THE chief executive of Bradford-based loans firm Provident Financial admits it faces “hard yards ahead” to get back on track after it reported a 22 per cent drop in its pre-tax profits for the first half of this year.

The subprime lender, which offers loans and finance to people with bad credit scores, saw pre-tax profit of £115.3 million, down from £148.9 in 2016.

It has blamed the profits fall on the re-structuring of its home credit business which has seen it move from employing a pool of part-time self-employed workers to a smaller full-time workforce.

But the group, which has 2.5 million customers, enjoyed a brighter performance from its short-term loans division Satsuma, with credit card issuer Vanquis Bank and car finance provider Moneybarn also notching up "record volumes of new business".

Vanquis saw a 0.3 per cent increase in adjusted pre-tax profit to £100.1m with new account bookings rising by 27 per cent to 234,000.

Moneybarn saw pre-tax profit up by 24.3 per cent to £16.9m. It also reported a 15 per cent rise in new business.

The new home credit operating model started on July 6 and the company says it will focus through the third quarter of this year, between July to September, on embedding it.

Peter Crook, Provident Financial's chief executive, admitted he was disappointed by the company's performance in the first half of the year.

“The results were worse than we expected," he said.

“It is very disappointing to land where we are. But hopefully it is short term and temporary in nature.

“It will take a few months to get back to where it should be.

“But there is a strong story around three of our four businesses.

“Vanquis Bank, Moneybarn and Satsuma are booking record volumes of new business derived from a combination of product innovation and enhanced distribution.

“We have some hard yards to do in the next few months, but we are set up to have a good last quarter of the year.

“The board has maintained the interim dividend recognising the group’s medium-term growth opportunities.”

Shares in the FTSE 100 firm have dropped 30 per cent since October.