Interim Management Statement

RNS Number : 9919H

Paragon Group Of Companies PLC

19 July 2012

 



THE PARAGON GROUP OF COMPANIES PLC

Interim Management Statement

The Paragon Group of Companies PLC ("Paragon" or the "Group") today publishes its Interim Management Statement based on the performance of the business from 1 April 2012 to date, including a commentary on the unaudited financial information for the period from 1 October 2011 to 30 June 2012.

The financial performance of the Group remained strong during the period, in line with management's expectations, generating operating profits (before fair value items) of £68.9 million for the nine months to 30 June 2012, compared with £58.9 million for the corresponding period in the previous year, the increase being attributable primarily to income generated from the Group's acquired portfolios of consumer loans.  Pre-tax profits, inclusive of a credit of £0.6 million for fair value hedging items, were £69.5 million for the period. 

Trading

The Group's loan portfolio continues to perform well, generating strong profits and cash flows.  Redemptions across the loan books remain low and the credit performance across the portfolio, including legacy buy-to-let and consumer assets, newly originated buy-to-let assets and the acquired books, remains in line with our expectations.  At 30 June 2012 arrears of three months or more on the buy-to-let portfolio, including acquired loans and receivership cases, were 54bp (55bp at 31 March 2012).

Cash generation from the Group's securitisation SPVs and from the acquired portfolios, remained strong over the period.  At 30 June 2012, free cash balances were £126.9 million (£104.9 million at 31 March 2012).

Business Activity

During the quarter, £45.1 million of new buy-to-let loans were advanced and a further   £2.1 million was advanced by way of further advances to existing borrowers.  In the year to date advances total £136.4 million and the pipeline of new business at 30 June 2012 was £121.3 million.  The credit quality of the new lending business written in the period has remained excellent.

The loan portfolios acquired by the Group's investment division, Idem Capital since 2009 have continued to perform well.  A number of opportunities for further investment are currently under review and a series of individual purchases of unsecured loans have been completed under a forward flow agreement with Royal Bank of Scotland PLC. 

During the quarter the servicing of a further 10,000 accounts commenced and a number of other potential servicing arrangements are currently under review.

Funding

Negotiations are progressing well for an extension to the Group's warehouse facility at the end of the current commitment period in December 2012 and an increase in its warehouse funding capacity to facilitate further development of the buy-to-let business.  Further information on the conclusion of these negotiations should be available in due course.

Outlook

During the period, the Group has continued to build on the excellent progress made during the first half of the financial year, continuing the prudent management of the existing and acquired books whilst seeking growth through new loan originations and through portfolio acquisitions. The Group will continue to pursue this strategy.

For further information, please contact:

Nigel S Terrington                    0121 712 2024

Chief Executive

Nicholas Keen                          0121 712 2000

Finance Director

Paul Farrow                             0207 544 3040/3032

Fishburn Hedges

 

END

 

 

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