Record results send IPF shares soaring

The Leeds-based doorstep lender reported a 24 per cent rise in 2013 pre-tax profit as it saw a marked increase in credit issued.

The company said underlying pre-tax profit rose to £118.1m in the year to December 31.

IPF’s chief executive Gerard Ryan said the results were driven by top line growth and customer quality.

“We’re lending larger sums of money to our best customers,” he said.

“There is strong demand for longer term loans of 90 weeks in Poland and 100 weeks in the Czech Republic and Slovakia.”

IPF lends to 2.5 million borrowers across eastern Europe and Mexico.

The group is also offering a 10 to 15 per cent discount on the service charge to its best customers.

“Customers are recommending our service to friends and family which is boosting growth,” said Mr Ryan.

The group’s research indicated that many customers wanted to borrow a larger sum of money whilst maintaining the same weekly instalment.

To meet this demand it rolled out a range of longer-term loan products to its best quality customers in Poland, the Czech Republic and Slovakia.

Longer-term loans were launched earlier this month in Hungary and a pilot is underway in Romania.

Preferential pricing, whereby the group rewards good quality, loyal customers, is now in place in Poland, the Czech Republic, Slovakia and Hungary.

Tests of preferential pricing have also begun in Mexico and Romania and IPF intends to roll out in these markets during the second half of 2014.

The group said it has conducted a test of a home insurance product in Hungary and late last year it launched a pilot scheme offering life and medical assistance insurance to customers in Mexico for the duration of their loan.

IPF entered Lithuania and Bulgaria for the first time in 2013, using operations in neighbouring countries for both launches.

In Lithuania, it opened two branches in Vilnius and Kaunas and four smaller offices. It now has 70 agents serving 1,800 customers and there are plans to open another three or four branches.

It opened in Bulgaria last September and it now has four branches, 96 agents and 2,400 customers.

It plans to open another six branches in the country as part of plans to accelerate geographical expansion rapidly in both Lithuania and Bulgaria in 2014.

IPF opened four new branches in Mexico including its first branch in Mexico City, which has a population of more than 20 million, last December.

As part of its expansion in Mexico City it is testing the delivery of loans on a pre-paid card.

IPF said its overall revenue rose 11 per cent to £746.8m. Total credit issued rose 15 per cent.

Last year IPF was fined £2.4m by the Polish authorities over the way it calculated some of its APR (annual percentage rate) lending terms.

Yesterday Mr Ryan said the group is appealing the decision and it is going through the court process.

“We feel we’re on very strong ground,” he said.

The group expects to get a decision next year and in the meantime, it is exploring alternative methods of charging.

IPF raised its final dividend to 5.5p per share, increasing the total payout for the year to 9.3p.

The group’s shares rose 53.5p to close at 557.5p.