Three distinct stories help to explain the dire sentiment towards consumer credit provider International Personal Finance (IPF), as first-half results attest.
The first concerns regulatory change, the peak of which chief executive Gerard Ryan thinks has “probably” passed. But uncertainty continues to hang over operations in Poland, where lawmakers are considering draft proposals to reduce non-interest charges. The daily interest rate cap has just dropped from 0.25 to 0.07 per cent in Latvia, where business has been booming, while Finland’s government has pared back its annual rate cap from 50 per cent to 20 per cent.
At least collections in the European division have been improving. In Mexico, a further deteriorating in lending conditions resulted in a sharp rise in impairments to £53.1m, or 42 per cent of revenues, pushing the group-level ratio up from 25.5 per cent to 27.7 per cent. Agent incentives are now skewed to collecting rather than issuing credit in a bid to bring the country’s impairment ratio to the low-30s, a level Mr Ryan deems more “acceptable”.
Only the third story is a clear plus: expectations that IPF’s digital arm is on course to make a profit this year, driven by booming credit issuance in new markets.
Analysts at house broker Numis forecast earnings of 20.7p a share this year, swinging to a loss of 30.6p in 2020.
| INTERNATIONAL PERSONAL FINANCE (IPF) | ||||
| ORD PRICE: | 103p | MARKET VALUE: | £231m | |
| TOUCH: | 103-105.2p | 12-MONTH HIGH: | 255p | LOW: 103p |
| DIVIDEND YIELD: | 12.0% | PE RATIO: | 3 | |
| NET ASSET VALUE: | 203p | NET DEBT: | 149% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 419 | 56.5 | 16.7 | 4.6 |
| 2019 | 447 | 56.1 | 14.8 | 4.6 |
| % change | +7 | -1 | -11 | - |
| Ex-div: | 5 Sep | |||
| Payment: | 4 Oct |
