Provident Financial withdraws forward guidance for 2020 following coronavirus pandemic

In an update, Provident Financial said: "The UK and global economies are currently experiencing unprecedented uncertainty as a result of COVID-19.

"The group's immediate priority has been on safeguarding the health and wellbeing of our colleagues and customers.

"Significant steps have already been taken in this regard in line with Government guidance and policy. These include working from home for a significant proportion of colleagues throughout the group; encouraging more customers to make remote payments through the internet, apps or via telephone; and introducing technology to allow some contact centre colleagues to work from home whilst maintaining telephone contact with customers."

The statement added: "In our home credit business, we have introduced a temporary pause on face-to-face visits given the Government's recent measures. Customer Experience Managers (CEMs) are maintaining the customer relationship through phone, SMS and online to support customers and encourage repayment through other mechanisms including the web, card payments via the CEM, contact centre or post office.

"Prior to the Government's recent social distancing measures, approximately 25% of weekly collections were through non-cash methods. In addition, we are introducing remote lending capability for CEMs and electronic disbursement of loans for home credit customers. We have also accelerated the roll out of Provident Direct to increase repayment optionality for customers."

The statement added: "In the first eleven weeks of 2020, there was no discernible impact of COVID-19 on credit issued, credit quality or collections. However, we continue to assess the impact on our business from the measures recently announced by the UK Government, together with our own actions on forbearance where we help customers in difficulty to manage their repayments over an extended time frame. We expect both our credit issued and collections performance to be adversely impacted during this period of uncertainty.

"It is too early to quantify the potential financial impact of COVID-19 on the group's financial performance and, therefore, we consider it prudent to withdraw any forward guidance for 2020."

The board has decided that, given the uncertainties at this time, the 2019 final dividend of 16.0p per share will no longer be proposed at the Annual General Meeting (AGM). The cash and capital impact of the decision to withdraw the dividend is approximately £40m. Future dividend decisions will be made as and when conditions normalise and an update will be provided with the group's interim results in July.

Malcolm Le May, Group Chief Executive, commented: "In these trying times, the welfare of our customers and colleagues has been paramount and I have been very pleased with how we have adapted our business practices to ensure that we continue to safely support our customers. I would like to thank all our colleagues for their hard-work and the way they have risen to this challenge.

"The impact of COVID-19 on the wider UK economy and our own financial performance clearly remains uncertain. However, the decisive actions we are taking, together with our strong capital and liquidity positions, mean that I remain confident in the group's medium-term opportunity."