Interim Management Statement

RNS Number : 9155R

International Personal Finance Plc

08 May 2009

 



08 May 2009

Interim Management Statement 

This constitutes the Interim Management Statement of International Personal Finance plc ('IPF'), in accordance with the UK Listing Authority's Disclosure and Transparency Rules. The purpose of this Interim Management Statement, the full text of which is set out below, is to provide an update on the performance of IPF from the start of 2009 up to the date of publication, along with an update of its financial position. 

The statement is as follows: 

'All markets with the exception of Hungary are performing in line with expectations.  

Our developing markets in Mexico and Romania are progressing to plan and the outbreak of Swine Flu in Mexico has not affected performance. We remain on track for Mexico to report a profit for 2009 and for Romania to report a much reduced loss.

Economic and trading conditions within Central Europe vary considerably. In Poland and Czech/Slovakia we experienced a sharp downturn in collections performance and a rise in impairment in January and February but in March and April collections performance was much improved and impairment levels were reduced. In most branch locations in these markets we are now able to relax the very tight credit criteria we imposed in October of last year and return to controlled growth in customer numbers and credit issued.

Hungary has been hardest hit by the global recession. It is clear that many of our customers are facing real and substantial problems in making loan repayments and, as a result, our collections performance has been well below the expected level. Impairment charges have risen sharply and pre-tax profits for the first four months of 2009 were £8 million short of our budget. We think it likely that economic conditions will remain difficult throughout this year and consequently management remains focused on collections and improving credit quality. Nevertheless, we estimate the results for Hungary for 2009 will be £20 million to £30 million below our expectations.  

At this stage of the year and in the current environment it is very difficult to guide on the outlook for this year. In particular we cannot know whether or not the recent more positive trends we have seen will continue and so help to offset the underperformance we now believe is likely in Hungary. Whilst we believe that IPF will deliver good results considering the current difficult economic environment it is likely, as a result of the underperformance in Hungary, that the outcome for 2009 will be substantially less than our expectations.

Our balance sheet remains strong and well funded. There have been no significant changes in the financial position of the Group since the publication of the Annual Report and Financial Statements for the year ended 31 December 2008, other than referred to above. We continue to expect that the group will comfortably meet all of its banking covenants. 

In summary, the extent and duration of the economic downturn in each of the markets in which we operate is becoming clearer. After a difficult start to the year conditions and the performance of our business are improving in all markets except Hungary. There conditions are very difficult. Our local team is performing well and we are working hard to help customers through difficult times and maintain good and profitable customer relationships. 

We have a resilient business model and are well funded. The Board remains confident that IPF is well placed to weather the downturn and to respond rapidly and grow when conditions improve.' 

The interim results for IPF will be published on Thursday, 23 July 2009 and will be accompanied by an analyst briefing. 

For further information contact: 

Finsbury 

Vanessa Neill - [phone] 

International Personal Finance plc 

Victoria Richmond -    [phone]

 

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