Better credit controls and restructuring of its Hungarian operations delivered a much improved first-half performance from International Personal Finance (IPF), on admittedly weak comparisons in 2009. The sub-prime lender managed to increase its customer numbers by 7.5 per cent to 2.1m, while reducing impairments as a percentage of revenue from 36.2 to 32.1 per cent in the period. However, the recent stand-off between Hungary and the IMF and fiscal tightening in Romania emphasises the brittleness in some of the company's markets.
IPF's main lending market is in central Europe where pre-tax profits in Poland, Slovakia and Czech Republic rose almost 25 per cent to £34.4m. Restructuring in Hungary turned around the business from a £7m loss to a £1.5m profit after 80,000 customers were targeted for debt recovery, but the country still remains in an unstable economic shape after a series of failed debt auctions. The Romanian operation also returned to a small profit after posting a £1.9m loss last year, but the government's recent move to cut civil servants' salaries by 25 per cent adds uncertainty.
Numis Securities forecasts full-year pre-tax profits of £100m and EPS of 28.3p (2009: £61.7m/17.8p).
INTERNATIONAL PERSONAL FINANCE (IPF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £514m | |
| TOUCH: | 199-200p | 12-MONTH HIGH: | 283p | LOW: 80p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 98p | NET DEBT: | 102% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 265 | 12.4 | 3.5 | 2.30 |
| 2010 | 303 | 36.9 | 10.7 | 2.53 |
| % change | +14 | +198 | +204 | +10 |
Ex-div:08 Sep Payment:08 Oct | ||||
