22nd Mar 2007 07:00
Paragon Group Of Companies PLC22 March 2007 TRADING STATEMENT The Paragon Group of Companies PLC will shortly be meeting with analysts aheadof its close period for the six months ending 31 March 2007. The following isan update on the trading position of the Group ahead of the end of the halfyear. The Board expects the results for the six months to 31 March 2007 to be in linewith market expectations. Lending activity has been strong during the year to date, with completions morethan 30% higher than a year ago. This growth is attributable to activity withinthe buy-to-let business as the Group has continued its strategy of stronglypromoting buy-to-let lending whilst limiting consumer lending. With redemption rates remaining low, the increase in buy-to-let lending in theperiod has resulted in strong growth of the buy-to-let portfolio, increasinglythe dominant asset in the Group's balance sheet. The pipeline of new buy-to-letmortgage business remains strong, ahead of the level a year ago, which augurswell for a strong start to the second half of the year. The credit quality ofthe buy-to-let portfolio remains exemplary. The Group expects to complete today its latest buy-to-let securitisation,Paragon Mortgages (No. 14) PLC. The £1.5 billion issue achieved pricing atprime levels and attracted strong demand from investors in the UK, Europe andthe US. At 10 basis points over LIBOR, the coupon for the long-dated AAA ratednotes reflects the high quality of Paragon's buy-to-let originations. Statistics from the Council of Mortgage Lenders show that 11% of all new firstmortgage lending in 2006 was for buy-to-let property. Short term demand andlong term demographic factors remain supportive of a strong private rentedsector for the foreseeable future, suggesting that the buy-to-let mortgagemarket has considerable room for further growth. Within the consumer division, our focus remains on cautious lending rather thanvolume growth and we have continued to restrict our activities to areas with alow incidence of arrears. In the current economic environment, withaffordability measures now more stretched for borrowers, we have allowedconsumer lending volumes to fall some 15% below those for the correspondingperiod last year. In addition, the Group has continued the orderly, managed rundown of the closed books. The Board of Directors intends to announce the interim results for the sixmonths ending 31 March 2007 on 22 May 2007 and a full report on the progress ofthe Group will be issued at that time. For further information please contact: Nigel S Terrington Chief Executive - Telephone 0121 712 2024 or Nicholas Keen Finance Director - Telephone 0121 712 2060 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Paragon Group