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RNS Number : 0818T
International Personal Finance Plc
30 July 2025
 

Notes

This report has been prepared to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The report should not be relied on by any other party or for any other purpose. The report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report, but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, as well as any forward-looking information. Percentage change figures for all performance measures, other than profit before taxation and earnings per share, unless otherwise stated, are quoted after restating prior year figures at a constant exchange rate (CER) for the period to present the performance variance.

  

 

30 July 2025

International Personal Finance plc

Half-year financial report for the six months ended 30 June 2025

 

 

Principal activity

International Personal Finance is helping to build a better world through financial inclusion by providing affordable credit products and insurance services to underserved consumers across nine markets.

 

Excellent credit quality and strong growth delivering results ahead of plan

 

Key highlights

 

Financial performance ahead of internal plan

·    Profit before tax of £49.9m (H1-24: £47.3m1) ahead of internal plan, driven by excellent credit quality and good growth momentum across all our divisions.

·    Interim dividend of 3.8p (H1-24: 3.4p) per share, an increase of 11.8%, in line with our policy of paying 33% of our prior year full dividend per share at the half year.

 

Strong demand and execution drive growth across all divisions

·    Continued strong demand for our credit offering supported customer lending growth of 11%2, reflecting the strength and relevance of our brands and products.

·    Closing net receivables increased by 12%2, with good growth being delivered by all three divisions. 

·    Customer repayment performance remained excellent, driving further improvement in credit quality and an impairment rate of 8.3% (H1-24: 10.5%), well ahead of target.

 

Robust funding position and capital strength supports ambitious growth plans

·    Headroom on undrawn funding facilities and non-operational cash balances of £92m.

·    £50m of new bank facilities secured in the first half enhancing long-term funding flexibility.

·    Equity to receivables ratio of 53% (H1-24: 56%) supports the Group's plans to accelerate investment in growth whilst maintaining a progressive dividend policy.



 

Momentum behind Next Gen strategy delivering progress across all three pillars

·    New digital credit card launched in Poland and plans to expand the Group's credit card proposition into Romania progressing well.

·    Retail partnership credit now live in over 1,100 offline and online stores in Romania and over 70 online retailers in Mexico.

·    Geographic expansion in Mexico home credit continues, with a new branch opened in Monterrey and a second due to launch shortly in Ensenada.

·    Strong demand for the Group's shorter-term loans recently trialled in Mexico and Poland. 


Outlook

·    Confidence in delivering an acceleration of growth in the second half.

·    Expect second half profits to be similar to the second half of last year4, after absorbing the impact of stronger growth.




 

Group key statistics

H1-25

H1-24

YoY change

Customer numbers (000s)

1,653

1,656

(0.2%)

Customer lending (£m) 

622.0

597.4

11.0%2

Closing net receivables (£m)

937.8

864.4

11.7%2

Pre-exceptional PBT (£m)1

49.9

47.3

5.5%

Statutory PBT (£m)

49.9

36.5

36.7%

Pre-exceptional EPS (pence)1,3

14.2p

12.6p

12.7%

Interim dividend per share (pence)

3.8p

3.4p

11.8%

1   Prior to an exceptional charge of £10.8m in H1-24 (see note 8 for details).

2   At constant exchange rates (CER).

3   Prior to an exceptional tax credit of £2.1m in H1-24  (see note 8 for details).

4   H2-24 pre-exceptional profit before tax of £37.9m.

 

Gerard Ryan, Chief Executive Officer at IPF commented:

 

"I'm very pleased with the Group's performance in the first half of the year. Our Next Gen strategy is delivering tangible results, we've responded well to good demand for our credit products and achieved strong growth across all our divisions. Customer repayment performance has remained excellent, further strengthening our financial position which has resulted in the Group delivering pre-exceptional profit before tax of £49.9m, an increase of 5.5%. Reflecting this performance and the Board's confidence in our outlook, we are declaring an interim dividend of 3.8p per share, up 11.8% year-on-year.

 

The strong first-half performance gives us confidence in our ability to deliver ahead of our internal plan for the full year. As we move into the second half, we are focused on accelerating growth, advancing our Next Gen strategy and expanding financial inclusion across our markets - while maintaining our commitment to strong credit quality and sustainable returns. I would like to thank all our colleagues for their outstanding contribution. It's their dedication and customer focus that continue to drive success for all our stakeholders."

 

 

Alternative performance measures

This half-year financial report provides alternative performance measures (APMs) which are not defined or specified under the requirements of International Financial Reporting Standards. We believe these APMs provide stakeholders with important additional information on our business. To support this, we have included an accounting policy note on APMs in the notes to this financial report, a glossary indicating the APMs that we use, an explanation of how they are calculated and how we use them, and a reconciliation of the APMs we use to a statutory measure, where relevant.

 

Investor relations and media contact:

Rachel Moran - Investor Relations

+44 (0)7760 167637

Marsha Watson - Interim Deputy Company Secretary

+44 (0)7707 857286

 


Investor and analyst webcast

International Personal Finance will host a webcast of its 2025 half-year results presentation at 09.00hrs (BST) today - Wednesday 30 July, which can be accessed here.

 

A copy of this statement can be found on our website at www.ipfin.co.uk.

Legal Entity Identifier: 213800II1O44IRKUZB59



 

Chief Executive Officer's review

Group performance

The Group delivered a very strong financial and operational performance in the first half of 2025, underpinned by excellent credit quality and good demand across all markets. Profit before tax increased by £2.6m or 5.5% to £49.9m (H1-24: pre-exceptional profit before tax of £47.3m), driven by disciplined execution against our strategy, strong credit quality and sustained growth momentum across all our divisions.

 

We generated good momentum in customer lending throughout the first half, and delivered an increase of 11% year on year at constant exchange rates (CER). IPF Digital delivered impressive growth of 16% (at CER), led by standout performances in Mexico and Australia, where we are successfully expanding our brand presence and customer reach. In European home credit, we delivered 13% growth (at CER), driven by a strong performance in Romania and improving momentum in Poland where, after a slow start, lending volumes strengthened through the period as we focused on rescaling the business and expanding our credit card offering. Growth was more muted in Mexico home credit but, following the completion and embedding of the upgrade to our front-end IT systems, the business has returned to year-on-year lending growth with performance improving as the half progressed and this has continued into July. With the momentum we are carrying into July, we feel confident in accelerating the rate of growth in the second half of the year.

 

At the end of June, Group net receivables were £938m, up 12% year on year (at CER), again with good growth being delivered by all three divisions. Carried forward by our momentum in lending, we expect receivables growth to accelerate through the second half of the year, supported by favourable year-on-year comparatives as Poland grows its credit card offering and Mexico home credit builds on its performance in June and July. Customer numbers remain little changed from the year end, but momentum was strongly weighted to quarter two where we saw growth of 14,000 customers.

 

We are also very pleased to report continued strong customer repayment behaviour across all our markets, resulting in excellent credit quality. The annualised impairment rate improved year on year by 2.2ppts to 8.3%, better than our internal plans and well below our target of 14% to 16%. As the pace of growth picks up in the second half, we expect the impairment rate to move gradually towards our target range over the next two years.

 

The Group continues to have a robust capital and funding position to support our growth plans. Headroom on debt facilities was £92m at June 2025 and the Group's equity to receivables ratio was 53% at June 2025 (H1-24: 56%) compared with our target of 40%. We continue to assess the appropriate time to commence the additional £15m share buyback announced with the 2024 year-end results.

 

Based on the growth momentum that we have continued to deliver, the Group's capital strength and the Board's confidence in our outlook, we are pleased to declare an 11.8% increase in the interim  dividend to 3.8 pence per share. This is in line with the Group's policy of paying 33% of our prior year full dividend per share at the half year. The interim dividend will be paid on 26 September 2025 to shareholders on the register at the close of business on 29 August 2025. The shares will be marked ex-dividend on 28 August 2025.

 

Full details of the Group financial performance are detailed in the financial review section.

 

Purpose and strategy

We are committed to building a better world through financial inclusion by expanding access to affordable, responsible credit. With 1.7 million customers across nine markets today, we remain focused on growing to 2.5 million people in the medium term and supporting many more underserved consumers with financial products that will help them in their day-to-day lives.

 

Our Next Gen strategy continues to build momentum across the business, with progress being made against all three strategic pillars. Our growth-focused agenda is designed to strengthen our customer proposition, enhance operational effectiveness, and accelerate value creation across the business.

 

Next Gen financial inclusion

We are building products, channels and territories to ensure our propositions are attractive to the next generation of customers.

 

We are focused on expanding our distribution model and product offering to better reach and serve more consumers. We call this approach 'filling in the white spaces', ensuring each market has the right combination of channels and products to meet the needs of its target audience.

 

We now have over 160,000 active credit cards in Poland and recently launched a fully digital credit card offering which we believe will be a major growth driver in this market. Credit card lending now represents 40% of receivables in Poland home credit, and customers clearly value using the card to shop in-store and online. The credit card's strong appeal gives us confidence to expand into new markets, and  we are now well progressed in planning a launch in Romania and expect to go live in the first quarter of next year.

 

We continue to scale our retail partnerships model to provide tailored credit solutions at the point of sale. In Romania, we now offer purchase finance at more than 1,100 offline and online stores. In Mexico, we are now partnering with over 70 e-commerce retailers, and our test and learn approach is now focused on increasing conversion and expanding the number of major partners we deal with.

 

In Mexico home credit, we have opened a new branch in Monterrey, and a second in Ensenada, south of Tijuana, is due to launch shortly. With traction being gained in the newer regions of Tijuana and Tampico, Mexico home credit is well placed to deliver stronger growth. 

 

We have successfully completed trials of our shorter-term digital loan products in Mexico and Poland, where many customers value the convenience of these products with their shorter repayment duration. These purpose-led products have excellent potential and complement our existing offering in both markets.

 

In Australia, we have delivered strong, profitable growth over the last two years. Following investment in automation and the customer journey, the unit economics now being delivered by the business has given us confidence to invest more in our brand proposition to capture greater market share.

 

In Romania, we are expanding our hybrid proposition which is, primarily, a digital credit offering but which can involve a customer representative if needed, either at the underwriting stage or during the loan repayment period. Good demand and improved credit quality are driving further investment in expanding this channel.

 

 

Next Gen organisation

We are continuing our journey to become a more efficient organisation that makes a positive impact on society.

 

Mexico home credit signed a three-year Memorandum of Understanding with UN Women, reinforcing our commitment to gender equality and financial inclusion. Aligned with the Women's Empowerment Principles, it supports economic empowerment, organisational transformation and societal change. With a predominantly female workforce and customer base, this marks a key step in our responsible business journey in one of our largest markets.

 

We conducted our biannual global people engagement survey in the first half of the year, with 91% of our 20,000 colleagues participating. The results showed strong engagement highlighting the positive impact of our culture and people-focused initiatives.

 

We also continued to support our communities through our annual Volunteer and Financial Inclusion Month. Nearly 4,000 colleagues took part in activities that combined physical challenges with social impact, raising €110,000 for local causes through our Invisibles programme, which helps underserved groups access financial services and gain visibility with stakeholders who can offer meaningful support.

 

Next Gen technology and data

We are investing to become a data driven, technology-enabled partner for our customers. 

 

The development of our mobile apps for customers in Romania, the Czech Republic and Hungary are underway with the first launches expected to go live by the end of 2025. These will complement our existing apps used by home credit customers in Mexico and Poland. In IPF Digital, we now also have around 120,000 customers using our mobile wallet technology.  

