Q3 2021 trading update
Highlights
o | Strong operational performance and well-positioned for further growth | |
o | Rebuild strategy proving highly effective and delivering sustained growth momentum | |
o | Improving consumer demand and selective relaxation of credit settings delivered 35% increase in credit issued year on year | |
o | Building sales momentum delivered 8% increase in closing receivables since the 2020 year end (at CER) | |
o | Strong collections and high-quality lending resulted in very low annualised impairment as a percentage of revenue at 12.0% | |
o | Strong funding position and well-capitalised balance sheet | |
o |
Successful issue of | |
o | Fitch Ratings improved IPF outlook to Stable and reaffirmed long-term credit rating of BB- |
"I'm delighted to report a very strong operational performance as levels of demand for credit continued to increase. Our business plays an essential role in society by providing credit to people who are underbanked or underserved, and we are successfully serving a growing number of customers in a responsible and sustainable way. Despite the ongoing challenges posed by the pandemic, we see significant long-term demand for affordable credit in all our markets and will continue to execute our rebuild strategy by increasing credit issued and growing the receivables portfolio while maintaining a clear focus on portfolio quality and costs. My thanks go to all of our colleagues who are working diligently to serve our customers safely and rebuild the business at this important time."
Group performance
Our rebuild strategy to return the business to full-year profitability and long-term growth continued to prove highly effective. We delivered a strong operational performance and sustained growth momentum in response to increasing demand for credit as freedom of movement and social distancing rules were eased in most of our markets. This resulted in a strong increase in credit issued of 35% year on year and we returned to serving 1.7 million people, adding a further 36,000 new customers in Q3.
With the company returning to growth mode we also delivered an 8% increase in closing receivables since the year end (at CER). We expect this growth trend to continue for both credit issued and receivables in the final quarter of the year which will, in turn, drive further revenue growth. Our strong collections performance and higher-quality lending resulted in a 25.4 ppt improvement in annualised impairment as a percentage of revenue since the 2020 year end to 12.0%. Other costs reduced year on year by 2% (
European home credit
Our business responded well to growing consumer demand in our European home credit markets, and we increased credit issued year on year by 48%. Customer numbers contracted year on year by 3% to 810,000 but as we successfully executed our rebuild strategy, they increased by 2,000 in Q3. Our collections performance together with the unwinding of Covid-19 impairment provisions booked in 2020 and higher-quality lending, resulted in annualised impairment as a percentage of revenue improving by 30.9 ppts since the 2020 year end to 4.7%.
Of the temporary Covid-19 related regulations introduced in 2020, only the temporary debt repayment moratorium in
Consumer appetite for credit in
Increasing demand for consumer credit is creating a good foundation on which to rebuild the digital business and deliver sustainable growth. Year on year, customer numbers reduced by 6% to 256,000 driven by suppressed demand early in 2021 as a result of the pandemic, our continued cautious credit settings in
Funding and balance sheet
As at
In October, we successfully issued a new 3-year
Fitch Ratings improved the outlook for IPF to Stable and reaffirmed its long-term credit rating of BB-.
As previously reported, IPF announced a Tender Offer for the purpose of delisting the Group's shares from trading on the WSE. The subscription period has now closed and on
Outlook
Our business plays an essential role in society, and we have a longstanding and successful record of providing affordable credit in a responsible way to those who are underbanked or underserved by banks. There is significant long-term demand for affordable credit from this group of consumers in all our markets and we will continue to execute our rebuild strategy by continuing to serve our customers safely, progressively and responsibly, increasing credit issued and growing the receivables portfolio while maintaining a clear focus on portfolio quality and costs.
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https://news.cision.com/international-personal-finance-plc/r/q3-2021-trading-update,c3445886
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