News releases
12 December 2007
International Personal Finance plc ("IPF" or "the Group") Pre-Close Update
International Personal Finance plc (IPF), the recently listed international company offering small sum, unsecured credit to 1.9 million customers in six emerging markets, today issues an update on trading ahead of its close period. The Board is pleased to announce that good progress is being made in the second half of the financial year. We have seen growth and a continuation of good credit quality in Central Europe. Consequently, we expect the Group's maiden results for the year ended 31 December 2007, to report pre-tax profit a little ahead of the market consensus of £46 million, compared with pro forma pre-tax profit for 2006 of £39.9 million.
Central Europe
The Central European business is performing well. We expect customer numbers to show moderate growth in the second half, with stronger growth in credit issued. Credit quality remains good and impairment levels have remained at a low level and are stable. Overall, we continue to expect the region to report strong profit growth for 2007.
Mexico
We continue to implement our performance improvement plan in Mexico. In both the Puebla and Guadalajara regions, the measures taken to improve credit quality are beginning to yield improvement in collection performance and in due course we expect this to feed through into reduced impairment.
In the Puebla region, we identified at the half year seven branches that were performing poorly and were subject to special measures to improve performance. We are seeing clear signs of improvement in five of them. We will provide more detailed information when we announce our final results in March.
We expect our investment this year in start-up losses in Mexico to be around £13 million. In line with our previous guidance, we continue to target profit from this market for 2009.
Romania
Following national roll-out in June, Romania has continued to progress to plan. A further two branches have been opened in the second half of the year, increasing our network to seven branches. Customer growth remains good, as does credit quality and impairment. As previously announced, we continue to expect our investment this year in start-up losses to be £3 - 4 million and that Romania will be profitable for 2010.
New Countries
In Russia, we are close to acquiring a small bank to facilitate market entry with a pilot in the Spring of 2008. Our market research of India and Ukraine is progressing well.
Tax
We continue to expect our tax rate for the year to be approximately 30%.
Dividend
As previously noted, and in the absence of unforeseen circumstances, the full year dividend in respect of 2007 will be 4.75 pence per share, including the interim dividend already paid of 1.90 pence per share.
Balance Sheet
The balance sheet remains strong and, as noted in the previous trading update, committed bank facilities are in place to support our growth strategy through to Spring 2010.
Regulation and Legislation
At the time of the trading update in September we highlighted that there had been discussion about the development of legislation to introduce a cap on interest rates charged by lenders in Slovakia and Hungary. In Slovakia, although the precise details are still to be finalised, we expect rate cap legislation to be implemented in early 2008, but are confident that, as we have done in Poland, we will be able to respond to this change and that there will not be a negative impact on the business. There have been no further significant developments in Hungary.
Outlook
IPF Group Executive Chairman, Christopher Rodrigues, concluded:
"We are pleased with the Group's trading performance, the continued excellent credit performance in Central Europe and the strength of our balance sheet. We expect that results for the full year will be a little ahead of market consensus and we continue to make good progress towards our longer-term objectives."
An analyst briefing of the full year results for IPF will be given by Christopher Rodrigues (Executive Chairman), John Harnett (Chief Operating Officer) and David Broadbent (Finance Director) on Wednesday, 05 March 2008.
Enquiries:
Media
Victoria Richmond, IPF 0113 285 6873
Vanessa Neill, Finsbury 020 7251 3801
Ryan O'Keeffe, Finsbury 020 7251 3801
Investor Relations
Helen Spivey, IPF 0113 285 6876