Paragon's (PAG) half-year underlying pre-tax profit rose 10 per cent during the period to £48.2m, helped by strong growth in both buy-to-let and consumer lending. Robust demand for rented accommodation boosted buy-to-let loans by nearly 15 per cent to £102.3m and, after the pipeline of prospective loans more than doubled to £241.2m, a significant increase in lending is expected in the second half.
To meet this demand, Paragon increased its loan warehouse facility to £450m and successfully launched a £200m securitisation of buy-to-let loans. Finances were also boosted by a £60m, 6 per cent bond issue maturing in 2020, which helped to lift free cash balances from £104.9m to £173.8m. Paragon continued to expand its loan portfolio operation, too - it bought £36.7m-worth of unsecured loans assets and spent a further £20.9m as a co-investor. The group also added to its mortgage loan servicing operation after assuming the servicing of further third-party portfolios comprising 29,600 accounts. Credit quality remained strong, though, with impairments having fallen from 0.15 per cent of the loan portfolio to just 0.11 per cent.
Broker Shore Capital expects full-year adjusted pre-tax profit of £104.3m, giving EPS of 26p (from £94.2m and 23.5p in 2012).
| THE PARAGON GROUP OF COMPANIES (PAG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 339.1p | MARKET VALUE: | £1.03bn | |
| TOUCH: | 339.1-339.4p | 12-MONTH HIGH: | 357p | LOW: 151p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 270p | |||
| Half-year to 31 Mar | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2012 | 44.8 | 11.4 | 1.50 |
| 2013 | 49.1 | 12.6 | 2.40 |
| % change | +10 | +11 | +60 |
Ex-div: 3 Jul Payment: 26 Jul | |||
