Buy-to-let and consumer finance group Paragon (PAG) grew full-year underlying pre-tax profit by a solid 10.5 per cent year-on-year to a £104.1m and rewarded shareholders with a hefty dividend hike. Free cash balances grew 34 per cent to £170.8m, too, and the group's return on equity rose from 9.3 per cent to 10.2 per cent.
Demand from professional landlords saw the group's buy-to-let loans advanced nearly double to £359.8m. To meet this demand, Paragon's warehouse funding facility was increased to £450m, while an improvement in asset quality saw the successful completion of two securitisations. Moreover, and despite the larger loan book, group impairment provisions fell 36.9 per cent to £15.2m - or just 0.17 per cent of total loans.
Paragon also continued to invest in loan portfolios, buying £71.9m of unsecured loan assets at deeply discounted prices, and investing a further £20.9m as a co-investor. Plans are in place as well to establish a banking subsidiary with a view to taking retail deposits and, initially, making car and second mortgage loans.
Prior to these figures, UBS was forecasting 2014 pre-tax profit of £116.2m and EPS of 30.3p.
| THE PARAGON GROUP OF COMPANIES (PAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 343p | MARKET VALUE: | £1.05bn | |
| TOUCH: | 343-344p | 12-MONTH HIGH: | 357p | LOW: 239p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 286p | |||
| Year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2009 | 54.3 | 13.9 | 3.30 |
| 2010 | 71.8 | 18.3 | 3.60 |
| 2011 | 80.8 | 20.2 | 4.00 |
| 2012 | 95.5 | 24.2 | 6.00 |
| 2013 | 105 | 28.4 | 7.20 |
| % change | +10 | +17 | +20 |
Ex-div: 8 Jan Payment: 10 Feb | |||
