International Personal Finance H1 profit falls as growth investment weighs
International Personal Finance H1 profit falls as growth investment weighs
Overview
UK consumer lender's H1 revenue rose 10.7% yr/yr on constant exchange rate basis
Pre-exceptional profit before tax fell 5% to £47.4 mln, reflecting growth investment
Pre-exceptional EPS declined 6.3% to 13.3p
Outlook
Company to increase investment in product development and customer acquisition by about £5 mln annually
IPF expects group impairment rate to rise gradually to 14%-16% over next two years
Company anticipates revenue yield to improve towards 54%-56% target range over time
Result Drivers
LENDING GROWTH - Customer lending rose 18.5% yr/yr, supported by demand across all divisions and expanded product offerings
HIGHER IMPAIRMENT CHARGES - Up-front IFRS 9 impairment charges increased with lending growth, especially in new channels
INVESTMENT IN GROWTH - Profit and EPS declined due to ongoing investment in growth initiatives and customer acquisition
Company press release: ID:nRSc2409Oa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 EPS |
| GBP 0.13 |
|
H1 Pretax Profit |
| GBP 47.40 mln |
|
H1 ROE |
| 9.10% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", no "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the consumer lending peer group is "buy"
Wall Street's median 12-month price target for International Personal Finance PLC is GBp195.00, about 21.7% below its July 28 closing price of GBp249.00
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 9 three months ago
Reuters Recommended Reads
July 28 - Provident Financial Q4 net interest income rises on lower funding costs, higher loan yields
July 27 - Happen Q2 EPS rises 52% as loan originations grow
July 29 - Poland's mBank posts 10% profit growth, meeting expectations
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)