Landmark for doorstep lender as customer base passes 2.5m

Gerard Ryan said that Leeds-based IPF made good progress in the quarter with its expansion into Lithuania and Bulgaria and the further roll-out of longer-term loans and preferential pricing for its best customers. He said the firm is well placed to achieved a good full-year performance in 2013.

Pre-tax profits for the third quarter were up by 19 per cent year-on-year to £32.5m. IPF said that this built on the profit growth achieved in the first and second quarters of the year.

Profits before tax and exceptional items for the nine months to September increased by 28 per cent to £74.8m, before the positive impact of £5.8m from stronger foreign exchange rates, offset by a £2.4m investment in new markets and a £1.8m cost from higher early settlement rebates.

Mr Ryan also said that the business recorded strong revenue growth. Revenue was up 11.1 per cent at a constant exchange rate to £189m in the third quarter.

Customer numbers were up by four per cent year-on-year to more than £2.5m.

The company, which employs around 160 people in Leeds, said in its update to the stock exchange yesterday: “We achieved this Q3 performance through delivering good credit issued growth, maintaining annualised impairment as a percentage of revenue in the middle of our target range and continuing to control costs.”

It added: “Credit quality remains consistently good and, as a result, annualised impairment as a percentage of revenue is stable at 26.8 per cent and well within our target range of 25 per cent to 30 per cent.”

The company said that its £60m share buy-back programme, which it announced in the summer, is close to completion.

IPF said that the business is expanding into new territories in line with its strategy to drive growth. Expansion into Lithuania and Bulgaria is progressing well, IPF said, while it is also extending its geographic footprint in Mexico.

Mr Ryan said: “Poland has done quite well, by far our largest market, continuing to grow and increasing momentum.”

The firm has increased its field management team in Romania and opened another new branch in Mexico. Its plans to expand into Mexico City, with a population of more than 20 million, with a branch opening scheduled for the coming months.

IPF said: “We now offer longer-term loans to our best quality customers in Poland (up to 90 weeks) and Czech-Slovakia (up to 100 weeks) and plan to extend 78 week loans in Romania following a successful test period.

“By the end of 2013 we will have put in place reward propositions for loyal, quality customers in all established markets. Preferential pricing, which offers discounted loans to quality customers, is being rolled out market-wide in Poland, Hungary and the Czech Republic. Tests will begin in Mexico and Romania in Q4.

“Our home insurance pilot in Hungary has now been running for eight months.”

IPF said that it has decided to keep it in pilot mode until it is satisfied with the productivity of its agent and call centre sales activities.

Looking ahead, the company said that the “more stable macroeconomic outlook” for 2013 and 2014 remains largely unchanged in Europe and Mexico. It added: “We are also seeing an increasing presence of payday lenders in Poland whose high-profile marketing has impacted our share of voice in the media.” IPF said other home credit operators in the Czech Republic are also active.