Provident Financial admitted yesterday that it could be forced to sell its Yes Car Credit division if the new management was unsuccessful in turning it around. Yes Car Credit sells second hand cars as well as offers loans to people who have been turned down elsewhere due to their poor credit histories.
However, the firm reported a loss of £6.2 million in the first six months of this year. This was drastically below the £5.7 million profit at the same time last year. Because of this poor performance by Yes Car Credit, Provident's overall pre-tax profits dipped by 1 percent to £83 million. But the Bradford-based group managed to register a 14 percent growth in its other divisions.
Flagging consumer confidence is the main reason behind Yes Car's troubles. The company has not had substantial enquiries since January despite unleashing a major advertising campaign. Robin Ashton, the group chief executive did say that since the past nine months there had been changes in the management of Yes. But he was emphatic that they might have to sell if results were not satisfactory. "The UK home credit market has become much more competitive over the past few years. If you are looking to borrow a small amount of money, such as £200 or £300, the options in terms of overdrafts and credit cards have increased significantly," he said. The company was also quick to point out that the soaring fuel prices have hit auto businesses and Yes was not exempt from this.
However, despite these warnings, Provident shares increased by 28.5 pence to 667 pence, helped by the promise to sell Yes.
Posted
on : Thu, 15 Sep 2005 18:05 GMT | Loans News
By : Anne Philips
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