Share Name Share Symbol Market Type Share ISIN Share Description
Paragon Grp. LSE:PAG London Ordinary Share GB00B2NGPM57 ORD 100P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +4.50p +1.37% 333.60p 333.40p 333.90p 335.50p 325.70p 326.50p 728,119 16:35:09
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonequity Investment Instruments 0.0 134.2 35.5 9.4 939.75

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Date Time Title Posts
04/10/201612:16Paragon - time to get in!2,632
08/11/200718:59Profits up - shares down - what am I missing?247
30/10/200722:48The first listed lender to go bust181
11/10/200709:52Paragon: will rise continue/hold?11

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Paragon Of Companies Daily Update: Paragon Grp. is listed in the Nonequity Investment Instruments sector of the London Stock Exchange with ticker PAG. The last closing price for Paragon Of Companies was 329.10p.
Paragon Grp. has a 4 week average price of 324.36p and a 12 week average price of 314.11p.
The 1 year high share price is 425.20p while the 1 year low share price is currently 225.10p.
There are currently 281,700,629 shares in issue and the average daily traded volume is 514,332 shares. The market capitalisation of Paragon Grp. is £939,753,298.34.
davebowler: Numis; Paragon (Buy, TP: 357p) Numbers a little light of our top of the range forecasts Paragon reported a first half profit of £71.9m an increase of 12.5% on the same period last year. Credit quality remained exceptional (impairment was flat on last year) and as expected there was very strong new BTL lending which increased 85% to £824m. EPS increased 17.2% to 19.1p with fewer shares in issue following the buy back. Idem continues to struggle in the increasingly competitive commodity end of the debt purchase market. We are however pleased to see the group exercise discipline and not chase volumes at any price (which is exactly what Paragon did in the BTL space ahead of the credit crisis) with the ERC declining to £510m from £639m. Overall the numbers were a little below our top of the range forecasts and we expect to downgrade modestly. Paragon remains cheap being valued at 7.4x earnings. Regulation: Paragon holds almost all of its mortgage assets outside of its bank. The current capital requirements for standardised BTL are (we estimate 3-4x) greater than for those with similar assets that use the IRB approach and we believe there will be no material change to the current capital requirements for BTL. With the trading statement Paragon allude to (they expect this to take two years) moving the IRB capital approach would reduce their capital requirements. We see the prospect of increased pressure on BTL landlords which is reflected in our estimate that Paragon Mortgages will see its profit decline 3% in 2017, 9% in 2018 and 12% in 2019. Regulation does negatively impact lenders but it very rarely dismantles substantial product lines that have been in existence for generations. It doesn't feel like recession is imminent: Book margins remain close to bottom of the cycle levels as opposed to being the usual wafer thin as they are at the top of the cycle. Credit remains relatively tight with banks still undertaking real affordability tests and there are no self-certified 125% LTV, £1m mortgages for bus drivers. Household debt is also still well down on the previous cyclical peak although household debt has started to rise rapidly and bank sector leverage is dramatically lower than pre-crisis. A slowdown is possible but the Paragon share price is pricing in a lot worse.
