International lender sees solid growth despite Greek debt crisis

The Leeds-based company said trading is ahead of plan in the year to date.

Chief executive John Harnett said: "Credit issued is growing steadily and credit quality in all markets is good."

But he warned that credit controls are still cautious, especially in Romania, where the impact of government cuts on public sector pay and pensions have yet to be felt.

The group's shares closed up 0.6p at 219.8p last night.

Following the update, analysts at Numis Securities put out a "buy" recommendation on the stock.

"IPF has announced a strong trading statement with trading ahead of management expectations for the year so far," said Numis analyst James Hamilton.

"As expected the second quarter is benefiting from the reversal of impairment taken in the first quarter due to poor weather."

Numis does not expect to change its record full-year pre-tax profit forecast of 89.1m.

"The shares are too cheap, being valued at 8.7 times this year's earnings," said Mr Hamilton.

IPF said there are two full weeks to complete before the half-year, but trading in the first three weeks of June was in line with expectations.

"We have seen no adverse impact as a result of the economic uncertainty that has followed from the Greek sovereign debt crisis and we are pleased with the continuing good progress in our Hungarian business," said Mr Harnett.

The company's half-yearly financial report will be published on July 22.

Last month, IPF said that trading has been ahead of expectations, fuelled by improving collections and lower impairment levels.

Chairman Christopher Rodrigues said that the company is looking to extend the maturity of its debt in 2010, after announcing plans to diversify its funding sources with a 1bn Euro (880m) medium-term note programme to raise funds.

IPF, the former international arm of Bradford-based credit lender Provident Financial, was hit by bad weather in central Europe at the start of the year, but reported swinging to a first quarter profit in April.

A return to normal trading in March and good weather in the first half of April meant the group produced a 2m pre-tax profit in the three-and-a-half months to April 14. This compares with an 8.5m loss in the first quarter last year.

The group suffered extremely cold weather in January and February, especially in Poland where it was minus five degrees during the day and it snowed all but two days in the first six weeks.

The company, which offers small loans to consumers in emerging markets such as Poland, Hungary and Mexico, had warned that the severe weather had hit its performance.

The group said that first-quarter profits in Poland, the Czech Republic and Slovakia rose by 11 per cent to 4.9m.

Growth in these three markets has been good.

The Hungarian business, which underperformed last year, is now on course to make a profit this year.

In Mexico, credit issued rose 26 per cent year on year, customer numbers grew by 17,000 to 541,000 and the division reported a quarterly pre-tax profit of 200,000 compared with a loss of 2.9m last year.

Household credit

International Personal Finance makes cash loans of between 150 and 500, mainly to women who are trying to manage the household budget.

Common reasons for borrowing money are to pay for Christmas, summer holidays and back-to-school necessities.

The money is collected in weekly payments by doorstep debt agents.

The group was formed in 1997 as a division of Bradford-based Provident Financial, the UK's leading provider of home credit.

The group, which was the former international division, split from Provident Financial in July 2007.

International Personal Finance established its first operations in Poland and the Czech Republic in 1997.