Non-Standard Finance warns of going concern risks as coronavirus hits

NSF's chief executive, John van Kuffeler, said: “The last 18 months have been difficult and disappointing for Non-Standard Finance with the failure of our offer for Provident Financial .

“The fall in sector values necessitating large write-downs in the values of our three principal subsidiaries and the Covid-19 pandemic which has paralysed the UK economy.”

Bradford-based Provident took a £24m hit after defending itself against the hostile takeover bid by Leeds-based NSF, which eventually failed.

Today, NSF reported a pre-tax loss of £76m for 2019 after an exceptional charge of £81m, that included a non-cash charge of £66m relating to goodwill impairment, fees and costs associated with the offer for Provident of £12.8m, and restructuring costs of £2m.

Analyst Gary Greenwood at Shore Capital said: "Following a lengthy delay while audit work was completed, Non-Standard Finance has published final results for the year to December 31.

"These reflect a particularly challenging period for the group, brought about by the failed offer for Provident Financial (resulting in material exceptional charges), a decline in sector valuation multiples (giving rise to further significant non-cash fair value write downs) and the onset of Covid-19 (which has led to a significant reduction in lending activity since the period end).

"In addition, the group has been required to restate its prior year accounts to reflect an error in the calculation of loan losses on transition to IFRS 9."

Mr Greenwood said NSF's statutory pre-tax of £76m was significantly worse than expected due to much larger than expected non-cash write-downs in goodwill associated with the group’s three principal subsidiaries (branch-based lending, guarantor lending and home credit).