aishah: UK challenger banks: OneSavings Bank, Aldermore, Shawbrook among the lenders seeing a bounce-back Challenger banks are bouncing back after months of share price weakness, with the markets rewarding smaller listed lenders for posting double-digit increases in profits, lending and customer numbers. hTtp://
eurofox: good to see one of the weaknesses in PAG share price down to Deutsche Bank's own problems (it needing to raise capital) - if so, this selling pressure may go away since the ECB are now able to buy Deutsche Bank's own bonds and thus reduce the pressure on it's reserves
asagi: 465p would be 11.4 times forecast 2016 EPS, with a 2.8% yield. Not unreasonable versus the share price today! David
aishah: This is what TMI said in last issue: Paragon (364p) Specialist BTL lender Paragon has also suffered share price turbulence but results were strong. In Paragon Mortgages, operating profit rose 17% to £94m while Idem Capital, which provides unsecured loans, increased profit 3% to £49.3m. If anything this performance masks even stronger trends with new BTL lending up 102% to £1,326m and the BTL pipeline up 72% to £713m. One other positive for future growth is that its funding “warehouseR21; capacity has been increased from £750m to £950m, while recently established Paragon Bank has attracted deposits of £708m (up from just £388m in Q3 ’15), a cheap way of funding further lending. Broker, Jefferies notes that while the BTL lending market is expected to fall from an annualized £37bn to £30bn (out of £209bn total UK lending) c. 52% of BTL gross mortgages is remortgage activity and therefore not affected by the stamp duty changes. Jefferies forecasts Paragon new BTL lending of £1.4bn in FY’16, rising to £1.6bn by FY’18 but even that would imply market share of only 5.8% compared with pre-crisis level of 9%, so we think there’s still upside to come. New forecasts are for eps to rise from 34.9p to 40p, 44.6p and 49.1p between FY’16-FY’;18. Jefferies’ price target is 536p while it notes a further £50m share buyback is targeted for the next 12 months. Buy.
yupawiese2010: From the I.C last week. Shares in the UK’s largest buy-to-let mortgage lender Paragon (PAG: 412p) are up 18 per cent in the nine months since I recommended buying at 347p (‘Riding the buy-to-let boom’, 27 October 2014), but are adrift of the 440p price level at the time of my last update (‘Repeat buy signals’, 11 May 2015). They are currently priced on a modest 11.5 times earnings estimates of 35.7p a share for the financial year to end September 2015, underpinned by a prospective dividend yield of 2.4 per cent based on a hike in the payout from 9p to 10p a share, and are rated on a price-to-book value of 1.3 times. The pull back in the share price since it hit a high of 461p is largely down to the change in government policy towards buy-to-let property landlords with restrictions being placed on the amount of mortgage interest they can offset against rental income on the homes they rent out. That said, I feel that professional investors are taking a sensible approach to the change in government policy as they will still be able to deduct all finance costs from their rental income until the 2017-18 tax year, and tax relief won’t be fully restricted to the basic rate of 20 per cent until the 2020-21 tax year. Someone looking at a buy-to-let investment today will be fully aware of the changes in the tax regime and will be factoring this into their decision. It’s also fair to say that residential property as an asset class still offers attractive net yields if you buy in the right areas even after taking into full consideration the impact of the aforementioned tax changes. With government bond yields at record lows, there are few alternatives which offer solid asset backing and a reliable income stream for yield hungry investors. And the potential group of investors looking at buy-to-let investments is not getting any smaller as this April’s tax changes to pensions has enabled millions of over 55s to access their pension pots. I still contend that some of these funds will make their way into the buy-to-let market as deposits on debt funded property purchases, a point I made when I initiated coverage last autumn. Furthermore, business is clearly good for Paragon as the company highlighted in its trading statement at the end of last week: the pipeline of buy-to-let mortgage business was at £865m at the end of June 2015, up 167 per cent on 12 months earlier; Paragon Bank's savings proposition has developed strongly, with the balance of deposits outstanding rising to £389m by the end of June; and the company is currently tapping the London Stock Exchange retail bond market by issuing its third bond issue. There is no shortage of investment appetite for either borrowing from or lending to the company. So ahead of Paragon’s full-year results for the year to 30 September 2015, I rate the shares a buy on a bid-offer spread of 411.5p to 412p.
the drewster: No - as usual with PAG, the share price action is all done and dusted just prior to the announcement.
