23rd Mar 2005 10:46
Paragon Group Of Companies PLC23 March 2005 THE PARAGON GROUP OF COMPANIES PLC TRADING UPDATE The Paragon Group of Companies PLC will shortly be meeting analysts ahead of theclose period for the half year ending 31 March 2005. The following is an updateof the trading position of the Group ahead of the end of the half year. The Board expects the results for the six months to 31 March to be in line withmarket expectations. The trading environment has undoubtedly been more challenging than during thefirst half of the previous financial year, a period which benefited from a surgeof activity after the war in Iraq. Borrowing behaviour has adjusted to increasedinterest rates and confidence in the housing market has weakened. As a consequence new business volumes have been lower than in the comparableperiod last year, but with generally lower rates of redemption reflecting thereduced activity, the loan book has continued to grow in line with ourexpectations. Margins across the business are comparable with 2004 and, with alarger portfolio, shareholders should expect to see strong growth in netinterest income in the first half. The Group has maintained its conservative credit stance and the performance ofthe buy-to-let book in particular remains exemplary. Increased borrowing costs,together with the normal seasonal expenditures, have caused some deteriorationin payment performance in the consumer finance books, and an increased provisioncharge is expected compared to the first half of last year. Lower new business activity has had a favourable impact on costs, which remainwell controlled across the group. An improvement can be expected in thecost:income ratio from last year. The outlook for landlords remains positive, with increased rental demandtranslating into higher rents and improving yields. As suggested by surveyevidence, landlords are taking a long term view of their property investmentsand indeed redemption rates have fallen over the period. Application flows haverecovered over the past two months and the pipeline at the end of the period isexpected to be at a similar level to March last year. We expect professionallandlords to continue to take advantage of market weakness in building theirportfolios. The Board intends to announce the interim results for the six months ending 31March 2005 on 25 May and a full report on the progress of the Group will beissued at that time. For further information please contact: Nigel S Terrington Chief Executive - Telephone: 0121 712 2024 or John L Wriglesworth The Wriglesworth Consultancy - Telephone: 020 7845 7900 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Paragon Group