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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Non-Standard Finance plc    NSF   GB00BRJ6JV17

NON-STANDARD FINANCE PLC

(NSF)
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NSF shares slide to record low after profit warning

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11/15/2019 | 06:52am EST

Non-Standard Finance on Friday warned that annual profit would miss market expectations and downgraded its loan book growth targets, highlighting the lender's struggles in going solo after its failed bid for Provident Financial.

NSF shares, which have plunged 50% this year due to the failed takeover attempt and its impact on the company's half-year results, slumped 17.3% to their lowest on record at 27 pence.

The UK subprime lender said its trading had been softer than expected in the three months to September, with lower volumes in guarantor loans, and that the UK economic outlook is more uncertain than at any point in the last decade.

NSF now expects its normalised operating profit for 2019 to be 10%-13% lower than market expectations, though still higher than last year.

It also lowered its medium-term loan book growth outlook for branch-based lending to 10%-15% from 20%.

Chief Executive John van Kuffeler told Reuters the growth target revisions were the result of NSF's preparation for any future recession, and reflect changes to provisioning policy rather than current market conditions.

As Brexit looms, companies as well as consumers have been cautious on taking out loans or committing to investments.

"We have eight years of economic growth. The average economic cycle rarely exceeds 10 years of economic growth," Kuffeler said.

"It is important to think when the next downturn (or)recession is going to come along, and the law of averages would dictate that it is possibly (in) a couple of years or sooner."

A global slowdown has hit a number of key economies, with Hong Kong slipping into recession and Germany narrowly avoiding the same outcome. The Bank of England recently softened monetary policy, with two of its bankers voting for an interest rate cut.

NSF, which dropped an unsolicited 1.3 billion pound ($1.66 billion) bid for larger rival Provident in June, also cut the forecast loan book growth in its home credit business to between -5% and +5% in the medium term from a 2%-5% rise previously.

Kuffeler said there has been no increase in loans in default or close to being in default.

"Growth targets have looked overly ambitious for some time and a more conservative provisioning policy signals a more realistic stance," Peel Hunt analysts wrote.

(Graphic: nsf link: https://fingfx.thomsonreuters.com/gfx/buzzifr/15/756/756/Pasted%20Image.jpg)

(Reporting by Muvija M in Bengaluru; Editing by Shailesh Kuber, Sherry Jacob-Phillips and Jan Harvey)

By Muvija M

Stocks mentioned in the article
ChangeLast1st jan.
HUDSON'S BAY COMPANY -3.87% 8.44 Delayed Quote.20.44%
NON-STANDARD FINANCE PLC -1.60% 16.9 Delayed Quote.-73.98%
PROVIDENT FINANCIAL PLC 0.07% 420.9 Delayed Quote.-26.85%
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Financials (GBP)
Sales 2019 187 M
EBIT 2019 44,1 M
Net income 2019 -17,6 M
Debt 2019 291 M
Yield 2019 17,5%
P/E ratio 2019 -2,57x
P/E ratio 2020 3,23x
EV / Sales2019 1,83x
EV / Sales2020 1,99x
Capitalization 52,8 M
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Technical analysis trends NON-STANDARD FINANCE PLC
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Income Statement Evolution
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Mean consensus HOLD
Number of Analysts 4
Average target price 58,00  GBp
Last Close Price 17,18  GBp
Spread / Highest target 302%
Spread / Average Target 238%
Spread / Lowest Target 191%
EPS Revisions
Managers
NameTitle
John Philip de Blocq van Kuffeler Group Chief Executive Officer & Director
Charles Henry Gregson Non-Executive Chairman
Nicholas John Teunon Chief Financial Officer & Executive Director
Heather Jane McGregor Independent Non-Executive Director
Niall Scott Kilgour Booker Independent Non-Executive Director
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