Shares in troubled doorstep lender Provident Financial have bounced back after it said it had replaced the boss of its beleaguered home credit business.
Provident was the biggest riser on London’s FTSE 100, up 20% days after a second profit warning in quick succession saw the stock collapse.
The rise came after the group announced the immediate departure of Andy Parkinson, managing director of the home credit division, to be replaced with Chris Gillespie, who previously held a similar role at the business.
But the shares are still worth only about half of their value at the start of the week.
Provident had fallen by as much as 75% on Tuesday when it alerted investors to a sharp downgrade in annual earnings after a “rapid deterioration” in its consumer credit business. It also announced the departure of chief executive Peter Crook.
The problems centred on changes to the business as it moves from using self-employed door-to-door agents to full-time “customer experience managers”.
Provident warned in June that the planned changes had resulted in agents leaving and a deterioration in sales and collection rates.
In its update this week it admitted that attempts to restore performance were “falling a long way short”.
Manjit Wolstenholme, who has taken charge as Provident’s executive chair after Mr Crook’s departure, has begun a review of the business and on Friday announced the management shake-up.
Provident said the appointment of Mr Gillespie to head the home credit business would see him focus on “re-establishing relationships with customers, bringing collections back to a normal level, and stabilising the operation of the business”.
The lender has around two million customers in the UK, offering credit limits of £250 to £4,000.
It provides credit to people who do not meet the loan criteria of mainstream banks.