Provident Financial PLC (LON:PFG) has appointed its acting executive chairman Malcolm Le May as group chief executive officer with immediate effect as it seeks a path to recovery after the shocks and warnings of last year.
Le May, who only became the FTSE 250 listed firm's chairman in November 2017 following the sudden death of Manjit Wolstenholme, takes over a post that has been vacant since August 2018, when a second profit warning in quick succession prompted the departure of previous CEO Peter Crook.
The troubled doorstep lender has been hit by unresolved problems at its door-to-door lending business, with the group's woes compounded by Financial Conduct Authority (FCA) investigations into two of its units.
Provident Financial also named Stuart Sinclair as its interim chairman, moving from the role of senior independent director, and said it has instigated a process to appoint a new external chairman as well as two additional non-executive directors as soon as practicable.
The company also announced other senior appointments to drive the execution of the group's strategy under Malcolm Le May “to serve customers better, enhance our relationship with the regulators, and to restore sustainable attractive returns for our shareholders”.
In its statement, Provident Financial also noted that since its trading statement on the 16 January 2018, its Home Credit business continues to make good operational progress, and discussions continue with the FCA in relation to the Vanquis Bank and Moneybarn investigations.
Malcolm Le May, the new CEO commented: "My key objective is to execute a turn around of the group. We will re-establish a stronger customer focused business; conclude with our regulators the issues surrounding Vanquis Bank and Moneybarn; continue the progress being made in our Home Credit business and restore it as the pre-eminent business in its market; and ensure our businesses collaborate for the benefit of our customers and our shareholders."
Provident Financial shares reacted positively to the news, adding 5% to 704p in morning trading.
In a note to clients reiterating a ‘hold’ rating on the stock, analysts at Shore Capital commented that “while these changes provide a greater degree of certainty around the group’s leadership structure, there are still a number of holes to fill”.
“In addition,”, they said, “the group continues to face significant challenges on a number of fronts, which will take time to resolve.”
The analysts concluded: “So, despite the shares offering 19% upside to our last published fair value of 800p (which includes a 25% haircut for regulatory risk), we would still like to see a greater degree of upside before reconsidering a more constructive stance on the shares.”
-- Adds share price, broker comment --