International Personal F... Share Discussion Threads

[wad collector] 13/7/2015 16:25

Decided to have a punt at 353 - the City likes to overreact to news in both directions.

[vk74] 13/7/2015 15:34

That is going on?

[tsmith2] 13/7/2015 14:05

One to watch only

[nwalsham15] 13/7/2015 13:29

shocking day.

might be some value at these prices though.

[dendria] 13/7/2015 12:49

Liberum says the proposal to cap all non-interest costs & penalty fees and restrictions on multiple loans would be bad news. Poland accounted for 62% of group adjusted PBT in FY14.

It doesn't seem clear what the impact will be even to IPF.

Don't hold but on watch list since MCB Finance t/o.

[wad collector] 13/7/2015 12:47

Shore Capital said the proposed change comes as an unwelcome development
A proposed change to credit laws in Poland could put a dent in the home credit profits of International Personal Finance (LON:IPF).

The FTSE 250 company put out a statement on Monday alerting the market to the possibility of an amendment to recently agreed proposals designed to put a cap on the total cost of credit agreements.

The existing proposal as it stands puts a cap on mandatory non-interest charges, and International Personal Finance (IPF) developed a product that fell into line with the draft legislation, but the lower chamber of the Polish department has put a spanner in the works by voting in favour of an amendment that extended the cap to all non-interest costs, irrespective of whether they are mandatory.

The level of the cap has not changed, and the proposed amendment still needs to go to the upper chamber, who could accept the amendment, alter it further or remove it completely.

In what IPF would probably regard as the worst case scenario, should the upper chamber rubber stamp the change, the bill would go to the President for approval.

IPF is reviewing the draft legislation to assess whether its product structure will be affected by the proposed cap.

“In addition, we are proactively developing an alternative product structure to mitigate any adverse financial impact to the greatest extent possible,” the company said.

“Dependent on legal interpretation of the final version, however, there can be no assurance that the legislation, if introduced in its present form, would not have some adverse financial impact on IPF,” the company added.

Broker Shore Capital has done some back of the envelope calculations and calculated that the proposed amendment could see the product's total income, defined as plus fees, will fall by 26%, all other things being equal.

This, Shore suggests, would be enough to wipe out product profitability and represents “a significant and unfortunate twist in the investment story for IPF”.

“Putting this into context, we currently expect Poland to generate £73.5mln of adjusted PBT [profit before tax] in 2015F, which is equivalent to 60% of our group adjusted PBT estimate of £122.4mln. As such, IPF may need to consider further product restructuring to mitigate the impact of the proposed change, should it be accepted and implemented by the Upper Chamber,” Shore said.

Shares in IPF tumbled 15% to 401.8p during the morning session.

[wad collector] 13/7/2015 12:44

Is the Polish lending bill enough to explain a 70p drop today?
The company made positive noises about the issue in their last statement.

[superstardj] 24/3/2015 14:45

Also the CEO has exercised about 141k share options today - AND RETAINED THEM.

[vosene] 24/3/2015 12:53

Have to agree with the note. At some point the market will stop worrying about a few tinpot issues and realise the bigger growth picture - and switch from a defensive valuation to a growth valuation - which will send this to 650-750 IMV, just a question of when.

[robinnicolson] 24/3/2015 12:38

Here is the Berenberg note:

International Personal Finance’s (IPF) shares have struggled over the last year, underperforming the SXFP (Stoxx Financial Services index) and the FTSE 250 by c45% and c18% respectively. While FX and regulatory fears are weighing on the shares, IPF is exposed to significant long-term growth opportunities. We see recent share price weakness as a buying opportunity as we expect the near-term headwinds (FX and investment costs) to begin
to fade in 2016 and beyond. We upgrade our recommendation to Buy with a new price target of £6.00 (c28% upside).
Potential to double PBT: IPF is present in nine countries and the recent acquisition of MCB Finance brings a digital presence in four new markets. We believe there is scope for IPF to more than double PBT in its existing footprint, and the digital opportunity could be very large. We believe the market is focusing more on the near-term concerns, and not enough on the longer-term opportunities that IPF could benefit from.
New markets drive growth: Mexico and Spain could add c£115m to IPF’s PBT over the long term, almost doubling group PBT. While it is early days for Spain, Mexico is one of IPF’s best-performing markets and is growing fast (2014-17E PBT CAGR of 34%). There is a lot more for IPF to go for as it expands coverage and increases penetration across Mexico. We believe management’s c£100m PBT target is looking increasingly achievable.
Transformation for growth: IPF is re-positioning itself from a single product (home credit), single-channel business into a more diverse
consumer finance business. It has embarked on a change programme, “Transformation for Growth” (T4G), which will reposition it with a more sustainable business model and provide incremental growth opportunities. T4G will deliver more than £20m in additional PBT from 2018 onwards via top-line growth, better credit quality and operating efficiencies.
Going digital: IPF is developing a digital product (hapi loans) to run alongside its traditional home credit product. The acquisition of MCB Finance is a good deal, in our view. The price paid was cheap (3.5x EBITDA), it provides access to four new markets, and it brings technology and c10 years of experience in digital lending. We estimate that digital lending could be a c£40m PBT business if IPF achieves a similar customer penetration rate to MCB Finance across its much larger European markets. The opportunity would be significantly larger if digital is successfully rolled out into new markets.
Growth priced at value: While FX could still deteriorate further, we believe the impact has largely been reflected in consensus now. We have reduced our estimates by 8-9% in 2015/16, mainly due to FX. Management believes it will receive regulatory approval for its restructured Polish product, which should allay regulatory concerns. On 10.5x 2016E for 11% EPS CAGR, we believe IPF is trading on a low multiple on earnings, which now reflect the large drag of FX and investment costs. We see current share price weakness as a buying opportunity for long-term investors.

