International Personal Finance (IPF) H1 2024 earnings summary

Executive summary

• Pre-exceptional profit before tax rose 25% year-on-year to £47.3m, exceeding internal targets and driven by the Next Gen strategy and robust operational performance.

• Interim dividend increased 9.7% to 3.4p per share; share buyback of up to £15m announced, reflecting strong capital position.

• Major Eurobond refinancing completed, extending debt maturity to 2029 and leading to a Fitch rating upgrade to BB.

• Strong demand for credit, with customer lending (ex-Poland) up 7% and receivables (ex-Poland) up 12% year-over-year.

• Next Gen strategy focused on financial inclusion, digital solutions, and operational efficiency, with expansion in Mexico and digital/mobile wallet growth.

Financial highlights

• Group revenue was £371.7m, down 2.2% year-over-year; impairment charges fell 27.9% to £64.3m.

• Pre-exceptional EPS rose 24% to 12.6p; reported EPS up 4.8% to 8.8p after exceptional items.

• Annualized revenue yield increased 1.2ppts to 55.4%; impairment rate improved to 10.5% (from 11.4%).

• Cost-income ratio at 59%, up 1.6ppts year-on-year due to lower revenue in Poland; ex-Poland, ratio improved to 54.7%.

• Pre-exceptional RORE at 16.2% (up from 14.7%); pre-exceptional ROE at 12.1%.

Outlook and guidance

• Full-year pre-exceptional profit before tax expected between £78m–£82m, ahead of market consensus.

• H2 profits expected to be lower than H1 due to credit card repricing in Poland and IFRS 9 impairment charges from increased lending.

• Anticipates acceleration in growth for the remainder of 2024, with Polish business stabilizing and Group profit moderating in H2.

• Customer numbers expected to show small single-digit growth year-on-year, with stabilization and growth in Poland in H2.