 

We are making strong progress across all divisions in enhancing the customer experience through digitalisation, as reflected in our consistently high Net Promoter Scores. In European home credit, more customers are engaging with and benefitting from our new omnichannel platform, which enables seamless transitions between channels - including call centres, websites and mobile apps. By integrating these touchpoints into a single, unified platform, we are developing a 360-degree view of each customer, enabling a more personalised and efficient service. As part of this transformation, we successfully launched Web Chat for customers in Hungary, the Czech Republic and recently extended this capability to Romania. We have also enhanced data management within the platform, improving access to real-time, data-driven insights for our Customer Service Centres.

 

As well as enhancing our front-end technology, we continue to enhance our operational resilience, implementing the necessary changes to controls and processes to ensure compliance with the Digital Operational Resilience Act (DORA). We also continue to invest in enhancing Group-wide IT security  and have recently completed the migration from on premise storage to public cloud with AWS across the Group.

 

We have also commenced a number of strategic projects to improve operational efficiency, including a project to remove most of the paper-based processes that our field and customer representatives have to manage in Europe, overhauling our legacy finance and HR systems to better standardise processes and speed up data processing and upgrading our core platform within our home credit businesses. All of these projects are designed to ensure we are more efficient and agile to enable us to better capture the strong growth potential of the Group.

  

Regulatory update

The second Consumer Credit Directive (CCD II) came into force in December 2023, with EU Member States required to comply within 24 months. Our European markets are actively progressing their transposition plans to ensure compliance and we continue to monitor any potential impact on the Group.

 

In the Czech Republic, our smallest operation, a rate cap proposal is now being consulted on by the Czech Legislative Council, after which it will be submitted to the Government for further discussions and potential amendment or approval. We will continue to work with industry groups to ensure that any rate cap is appropriate and assists the provision of responsibly provided credit to those in need. The Czech Republic is the last remaining country where we do not have a rate cap, and this change has been anticipated for some time. We have demonstrated a strong track record in adapting to regulatory changes across the Group, including new rate caps.

 

Outlook

We have had an excellent start to the year and enter the second half with considerable momentum, underpinned by excellent credit quality and a strong balance sheet. Building on this performance, we are accelerating growth in customer lending across all markets, supported by product expansion, digital innovation, and moving into new geographical areas in Mexico. Our investments in technology will also be key to accelerating the pace of change in the business, driving greater improvements for customer journeys as well as improved operational efficiency. We have a clear roadmap to grow scale across the Group, in particular in key markets such as Poland, Mexico and Australia, and we are confident in delivering our operational and financial plans towards our long-term vision to increase financial inclusion whilst delivering strong returns to our shareholders. Reflecting the impact of stronger growth, we expect second-half profits to be broadly in line with the prior year period.

 

Financial review

 

Group

The Group delivered a strong financial performance in the first half of 2025, underpinned by disciplined execution of our Next Gen strategy, an acceleration in growth and excellent credit quality. Profit before tax increased to £49.9m (H1-24: pre-exceptional profit before tax of £47.3m), up £2.6m or 5.5% on a reported basis, and up 18.8% on a constant currency basis after adjusting for a £5.3m adverse impact from weaker currencies, particularly the Mexican peso. The first half financial performance was ahead of our internal plans and provides a strong foundation for a further acceleration of growth in the second half of the year. Reported profit before tax, after an exceptional charge of £10.8m in the first half of 2024 (see note 8), increased by £13.4m or 36.7%.



An analysis of the first half divisional results is shown below:


H1-25

£m 

H1-24

£m 

Change

£m

Change 

European home credit

35.9

29.8

6.1

20.5%

Mexico home credit

14.4

17.7

(3.3)

(18.6%)

IPF Digital

6.9

7.2

(0.3)

(4.2%)

Central costs

(7.3)

(7.4)

0.1

1.4%

Pre-exceptional profit before taxation

49.9

47.3

2.6

5.5%

Exceptional items

-

(10.8)

10.8

n/a

Profit before taxation

49.9

36.5

13.4

36.7%

 

The detailed income statement of the Group, together with associated KPIs, is set out below:

 

 

 

 

H1-25

£m 

 

H1-24

£m 

 

Change

£m

 

Change 

Change at CER

%

Customer numbers (000s)

         1,653

        1,656

(3)

(0.2%)

(0.2%)

Customer lending

         622.0

        597.4

24.6

4.1%

11.0%

Average gross receivables

      1,318.6

     1,369.9

(51.3)

(3.7%)

2.4%

Closing net receivables

937.8

864.4

73.4

8.5%

11.7%


 





Revenue

347.8

371.7

(23.9)

(6.4%)

1.9%

Impairment

(46.3)

(64.3)

18.0

28.0%

16.3%

Revenue less impairment

301.5

307.4

(5.9)

(1.9%)

5.4%

Costs

(216.8)

(225.4)

8.6

3.8%

(2.5%)

Interest expense

(34.8)

(34.7)

(0.1)

(0.3%)

(6.7%)

Pre-exceptional profit before taxation

49.9

47.3

2.6

5.5%

18.8%

Exceptional items

-

(10.8)

10.8

n/a


Profit before taxation

49.9

36.5

13.4

36.7%


 

 





Annualised revenue yield

53.3%

55.4%

(2.1)ppts



Annualised impairment rate

8.3%

10.5%

2.2ppts



Annualised cost-income ratio

61.9%

59.0%

(2.9)ppts



Pre-exceptional EPS-1,2

14.2p

12.6p

12.7%



Annualised pre-exceptional RoRE1,2,3

15.4%

16.2%

(0.8)ppts



Annualised RoE

14.7%

10.4%

4.3ppts



1 Prior to a pre-tax exceptional charge of £10.8m in 2024 (see note 8 for details).

2 Prior to an exceptional tax credit of £2.1m in H1-24  (see note 8 for details).

3 Based on required equity to receivables of 40%.


Group customer lending increased by 11% year-on-year (at CER), with particularly strong contributions from IPF Digital in Mexico and Australia, and Poland and Romania in European home credit. Poland has now returned to growth, supported by the granting of the full payment institution licence at the end of last year, which allows us to increase credit card lending. Mexico home credit has also returned to lending and customer growth following the IT disruption to field activities in the last quarter of 2024 and the first quarter of this year.


Group net receivables grew strongly, increasing by 12% (at CER) year on year to £937.8m (H1-24: £864.4m), with all three divisions contributing to the growth.

 

Customer numbers were unchanged at 1.7 million. Excluding Poland, where numbers declined by 10%, the rest of the Group delivered 2% growth. Encouragingly, the Group added 14,000 customers in the second quarter and, with both Mexico home credit and Poland now returning to growth, we expect the upward trend to continue in the second half of 2025.

 

Our financial model is designed to deliver sustainable returns by optimising three core value drivers - revenue yield, credit performance and operational efficiency - and we remain firmly focused on managing these levers to support delivery of our growth ambitions and drive long-term shareholder value.

 

The Group's annualised revenue yield decreased by 2.1ppts to 53.3% (H1-24: 55.4%), driven mainly by the flow-through of lower rate caps in Poland and temporary changes in the lending mix in Mexico home credit. Excluding Poland, the yield was 57.1% (H1-24: 59.1%) within the Group's target range of 56% to 58%. We expect our shift to higher yielding products (Poland credit cards and more new customers in Mexico) to move the Group's annualised revenue yield towards our target range by 2027.

 

Customer repayments continued to be excellent and together with strong lending discipline, we delivered a further 2.2ppt improvement in the annualised impairment rate to 8.3% (H1-24: 10.5%). The very good repayment performance has resulted in a marginal reduction in the impairment coverage provision from 32.9% at December 2024 to 32.0% at June 2025 and continues to reflect our conservative balance sheet position.  We expect growth in Poland to accelerate in the second half, which will lead to a steady increase in the impairment rate due to higher up-front IFRS 9 impairment charges.  Excluding Poland, where the contraction in the receivables book through 2023 and 2024 has benefitted impairment, the Group annualised impairment rate was 14.5% (H1-24: 14.4%) compared with our target range of 14% to 16%.

 

Cost growth in the first half was successfully limited to 2.5% (at CER) compared with net receivables growth of 11.7% (at CER). We remain focused on delivering cost efficiencies to drive down the Group's cost-income ratio to our medium-term target range of 49% to 51%. At the end of the first half, the Group's annualised cost-income ratio had increased by 2.9ppts to 61.9% (H1-24: 59.0%), due wholly to reduced revenue in Poland following the contraction in the business over the last two years. Excluding Poland, the Group's annualised cost-income ratio was 56.1%, up from 55.2% at June 2024, reflecting the reduction in revenue yield as well as the investment in growth initiatives. We expect the Group's cost-income ratio to improve into our target range of 49% to 51% in the medium term as we grow the lending portfolio and maintain tight discipline on the investments made in building scale and expanding capabilities to accelerate the pace of change across the Group.

 

The Group continued to deliver good returns with annualised pre-exceptional RoRE at 15.4% (H1-24: 16.2%). We expect returns to moderate a little over the next 18 months as we accelerate growth before returning to target levels in 2027. The Group's annualised RoE, based on actual equity, was 14.7% (H1-24: 10.4%).

 

Pre-exceptional earnings per share (EPS) grew year on year by 12.7% to 14.2p per share (H1-24: 12.6p), reflecting higher profit, a lower tax rate and a reduced number of shares in issue following successful completion of the £15m share buyback programme in the second half of 2024. Reported EPS of 14.2p per share (H1-24: 8.8p) increased by 61.4%.

 

Divisional performance

 

European home credit

 


 

H1-25

£m 

 

H1-24

£m 

 

Change 

£m 

 

Change 

Change at 

CER 

Customer numbers (000s)

711

717

(6)

(0.8%)

(0.8%)

Customer lending

351.7

315.4

36.3

11.5%

13.2%

Average gross receivables

707.5

744.8

(37.3)

(5.0%)

(2.5%)

Closing net receivables

502.1

444.0

58.1

13.1%

12.2%


 





Revenue

160.6

166.0

(5.4)

(3.3%)

(1.4%)

Impairment

6.0

(5.7)

11.7

205.3%

207.1%

Revenue less impairment

166.6

160.3

6.3

3.9%

6.0%

Costs

(111.5)

(112.1)

0.6

0.5%

(0.7%)

Interest expense

(19.2)

(18.4)

(0.8)

(4.3%)

(7.3%)

Pre-exceptional profit before taxation1

35.9

29.8

6.1

20.5%


 

 





Annualised revenue yield

45.6%

47.2%

(1.6)ppts



Annualised impairment rate

(0.5%)

2.2%

2.7ppts



Annualised cost-income ratio

69.6%

64.7%

(4.9)ppts



Annualised pre-exceptional RoRE1,2

21.2%

21.3%

(0.1)ppts



 

1   Prior to a pre-tax exceptional charge of £5.0m in H1-24 (see note 8).

2   Based on required equity to receivables of 40%.

 

Our European home credit division continued to perform strongly in the first half of the year, delivering a £6.1m increase in profit before tax to £35.9m (H1-24: pre-exceptional profit before tax of £29.8m), reflecting disciplined execution of our Next Gen strategy as we stepped up growth.

 

Consumer demand remained strong and lending growth was 13% (at CER) year on year. Supported by continued expansion of the partnership channel, Romania delivered 19% growth (at CER), whilst the granting of a full payment institution licence last November enabled Poland to grow lending by 17%. Both Hungary and the Czech Republic delivered solid growth of just over 5% (at CER).

 

Closing net receivables increased by 12% (at CER) to £502.1m (H1-24: £444.0m), driven by 14% growth in Hungary and Romania, 10% in Poland and 9% in the Czech Republic. Given the strong momentum in customer lending, we expect European home credit receivables growth to be between 15% and 20% (at CER) for the year as a whole.

