Shop Direct books loss on £100 million extra for PPI claims

Cost: Very owner Shop Direct took a further provision on PPI after the deadline was extended

Michael Bow23 May 2018

Shop Direct swung to a third-quarter loss on Thursday after setting aside another £100 million to pay PPI claims.

The online retailer, which owns fashion and sportswear brand Very, did so because the claim deadline has been extended until August next year by regulators.

Nearly £80 million was paid out in the nine months ending March.by the company, which offers store credit to customers.

After accounting for the provision, pre-tax losses for the third quarter were £10.7 million, erasing a profit for the same period last year.

Strong sales at Very helped offset a decline in Littlewoods. The company added more than one million new customers in the third quarter.

However the price of the retailer’s bonds plunged to a fresh low of 79.2p in the pound, down from 85p. The company raised £550 million from investors in November.

Group revenue grew 1.6% in the three months ending March but underlying earnings were down 1.8% to £167.8m due to tighter margins.