[daz] 24/3/2015 10:36

The rise today may be due to the good results from SUS, who operate in the same sector. Can't help but th.ink there may be some profit taking at these levels though.

[wad collector] 24/3/2015 10:20

Motoring today ; almost back to a fiver .Berenberg upped their target to 600 from 525 today though I see JPM lowered theirs to 430p. One of them is wrong.

[wad collector] 27/2/2015 10:00

I think the share price drop is overdone again - a few more pence and I will snaffle some more .
Euroinstability I think is factored into the price.

[wad collector] 26/2/2015 22:12

Sp unchanged at the end of the day of finals.
International Personal Finance Plc

25 February 2015

International Personal Finance plc

Annual results announcement and statement of dividends

Year ended 31 December 2014


-- Strong underlying profit growth
o Strong underlying growth of GBP25.4M (21.5%) in profit
before tax and exceptional items offset by additional
new business investment of GBP9.0M and weaker FX rates
of GBP11.0M
o Profit before tax and exceptional items increased 5%
to GBP123.5M
o Costs well-managed and further improvement in efficiency
with cost-income ratio 38.8% after absorbing new business
costs
o Impairment as a percentage of revenue in target range
at 28.1%

-- Continued growth in customers and credit issued although
slowed as Q4 progressed
o Year-on-year customer numbers and credit issued grew
2% and 5% respectively
o Revenue for the year increased by 13%
o Growth in the last weeks of the year below expectations

-- New products, channel developments and further geographic
expansion will contribute to higher levels of growth in
2015 and beyond
o Licence to commence trading in Spain expected shortly
o Further geographic expansion continues in Mexico, Lithuania
and Bulgaria
o Transformation for Growth (T4G) programme positively
impacting business
o Multiple new product and channel launches to broaden
appeal to new and existing home credit customers

-- Digital business established
o Acquisition of MCB Finance Group plc (MCB) in February
2015 - an experienced, profitable digital consumer
loans provider in five countries
o hapiloans launched in Poland

-- Target capital ratio reduced and dividend pay-out ratio
increased
o Target equity to receivables capital ratio reduced
to 40% from 45%
o Target dividend pay-out ratio increased to 35% from
current 25%
o Proposed full year dividend increase of 29% to 12.0
pence per share
o EUR300M core Eurobond funding refinanced at significantly
lower rate and GBP100M bank facilities renewed



YOY change
Key stats 2014 2013 at CER
----------------------- -------- -------- -----------
Customers (000s) 2,640 2,578 2.4%
Credit issued (GBPM) 1,022.0 1,050.8 4.7%
Revenue (GBPM) 783.2 746.8 12.7%
Impairment % revenue 28.1% 26.6% (1.5) ppts
Cost-income ratio 38.8% 39.5% 0.7 ppts
PBT* (GBPM) 123.5 118.1 4.6%
Statutory PBT (GBPM) 100.2 130.5
EPS* (pence) 38.0 35.5
Statutory EPS (pence) 30.2 39.2
Return on equity* (%) 23.6 22.9
----------------------- -------- -------- -----------

I like the dividend rise but not the exceptionals.

[alphahunter] 28/1/2015 23:58

Candid question: any indirect exposure to the removal of CHF/EUR's peg?

[ttny2004] 21/1/2015 21:35

Think a good entry point. Potential for 33% capital growth.

[wad collector] 21/1/2015 15:44

Yes but it made 40p a share last year - so the dividend is well covered - I will settle for capital growth instead. Hopefully..

[envirovision] 21/1/2015 13:16

Pity about the pitiful dividend.

[wad collector] 21/1/2015 13:11

Well that's me in again on a 8 month low. European Finance looks a bit volatile this week but expect it will reach a solution eventually.

[wad collector] 20/1/2015 11:33

Haven't been a holder here since 2012 when I made some good profit but missed a bigger one by not holding on. The roaring BB called out to me!
Finally looks tempting again to me ; 423 limit buy set. If the brokers predictions for next yr are close then a 3% yield will be covered 3x.
Brokers of course are guessing too.

[ttny2004] 23/11/2014 11:26

That should have read 460p to 480p range

[ttny2004] 23/11/2014 11:25

SP Drifting aimlessly within 560 to 500p range. Be intersting to know which way it breaks out. Hoping upwards of course!

[ttny2004] 31/10/2014 12:11

Good day today. Maybe finally this is waking up again. Well overdue in my opinion.

[ttny2004] 31/10/2014 10:03

Indeed. Think solid performance will be continued for next few years with share price in toe. Don't believe it will be long before we are above the 500p levels attacking 600p plus again.