Hardman & Co Research
Hardman & Co Research: Non-Standard Finance Plc (NSF): Trading update:
understand the accounting
18-Nov-2019 / 10:05 GMT/BST
Hardman & Co Research: Trading update: understand the accounting
NSF has issued a trading update highlighting a 4%-5% reduction in consensus
estimates due to softer trading in 3Q (primarily lower loan volumes in
guarantor loans, a market which has been affected by adverse press coverage)
and a 6%-8% reduction associated with a step change in provisioning policy.
The latter highlights yet again the importance of understanding the
assumptions in provisioning. For the same arrears, a higher assumed
probability of downside has increased provisions. This reflects the known
cyclicality inherent in IFRS9. A downgrade is unwelcome, but it does not
reflect current customer deterioration, only the Board's cautious approach.
After today's reduction's, we still forecast 2021 adjusted profits at 2x the
level of 2018.
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915383 18-Nov-2019
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(END) Dow Jones Newswires
November 18, 2019 05:05 ET (10:05 GMT)
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