competition and Markets Authority approval.

What Non-Standard Finance said

“2018 saw the Group continue to make good progress. It also marked the conclusion of a period of significant investment in the Group and structural change, so that we are now delivering sustained earnings growth.

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“The fundamental drivers of our business remain robust: we are delivering strong loan book growth whilst maintaining tight control over impairment and have high risk-adjusted margins in all three business divisions.

“Having made a good start to the current year we remain confident in the full year outlook and are pleased to recommend a final dividend of 2p per share making 2.60p for the year as a whole, an increase of 18 per cent over the prior year.”