18th Nov 2020 11:51
(Alliance News) - International Personal Finance PLC on Wednesday reported continued improvements in its trading performance during October 2020.
The provider of home credit and owner of fintech business IPF Digital said it delivered a strong level of collections effectiveness throughout 2020, rising to 97% of pre-Covid expectations in October from 80% in May. Despite this, IPF continues to expect a modest reduction in collections effectiveness over winter as it had said in its third-quarter update back in October.
Due to the improved collections since the half year point, IPF has been able to progressively relax credit settings, resulting in an increase in credit issued to 60% of pre-Covid expectations, primarily in home credit operations in Europe and Mexico. The company plans to continue increasing credit issued throughout the rest of the year.
IPF's net cashflow generation in October fell to GBP7 million from GBP43 million back in May, a decrease 84%. This reflects its decision to increase lending cautiously to rebuild the loan portfolio, as well as tax payments falling in many of its jurisdictions.
IPF also has completed a new five-year bond issue and amended covenant package across all of its bonds, which combined with its bank facilities totals GBP560 million of funding with amended covenants to support the future of the business. This compares to borrowings net of non-operational cash balances of GBP401 million at the end of October.
Gerard Ryan, IPF chief executive, said: "I'm very pleased to report a further improvement in our collections performance and that we are carefully increasing lending to our highest quality customers. We are well-prepared for operating during the second wave of the Covid pandemic, with our priority being the health and safety of our colleagues and customers.
"Successfully completing the refinancing of the business provides the financial foundation on which we will continue to provide credit responsibly to under-served consumers and deliver long-term growth and value to all our stakeholders."
Shares in International Personal Finance PLC were up 10% at 91.00 pence in London on Wednesday.
By Zoe Wickens; [email protected]
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