StockMarketWire.com - Subprime lender Provident Financial swung to a first-half loss and scrapped its interim dividend, as its revenue fell and impairment charges grew amid the Covid-19 pandemic.

The company, however, said it had nevertheless performed better than expected and had repaid furlough support to the UK government.

Pre-tax losses for the six months through June amounted to £28.0m, compared to a profit of £43.1m.

Revenue fell 11% to £445.6m while impairment charges rose 45% to £240.3m.

Provident Financial said it had decided not to pay a dividend with the continued aim of preserving capital and supporting business stability.

'However, it remains the group's intention to resume dividend payments to shareholders as soon as operational and financial conditions normalise,' it added.

Chief executive Malcolm Le May said the first half had been the most difficult and testing in his 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,' he said.

'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.'



Story provided by StockMarketWire.com