yupawiese2010: I.C article. There may be a lull in housing activity ahead of the general election, but buy-to-let lending to professional landlords is still going from strength to strength. The Paragon Group (PAG) is one of the key suppliers of such finance, and in the three months to January this year buy-to-let completions at Paragon rose 58.4 per cent from a year earlier to £222m. And there is no sign of demand drying up because the pipeline of loans at the end of December stood at £417m; that’s nearly double the amount from a year earlier. Credit quality remains impressive, too. Arrears on the buy-to-let portfolio stood at just 22 basis points at the end of December, down from 25 in September, while redemptions fell over the same period from £107m to £97m. Paragon caters mostly for well-established professional landlords, typically with a dozen or more properties. There is considerable security here because in cases where arrears start to grow, the group has recourse to using a property's rental income to meet repayments. And where this is not possible, the property can be sold to redeem the mortgage, which is usually not more than around 70 per cent of the property value. One of the strengths of the Paragon business model is the diversity of income streams. This reflects the group's success in addressing the adverse conditions that accompanied the financial crash, a time when the share price collapsed from over 1,000p to just 31p. The problem then was that, as well as a complete freeze in the wholesale finance market, there was also a total moratorium on securitisation. Prior to the crash, Paragon would bundle up a parcel of buy-to-let mortgages and use them as collateral to issue bonds. These were consequently removed from the balance sheet, leaving the group's "warehouse facility" with banks replenished and available to make further loans. While the crash left Paragon ticking over, it was at this time that plans were hatched to reduce the reliance on mortgage lending. Since then, it has moved into car finance, buying up distressed debt from banks anxious to reduce their debt portfolios, and has also opened its own deposit-taking bank, a useful source of finance which reduces its reliance on the wholesale money market. Buying up packages of distressed debt has really taken off. Under the group's operating arm, Idem Capital, net investments last year nearly doubled to £175m, taking outstanding balances up to £427m. These debts are purchased at significant discounts to face value, a useful buffer against the inevitable batch of non-performing loans. Cash performance remains strong though, and Idem contributed £48m to group underlying profits last year, up from £35m a year earlier. Paragon's own bank is the latest addition to the business model, receiving formal authorisation in February last year. The bank concentrates on three revenue streams; car finance, personal finance and buy-to-let. Paragon's own bank is the latest addition to the business model, receiving formal authorisation in February last year. The bank concentrates on three revenue streams; car finance, personal finance and buy-to-let. And last summer, it launched its own internet-only savings product. Overall progress here has been encouraging, with £94m of deposits taken by the end of 2014. The bank also offers easy access one, two and three year bonds, as well as 40 and 120 day notice deposit accounts. Inevitably, starting up a new business line involves significant capital investment, and the group injected an additional £36m of capital into the bank at the end of September. Losses last year amounted to £6.4m, in line with expectations. With the securitisation market now functioning again, the group was able to complete its latest securitisation in November, bringing total note issuance last year to £930m. It also renewed its £250m mortgage warehouse facility with Macquarie Bank, which now runs until December 2016, and the total warehouse facilities for buy-to-let lending now stand at £550m. Cash generation continues to strengthen, too, with available cash rising from £177m in September to £222m in January this year. Paragon is also progressing with a £50m share buy-back programme. Paragon could see trading conditions toughen up when interest rates start to rise, but the effects are likely to be gradual, not least because any rise in rates will initially be small, and look to be some way off. The dividend payout is expected to grow, although the yield remains relatively modest. However, it is the solid cash generation and business pipeline that makes Paragon attractive. The shares are trading on a modest 10 times forecast 2016 earnings and just 1.1 times forecast net assets, which gives plenty of room for advancement. Buy.
mikeja: FF,you should check your facts before making stupid assertions about OSB.The CEO has 25 years experience in finance ,including 10 years as CEO of Saffron Building Society which came through the crash smelling of roses unlike PAG.A fair part of his team also came from Saffron. I have laid it out in full on the OSB board. As the latest RNS made clear the PAG price is being supported at the moment by the company buying in its own shares.
yupawiese2010: Nice set of figures, hopefully this will put a floor under the poor share price performance
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