  

Customer numbers ended the first half at 711,000, showing a modest year-on-year reduction of 0.8%. Hungary, Romania and the Czech Republic combined delivered an increase of 4.5%, whilst Poland saw a 9% decline, primarily due to the credit card lending restrictions in the second half of 2024. We are pleased to report that customer numbers in Poland have now stabilised and it was encouraging to see growth returning in June.

 

The annualised revenue yield has reduced by 1.6ppts to 45.6% (H1-24: 47.2%). We expect the yield to moderate further through the second half of 2025 before growing in 2026 as credit card lending, which carries a higher yield than loans, increases in Poland.

 

A combination of consistently strong customer repayment performance and the contraction of the portfolio in Poland through 2023 and 2024 resulted in an annualised impairment rate credit of 0.5% (H1-24: charge of 2.2%). As noted previously, we expect the impairment rate to increase as Poland grows strongly over the next two years, before normalising in the medium term to within the target range for European home credit of 8% to 10%.

 

The year-on-year increase in the annualised cost-income ratio to 69.6% (H1-24: 64.7%) was driven by reduced revenue in Poland and our investment in growth. As the Polish portfolio grows and revenue increases, we expect our cost-income ratio to move towards our target range of 49% to 51%.

 

European home credit continues to generate strong returns and delivered an annualised RoRE of 21.2% in the first half (H1-24: 21.3%). We expect returns to moderate in the short term as we invest in rebuilding the receivables book in Poland over the next 18 months.

 

 

Mexico home credit


 

H1-25

£m

 

H1-24

£m 

 

Change 

£m 

 

Change 

        % 

Change at 

CER 

Customer numbers (000s)

683

710

(27)

(3.8%)

(3.8%)

Customer lending

132.6

156.0

(23.4)

(15.0%)

1.6%

Average gross receivables

284.3

319.1

(34.8)

(10.9%)

4.9%

Closing net receivables

167.8

183.0

(15.2)

(8.3%)

3.8%


 





Revenue

116.0

139.9

(23.9)

(17.1%)

(0.9%)

Impairment

(34.2)

(44.7)

10.5

23.5%

8.3%

Revenue less impairment

81.8

95.2

(13.4)

(14.1%)

2.5%

Costs

(60.9)

(70.1)

9.2

13.1%

(2.9%)

Interest expense

(6.5)

(7.4)

0.9

12.2%

(3.2%)

Reported profit before taxation

14.4

17.7

(3.3)

(18.6%)


 

 





Annualised revenue yield

84.4%

86.5%

(2.1)ppts



Annualised impairment rate

28.8%

30.5%

1.7ppts



Annualised cost-income ratio

50.7%

49.1%

(1.6)ppts



Annualised RoRE1

20.4%

24.9%

(4.5)ppts










 1  Based on required equity to receivables of 40%.

 

On a constant exchange basis, Mexico home credit increased profit before tax by 0.7% to £14.4m. On a reported basis, this was £3.3m lower than last year (H1-24: £17.7m), due to the weaker Mexican peso. 

 

Having recently embedded significant upgrades to our front-end technology, customer lending grew by only 1.6% (at CER). Now that these changes are complete, we saw a significant pick up in momentum in June where lending volumes increased by 4.6%, and this momentum has continued into July. Supported by strong consumer demand and softer second-half comparators, we expect to deliver full-year lending growth of between 7% and 9% (at CER).

 

Customer numbers showed a decline of 4% to 683,000, but grew by 6,000 in the second quarter as the technology changes were completed.  We expect a return to customer growth in the second half of the year.

 

Closing net receivables increased by 3.8% (at CER) to £167.8m, and we expect the pace of growth to accelerate in the second half as lending momentum continues to build. For the full year, we anticipate receivables growth of between 10% to 15% (at CER). The annualised revenue yield declined modestly from 86.5% to 84.4% but we expect the yield to begin to strengthen in the second half as the proportion of new customers grow.

 

The annualised impairment rate improved year on year to 28.8% (H1-24: 30.5%) which reflects both the greater focus on good-quality existing customers together with targeted actions to ensure lending quality and repayment behaviour. As lending growth increases in the second half, including a greater proportion of new customers, we expect the impairment rate to trend back toward the 30% level, in line with our longer-term expectations.

 

Our ongoing investment in geographic expansion and the cost of the IT infrastructure upgrade were reflected in a slight increase in the annualised cost-income ratio to 50.7% (H1-24: 49.1%). However, this remains within our 49% to 51% target range.

 

The annualised RoRE at the end of the first half was 20.4% (H1-24: 24.9%), with the Mexico home credit business continuing to deliver returns in line with the Group's target, despite the disruption experienced over the past 12 months. This excellent performance demonstrates the maturity of the business and its strong operational rhythm, enabling it to maintain returns through periods of change and challenge.

 

 

IPF Digital


 

H1-25

£m 

 

H1-24

£m 

 

Change 

£m 

 

Change 

                % 

Change at 

CER 

Customer numbers (000s)

259

229

30

13.1%

13.1%

Customer lending

137.7

126.0

11.7

9.3%

15.5%

Average gross receivables

326.8

306.0

20.8

6.8%

12.0%

Closing net receivables

267.9

237.4

30.5

12.8%

16.3%


 





Revenue

71.2

65.8

5.4

8.2%

15.8%

Impairment

(18.1)

(13.9)

(4.2)

(30.2%)

(46.0%)

Revenue less impairment

53.1

51.9

1.2

2.3%

8.1%

Costs

(37.2)

(35.9)

(1.3)

(3.6%)

(8.5%)

Interest expense

(9.0)

(8.8)

(0.2)

(2.3%)

(8.4%)

Reported profit before taxation

6.9

7.2

(0.3)

(4.2%)


 

 





Annualised revenue yield

42.7%

42.9%

(0.2)ppts



Annualised impairment rate

9.5%

10.0%

0.5ppts



Annualised cost-income ratio

52.5%

53.4%

0.9ppts



Annualised RoRE1

10.6%

8.5%

2.1ppts



 1  Based on required equity to receivables of 40%.

 

IPF Digital continues to deliver excellent growth combined with improving profitability and returns. On a constant exchange basis, profit before tax in the first half was £6.9m, up 6.2%. On a reported basis, profit was £0.3m lower than the £7.2m in H1 last year, due the weaker Mexican peso.

 

Demand for fully remote credit solutions continues to rise, driving strong year-on-year increases in both customer numbers and lending, which were up 13% and 16% respectively (at CER). The standout performers were Mexico and Australia which delivered lending growth of 43% and 28% respectively (both at CER), with Mexico customer numbers surpassing 100,000 during the first half. We are increasing our investment in both the brand and product proposition to maintain the acceleration in growth and capture the very strong growth opportunity in both markets.  

 

Closing net receivables increased by 16% (at CER) to £267.9m (H1-24: £237.4m), reflecting consistent delivery of our digital strategy across all markets. Mexico and Australia led the way with strong receivables growth of 32% and 28% respectively (both at CER), whilst our other markets in the Baltics, Poland and the Czech Republic delivered combined growth of 9% (at CER). Looking ahead, we continue to expect IPF Digital's overall receivables growth for 2025 will be towards 20% (at CER).

 

The annualised revenue yield showed a modest reduction of 0.2ppts to 42.7% (H1-24: 42.9%) with the impact of reductions in base rate linked interest rate caps being offset by the growth in the receivables book in Mexico which carries a higher yield.

 

Customer repayment performance remains strong across all IPF Digital markets, underpinning very good portfolio quality. The annualised impairment rate improved by 0.5ppts to 9.5% (H1-24: 10.0%), reflecting continued discipline in lending and customer repayments. As Mexico becomes a more prominent part of the receivables portfolio, we expect the medium-term impairment rate to move closer to the Group's target range of 14% to 16%.

 

To support growth and customer acquisition in competitive digital markets, we are investing in building strong, trusted brands alongside technology that enhances speed and simplicity in the customer journey, particularly in Mexico and Australia. These investments, which will drive scale and long-term value, contributed to an 8.5% increase in operating costs (at CER). However, the annualised cost-income ratio improved by 0.9ppts to 52.5% (H1-24: 53.4%) as we build scale. We expect the cost-income ratio to trend toward our medium-term target of approximately 45% for the digital business.

 

IPF Digital's continued growth and improvement in financial performance has resulted in the annualised RoRE further strengthening year on year by 2.1 ppts to 10.6% (H1-24: 8.5%).

 

Taxation

The tax charge on the profit for the first half has been based on an expected tax rate for the full year of approximately 38% (H1-24: 40%). In the first half of 2024, an exceptional tax credit of £2.1m was recognised in respect of the total exceptional costs of £10.8m in connection with refinancing the Group's Eurobond (£5.8m) and a restructuring in the Polish home credit business (£5.0m).

 

Funding and balance sheet

Our strong funding position and balance sheet continue to underpin our growth ambitions.

 

As at 30 June 2025, the Group held total debt facilities of £650m, comprising £396m in bonds and £254m in bank funding, including £50m of new bank facilities arranged during the first half of the year. Net borrowings at the end of the first half totalled £558m, and the Group has funding headroom of £92m.

 

Our blended cost of funding continues to reduce steadily and was 12.5% in the first half (H1-24: 13.2%) due to the reduction in interest rates across our markets as well as lower costs of hedging as interest differentials narrowed. 

 

Both Fitch Ratings and Moody's Ratings reviewed the Group's long-term credit ratings in the first half of the year and reaffirmed their previous assessments. Fitch maintained its rating at BB with a Stable outlook, while Moody's confirmed its Ba3 rating, also with a Stable outlook.

 

In March we repaid at par and subsequently delisted the remaining €66.7m of our 2020 Eurobonds. The strong secondary market performance of our €341m 2029 Eurobonds and 2027 retail bonds reflects continued investor confidence in our business, and positions us well to access capital markets in due course.

 

The reduction in Group's equity to receivables ratio to 53% (H1-24: 56%) reflects the completion of the £15m share buyback in the second half of last year and the acceleration in growth in receivables during the first half of this year. Our strong capital position supports the Group's ambitious growth plans and the Group's progressive dividend policy through to the point at which we are delivering our target returns and operating in line with our financial model which we expect to be in 2027. 

 

The Group's gearing ratio was 1.2 times (H1-24: 1.2 times) at the end of June 2025, comfortably within our covenant limit of 3.75 times, and our interest cover covenant was 2.7 times (H1-24: 2.7 times), again comfortably within our covenant limit of 2.0 times.

 

 

Financial statements

Consolidated income statement

 


Unaudited

Unaudited

Audited


Six months

ended

Six months

ended

Year

ended



30 June

2025

30 June

2024

31 December 2024


Notes

£m

£m

£m

Revenue

3

347.8

371.7

726.3

Impairment

3

(46.3)

(64.3)

(127.5)

Revenue less impairment


301.5

307.4

598.8



 



Interest expense

4

(34.8)

(34.7)

(70.4)

Other operating costs


(65.0)

(68.5)

(135.1)

Administrative expenses


(151.8)

(156.9)

(308.1)

 


(251.6)

(260.1)

(513.6)



 



Pre-exceptional profit before taxation

3

49.9

47.3

85.2

Exceptional items

8

-

(10.8)

(11.9)

Profit before taxation


49.9

36.5

73.3

 

Pre-exceptional tax (expense)/income


 



-      UK


-

-

0.2

-      Overseas


(18.9)

(18.9)

(30.0)

Pre-exceptional tax expense

5

(18.9)

(18.9)

(29.8)

Exceptional tax income

8

-

2.1

17.4

Total tax expense


(18.9)

(16.8)

(12.4)

Profit after taxation attributable to equity shareholders


 

31.0

 

19.7

 

60.9

 

The notes to the financial information are an integral part of these condensed consolidated interim financial statements.

