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An interesting part of the article was the commentary from Numis analyst James Hamilton who observed that the markets are "estimating that financial markets are implicitly pricing-in a 77% probability that the company will go under or suffer a permanent drop in capital, or both...We do not see this probability as reasonable and therefore believe IPF offers very good value."
IPF "remains a high-margin market leader with probably the best fintech lending business in the world."
There is new short position in IPF. Millennium look to have taken out short positions of around 0.50% against a number of Covid impacted businesses last week. They seem to have fairly deep pockets, be interesting to see if they increase
https://shorttracker.co.uk/company/GB00B1YKG049/
I'd say you'd need to consider the audience of the Times for some perspective on their recommendations. IPF is a high risk return equation. All sorts of challenges and headwinds but already reflected in rock bottom valuation. Its not the for the average Times investor who wants to protect their retirement nest egg with a nice steady dividend income and its pretty rare that they'll recommend something in this situation. So I tend to agree they recommend this as an avoid to the average reader. I try and take a slightly more balanced (and risk seeking view) to acknowledge there is a refinance risk but the SP already reflects a x% probability that the bonds wont be refinanced and the company will require a dilutive equity raising. If you think that risk is lower than the implied valuation and this fits your risk profile than it might be worth considering.
Their picking and choosing simply based on their opinion as to whether the bond will get refinanced which I understand but in this climate and level of uncertainty meaning bonds can be further refincnanced or actual not it's difficult to predict.
What we do know is the government isn't back tracking to full covid lockdown, what we know is they simply won't do this again due to economic disaster and so the business will be able to perform at far higher levels than seen in the last six months.
Does lending now increase as banks only choose certain people, roots? So whilst risky to banks safe bets for IPF?
They seem a very switched on business to me, you ideally have to be based on actually what they do and I hope and believe they are more than capable of refinancing. I guess we may continue to get more often covid updates in order to Calm the share and give some confidence. Gla
Maybe I have been seeing Margin Call too many times but it seems a bit convenient timing for Whitebox.
The Investor Chronicle article from the 8th Sep is similar to the FT you need to have a subscription to read has the following summary with a "Hold" rating:
"Peer past the predictably weak headline figures for International Personal Finance’s (IPF) six months trading to June, and the tone is upbeat. Management asserted the foundations for “a quick return to profitability and long-term growth” are in place, while analysts at broker Numis cited a “rapidly improving picture”."
The FT tear sheet shows that 3 analysts offering 12 month price targets for International Personal Finance Plc have a median target of 195.00, with a high estimate of 247.00 and a low estimate of 165.00. The median estimate represents a 214.52% increase from the last price of 62.00. The 3 broker ratings date from the 10th Sep have two as "Buy" vs one has "Hold".
Ultimately this comes down to a judgement call whether you believe the refinance will happen before Year End. I have actually been a bit surprised by the scale of the sell-off this week where as opposed to other stocks the market didn't want to see past the last 6 months to the very bullish statements. Hopefully this will give the Company further impetus to provide a succinct statement to the market on progress to bring an end to the speculation. Some Director purchases will not go amiss as well please?!
The bonds refinancing have been discussed as far back as June.
A discussion around the bond structure ahead of a covenant test post COVID for a company that has since returned to normality is no different to ANY other company that has been affected during the pandemic.
In regards the going concern comment, that is standard and expected practise. Most small caps post an emphasis of matter statement periodically - the difference here is, IPF actually has a business that is clearly generating cash. The pay down of existing debt and increased headroom on lending facilities signifies just that.
Hmm. IPF gets an article in the Business section of Today’s Sunday Times. The article ends by saying ‘with a hefty refinancing looming these are risky. Sell’. Not what I would like to see printed in a national paper about IPF!
https://twitter.com/shortdatauk/status/1304446377821384707?s=20
Dare we say bring on next week?
No reason to doubt they won’t refinance and it sounds from the interview they are already months in to the discussions.
Business has retrurned largely to normal and a great collection rate - they’ll certainly weather the storm. Flush this seller and it should begin to lift.
... but doesn't change the story. I'm still confounded what has caused the plunge in price. The NTA is double the SP, progress being made on refinancing and new business slowly returning. I'm scavenging a few more at the moment, it may fall further no doubt, just cant see it staying down for long given that huge net asset buffer.
