20th May 2014 08:15
LONDON (Alliance News) - Paragon Group of Companies PLC Tuesday reported a 19% increase in first-half pretax profit, supported by buy-to-let lending and its debt purchase business, Idem Capital.
In a statement, the specialist lender said it made a GBP58.2 million pretax profit in the six months ended March 31, compared with GBP48.8 million in the corresponding period a year earlier.
Operating income increased to GBP96.3 million, from GBP86.6 million, driven by rising net interest income as it originated more mortgage and consumer finance loans. That more than offset an increase in operating expenses to GBP31.0 million, from GBP29.4 million, due to increased staff numbers. Loan impairment charges fell to GBP7.5 million, from GBP9.3 million.
Paragon Group of Companies has been diversifying its range of activities, launching a bank that will provide car finance and deposit products. The bank recently commenced a soft launch of its savings products which are expected to be available to the wider public in a few months. Personal loans will be offered through intermediaries and are expected to be launched later in 2014. Other consumer and small business finance products, including buy-to-let products will also be developed.
"The successful launch of Paragon Bank and its initial range of car finance and deposit products marks a milestone in the on-going diversification of the group's income streams and funding sources," Nigel Terrington, chief executive, said in a statement.
"Meanwhile our core buy-to-let lending business has advanced strongly and our significant pipeline of new business and the strength in the UK housing market are positive drivers for continued growth. Whilst the buy-to-let market has expanded well in recent years, it remains materially below its pre-financial crisis peak, again highlighting additional growth opportunities in the future," Terrington said.
"Our debt purchase business, Idem Capital, has invested a further GBP121.9 million in the first six months of the year and we see a strong pipeline of acquisition opportunities ahead. Idem Capital is now firmly established as one of the leading players in the UK's debt purchase market," the CEO added.
With these three business lines, the group remains well positioned for further growth in the second half of the year and opens a new phase in the group's expansion as a specialist lender."
Paragon increased its interim dividend to 3.0 pence a share, from 2.4 pence.
Paragon shares were Tuesday quoted at 370.50 pence, up 5.8%.
By Samuel Agini; [email protected]; @samuelagini
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