  

Earnings per share - statutory

 


Unaudited

Unaudited

Audited



Six months ended

Six months ended

Year

ended



30 June

2025

30 June

2024

31 December 2024


Notes

pence

pence

pence

Basic 

6

14.2

8.8

27.3

Diluted

6

13.5

8.3

25.9

  

Earnings per share - pre-exceptional items

 


Unaudited

Unaudited

Audited



Six months ended

Six months ended

Year

ended



30 June

2025

30 June

2024

31 December 2024



pence

pence

pence

Basic 


14.2

12.6

24.9

Diluted


13.5

11.9

23.5

 

 

Dividend per share

 


Unaudited

Unaudited

Audited



Six months ended

Six months ended

Year

ended



30 June

2025

30 June

2024

31 December 2024


Notes

pence

pence

pence

Interim dividend

7

3.8

3.4

3.4

Final dividend

7

-

-

8.0

Total dividend


3.8

3.4

11.4

 

 

Dividends paid

 


Unaudited

Unaudited

Audited



Six months ended

Six months ended

Year

ended



30 June

2025

30 June

2024

31 December 2024


Notes

£m

£m

£m

Interim dividend of 3.8 pence

(2024: interim dividend of 3.4 pence) per share

 

 

7

-

 

-

 

 

7.7

Final 2024 dividend of 8.0 pence

(2024: final 2023 dividend of 7.2 pence) per share

 

 

7

17.5

16.2

 

 

16.2

Total dividends paid


17.5

16.2

23.9

 

 Consolidated statement of comprehensive income

 

 


Unaudited

Unaudited

Audited


Six months ended

30 June 2025

Six months ended

30 June 2024

Year

ended

31 December 2024


£m

£m

£m

Profit after taxation attributable to equity shareholders

31.0

19.7

60.9

Other comprehensive income/(expense)

 



Items that may subsequently be reclassified to income statement

 



Exchange gains/(losses) on foreign currency translations

19.2

(25.6)

(57.3)

Net fair value gains/(losses) - cash flow hedges

0.6

0.9

(0.4)

Tax credit on items that may be reclassified

-

-

0.1

 

Items that will not subsequently be reclassified to income statement

 



Actuarial gains/(losses) on retirement benefit asset

0.1

(1.3)

(2.0)

Tax credit on items that will not be reclassified

-

0.3

0.5

Other comprehensive income/(expense) net of taxation

19.9

(25.7)

(59.1)

Total comprehensive income/(expense) for the period attributable to equity shareholders

50.9

(6.0)

 

1.8

  

Consolidated balance sheet

 


Unaudited

Unaudited

Audited


 

 

30 June

2025

30 June

2024

31 December 2024


Notes

£m

£m

£m

Assets


 


 

Non-current assets

 

 

 

 

Goodwill

9

23.3

23.1

22.6

Intangible assets

10

42.4

33.4

37.1

Property, plant and equipment

11

13.5

13.8

14.0

Right-of-use assets

12

19.7

19.9

17.7

Amounts receivable from customers

14

263.7

239.2

245.6

Deferred tax assets

13

108.7

125.9

106.7

Retirement benefit asset

17

4.6

4.9

4.4



475.9

460.2

448.1

Current assets

 

 

 

 

Amounts receivable from customers

14

674.1

625.2

624.4

Derivative financial instruments


3.6

5.1

2.6

Cash and cash equivalents


38.0

86.5

27.6

Other receivables


18.1

16.5

22.9

Current tax assets


16.1

3.3

16.1



749.9

736.6

693.6

Total assets

3

1,225.8

1,196.8

1,141.7

Liabilities

 

 


 

Current liabilities

 

 

 

 

Borrowings

16

(84.2)

(54.1)

(92.8)

Derivative financial instruments


(1.1)

(2.7)

(1.6)

Trade and other payables


(118.0)

(123.3)

(125.1)

Provisions for liabilities and charges

15

-

(3.9)

(2.8)

Lease liabilities

12

(7.7)

(8.9)

(8.1)

Current tax liabilities


(13.9)

(12.9)

(6.0)



(224.9)

(205.8)

(236.4)

Non-current liabilities

 

 

 

 

Deferred tax liabilities


(4.1)

(7.1)

(4.1)

Lease liabilities

12

(13.8)

(13.1)

(11.8)

Borrowings

16

(481.4)

(490.4)

(423.1)



(499.3)

(510.6)

(439.0)

Total liabilities

3

(724.2)

(716.4)

(675.4)

Net assets

 

501.6

480.4

466.3

Equity attributable to owners of the Company

 



Called-up share capital


22.5

23.4

22.5

Other reserve


(22.5)

(22.5)

(22.5)

Foreign exchange reserve


(6.1)

6.4

(25.3)

Hedging reserve


0.5

1.1

(0.1)

Own shares


(18.3)

(26.0)

(24.9)

Capital redemption reserve


3.2

2.3

3.2

Retained earnings


522.3

495.7

513.4

Total equity


501.6

480.4

466.3

  

Consolidated statement of changes in equity

 


Unaudited


Called-up share capital

£m

 

Other reserve

£m

 

*Other  reserves

£m

 

Retained

earnings

£m

 

Total

equity

£m

At 1 January 2024

23.4

(22.5)

(2.2)

503.2

501.9

Comprehensive income:

 

 

 

 

 

Profit after taxation for the period

-

-

-

19.7

19.7

Other comprehensive (expense)/income:

 

 

 

 

 

Exchange losses on foreign currency translation (note 20)

 

-

 

-

 

(25.6)

 

-

 

(25.6)

Net fair value gains - cash flow hedges

-

-

0.9

-

0.9

Actuarial loss on retirement benefit asset

-

-

-

(1.3)

(1.3)

Tax credit on other comprehensive income

-

-

-

0.3

0.3

Total other comprehensive expense

-

-

(24.7)

(1.0)

(25.7)

Total comprehensive (expense)/income for the period

 

-

 

-

 

(24.7)

 

18.7

 

(6.0)

Transactions with owners:

 

 

 

 

 

Share-based payment adjustment to reserves

-

-

-

2.1

2.1

Purchase of own shares

-

-

(1.4)

-

(1.4)

Shares granted from treasury and employee trust

-

-

12.1

(12.1)

-

Dividends paid to Company shareholders

-

-

-

(16.2)

(16.2)

At 30 June 2024

23.4

(22.5)

(16.2)

495.7

480.4

 

Audited

At 1 January 2024

23.4

(22.5)

(2.2)

503.2

501.9

Comprehensive income:

 

 

 

 

 

Profit after taxation for the year

-

-

-

60.9

60.9

Other comprehensive (expense)/income:

 

 

 

 

 

Exchange losses on foreign currency translation (note 20)

-

-

(57.3)

-

(57.3)

Net fair value losses - cash flow hedges

-

-

(0.4)

-

(0.4)

Actuarial loss on retirement benefit obligation

-

-

-

(2.0)

(2.0)

Tax credit on other comprehensive expense

-

-

0.1

0.5

0.6

Total other comprehensive expense

-

-

(57.6)

(1.5)

(59.1)

Total comprehensive (expense)/income for the year

-

-

(57.6)

59.4

1.8

Transactions with owners:






Share-based payment adjustment to reserves

-

-

-

2.9

2.9

Acquisition of own shares

(0.9)

-

0.9

(15.1)

(15.1)

Shares acquired by employee trust

-

-

(1.3)

-

(1.3)

Shares granted from treasury and employee trust

-

-

13.1

(13.1)

-

Dividends paid to Company shareholders

-

-

-

(23.9)

(23.9)

At 31 December 2024

22.5

(22.5)

(47.1)

513.4

466.3

 

Unaudited

 

Called-up share capital

£m

 

Other reserve

£m

 

*Other  reserves

£m

 

Retained

earnings

£m

 

Total

equity

£m

At 1 January 2025

22.5

(22.5)

(47.1)

513.4

466.3

Comprehensive income:

 

 

 

 

 

Profit after taxation for the period

-

-

-

31.0

31.0

Other comprehensive income:

 

 

 

 

 

Exchange gains on foreign currency translation (note 20)

 

-

 

-

 

19.2

 

-

 

19.2

Net fair value gains - cash flow hedges

-

-

0.6

-

0.6

Actuarial gain on retirement benefit asset

-

-

-

0.1

0.1

Total other comprehensive income

-

-

19.8

0.1

19.9

Total comprehensive income for the period

-

-

19.8

31.1

50.9

Transactions with owners:

 

 

 

 

 

Share-based payment adjustment to reserves

-

-

-

1.9

1.9

Shares granted from treasury and employee trust

-

-

6.6

(6.6)

-

Dividends paid to Company shareholders

-

-

-

(17.5)

(17.5)

At 30 June 2025

22.5

(22.5)

(20.7)

522.3

501.6

 * Includes foreign exchange reserve, hedging reserve, own shares and capital redemption reserve.

 

Consolidated cash flow statement

 

 

 

Unaudited

Unaudited

Audited

 

 

Six months ended

30 June

2025

Six months ended

30 June

2024

Year

ended

31 December

2024

 

Notes

£m

£m

£m

Cash flows from operating activities

 

 



   Cash generated from operating activities

19

51.9

71.6

114.1

   Finance costs paid

   Finance income received

 

(36.1)

0.2

(33.2)

0.7

(72.3)

1.3

   Income tax paid

 

(10.9)

(11.5)

(18.3)

Net cash generated from operating activities

 

5.1

27.6

24.8

 


 



Cash flows used in investing activities


 



    Purchases of intangible assets

10

(11.1)

(7.4)

(17.8)

    Purchases of property, plant and equipment

11

(2.2)

(1.7)

(6.4)

    Proceeds from sale of property, plant and equipment


-

-

0.1

Net cash used in investing activities

 

(13.3)

(9.1)

(24.1)

Net cash (used in)/generated from operating and investing activities


 

(8.2)

 

18.5

 

0.7

 


 



Cash flows from financing activities


 



    Proceeds from borrowings

 

99.5

295.0

313.2

    Repayment of borrowings

 

(57.7)

(244.6)

(273.5)

    Principal elements of lease payments

12

(6.3)

(5.9)

(12.2)

    Acquisition of own shares


-

-

(15.1)

    Shares acquired by employee trust


-

(1.4)

(1.3)

    Dividends paid to equity shareholders


(17.5)

(16.2)

(23.9)

    Cash received on share options exercised


-

-

0.2

Net cash generated from/(used in) financing activities

 

18.0

26.9

(12.6)

 


 



Net increase/(decrease) in cash and cash equivalents

 

9.8

45.4

(11.9)

Cash and cash equivalents at beginning of period

 

27.6

42.5

42.5

Exchange gains/(losses) on cash and cash equivalents


0.6

(1.4)

(3.0)

Cash and cash equivalents at end of period

 

38.0

86.5

27.6

Notes to the condensed consolidated interim financial statements

 

1.  Basis of preparation

 

These unaudited condensed consolidated interim financial statements for the six months ended 30 June 2025 have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority and with International Accounting Standard (IAS) 34 'Interim Financial Reporting' as adopted by the United Kingdom. These condensed consolidated interim financial statements should be read in conjunction with the Annual Report and Financial Statements ('the Financial Statements') for the year ended 31 December 2024, which have been prepared in accordance with International Financial Reporting Standards (IFRSs) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. These condensed consolidated interim financial statements were approved for release on 30 July 2025.

