International Personal Finance hikes dividend after strong year

(Sharecast News) - International Personal Finance reported a strong financial performance for 2024 on Wednesday, with pre-exceptional profit before tax rising to £85.2m, ahead of previous guidance and slightly above the £83.9m recorded in 2023. The London-listed firm said growth was driven by record profits from Mexico home credit and IPF Digital's operations in Mexico and Australia, as well as record lending volumes in Hungary.

It proposed an 11.1% increase in the final dividend to 8p per share, bringing the full-year dividend to 11.4p, up 10.7% from the previous year.

Customer lending grew 9% year-on-year, supported by robust demand across the company's product range.

Net receivables rose 7%, with IPF Digital leading at 18% growth and Polish operations returning to expansion in the final quarter.

A strong customer repayment performance helped improve the impairment rate to 9.6%, down from 12.2% in 2023, exceeding the company's target.

International Personal Finance said it secured nearly £400m in funding during the year, including the refinancing of its Eurobond.

The company reported significant financial flexibility, with £138m in undrawn funding facilities and non-operational cash, providing coverage through to the end of 2025.

It said its equity-to-receivables ratio stood at 54%, slightly lower than the prior year's 56%, supporting plans for accelerated growth while maintaining a progressive dividend policy.

The company also reported progress in its Next Gen strategy to drive long-term growth.

In Poland, the receipt of a full payment institution licence in the fourth quarter was expected to accelerate expansion, with over 200,000 credit cards now issued.

It added that in Mexico, home credit was positioned for stronger growth following regional restructuring and an IT infrastructure upgrade.

IPF Digital saw a 50% increase in mobile wallet customers, reaching 115,000, while retail partnership credit was now available in 700 stores in Romania and 50 online retailers in Mexico.

The company said it was continuing to explore opportunities to expand its product range across all markets, particularly in credit cards.

Following the successful completion of a £15m share buyback in the second half of 2024, the company announced plans for an additional £15m buyback, expected to be completed by the third quarter of 2025.

Its management remained optimistic about growth prospects, underpinned by strong credit demand, operational execution, and a well-capitalised balance sheet.

"I am very pleased to report significant progress across our group in 2024 -the ongoing execution of our Next Gen strategy has delivered good growth, and we provided over £1bn of credit to those who find it difficult to get finance from banks," said chief executive officer Gerard Ryan.

"Combined with very strong customer repayment performance, we delivered a pre-exceptional profit before tax of £85.2m, ahead of the guidance we provided at the interim results.

"Reflecting the continued strong performance of the group and the success of our strategy to realise the long-term growth potential of the business, the board is pleased to declare an 11.1% increase in the final dividend to 8.0p, and our intention to commence a further share buyback programme of up to £15m, improving the efficiency of our balance sheet."

Ryan said that beyond the strong financial results, the company served its 15 millionth customer in September, which he called a "great sign" of its ability and commitment to supporting underserved communities.

"With good growth momentum and a strong balance sheet, we enter 2025 in an excellent position to accelerate both growth and the pace of change across the group.

"Building on our track record of success, we will maintain our focus on serving those consumers who need us most and enhancing our customer experience, while pursuing growth opportunities with discipline and a clear focus on sustainable returns."

At 1003 GMT, shares in International Personal Finance were up 4.33% at 132.5p.

Reporting by Josh White for Sharecast.com.