Buy-to-let and consumer finance group Paragon (PAG) delivered another polished performance, with full-year underlying profit having risen 16.2 per cent year-on-year to £94.2m. Management also announced a step change in its dividend policy, targeting dividend cover of between three and 3.5 times earnings over the medium term - hence the hefty hike in the payout.
Paragon secured a two-year extension with Macquarie Bank on its existing warehouse loan facility, too, and established a new agreement with Lloyds - taking funding capacity up 125 per cent to £450m. Renewed investor confidence also allowed Paragon to successfully conclude two securitisations. Moreover, demand from professional landlords for fresh financing remains robust, with advances rising from £127m to £184.3m - although underlying operating profit here fell from £67.3m to £61.6m as the previous year's low £5.6m impairment charge returned to more typical levels at £12.4m. Still, Paragon's move into buying loan portfolios from banks wishing to downsize has continued to pay-off, with underlying profits from the consumer finance arm having jumped from £13.8m to £32.6m.
Prior to these figures, UBS was forecasting pre-tax profit of £99.5m for 2013, giving and EPS of 25.7p.
| THE PARAGON GROUP OF COMPANIES (PAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 246p | MARKET VALUE: | £741m | |
| TOUCH: | 245-246p | 12-MONTH HIGH: | 257p | LOW: 150p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 267p | |||
| Year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2008 | 53.7 | 17.9 | 3.00 |
| 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 |
| % change | +18 | +20 | +50 |
Ex-div: 9 Jan Payment: 11 Feb | |||