 

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006.  The Financial Statements for the year ended 31 December 2024 were approved by the Board on 26 February 2025 and delivered to the Registrar of Companies. The Financial Statements contained an unqualified audit report and did not include an emphasis of matter paragraph or any statement under Section 498 of the Companies Act 2006. The Financial Statements are available on the Group's website (www.ipfin.co.uk).

 

The accounting policies applied to prepare these condensed consolidated interim financial statements are consistent with those applied to the most recent full year Financial Statements for the year ended 31 December 2024.

 

We operate a formal risk management process, the details of which are set out on page 39 of the Financial Statements for the year ended 31 December 2024. Details of our principal risks can be found on pages 40 to 43 of the Financial Statements.

 

The risks assessed in preparing these condensed consolidated interim financial statements are consistent with those assessed in the most recent full year Financial Statements for the year ended 31 December 2024.

 

Board members

 

As at 30 June 2025, the Group's Board members were as follows:

 

Stuart Sinclair

Chairman

Gerard Ryan

Executive Director and Chief Executive Officer

Gary Thompson

Executive Director and Chief Financial Officer

Katrina Cliffe

Senior independent non-executive director

Richard Holmes

Independent non-executive director

Aileen Wallace

Independent non-executive director

 

 Going concern

 

In considering whether the Group is a going concern, the Board has taken into account the Group's financial forecasts and its principal risks (with particular reference to funding, liquidity and regulatory risks). The forecasts have been prepared for the two years to 31 December 2026 and include projected profit and loss, balance sheet, cashflows, borrowings, headroom against debt facilities and funding requirements. These forecasts represent the best estimate of the businesses performance, and in particular the evolution of customer lending and repayments cash flows as well as management's best assumption regarding the renewal/extension of maturing financing facilities. 

The financial forecasts have been stress tested in a range of downside scenarios to assess the impact on future profitability, funding requirements and covenant compliance. The scenarios reflect the crystallisation of the Group's principal risks (with particular reference to funding, liquidity and regulatory risks). Consideration has also been given to multiple risks crystallising concurrently and the availability of mitigating actions that could be taken to reduce the impact of the identified risks. In addition, we examined a reverse stress test on the financial forecasts to assess the extent to which a recession would need to impact our operational performance in order to breach a covenant. This showed that net revenue would need to deteriorate significantly from the financial forecast and the Directors have a reasonable expectation that it is unlikely to deteriorate to this extent.

At 30 June 2025, the Group had £92m of non-operational cash and headroom against its debt facilities (comprising a range of bonds and bank facilities), which have a weighted average maturity of 2.8 years. Total debt facilities as at 30 June 2025 amounted to £650m of which £80m (excluding £47m of uncommitted loans, which do not require extension) is due for renewal over the following 12 months. A combination of these debt facilities, the embedded business flexibility in respect of cash generation and a successful track record of accessing funding from debt capital markets over a long period (including periods with challenging macroeconomic conditions and a changing regulatory environment), are expected to meet the Group's funding requirements for the foreseeable future (12 months from the date of approval of this report). Taking these factors into account, together with regulatory risks set out on page 40 of the 2024 Annual Report and Financial Statements, the Board has a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, the Board has adopted the going concern basis in preparing the Report.

 

The following amendments to standards are mandatory for the first time for the financial year beginning 1 January 2025 but do not have any material impact on the Group:

·      Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability' 

The following standards, interpretations and amendments to existing standards are not yet effective and have not been early adopted by the Group:

·      IFRS S1 'General Requirements for Disclosure of Sustainability-related Financial Information'

·      IFRS S2 'Climate-related Disclosures'

·      IFRS 18 'Presentation and Disclosure in Financial Statements'

·      IFRS 19 'Subsidiaries without Public Accountability: Disclosures'

·      Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: 'Disclosures: Classification and Measurement of Financial Instruments'

·      Annual Improvements to IFRS standards - Volume 11

 

Exceptional items

 

Exceptional items are items that are unusual because of their size, nature or incidence and which the directors consider should be disclosed separately to enable a full understanding of the Group's underlying results.

 

Critical accounting judgements and key sources of estimation uncertainty

 

The preparation of condensed consolidated interim financial statements requires the Group to make estimates and judgements that affect the application of policies and reported accounts.

 

Critical judgements represent key decisions made by management in the application of the Group accounting policies. Where a significant risk of materially different outcomes exists due to management assumptions or sources of estimation uncertainty, this will represent a critical accounting estimate. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

 

The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below.

 

Key sources of estimation uncertainty

In the application of the Group's accounting policies, the directors are required to make estimations that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The following are the critical estimations, that the directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in these condensed consolidated interim financial statements.

 

Revenue recognition

The estimate used in respect of revenue recognition is the methodology used to calculate the effective interest rate (EIR). In order to determine the EIR applicable to loans an estimate must be made of the expected life of each loan and hence the cash flows relating thereto. These estimates are based on historical data and are reviewed regularly.

 

Amounts receivable from customers

The Group reviews its portfolio of customer loans and receivables for impairment on a weekly or monthly basis. The Group reviews the most recent customer repayment performance to determine whether there is objective evidence which indicates that there has been an adverse effect on expected future cash flows. For the purposes of assessing the impairment of customer loans and receivables, customers are categorised into stages based on days past due as this is considered to be the most reliable predictor of future payment performance. The level of impairment is calculated using historical payment performance to generate both the estimated expected loss and also the timing of future cash flows for each agreement. The expected loss is calculated using probability of default (PD) and loss given default (LGD) parameters.

 

Impairment models are monitored regularly to test their continued capability to predict the timing and quantum of customer repayments in the context of the recent customer payment performance. The models used typically have a strong predictive capability reflecting the relatively stable nature of the business and therefore the actual performance does not usually vary significantly from the estimated performance. The models are ordinarily updated at least twice per year. Where we expect the models to show an increase in the expected loss or a slowing of the future cashflows in the following 12 months, we apply an adjustment to the models. At 30 June 2025, this adjustment was a reduction in receivables of £13.2m (30 June 2024: reduction of £15.7m; 31 December 2024: reduction of £7.9m).

 

Post model overlays (PMOs) on amounts receivable from customers

 

 

 

Unaudited

30 June

2025

£m

Unaudited

30 June

2024

£m

Audited

31 December 2024

£m

Home credit

7.5

9.3

7.8

IPF Digital

1.8

2.1

1.8

Total

9.3

11.4

9.6

 

To date there has been no discernible impact on customer repayments as a result of the cost-of-living crisis. Inflation rates have continued to decrease however, prices remain significantly higher than pre-crisis. There is also an additional risk that governments could increase taxes following an increase in government debt driven by the support packages that were provided prior to elections in some markets. As a result, there remains a risk that the cost-of-living crisis will have a significant adverse impact on our customers' disposable income and therefore their ability to make repayments. Due to the resilience of our customers to date, the impact is expected to be lower than previously anticipated. The PMO related to the cost-of-living at 30 June 2025 is £8.5m (30 June 2024: £10.0m; 31 December 2024: £8.5m). In order to calculate this PMO, country-specific expert knowledge, informed by economic forecast data to estimate the increase in losses, has been used. This represents management's current assessment of a reasonable outcome from the cost-of-living crisis.

 

The Hungarian debt moratorium, which initially began in March 2020, ended in December 2022. There remains a small proportion of the portfolio that has at some point been in the moratorium. Given the age of these loans, PMOs have been applied to the impairment models in order to calculate the continued risks that are not fully reflected in the standard impairment models. Based on management's current expectations, the impact of these PMOs was to increase impairment provisions at 30 June 2025 to £0.8m (30 June 2024: £1.4m; 31 December 2024: £1.1m). In order to calculate the PMO, the portfolio was segmented by analysis of the most recent payment performance and, using this information, assumptions were made around expected credit losses. This represents management's current assessment of a reasonable outcome from the actual repayment performance on the debt moratorium impacted portfolio.

 

Accounting for credit card receivables 

As at June 2025, the Group does not yet have sufficient historical credit card data in order to fully calculate an expected loss provision for the credit card receivables portfolio. The credit card receivables portfolio is behaving similarly to the instalment loan portfolio in Poland, and consequently some parameters from the instalment loan portfolio have been used to calculate an expected loss provision and value the credit card receivables portfolio. Based on a 10% variation in expected loss parameters, it is estimated that the amounts receivable from customers would be higher/lower by £1.6m.

 

Tax

Estimations must be exercised in the calculation of the Group's tax provision, in particular with regard to the existence and extent of tax risks.

 

Deferred tax assets arise from timing differences between the accounting and tax treatment of revenue and impairment transactions and tax losses.  Estimations must be made regarding the extent to which timing differences reverse and an assessment must be made of the extent to which future profits will be generated to absorb tax losses. A shortfall in profitability compared to current expectations may result in future adjustments to deferred tax asset balances.

 

Alternative performance measures

In reporting financial information, the Group presents alternative performance measures, 'APMs', which are not defined or specified under the requirements of IFRS.

 

The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business. The APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board.

 

Each of the APMs used by the Group is set out on pages 42 to 50 including explanations of how they are calculated and how they can be reconciled to a statutory measure where relevant.

 

The Group reports percentage change figures for all performance measures, other than profit or loss before taxation and earnings per share, after restating prior year figures at a constant exchange rate. The constant exchange rate, which is an APM, retranslates the previous year measures at the average actual periodic exchange rates used in the current financial year. These measures are presented as a means of eliminating the effects of exchange rate fluctuations on the year-on-year reported results.

 

The Group makes certain adjustments to the statutory measures in order to derive APMs where relevant. The Group's policy is to exclude items that are considered to be significant in both nature and/or quantum and where treatment as an adjusted item provides stakeholders with additional useful information to assess the year-on-year trading performance of the Group.

 

2.  Related parties

 

The Group has not entered into any material transactions with related parties in the first six months of the year. 

   

3.  Segment analysis

 

 


Unaudited

Unaudited

Audited


Six months

ended

Six months

ended

Year

ended

 

30 June

2025

 

30 June

2024

 

31 December 2024

 

 

£m

£m

£m

 

Revenue

 



European home credit

160.6

166.0

328.2

Mexico home credit

116.0

139.9

263.8

IPF Digital

71.2

65.8

134.3

Revenue

347.8

371.7

726.3

 

Impairment

 



European home credit

(6.0)

5.7

8.1

Mexico home credit

34.2

44.7

92.4

IPF Digital

18.1

13.9

27.0

Impairment

46.3

64.3

127.5

 

Pre-exceptional profit before taxation

 



European home credit

35.9

29.8

57.4

Mexico home credit

14.4

17.7

26.0

IPF Digital

6.9

7.2

17.0

UK costs1

(7.3)

(7.4)

(15.2)

Pre-exceptional profit before taxation

49.9

47.3

85.2

Segment assets

 


 

European home credit

592.3

522.8

530.3

Mexico home credit

251.0

287.2

243.3

IPF Digital

304.2

270.3

281.3

UK1

78.3

116.5

86.8

Total

1,225.8

1,196.8

1,141.7

Segment liabilities

 



European home credit

(267.4)

(251.9)

(285.5)

Mexico home credit

(125.7)

(113.9)

(127.3)

IPF Digital

(235.2)

(145.3)

(195.1)

UK1

(95.9)

(205.3)

(67.5)

Total

(724.2)

(716.4)

(675.4)

 1 Although the UK is not classified as a separate segment in accordance with IFRS 8 'Operating Segments', it is shown separately in order to provide a reconciliation to other operating costs, administrative expenses, profit before taxation and consolidated total assets and liabilities.

