International Personal Finance upgrades expectations, launches buyback

International Personal Finance (IPF) announced a solid set of first-half results on Wednesday, upgrading its full-year expectations after a significant increase in profits, alongside a new share buyback programme aimed at enhancing shareholder value.

The London-listed company posted a pre-exceptional profit before tax of £47.3m for the first six months of 2024, a 25% rise from the same period in 2023, exceeding internal expectations.

That strong performance prompted IPF to increase its interim dividend by 9.7% to 3.4p per share, maintaining its policy of paying 33% of the prior year’s total dividend.

In line with its strategy to return excess capital to shareholders, IPF launched a share buyback programme worth up to £15m.

The board said the move was aimed at increasing capital efficiency and reducing the company’s share capital.

It said the buyback was supported by IPF’s solid balance sheet, which boasts an equity-to-receivables ratio of 56%, well above the target of 40%.

The company appointed Peel Hunt and Panmure Liberum to manage the buyback process, with purchases expected to occur even during closed periods.

Operationally, IPF experienced strong demand for its financial products across most of its markets in the half-year, with customer lending, excluding Poland, growing 7% year-on-year.

However, lending and receivables in Poland saw planned reductions of 7% and 28%, respectively, as the company worked to stabilise its portfolio in the region.

Despite those reductions, the overall growth momentum remained positive, supported by excellent customer repayment performance and a reduced impairment rate of 10.5%.

Additionally, IPF successfully refinanced a €341m eurobond, extending its debt maturity to 2029 and receiving a credit rating upgrade from Fitch to BB.

The company said it also made progress in its Next Gen strategy, expanding its operations in Mexico, issuing over 180,000 credit cards in Poland, and growing its digital mobile wallet user base by over 50%.

Looking ahead, IPF said it was confident in its ability to accelerate growth in the second half of the year, and projected a full-year pre-exceptional profit before tax of between £78m and £82m, surpassing current market expectations.

“I am delighted to announce very strong financial and operational progress for IPF in the first half of the year,” said chief executive officer Gerard Ryan.

“Executing on our Next Gen strategy has delivered good growth momentum, exceptional customer repayment performance and pre-exceptional profit before tax of £47.3m, ahead of our 2024 internal financial plan.

“The successful refinancing of our €341m eurobond, which attracted very good demand and over 150 investors, ensures that we have a strong funding position to support our ambitious growth plans.”

Ryan said that as a result of its “excellent” first half results, strong balance sheet and positive growth prospects, the company had increased the interim dividend by 9.7% to 3.4p per share, in line with its progressive dividend policy, together with a share buyback programme of £15m.

“We continue to see substantial demand for our broadening portfolio of credit and insurance services from underserved consumers and we are confident that there are further attractive growth opportunities as we continue to execute on our strategy.”

At 1054 BST, shares in International Personal Finance were up 7.83% at 148.8p.

Reporting by Josh White for Sharecast.com.