International Personal Finance plc.: Half-Year Report

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION WITHIN THE MEANING OF THE UK MARKET ABUSE REGULATION.

31 July 2024

International Personal Finance plc

Half-year financial report for the six months ended 30 June 2024

Principal activity

International Personal Finance is helping to build a better world through financial inclusion by providing affordable credit products and insurance services to underserved consumers across nine markets.

STRONG OPERATIONAL AND FINANCIAL PERFORMANCE

Key highlights

Strong first-half financial performance enabling increased returns to shareholders

• Pre-exceptional profit before tax of £47.3m¹ (H1-23: £37.8m), up 25% on H1-23 and ahead of our 2024 internal plans.
• Interim dividend of 3.4p (H1-23: 3.1p), an increase of 9.7%, in line with our policy of paying 33% of the prior year full dividend per share at the interim.
• Excess capital to be returned to shareholders in the form of a share buyback programme of up to £15m.

Strong demand for credit and an excellent operational performance builds growth momentum

• Good demand for our broad range of financial products resulted in customer lending, excluding Poland, growing 7%² year-on-year, with improving momentum in the second quarter.
• Receivables, excluding Poland, showed strong year-on-year growth of 12%², with all divisions performing well.
• Customer lending and receivables in Poland reduced by 7%² and 28%² respectively, in line with our plans and total Poland receivables of £187m are now stabilising.
• Exceptional customer repayment performance and excellent credit quality, delivering an impairment rate of 10.5% (H1-23: 11.4%).

Major refinancing strengthens funding position to support future growth

• Successfully refinanced our €341m Eurobond in June, extending the debt maturity profile to 2029, as well as leading to a rating upgrade from Fitch Ratings to BB.
• Significant headroom on undrawn funding facilities and non-operational cash balances of £179m to fund the Group's plans through to the end of 2025.
• Equity to receivables ratio of 56% (H1-23: 52%) underpins the Group's growth plans, progressive dividend policy and the share buyback programme.

Excellent progress against our Next Gen strategy to take advantage of substantial long-term growth opportunities

• Over 180,000 credit cards now issued in Poland, with the product demonstrating valuable utility for customers.
• Continued growth in our geographic footprint in Mexico with a new branch opening in Mexicali.
• Retail partnership credit now available in 450 stores in Romania.
• Mobile wallet customers in IPF Digital increased by over 50% to 85,000 in the first half.

Outlook

• Confidence in delivering an acceleration in growth through the remainder of the year.
• Expect full year pre-exceptional profit before tax of between £78m and £82m for 2024, ahead of current market expectations³.

Group key statistics	H1-24	H1-23	YOY change
Customer numbers (000s)	1,656	1,718	(3.6%)
Customer lending (£m)	597.4	578.8	3.2%2
Average gross receivables (£m)	1,369.9	1,343.2	(0.1%)2
Closing net receivables (£m)	864.4	893.1	(0.4%)2
Pre-exceptional PBT (£m)1	47.3	37.8	25.1%
Statutory PBT (£m)	36.5	37.8	(3.4%)
Pre-exceptional EPS (pence)1,4	12.6p	10.2p	23.5%
Interim dividend per share (pence)	3.4p	3.1p	9.7%

1 Prior to an exceptional charge of £10.8m in 2024 (see note 8 for details).

2 At constant exchange rates (CER).

3 Market expectations based on consensus pre-exceptional profit before tax for 2024 of £71.4m at 30 July 2024.

4 Prior to an exceptional tax charge of £4.0m in 2023 (see note 8 for details).

Gerard Ryan, Chief Executive Officer at IPF commented:

"I am delighted to announce very strong financial and operational progress for IPF in the first half of the year. Executing on our Next Gen strategy has delivered good growth momentum, exceptional customer repayment performance and pre-exceptional profit before tax of £47.3m, ahead of our 2024 internal financial plan. The successful refinancing of our €341m Eurobond, which attracted very good demand and over 150 investors, ensures that we have a strong funding position to support our ambitious growth plans.

As a result of the excellent first half results, our strong balance sheet and positive growth prospects, we have announced an increase in the interim dividend of 9.7% to 3.4 pence per share, in line with our progressive dividend policy, together with a share buyback programme of £15m, improving the efficiency of our balance sheet.

We continue to see substantial demand for our broadening portfolio of credit and insurance services from underserved consumers and we are confident that there are further attractive growth opportunities as we continue to execute on our strategy. I would like to say thank you to all my hard-working colleagues whose commitment ensures we continue to increase financial inclusion for our customers in all our markets."

Alternative performance measures
This half-year financial report provides alternative performance measures (APMs) which are not defined or specified under the requirements of International Financial Reporting Standards. We believe these APMs provide stakeholders with important additional information on our business. To support this, we have included an accounting policy note on APMs in the notes to this financial report, a glossary indicating the APMs that we use, an explanation of how they are calculated and how we use them, and a reconciliation of the APMs we use to a statutory measure, where relevant.

Investor relations and media contact:

Rachel Moran - Investor Relations[phone]
Georgia Dunn - Deputy Company Secretary[phone]

Investor and analyst webcast
International Personal Finance will host a webcast of its 2024 half-year results presentation at 09.00hrs (BST) today - Wednesday 31 July, which can be accessed here.

A copy of this statement can be found on our website at www.ipfin.co.uk.

Legal Entity Identifier: 213800II1O44IRKUZB59

Please refer to the associated PDF document to view the full announcement.

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