 

4. Interest expense

 


Unaudited

Unaudited

Audited

 

Six months

ended

30 June

2025

Six months

ended

30 June

2024

Year

ended

31 December

2024

 

£m

£m

£m

Interest payable on borrowings

33.8

34.2

69.3

Interest payable on lease liabilities

1.2

1.2

2.4

Interest income

(0.2)

(0.7)

(1.3)

Interest expense

34.8

34.7

70.4

 

5.  Tax expense

 

The pre-exceptional taxation charge on the profit for the first six months of the year of £18.9m (30 June 2024: £18.9m), has been based on an expected effective tax rate for 2025 of 38% (30 June 2024: 40%).

 

The 2024 results reflected exceptional tax credits (30 June 2024: £2.1m; 31 December 2024: £17.4m), further details of which are included in note 8.

 

The Group is subject to tax audits in respect of the Mexican digital business (regarding 2019).

 

6.  Earnings per share

 

 

Unaudited

Unaudited

Audited

 

Six months

ended

Six months

ended

Year

ended

 

30 June

2025

30 June

2024

31 December

2024

 

pence

pence

pence

Basic EPS

14.2

8.8

27.3

Dilutive effect of awards

(0.7)

(0.5)

(1.4)

Diluted EPS

13.5

8.3

25.9

 

Basic earnings per share (EPS) for 30 June 2025 is calculated by dividing the profit attributable to shareholders of £31.0m (30 June 2024: £19.7m; 31 December 2024: £60.9m) by the weighted average number of shares in issue during the period of 217.7m which has been adjusted to exclude the weighted average number of shares held in treasury and by the employee trust (30 June 2024: 224.9m; 31 December 2024: 222.8m). 

 

For diluted EPS for 30 June 2025, the weighted average number of shares has been adjusted to 230.1m (six months ended 30 June 2024: 238.1m; 31 December 2024: 235.3m) to assume conversion of all dilutive potential ordinary share options relating to employees of the Group.

  

7.  Dividends

 

Reflecting the continued strong performance of the Group and our strategy to realise the long-term growth potential of the business, the Board is pleased to declare a 11.8% increase in the interim dividend to 3.8 pence per share (30 June 2024: 3.4 pence). This is in line with our progressive dividend policy which sets the interim dividend payment at 33% of the prior year's full dividend payment.  The interim dividend will be paid on 26 September 2025 to shareholders on the register at the close of business on 29 August 2025. The shares will be marked ex-dividend on 28 August 2025.

 

8. Exceptional items

 

The 2024 income statement included exceptional items which comprised of the following items:

 


Unaudited

Unaudited

Audited


Six months ended

30 June

2025

Six months ended

30 June

2024

Year

ended

31 December

2024


£m

£m

£m

Eurobond refinance costs

-

(5.8)

(5.8)

Poland restructuring costs

-

(5.0)

(6.1)

Exceptional items before tax

-

(10.8)

(11.9)


 



Tax credit on Eurobond refinance costs

-

1.1

1.1

Tax credit on Poland restructuring costs

-

1.0

1.1

Decision of the General Court of the EU on State Aid

-

-

15.2

Exceptional tax items

-

2.1

17.4

Exceptional items after tax

-

(8.7)

5.5

 

 

9.  Goodwill

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Net book value at start of period

22.6

23.6

23.6

Exchange adjustments

0.7

(0.5)

(1.0)

Net book value at end of period

23.3

23.1

22.6

 

Goodwill is tested annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amount is determined from a value in use calculation, based on the expected cash flows resulting from the legacy MCB business' outstanding customer receivables. The key assumptions used in the value in use calculation relate to the discount rates and cash flows used. The rate used to discount the forecast cash flows is 12% (30 June 2024: 13%; 31 December 2024: 12%) and would need to increase to 14% for the goodwill balance to be impaired; the cashflow forecasts arise over a 1-4 year period and would need to be 18% lower than currently estimated for the goodwill balance to be impaired.

  

10.  Intangible assets

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Net book value at start of period

37.1

32.3

32.3

Additions

11.1

7.4

17.8

Amortisation

(6.2)

(6.0)

(12.4)

Exchange adjustments

0.4

(0.3)

(0.6)

Net book value at end of period

42.4

33.4

37.1

 

Intangible assets comprise computer software and are a mixture of self-developed and purchased assets. All purchased assets have had further capitalised development on them, meaning it is not possible to disaggregate fully between the relevant intangible categories.

 

11.  Property, plant and equipment

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Net book value at start of period

14.0

16.0

16.0

Exchange adjustments

0.3

(0.7)

(1.5)

Additions

2.2

1.7

6.4

Disposals

-

-

(0.1)

Depreciation

(3.0)

(3.2)

(6.8)

Net book value at end of period

13.5

13.8

14.0

 

As at 30 June 2025, the Group had £6.6m of capital expenditure commitments with third parties that were not provided for (30 June 2024: £7.0m; 31 December 2024: £5.5m).

 

12. Right-of-use assets and lease liabilities

 

The recognised right-of-use assets relate to the following types of assets:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Properties

10.0

9.7

8.9

Motor vehicles

9.7

10.2

8.8

Total right-of-use assets

19.7

19.9

17.7

  

The movement in the right-of-use assets in the period is as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Net book value at start of period

17.7

21.7

21.7

Exchange adjustments

0.4

(0.9)

(2.2)

Additions

6.3

4.0

8.3

Depreciation

(4.7)

(4.9)

(10.1)

Net book value at end of period

19.7

19.9

17.7

 

The movement in lease liabilities in the period is as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Lease liabilities at start of period

19.9

23.6

23.6

Exchange adjustments

0.4

(0.9)

(2.2)

Additions

6.3

4.0

8.3

Interest

1.2

1.2

2.4

Lease payments

(6.3)

(5.9)

(12.2)

Lease liabilities at end of period

21.5

22.0

19.9

 

Analysed as:

 


Unaudited

Unaudited

Audited


30 June

30 June

31 December


2025

2024

2024


£m

£m

£m

Current

7.7

8.9

8.1


 



Non-current:

 



- between one and five years

12.0

11.9

11.4

- greater than five years

1.8

1.2

0.4


13.8

13.1

11.8


 



Lease liabilities at end of period

21.5

22.0

19.9

 

13. Deferred tax assets

 

Deferred tax assets have been recognised in respect of tax losses and other temporary timing differences (principally relating to recognition of revenue and impairment) to the extent that it is probable that these assets will be utilised against future taxable profits.

 

On 20 June 2023, the United Kingdom government's legislation applying the Pillar Two income tax rules became substantively enacted, effective from 1 January 2024.  Under the legislation the parent company will be required to pay in the United Kingdom top-up tax on profits of subsidiaries that are taxed at an effective tax rate of less than 15% (as calculated under the rules).  A system of simplified safe harbours will apply for a transitional period of up to three years.

 

The Group has performed an impact assessment using a combination of historic and forecast financial data and concludes that no material Pillar Two top-up tax liabilities are expected to arise.  However, given the uncertainty regarding forecast financial data and the potential for changes in the tax environment in the markets in which the Group operates, the actual impact that the Pillar Two legislation will have in the future may differ.  The Group is continuing to assess the impact of the Pillar Two income taxes legislation on its future financial performance.

 

14.  Amounts receivable from customers

 

Amounts receivable from customers comprise:

 

 

Unaudited

Audited

 

30 June

31 December

 

2024

2024

 

£m

£m

£m

Amounts due within one year

674.1

625.2

624.4

Amounts due in more than one year

239.2

245.6

Total receivables

937.8

864.4

870.0

 

 All lending is in the local currency of the country in which the loan is issued. The currency profile of amounts receivable from customers is as follows:

 

 

Unaudited

Audited

 

30 June

31 December

 

2024

2024

 

£m

£m

£m

Polish zloty

208.4

187.2

191.6

Czech crown

53.0

54.1

Euro*

100.7

105.6

Hungarian forint

140.8

149.2

Romanian leu

108.8

111.8

Mexican peso

226.6

205.6

Australian dollar

47.3

52.1

Total receivables

937.8

864.4

870.0

*Includes receivables in Estonia, Latvia and Lithuania.

Amounts receivable from customers are held at amortised cost and are equal to the expected future cash flows receivable discounted at the average effective EIR of 94.1% (30 June 2024: 101.6%; 31 December 2024: 99.0%). All amounts receivable from customers are at fixed interest rates. The average period to maturity of the amounts receivable from customers is 13.5 months (30 June 2024: 13.1 months; 31 December 2024: 13.5 months).

 

Determining an increase in credit risk since initial recognition

 

IFRS 9 has the following recognition criteria:

 

·    Stage 1 : requires the recognition of 12 month expected credit losses (the expected credit losses from default events that are expected within 12 months of the reporting date) if credit risk has not significantly increased since initial recognition.

·    Stage 2 : lifetime expected credit losses for financial instruments for which the credit risk has increased significantly since initial recognition.

·    Stage 3 : credit impaired.

 

When determining whether the risk of default has increased significantly since initial recognition the Group considers both quantitative and qualitative information based on the Group's historical experience.

 

The approach to identifying significant increases in credit risk is consistent across the Group's products. In addition, as a backstop, the Group considers that a significant increase in credit risk occurs when an asset is more than 30 days past due.

 

Financial instruments are moved back to stage 1 once they no longer meet the criteria for a significant increase in credit risk.

 

Definition of default and credit impaired assets

The Group defines a financial instrument as in default, which is fully-aligned with the definition of credit-impaired, when it meets one or more of the following criteria:

 

·    Quantitative criteria: the customer is more than 90 days past due on their contractual payments in home credit and 60 days past due on their contractual payments in IPF Digital.

·    Qualitative criteria: indication that there is a measurable movement in the estimated future cash flows from a group of financial assets. For example, if prospective legislative changes are considered to impact the repayments performance of customers.

 

The default definition has been applied consistently to model the PD, exposure at default (EAD) and LGD throughout the Group's expected credit loss calculations.

 

An instrument is considered to no longer be in default (i.e. to have cured) when it no longer meets any of the default criteria.

 

The breakdown of receivables by stage is as follows:

 

 

 

30 June 2025

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Home credit

492.6

57.5

119.8

669.9

IPF Digital

251.4

11.5

5.0

267.9

Group

744.0

69.0

124.8

937.8

 

 

 

30 June 2024

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Home credit

432.3

59.8

134.9

627.0

IPF Digital

221.7

9.9

5.8

237.4

Group

654.0

69.7

140.7

864.4

 

 

 

31 December 2024

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Home credit

443.2

56.7

119.1

619.0

IPF Digital

234.7

10.9

5.4

251.0

Group

677.9

67.6

124.5

870.0

 

The Group has one class of loan receivable and no collateral is held in respect of any customer receivables.

 

Gross carrying amount and loss allowance

 

The amounts receivable from customers includes a provision for the loss allowance, which relates to the expected credit losses on each agreement. The gross carrying amount is the present value of the portfolio before the loss allowance provision is deducted. The gross carrying amount less the loss allowance is equal to the net receivables.

