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International Personal Finance's (IPF) shares jumped over 4 per cent on these results, as the provider of non-standard loans reported a sharp profit rise.
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The bulk of IPF's business comes from its central European division, where credit issued rose from £252.6m to £336.4m in the period - easily outstripping a rise in impairment charges from £34.2m to £53m - while customer numbers grew 3.9 per cent to over 1.6m. What's more, back office costs have been kept in check, leading to an improved cost-to-income ratio of 40.3 per cent, against 42.6 per cent a year earlier.
Good progress was also made in Mexico, where the emphasis has been on achieving acceptable credit quality before pushing for more customers. That's largely been achieved, with impairment costs now similar to those in central Europe. And losses there were reduced by 21.7 per cent to £5.4m, so IPF expects the division to break even next year. Group finances are also in good shape with sufficient funding headroom to support planned growth through to the spring of 2010.
Numis Securities expects full-year pre-tax profits of £63.6m and EPS of 21.6p (£47.0m and 18p in 2007).
| INTERNATIONAL PERSONAL FINANCE (IPF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 294p | MARKET VALUE: | £756m | |
| TOUCH: | 294-295p | 12-MONTH HIGH: | 294p | LOW:177p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 95p | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2007 | 12.3 | 3.15 | 1.90 |
| 2008 | 22.1 | 6.03 | 2.30 |
| % change | +80 | +91 | +21 |
Ex-div: 3 Sep Payment: 3 Oct |
|||
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IPF's shares have bucked the financial sector trend and are up 13 per cent on our buy recommendation (261p, 27 July 2007). True, a forward PE of 14 isn't cheap for the sector - but IPF is one of the few financial plays offering solid growth. Buy.
Last IC view: Buy, 265p, 30 Jun 2008
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-IC-2.1.3g-prod - 17/03/2010 18:13:09 - ben.wheeler
