LSE:PFG

Stock Analysis Report

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Executive Summary

Provident Financial plc provides personal credit products to the non-standard lending market in the United Kingdom and the Republic of Ireland. More Details


Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has Provident Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PFG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-12.3%

PFG

-8.5%

GB Consumer Finance

-3.3%

GB Market


1 Year Return

-52.3%

PFG

-50.4%

GB Consumer Finance

-17.2%

GB Market

Return vs Industry: PFG underperformed the UK Consumer Finance industry which returned -50.4% over the past year.

Return vs Market: PFG underperformed the UK Market which returned -17.2% over the past year.


Shareholder returns

PFGIndustryMarket
7 Day-12.3%-8.5%-3.3%
30 Day-20.6%-13.7%-3.7%
90 Day11.6%0.8%-3.4%
1 Year-52.3%-52.3%-49.8%-50.4%-13.8%-17.2%
3 Year-66.4%-76.6%-59.6%-68.7%-8.3%-19.5%
5 Year-90.4%-93.8%-84.9%-89.9%18.8%-8.1%

Price Volatility Vs. Market

How volatile is Provident Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Provident Financial undervalued compared to its fair value and its price relative to the market?

13.45x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PFG (£1.95) is trading above our estimate of fair value (£0.71)

Significantly Below Fair Value: PFG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: PFG is poor value based on its PE Ratio (13.4x) compared to the GB Consumer Finance industry average (6.7x).

PE vs Market: PFG is good value based on its PE Ratio (13.4x) compared to the UK market (17.4x).


Price to Earnings Growth Ratio

PEG Ratio: PFG is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: PFG's PB Ratio (0.7x) is in line with the GB Consumer Finance industry average.


Next Steps

Future Growth

How is Provident Financial forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

87.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PFG's forecast earnings growth (87.3% per year) is above the savings rate (1.2%).

Earnings vs Market: PFG's earnings (87.3% per year) are forecast to grow faster than the UK market (23.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PFG's revenue (7.6% per year) is forecast to grow faster than the UK market (6.3% per year).

High Growth Revenue: PFG's revenue (7.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PFG's Return on Equity is forecast to be low in 3 years time (13.5%).


Next Steps

Past Performance

How has Provident Financial performed over the past 5 years?

-34.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PFG has a large one-off loss of £26.8M impacting its June 30 2020 financial results.

Growing Profit Margin: PFG's current net profit margins (8%) are lower than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: PFG's earnings have declined by 34.4% per year over the past 5 years.

Accelerating Growth: PFG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PFG had negative earnings growth (-46%) over the past year, making it difficult to compare to the Consumer Finance industry average (13.7%).


Return on Equity

High ROE: PFG's Return on Equity (4.9%) is considered low.


Next Steps

Financial Health

How is Provident Financial's financial position?


Financial Position Analysis

Short Term Liabilities: PFG's short term assets (£3.0B) exceed its short term liabilities (£1.1B).

Long Term Liabilities: PFG's short term assets (£3.0B) exceed its long term liabilities (£1.5B).


Debt to Equity History and Analysis

Debt Level: PFG's debt to equity ratio (320.2%) is considered high.

Reducing Debt: PFG's debt to equity ratio has increased from 256.9% to 320.2% over the past 5 years.

Debt Coverage: PFG's debt is not well covered by operating cash flow (14.6%).

Interest Coverage: Insufficient data to determine if PFG's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is Provident Financial current dividend yield, its reliability and sustainability?

3.88%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate PFG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate PFG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PFG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PFG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: PFG is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PFG's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

Malcolm Le May (62 yo)

2.58yrs

Tenure

UK£1,507,000

Compensation

Mr. Malcolm John Le May is Co-Founder of Juno Capital LLP and serves as its Chairman and Advisor. Mr. Le May joined Juno Capital LLP in July 2015. He serves as Non-Executive Director at IG Group Holdings P ...


CEO Compensation Analysis

Compensation vs Market: Malcolm's total compensation ($USD1.91M) is above average for companies of similar size in the UK market ($USD1.23M).

Compensation vs Earnings: Malcolm's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Malcolm Le May
CEO & Director2.58yrsUK£1.51m0.21%
£ 1.0m
Neeraj Kapur
CFO & Director0.42yrno datano data
Greg Cant
Director of Corporate Finance & Developmentno datano datano data
Conor Breslin
Group Chief Information Officerno datano data0.031%
£ 151.0k
Gary Thompson
Head of Investor Relations and Group Financial Controllerno datano datano data
Charlotte Davies
Group General Counsel1.67yrsno data0.0045%
£ 21.9k
Richard King
Group Corporate Communication Directorno datano data0.018%
£ 89.9k
Cheryl Ball
Group Human Resources Directorno datano datano data
David Merrett
Chief Strategy Officer2.5yrsno datano data
Susan Wilkie
Head of Taxno datano datano data
Ele Thornhill
Finance Head of Consumer Credit Division2.58yrsno datano data
Shaun Brown
Interim Group Chief Auditorno datano datano data

2.5yrs

Average Tenure

Experienced Management: PFG's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Malcolm Le May
CEO & Director2.58yrsUK£1.51m0.21%
£ 1.0m
Neeraj Kapur
CFO & Director0.42yrno datano data
Charlotte Davies
Group General Counsel1.67yrsno data0.0045%
£ 21.9k
Angela Knight
Independent Non-Executive Director2.17yrsUK£104.00kno data
Patrick Joseph Snowball
Chairman2yrsUK£320.00k0.038%
£ 187.8k
Paul Hewitt
Independent Non-Executive Director2.17yrsUK£103.00k0.014%
£ 66.6k
Elizabeth Chambers
Independent Non-Executive Director2.17yrsUK£119.00k0.0048%
£ 23.4k
Andrea Blance
Senior Independent Director2.58yrsUK£118.00kno data
Robert East
Independent Non-Executive Director1.25yrsUK£39.00k0.0020%
£ 9.7k
Graham Lindsay
Independent Non-Executive Director1.42yrsUK£64.00k0.0039%
£ 19.0k
Margot James
Independent Non-Executive Director0.17yrno datano data

2.0yrs

Average Tenure

62yo

Average Age

Experienced Board: PFG's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Provident Financial plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Provident Financial plc
  • Ticker: PFG
  • Exchange: LSE
  • Founded: 1880
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: UK£488.234m
  • Shares outstanding: 250.76m
  • Website: https://www.providentfinancial.com

Number of Employees


Location

  • Provident Financial plc
  • No. 1 Godwin Street
  • Bradford
  • West Yorkshire
  • BD1 2SU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FPLP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 1993
PFGLSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 1993
PRVADB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 1993
PFGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 1993
FPLP.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDAug 2008

Biography

Provident Financial plc provides personal credit products to the non-standard lending market in the United Kingdom and the Republic of Ireland. The company operates through Vanquis Bank, Moneybarn, and Con ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/26 02:57
End of Day Share Price2020/09/25 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.