The wheels have come off International Personal Finance 's (IPF) Mexican business, one of its big hopes for lending growth. Profits for the reported period fell by almost three-quarters, compared with the same period last year, to just £2.3m. While credit issued increased by 2 per cent in constant-currency terms, impairments rose from £27m to £34m. Chief executive Gerard Ryan says switching out senior leadership from the country's home credit business, less productive agents and increased investment spend on new initiatives all took their toll.
Mr Ryan hopes the reintroduction of senior leadership and increased monitoring of agents will correct the business's "mis-step". However, the sub-prime lender is still being clobbered by regulation across its key markets. Pre-tax profits at its principal Poland-Lithuania business fell by a quarter to £21m, hit by legislation on the total cost of credit and a shift towards long-term, lower-yielding lending in Poland.
There was better news in southern Europe, where improved credit quality and collection rates meant pre-tax profits almost doubled to £13m. Digital customers also grew by half to 157,000 and management plans to launch this service in Mexico in the third quarter.
Analysts at Numis expect adjusted EPS of 31.3p for this financial year, down from 37.1p in 2015.
INTERNATIONAL PERSONAL FINANCE (IPF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 269p | MARKET VALUE: | £595m | |
| TOUCH: | 269.0-269.6p | 12-MONTH HIGH: | 436p | LOW: 216p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 172p | |||
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 373 | 38.6 | 11.6 | 4.6 |
| 2016 | 364 | 30.7 | 9.8 | 4.6 |
| % change | -2 | -20 | -16 | - |
Ex-div:01 Sep Payment:07 Oct | ||||
