Provident on the march in Europe

DOOR-TO-DOOR lender Provident Financial is to continue its push into Europe with the roll-out of a branch network in Hungary and Slovakia over the next four years.

The consumer credit group said it would spend £5m this year on the project following pilot operations in both countries. They would be profitable by 2006.

Provident's international operations, which already include Poland and the Czech Republic, posted their maiden first-half profit today of £1.1m, compared with a £1.6m loss a year earlier.

This underpinned a rise in group profit before tax and exceptionals from £70.2m to £74.6m for the six months to 30 June. But it took a £10.7m one-off charge on the sale of Colonnade Insurance Brokers, cutting the pre-tax line to £63.8m from £70.2m previously.

Provident said growth in the British market had been steady. Operating profit rose from £61.3m to £62m. The firm booked a bad-debt charge of £46m although, as a portion of the credit book, this is little changed at 8.9%.

Profit from the motor insurance operation was flat at £18m. But Provident warned that a fall in policyholders and a drop in margins were likely in the current half as pricing power was eroded.

The dividend is up 6% at 12.46p a share.