 

 

 

30 June 2025

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Gross carrying amount

875.7

129.1

373.6

1,378.4

Loss allowance

(131.7)

(60.1)

(248.8)

(440.6)

Group

744.0

69.0

124.8

937.8

Stage allocation

64%

9%

27%

100%

Coverage ratio

15%

46%

67%

32%

  

 

 

30 June 2024

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Gross carrying amount

788.0

134.9

400.5

1,323.4

Loss allowance

(134.0)

(65.2)

(259.8)

(459.0)

Group

654.0

69.7

140.7

864.4

Stage allocation

60%

10%

30%

100%

Coverage ratio

17%

48%

65%

35%

   

 

 

31 December 2024

 

Stage 1

£m

 

Stage 2

£m

 

Stage 3

£m

Total net receivables

£m

Gross carrying amount

802.0

128.9

366.6

1,297.5

Loss allowance

(124.1)

(61.3)

(242.1)

(427.5)

Group

677.9

67.6

124.5

870.0

Stage allocation

62%

10%

28%

100%

Coverage ratio

15%

47%

66%

33%

  

15. Provisions for liabilities and charges

 

The Group had £nil payable to employees outstanding at 30 June 2025 relating to the 2024 exceptional item (see note 8) following the restructure exercise in Poland (30 June 2024: £3.9m; 31 December 2024: £2.8m).

 

 16.  Borrowing facilities and borrowings

 

The maturity of the Group's bond and bank borrowings is as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Repayable

 

 


- in less than one year

84.2

54.1

92.8


 



- between one and two years

45.5

75.8

47.6

- between two and five years

435.9

414.6

375.5


481.4

490.4

423.1


 



Total borrowings

565.6

544.5

515.9

 

 



Borrowings are stated net of deferred debt issuance costs of £6.8m (30 June 2024: £8.7m; 31 December 2024: £7.6m).

 

The maturity of the Group's bond and bank facilities is as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Repayable

 



- on demand

47.3

34.0

35.2

- in less than one year

80.0

71.8

135.1

- between one and two years

71.6

115.9

78.9

- between two and five years

451.3

168.5

407.7

- greater than five years

-

288.5

-

Total facilities

650.2

678.7

656.9

 

The undrawn external bank facilities are as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Expiring within one year

43.1

51.7

77.2

Expiring between one and two years

26.1

39.7

31.3

Expiring in more than two years

15.4

34.1

24.9

Total

84.6

125.5

133.4

 

Undrawn external facilities above do not include unamortised arrangement fees.

 

The average period to maturity of the Group's external bonds and committed external borrowings is 2.8 years (30 June 2024: 3.3 years; 31 December 2024: 3.0 years).

 

The Group complied with its covenants at 30 June 2025.  Each covenant calculation has been made in accordance with the terms of the relevant funding documentation.

 

17.  Retirement benefit asset

 

The amounts recognised in the balance sheet in respect of the retirement benefit asset are as follows:

 

 

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

Diversified growth funds

3.8

0.9

3.1

Corporate bonds

7.8

8.3

8.4

Equities

3.2

0.7

3.5

Liability driven investments

10.9

18.0

10.7

Other

0.4

0.4

0.6

Total fair value of scheme assets

26.1

28.3

26.3

Present value of funded defined benefit obligations

(21.5)

 

(23.4)

 

(21.9)

Net asset recognised in the balance sheet

4.6

4.9

4.4

 

The credit recognised in the income statement in respect of defined benefit pension costs is £0.1m (June 2024: £0.1m; 31 December 2024: £0.3m).  

 

18.  Fair values of financial assets and liabilities

 

IFRS 13 requires disclosure of fair value measurements of financial instruments by level of the following fair value measurement hierarchy:

 

·   

quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

·   

inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and

·   

inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The fair value of derivative financial instruments has been calculated by discounting expected future cash flows using interest rate yield curves and forward foreign exchange rates prevailing at the relevant period end.

 

In 2024 and 2025, there has been no change in classification of financial assets as a result of a change in purpose or use of these assets.

 

Except as detailed in the following table, the carrying value of financial assets and liabilities recorded at amortised cost, which are all short-term in nature, are a reasonable approximation of their fair value:

 

 

Carrying value

Fair value

 

 

Unaudited

30 June

2025

£m

 

Unaudited

30 June

2024

£m

 

Audited

31 December

2024

£m

 

Unaudited

30 June

2025

£m

 

Unaudited

30 June

2024

£m

 

Audited

31 December

2024

£m

Financial assets

 



 



Amounts receivable from customers

937.8

864.4

 

 

870.0

1,211.4

1,129.9

 

 

1,124.5


937.8

864.4

870.0

1,211.4

1,129.9

1,124.5

Financial liabilities

 



 



Bonds

389.4

474.0

433.4

431.8

490.2

468.2

Bank borrowings

 

176.2

 

70.5

 

82.5

 

176.2

 

70.5

 

82.5


565.6

544.5

515.9

608.0

560.7

550.7

 

The fair value of amounts receivable from customers has been derived by discounting expected future cash flows (as used to calculate the carrying value of amounts due from customers), net of customer representative repayment costs, at the Group's weighted average cost of capital which we estimate to be 12% (30 June 2024: 13%; 31 December 2024: 12%) which is assumed to be a proxy for the discount rate that a market participant would use to price the asset.

 

The fair value of the bonds has been calculated by reference to their market value.

 

The carrying value of bank borrowings is deemed to be a good approximation of their fair value. Bank borrowings can be repaid within six months if the Group decides not to roll over for further periods up to the contractual repayment date. The impact of discounting would therefore be negligible.  This methodology has been used consistently for all periods.

   

19.  Reconciliation of profit after taxation to cash generated from operating activities

 

 

Unaudited

Unaudited

Audited

 

Six months ended

Six months ended

Year

ended

 

30 June

2025

30 June

2024

31 December 2024

 

£m

£m

£m

Profit after taxation from operations

31.0

19.7

60.9

Adjusted for

 



        Tax charge

18.9

16.8

12.4

        Finance costs

35.0

35.4

71.7

 Finance income

(0.2)

(0.7)

(1.3)

        Share-based payment charge

1.0

1.1

1.7

        Amortisation of intangible assets (note 10)

6.2

6.0

12.4

        Depreciation of property, plant and equipment (note 11)

 

3.0

 

3.2

 

6.8

       Depreciation of right-of-use assets (note 12)

4.7

4.9

10.1

  Short term and low value lease costs

0.6

0.4

1.4

Changes in operating assets and liabilities

 

 


        Amounts receivable from customers

(43.7)

(5.7)

(58.8)

        Other receivables

6.1

(5.2)

(10.4)

        Trade and other payables

(6.9)

(5.1)

7.6

 Provision for liabilities and charges

(2.8)

3.9

2.8

        Retirement benefit asset

(0.1)

(0.1)

(0.3)

        Derivative financial instruments

(0.9)

(3.0)

(2.9)

Cash generated from operating activities

51.9

71.6

114.1

 

20.  Foreign exchange rates

 

The table below shows the average exchange rates for the relevant reporting periods and closing exchange rates at the relevant period ends.   

 


Average

H1

2025

Closing

June

2025

Average

H1

2024

Closing

June

2024

Average Year

2024

Closing

December 2024

Polish zloty

5.0

5.0

5.1

5.1

5.1

5.2

Czech crown

29.6

29.0

29.2

29.4

29.6

30.4

Euro

1.2

1.2

1.2

1.2

1.2

1.2

Hungarian forint

479.2

470.2

457.0

468.0

466.9

496.9

Romanian leu

5.9

5.9

5.8

5.9

5.9

6.0

Mexican peso

25.8

25.8

21.7

22.8

23.0

26.0

Australian dollar

2.1

2.1

1.9

1.9

1.9

2.0

 

The £19.2m exchange gain on foreign currency translations shown within the consolidated statement of comprehensive income arises on retranslation of net assets denominated in currencies other than sterling, due to the change in foreign exchange rates against sterling between December 2024 and June 2025 shown in the table above.

 

21. Contingent Liabilities

 

Treatment of the Group's finance company

In December 2020 HMRC initiated a review of the Group's finance company's compliance with certain conditions under the UK domestic tax rules to confirm whether the company is eligible for the benefits of the Group Financing Exemption which it has claimed in its historic tax returns. IPF believes that all conditions have been complied with and have sought legal advice with regard to the interpretation of the relevant legislative condition. The legal advice confirmed IPF's view and assessed that, in the event that HMRC were to take the matter to Tribunal, it is more likely than not that the company would succeed in defending its position. In the unexpected event that HMRC were to conclude that the company is not in compliance with the conditions and to pursue the matter in Tribunal, and won, the amount of tax at stake for all open years is £8.8m. It is of note that although HMRC issued a protective Discovery Assessment with respect to 2016, so far no actual challenge has been made to the company's filing position and HMRC have simply requested information.

 

Other legal actions and regulatory matters

In addition, in the course of its business the Group is subject to other complaints and threatened or actual legal proceedings (including class or group action claims) brought by or on behalf of current or former employees, customer representatives, customers, investors or other third parties. This extends to legal and regulatory challenges and investigations (including relevant consumer bodies) combined with tax authorities taking a view that is different to the view the Group has taken on the tax treatment in its tax returns. Where material, such matters are periodically reassessed, with the assistance of external professional advisers where appropriate, to determine the likelihood of the Group incurring a liability. In those instances where it is concluded that it is more likely than not that a payment will be made, a provision is established based on management's best estimate of the amount required at the relevant balance sheet date. In some cases, it may not be possible to form a view, for example because the facts are unclear or because further time is needed to assess properly the merits of the case, and no provisions are held in relation to such matters. In these circumstances, specific disclosure in relation to a contingent liability will be made where material. However, the Group does not currently expect the final outcome of any such case to have a material adverse effect on its financial position, operations or cash flows.

 

  

Responsibility statement

 

The following statement is given by each of the directors: namely; Stuart Sinclair, Chairman; Gerard Ryan, Chief Executive Officer; Gary Thompson, Chief Financial Officer; Katrina Cliffe, Senior independent non-executive director; Richard Holmes, independent non-executive director; and Aileen Wallace, independent non-executive director.

 

The directors confirm that to the best of their knowledge:

 

·     

the condensed consolidated interim financial statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4R;

·     

the half-year financial report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

·     

the half-year financial report includes a fair review of the information required by DTR 4.2.8 (disclosure of related parties' transactions and changes therein).

 

 

Alternative performance measures (APMs)

 

This half-year financial report provides APMs which are not defined or specified under the requirements of International Financial Reporting Standards. We believe these APMs provide readers with important additional information on our business. To support this we have included a reconciliation of the APMs we use, where relevant, and a glossary indicating the APMs that we use, an explanation of how they are calculated and why we use them.

 

APM

 

Closest equivalent

statutory measure

Reconciling items to

statutory measure

Definition and purpose

 

Income statement measures

 

 

Customer lending growth at constant exchange rates (%)

 

None

Not applicable

Customer lending is the principal value of loans advanced to customers and is an important measure of the level of lending in the business. Customer lending growth is the period-on-period change in this metric which is calculated by retranslating the previous half-year's customer lending at the average actual exchange rates used in the current financial year. This ensures that the measure is presented having eliminated the effects of exchange rate fluctuations on the period-on-period reported results.

Revenue growth at

constant exchange

rates (%)

 

None

Not applicable

The period-on-period change in revenue which is calculated by retranslating the previous half-year's revenue at the average actual exchange rates used in the current financial year. This measure is presented as a means of eliminating the effects of exchange rate fluctuations on the period-on-period reported results.

Revenue yield (%)

None

Not applicable

Revenue yield is reported revenue divided by average gross receivables (before impairment provision) and is an indicator of the return being generated from average gross receivables. This is reported on a rolling annual basis (annualised).

Impairment rate (%)

 

None

Not applicable

Impairment as a percentage of average gross receivables (before impairment provision). This is reported on a rolling annual basis (annualised).

