Recovery on the cards for credit lender

CREDIT lender International Personal Finance (IPF) said today that it is continuing to make a strong recovery following a difficult start to the year.

The group, formerly the international division of Bradford-based Provident Financial, said that if current trends continued results for the year were likely to be materially ahead of current market expectations, although it warned that the impact of recession on the Christmas lending peak remained unpredictable.

Earlier this year IPF reported that pre-tax profits from continuing operations for the six months to June 30 dipped to £9.1m from £26.3m at the same time last year reflecting increased impairment.

The Leeds-based group said its market in Hungary had been worst affected by the economic downturn but that it had a plan in place to return this market to profit for 2010.

Today it reported that Hungary had returned to profit with profits in Poland, the Czech Republic and Slovakia up by 7%.

Credit quality and collections performance have improved and following the re-structuring, costs have been significantly reduced.

The Hungary business reported a loss of £2m in the third quarter reflecting an underlying operating profit of £1m and one-off restructuring costs of £3m.

Romania is also progressing well and on track to record a profit next year. Costs in Central Europe are also 13% lower than quarter three 2008.

Likewise, Mexico is on track for full year profit this year reporting a maiden quarterly pre-tax profit of £200,000 compared with a loss of £3m in the same quarter of the previous year.

IPF said that its balance sheet remained strong at that borrowing at the end of September was £337.6m. Current bank facilities are £609.7m.

“Approximately £396.1m of these facilities are committed to October 2011 and this provides sufficient funding for existing operations to that time. We expect the group to continue to satisfy all of its covenants,” it added in a statement.