Provident Financial to be demoted from FTSE 100
Shares in the group tumbled by 66 per cent last Tuesday, one of the FTSE’s biggest one-day falls, after it warned investors of a “substantial under-performance” with losses of up to £120m anticipated.
The week was a tough one for the Bradford-based lender, with chief executive Peter Crook resigning in the wake of the profit warning and the revelation that the Financial Conduct Authority is investigating products sold by its Vanquis banking arm.
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Hide AdShares have recovered some of the ground lost, but likely not enough to save it from relegation to the FTSE 250 Index when the FTSE Russell EMEA Committee confirms the results of the review after market close today.
Provident is on course to be replaced in the premier share league by United Arab Emirates-based healthcare provider NMC Health, with the reshuffle based on Tuesday’s closing prices.
Late last week Manjit Wolstenholme, who took on the role of executive chairman after Mr Crook quit, removed Andy Parkinson as managing director of the division as part of a management review.
He has been replaced by Chris Gillespie, whose role will be “establishing relationships with customers, bringing collections back to a normal level, and stabilising the operation of the business”.
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Hide AdIt will be Mr Gillespie’s second stint with the firm, having resigned as managing director of Provident’s consumer credit division in 2013. Provident is one of Yorkshire’s largest firms with more than 2.5m customers.
Also set to exit the list of Britain’s 100 largest listed firms is construction firm Carillion.
It looks to be downgraded to the small cap index after a shock profit warning in July wiped almost £600 million from its stock market value.
Chief executive Richard Howson also stepped down last month as the group said it would need to bolster its balance sheet and was struggling to stay within its borrowing limits.
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Hide AdThe group has failed to stage a shares turnaround despite brighter news since then that it has been named as one of the builders of the HS2 rail line linking Yorkshire and the capital, while also securing two government contracts worth £158 million.
Under the FTSE reshuffle, companies listed on the UK stock market are reviewed four times a year and moved among the indexes based on their market capitalisation, a measurement derived from the price of a company’s shares.
The changes will take effect from the start of trading on Monday September 18.