25th Feb 2015 08:43
LONDON (Alliance News) - International Personal Finance PLC Wednesday reported a drop in pretax profit in its last financial year, with the lender citing the costs of a Eurobond buyback, investing in its business, and foreign exchange translation losses.
In a statement, International Personal Finance, which lends to people in Europe and Mexico, said that pretax profit fell to GBP100.2 million in 2014 from GBP130.5 million in 2013.
However, Chief Executive Gerard Ryan said underlying profit growth was strong, with pretax profit before exceptional items up to GBP123.5 million from GBP118.1 million.
"In 2014 we delivered strong underlying profit growth and invested in further expansion of our business and we now have operations in thirteen countries," Ryan said.
"We experienced a slowdown in growth in Europe in the final weeks of the year, but have taken action to address this and continue to launch new products to support future growth. We are also very pleased to have established our new digital business that we believe will broaden our appeal to a much wider customer base," Ryan said.
"Overall, we believe that the business is well placed to make good progress in 2015," the CEO added.
International Personal Finance increased its full-year dividend to 12.0 pence per share from 9.3 pence for 2013, and increased its target dividend pay-out ratio to 35% from 25%.
It also reduced its target equity to receivables capital ratio to 40% from 45%.
"This means that we need to retain a lower level of capital to fund our growth. We considered carrying out a further programme of annual share buybacks but concluded that removing additional liquidity from our stock was not helpful," International Personal Finance said.
"We have decided therefore that it is appropriate to increase the target dividend pay-out ratio to approximately 35% of post-tax earnings, from the current level of 25%. Any actions to reduce the capital ratio will accommodate the future capital needs of the business for growth," the company added.
Still, International Personal Finance shares were down 1.6% at 460.00 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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