Moneybarn has published its trading update for the six months to 30 June 2019, revealing a 46.2% jump in profit before tax to £15.5m.
The company said the positive results reflect strong growth in receivables and the benefit of improved credit quality following the tightening of underwriting in 2017 and 2018. This was partly offset by investments in the management team and customer service resource.
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New business volumes were 34% higher than last year, while the number of active customers was up 22.8% from 57,000 in June 2018 to 70,000 now.
The business wrote that the market was increasingly competitive. “The non-standard vehicle finance market remains competitive, particularly in the nearer prime segment of the market where there has been a number of smaller new entrants. However, demand for used cars has remained robust and, despite continued tight underwriting standards, new business volumes during the first half have been very strong.
“Continued development of core broker-introduced distribution channels, including revising affordability processes and a number of other operational developments, has resulted in a better customer experience and reinforced Moneybarn’s primacy amongst its broker network.”
Moving forward, the company said it is continuing to explore opportunities to extend its product offering and distribution channels. Moneybarn products are now live on the Vanquis Bank app, while new asset classes are now available to customers – including light commercial vehicles, motorbikes and touring caravans.
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By GlobalDataThe company also stated that the FCA investigation into Moneybarn is close to being concluded with the expected financial impact within previously announced financial provisions.
Parent group Provident’s profit before tax rose 76.9% to £61.2m, which is in line with internal plans and the first half of 2018.
The Provident board will be pleased with the results after a turbulent year.
Subprime lender Non-Standard Finance attempted a hostile takeover of the group in May, despite securing only 53.5% of shareholder support. NSF then abandoned plans after the Competitions and Markets Authority said it would be investigating the bid.
Malcolm Le May, chief executive officer of Provident, said: “Despite the distraction of the unsolicited bid from February to June this year, I am pleased with the group’s operational and financial performance during the first half of the year. We have delivered strong new business volumes whilst maintaining stable delinquency trends and our first half results are in line with our internal plans.”
