Equity Income  

Woodford’s woes continue with fresh Provident profit warning

 

“Assuming some stabilisation in the consumer credit division with a smaller customer base, along with other conservatively-struck assumptions about the rest of the business, the group should deliver pre-tax profit in excess of £300m in 2019. This equates to approximately 160p in earnings per share in 2019, which at the time of writing represents a price / earnings ratio of around 3x. If we assume the resumption of dividends with a 50% pay-out ratio, an 80p dividend would equate to around 15% dividend yield.”

Another Mr Woodford Holding that has been in the wars of late is Astra Zeneca. The shares of that company are moderately higher this morning after the company announced an investment of £23m in a gene messenger company, via a tie-up with a German Ethris.

The CF Woodford Equity Income fund has endured a torrid year, being among the bottom 25 per cent of funds in the IA UK Equity Income sector.

David.Thorpe@Ft.com