Cost-income ratio (%)

None

Not applicable

The cost-income ratio is costs, including customer representatives' commission, excluding interest expense, divided by reported revenue. This measure is reported on a rolling annual basis (annualised). This is useful for comparing performance across markets.


 

APM

 

Closest equivalent

statutory measure

Reconciling items to

statutory measure

Definition and purpose

 

Balance sheet and returns measures

Equity to receivables ratio (%)

None

Not applicable

Total equity divided by amounts receivable from customers, this is a measure of balance sheet strength and the Group targets a ratio of around 40%.

Headroom (£m)

Undrawn

external bank

facilities

None

 

Calculated as the sum of undrawn external bank facilities and non-operational cash.

Net debt (£m)

None

Not applicable

Borrowings less cash.

Gross receivables (£m)

None

Not applicable

Gross receivables is the same definition as gross carrying amount.

Impairment coverage ratio (%)

None

Not applicable

Expected loss allowance divided by gross receivables (before impairment provision).

RoE (%)

None

Not applicable

Return on equity (RoE) calculated as rolling annual profit after tax divided by average net assets over the same period.

Pre-exceptional RoRE (%)

None

Not applicable

Return on required equity (RoRE) is calculated as rolling annual pre-exceptional profit after tax divided by required equity of 40% of average net receivables.

Other measures




Customers

None

Not applicable

Customers that are being served by our customer representatives or through our money transfer product in the home credit business and customers that are not in default in our digital business.


 

Constant exchange rate reconciliations

 

The period-on-period change in pre-exceptional profit and loss accounts is calculated by retranslating the 2024 half-year's profit and loss account at the average actual exchange rates used in the current year.

 

H1 2025

 

 

 

 

 

 

£m

European home credit

Mexico home credit

IPF Digital

Central costs

Group

 

Customer numbers (000s)

711

683

259

-

1,653

 

Customer lending

351.7

132.6

137.7

-

622.0

 

Average gross receivables

707.5

284.3

326.8

-

1,318.6

 

Closing gross receivables

749.0

284.8

344.6

-

1,378.4

 

Closing net receivables

502.1

167.8

267.9

-

937.8

 

Revenue

160.6

116.0

71.2

-

347.8

 

Impairment

6.0

(34.2)

(18.1)

-

(46.3)

 

Revenue less impairment

166.6

81.8

53.1

-

301.5

 

Costs

(111.5)

(60.9)

(37.2)

(7.2)

(216.8)

 

Interest expense

(19.2)

(6.5)

(9.0)

(0.1)

(34.8)

 

Profit before tax

35.9

14.4

6.9

(7.3)

49.9

 









 

H1 2024 performance, at average H1 2024 foreign exchange rates

£m

European home credit

Mexico home credit

IPF Digital

Central

costs

Group

 

Customer numbers (000s)

717

710

229

-

1,656

 

Customer lending

315.4

156.0

126.0

-

597.4

 

Average gross receivables

744.8

319.1

306.0

-

1,369.9

 

Closing gross receivables

698.8

312.4

312.2

-

1,323.4

 

Closing net receivables

444.0

183.0

237.4

-

864.4

 

Revenue

166.0

139.9

65.8

-

371.7

 

Impairment

(5.7)

(44.7)

(13.9)

-

(64.3)

 

Revenue less impairment

160.3

95.2

51.9

-

307.4

 

Costs

(112.1)

(70.1)

(35.9)

(7.3)

(225.4)

 

Interest expense

(18.4)

(7.4)

(8.8)

(0.1)

(34.7)

 

Profit before tax

29.8

17.7

7.2

(7.4)

47.3

 

 

 

Constant exchange rate reconciliations (continued)

 

Foreign exchange movements

£m

European home credit

Mexico home credit

IPF Digital

Central

costs

Group

 

Customer numbers (000s)

-

-

-

-

-

 

Customer lending

(4.8)

(25.5)

(6.8)

-

(37.1)

 

Average gross receivables

(19.5)

(48.2)

(14.3)

-

(82.0)

 

Closing gross receivables

(0.9)

(33.5)

(11.4)

-

(45.8)

 

Closing net receivables

3.5

(21.3)

(7.0)

-

(24.8)

 

Revenue

(3.2)

(22.8)

(4.3)

-

(30.3)

 

Impairment

0.1

7.4

1.5

-

9.0

 

Revenue less impairment

(3.1)

(15.4)

(2.8)

-

(21.3)

 

Costs

1.4

10.9

1.6

-

13.9

 

Interest expense

0.5

1.1

0.5

-

2.1

 

Profit before tax

(1.2)

(3.4)

(0.7)

-

(5.3)

 

 

H1 2024 performance, at average H1 2025 foreign exchange rates

£m

European home credit

Mexico home credit

IPF Digital

Central

costs

Group

 

Customer numbers (000s)

717

710

229

-

1,656

 

Customer lending

310.6

130.5

119.2

-

560.3

 

Average gross receivables

725.3

270.9

291.7

-

1,287.9

 

Closing gross receivables

697.9

278.9

300.8

-

1,277.6

 

Closing net receivables

447.5

161.7

230.4

-

839.6

 

Revenue

162.8

117.1

61.5

-

341.4

 

Impairment

(5.6)

(37.3)

(12.4)

-

(55.3)

 

Revenue less impairment

157.2

79.8

49.1

-

286.1

 

Costs

(110.7)

(59.2)

(34.3)

(7.3)

(211.5)

 

Interest expense

(17.9)

(6.3)

(8.3)

(0.1)

(32.6)

 

 

Year-on-year movement at constant exchange rates

%

European home credit

Mexico home credit

IPF Digital

Central

costs

Group

 

Customer numbers

(0.8%)

(3.8%)

13.1%

-

(0.2%)

 

Customer lending

13.2%

1.6%

15.5%

-

11.0%

 

Average gross receivables

(2.5%)

4.9%

12.0%

-

2.4%

 

Closing gross receivables

7.3%

2.1%

14.6%

-

7.9%

 

Closing net receivables

12.2%

3.8%

16.3%

-

11.7%

 

Revenue

(1.4%)

(0.9%)

15.8%

-

1.9%

 

Impairment

207.1%

8.3%

(46.0%)

-

16.3%

 

Revenue less impairment

6.0%

2.5%

8.1%

-

5.4%

 

Costs

(0.7%)

(2.9%)

(8.5%)

1.4%

(2.5%)

 

Interest expense

(7.3%)

(3.2%)

(8.4%)

-

(6.7%)

 

 

 Balance sheet and returns measures

 

Average gross receivables (before impairment provisions) are used in the revenue yield and impairment rate calculations.

 

Average Gross Receivables

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

£m

£m

European home credit

707.5

744.8

706.0

Mexico home credit

284.3

319.1

306.9

IPF Digital

326.8

306.0

314.6

Group

1,318.6

1,369.9

1,327.5

 

The impairment coverage ratio is calculated as loss allowance divided by gross carrying amount.

 

Impairment coverage ratio

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

Closing gross carrying amount

1,378.4

1,323.4

1,297.5

Loss allowance

(440.6)

(459.0)

(427.5)

Closing net receivables

937.8

864.4

870.0

Impairment coverage ratio

32.0%

34.7%

32.9%

 

Return on equity (RoE) is calculated as rolling annual profit divided by equity.

 

RoE 30 June 2025

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

Equity (net assets)

501.6

480.4

466.3

Average equity

491.0

471.7

484.1

Profit after tax

31.0

19.7

60.9

Profit 12 months to 30 June 2025

72.2

49.0

-

RoE

14.7%

10.4%

12.6%

 

 

RoE 30 June 2024

Unaudited

Unaudited

Audited

 

30 June

30 June

31 December

 

2025

2024

2024

 

£m

Equity (net assets)

480.4

462.9

501.9

Average equity

471.7

433.4

473.6

Profit after tax

19.7

18.7

48.0

Profit 12 months to 30 June 2024

49.0

44.7

-

RoE

10.4%

 

 

Pre-exceptional return on required equity (RoRE) is calculated as rolling annual pre-exceptional profit divided by required equity of 40% of average net receivables.

 

 

Pre-exceptional RoRE 30 June 2025

European home credit

Mexico

home credit

IPF Digital

Group

 

£m

£m

£m

£m

Closing net receivables H1 2024

444.0

183.0

237.4

864.4

Closing net receivables H1 2025

502.1

167.8

267.9

937.8

Average net receivables

473.1

175.4

252.6

901.1

Equity (net assets) at 40%

189.2

70.2

101.0

360.4


 

 

 

 

Pre-exceptional profit before tax:

 

 

 

 

FY 2024

57.4

26.0

17.0

85.2

Exclude H1 2024

(29.8)

(17.7)

(7.2)

(47.3)

H2 2024

27.6

8.3

9.8

37.9

H1 2025

35.9

14.4

6.9

49.9

12 MO to H1 2025

63.5

22.7

16.7

87.8

Tax at 38% H1 2025 (35% H2 2024)

(23.3)

(8.4)

(6.0)

(32.2)

Pre-exceptional profit after tax

40.2

14.3

10.7

55.6

Pre-exceptional RoRE

21.2%

20.4%

10.6%

15.4%

 

 

Pre-exceptional RoRE 30 June 2024

European home credit

Mexico

home credit

IPF Digital

Group

 

£m

£m

£m

£m

Closing net receivables H1 2023

499.1

176.1

217.9

893.1

Closing net receivables H1 2024

444.0

183.0

237.4

864.4

Average net receivables

471.5

179.6

227.7

878.8

Equity (net assets) at 40%

188.6

71.8

91.1

351.5






Pre-exceptional profit before tax:





FY 2023

67.7

23.1

8.1

83.9

Exclude H1 2023

(31.8)

(11.4)

(2.6)

(37.8)

H2 2023

35.9

11.7

5.5

46.1

H1 2024

29.8

17.7

7.2

47.3

12 MO to H1 2024

65.7

29.4

12.7

93.4

Tax at 40% H1 2024 (38% H2 2023)

(25.5)

(11.5)

(5.0)

(36.4)

Pre-exceptional profit after tax

40.2

17.9

7.7

57.0

Pre-exceptional RoRE

21.3%

24.9%

8.5%

16.2%

 

  

Pre-exceptional RoRE 2024

European home credit

Mexico

home credit

IPF Digital

Group

 

£m

£m

£m

£m

Closing net receivables 2024

459.6

159.4

251.0

870.0

Closing net receivables 2023

475.4

187.1

230.4

892.9

Average net receivables

467.5

173.3

240.7

881.5

Equity (net assets) at 40%

187.0

69.3

96.3

352.6






Pre-exceptional profit before tax

57.4

26.0

17.0

85.2

Tax at 35%

(20.1)

(9.1)

(6.0)

(29.8)

Pre-exceptional profit after tax

37.3

16.9

11.0

55.4

Pre-exceptional RoRE

19.9%

24.4%

11.4%

15.7%

 

 

INDEPENDENT REVIEW REPORT TO INTERNATIONAL PERSONAL FINANCE PLC

Conclusion

We have been engaged by the group to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with UK adopted IASs. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities of directors

 

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of financial information

In reviewing the half-yearly report, we are responsible for expressing to the group a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.

Use of our report

This report is made solely to the company's directors, as a body, in accordance with the terms of our engagement letter dated 4 June 2025.  Our review has been undertaken so that we might state to the company's directors those matters we have agreed to state to them in a reviewer's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's directors as a body, for our work, for this report, or for the conclusions we have formed.

 

 

PKF Littlejohn LLP                                                                                                             15 Westferry Circus

Statutory Auditor                                                                                                                         Canary Wharf

30 July 2025                                                                                                                             London E14 4HD

 

 

 

 

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