Provident Financial FY10 Profit Increases - Update

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Home credit provider Provident Financial Plc (PFG.L) Tuesday reported higher profit for fiscal 2010, as revenues increased and collections from customers remained sound. The company issued a confident outlook for the year.

Profit attributable to equity shareholders for the year ended December 31, 2010 increased to 101.5 million pounds (about $165 million) from 88.6 million pounds in the previous year. On a per share basis, earnings advanced to 76.6 pence from 67.3 pence in 2009.

Full-year adjusted earnings increased to 104.0 million pounds or 78.5 pence per share from 93.7 million pounds or 71.2 pence per share reported a year ago.

Pre-tax profit grew to 142 million pounds from last year's 125.7 million pounds. Profit before tax and exceptional costs rose 11.1 percent to 144.5 million pounds.

Revenue increased to 866.4 million pounds from 815.6 million pounds in the prior year. In Home Credit, profit edged up to 129.1 million pounds from 128.9 million pounds and revenue increased 4.1 percent to 701.1 million pounds.

According to the company, demand for credit was subdued in the first nine months of the year, while the last quarter found an improvement. "...a strong focus on collections and the early actions taken to manage margins and reduce costs underpinned profitability," the subprime lender said.

Vanquis Bank's profit in the year surged 89.4 percent to 26.7 million pounds. Revenue increased 23.4 percent to 162 million pounds.

Customer numbers increased 5.7 percent to 2.41 million and Average customer receivables advanced 4.4 percent to 1.05 billion.

The company's directors recommended a final dividend of 38.1 pence per share, flat with last year.

Looking ahead, Peter Crook, Chief Executive of Provident Financial, said, "Both Home Credit and Vanquis Bank have made a good start to 2011. Combined with our strong funding and liquidity position, we are well placed to continue to deliver good quality growth through this year. When the UK economy begins to recover, we see an enhanced opportunity to build on our leading position in the UK non-standard consumer lending market."

PFG.L is currently trading at 1,031 pence, down 2 pence, on 74,764 shares.

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