If the SP did fall because of the refinancing risk leading to going concern anxiety, when they refinance (which I believe they will) what's going to happen?
Seems stuck despite the number of trades happening each day. Background transfer? With support at the 60p level does anyone know when the Shore Capital forecast coverage will be released to potentially get this going? Saying that with Peel Hunt retaining their 'buy' rating though reducing their target from 270p to 165p who knows what will be needed.
Re dropping to 30s. I don't think so. If it does I'll buy the company lol!
Could only see dropping to mid 50s which it nearly did today but rebounded.
Given the high volume of trades and the relative sp stability (today obviously not yesterday) I am inclined to think there's a large backroom transfer of shares happening
Will this drop to 30s?
Disappointed but fortunately I haven’t lost any money , without the 45m from Poland this would have been a disaster and going forward there’s also 35m to be paid back before Any profit. Can’t see any dividends for a few years.
Seems to be an over reaction by the market to what was obviously going to be difficult reading which discounted the underlying robustness and refinancing progress commentary. Although there will be some frankly obvious shorting commentary to taken advantage it does seem that the sp is settling down as well as the bond price which has marginally changed today. Hopefully we should see some delayed bounce back this afternoon
https://www.boerse-frankfurt.de/bond/xs1054714248-international-personal-finance-plc-5-75-14-21
I’ve two divi payments in a couple of weeks so I’m going to invest here and average down slightly if sp is similar, gla
Agree a very good webcast explaining the results.
Confidence in strong return to profitability next year.
H1 taken hit covid19 with 36m factored in balance sheet as a loss expected to be fully repaid over next 12 months and coming through on the balance sheet over these periods.
Lending to be significantly increased over coming months.
Very confident of bond apr 2021 refinancing and statement regarding risk of going concern had to be put in legally.
Talks to date going well and supportive. This will be a big step forward once that happens.
Dividends will be reinstatated but uncertainty exactly when. My guess H2 2021.
Strong balance sheet.
Collections at 96% and if take hungry opt out moratorium in place would be closer to 100%.
All in all a solid performance in exceptional times. Will be interesting to see any brokers notes and revised forecasts.
Lastly, will review monthly updates but expect to issue a Sep update.
Sep 05
Price target raised to UK£2.37
Up from UK£2.21, the current price target is an average from 2 analysts. The new target price is 251% above the current share price of UK£0.68. As of last close, the stock is down 36% over the past year.
I think your right, it will take a significant deterioration in payments to create problems, they are preparing and understanding their numbers as you’d expect very well and it’s in hand. Where is the £45, too small to make an impact?
Reuters
London, Sept 8 - Doorstep lender International
Personal Finance said on Tuesday there is a "material
uncertainty" around its ability to continue as a going concern
after posting a loss and given the upcoming maturity of a
eurobond.
The UK-listed firm, which operates primarily in Central and
Eastern Europe and Mexico, posted a pretax loss of 53.3 million
pounds ($70.05 million) in the first half of 2020 after COVID-19
hampered its ability to collect loan repayments and forced it to
significantly tighten its lending criteria.
The company said its collections have now improved and it is
implementing a strategy to rebuild its business.
However, it has near-term funding issues with a 397 million
euro ($469.13 million) eurobond due to mature in April 2021 and
a need to renegotiate the terms of some of its loans.
"The need to refinance the 2021 Eurobond and obtain covenant
amendments create a material uncertainty surrounding going
concern," the company said.
Are these the same accountants which did not even get close to uncovering frauds and gross incompetency to allow companies like CAKE, Conviviality etc etc go bust? The accountants are covering their asses plan and simple and are detached from the commercial reality of the market with zero value add. You don't need to be one to know that if you don't pay your debts you go bust. The world is desperate for yield, particularly of the high yield junk variety and IPF has the assets coverage and reputation to raise the required finance
GOING CONCERN RISK
Im an accountant.
Going concern risks - From the web -
The going concern principle is the assumption that an entity will remain in business for the foreseeable future.
If there are going concern risks - this infers there is risk of the entity potentially NOT continuing as a going concern. Good luck guys!
Either the report was different or the expectations were. I expect both.
Maybe 15- 20% down?
At the moment only 14% down...Baron is not ramping enough on Twitter...:) :)