10th Jun 2020 09:56
(Alliance News) - International Personal Finance PLC said Wednesday it maintained tighter credit standards during the coronavirus pandemic in an effort to protect its credit quality and manage cashflow.
Shares in the doorstep lender were 13% higher in London on Wednesday morning at 70.88 pence each. However, the stock has more than halved since the start of the year, when it was priced above 160p.
What's more, IPF restricted its credit issued in April and May to 30% of its 2020 budget.
"In the near-term, our focus for new lending will continue to be on our loyal customers who have strong credit quality characteristics. We expect volumes to increase moderately in June as lockdown restrictions are eased and our collections performance continues to improve," the lender added.
IPF noted its collection effectiveness improved to 80% of pre-Covid-19 levels, which the lender attributed to its European home credit arm where there was an increase in the proportion of agents visiting customers.
IPF expects collections effectiveness to "progressively improve" in the coming months due to the easing of lockdown restrictions.
Chief Executive Gerard Ryan said: "I am pleased with the progress we have made since our last trading update. We have adhered to our guiding principles of protecting our people, our customers and our business, and through the huge effort, dedication and response of our teams across the business, we have improved our collections effectiveness.
"We have a resilient business and as restrictions ease further, I am confident that we will increase our volume of new lending and see a steady improvement in performance. It is clear that following the pandemic, the need for a principled and responsible institution that provides finance to underbanked and underserved consumers around the world will be more important than ever. We fully expect to fulfil that role."
IPF's net cash flow generation in May was GBP43 million, improved from GBP41 million in April. The company's cash and headroom on undrawn debt facilities ended May 31 at GBP223 million.
IPF said it is focussing on its "need" to refinance its EUR406 million Eurobond, which matures April 2021.
IPF also said its interim results will be delayed to "early" September, from its originally scheduled date of July 29. IPF said the delay will allow the company to "provide a greater degree of clarity" on its performance.
By Paul McGowan; [email protected]
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