Weak Mexican performance hits cash lender International Personal Finance
The Leeds-based group said credit issued in Mexico grew by four per cent in its first quarter, which was slower than expected.
IPF’s CEO Gerard Ryan said: “The factors driving this are largely operational and we have a clear plan to address these and return to higher rates of growth as we move through the year.”
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Hide AdThe group said that in order to support longer-term growth in Mexico, it has started a geographic expansion programme to open around 10 new branches in 2016. It has opened three so far this year.
Analyst Gary Greenwood at Shore Capital said: “IPF’s first quarter update flags a surprisingly disappointing performance in Mexico where credit issued growth was slower than expected at 4 per cent during the quarter and collections performance was also weaker than expected resulting in an increase in impairments.
“Management says that it has taken action to address these issues. However, following the group’s recent well-publicised problems in Eastern Europe, a wobble in one of its faster growing markets comes as a somewhat unwanted further development that is likely to impact negatively on the shares this morning.”
The shares closed down 16p at 224.5p.
“Overall, we view this as a disappointing update but understand that management remains comfortable with consensus statutory pre-tax profit of £92.8m.
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Hide Ad“While we expect profits to take a step backwards in 2016, our positive stance is based on a combination of low current year earnings multiple and strong anticipated profit growth thereafter driven by growth in Mexico and Digital and a stabilisation in Eastern Europe.”
IPF said it increased customer numbers by 3 per cent year on year.