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Further info on bond covenants etc https://www.ipfin.co.uk/en/investors/consent-solicitation-for-bonds.html
These rates are the sign of the times it seems thanks to Covid
This should be motoring now especially when this was in the 70’s before the previous update. Once refinance gets completed 100p is a possibility which would still be a large discount to pre covid level of 180p
Apologies typo in last paragraph. Annualised impairment as a % of revenue was 38.1% not 55%. So a 38.1% impairment vs a sp which is trading at 2/3rds of its pre-Covid sp.
Write up by Proactive Investors:
"A series of actions were announced to improve the funding position of the group, including a proposed refinancing of the €397mln of Eurobonds due in 2021 along with solicitations of consent to amend covenants on sterling and Swedish krona bonds due in 2023 and 2022 respectively.
IPF said it was also making progress in discussions on the amendment of bank covenants in respect of £123mln of facilities."
https://www.proactiveinvestors.co.uk/companies/news/931417/ipf-returns-to-profitability-and-plans-bond-refinancing-931417.html
At a high-level the price of Eurobond went to a intra-day high of 95.63 so I suspect sp still has still to reflect this. Key points of refinancing of €397 million Eurobond 5.75% due April 2021:
- Exchange of bonds for a combination of a new Eurobond (80%) and partial cash repayment at par (20%)
- Amendment to the Interest Cover covenant (which is currently set at 2.0x on a 12-month look-back basis) to allow IPF to pass its Interest Cover tests and similarly to move all Interest Cover tests from a Consolidated EBITA to a Consolidated EBITDA basis
- The interest rate and the issue price of the New Notes is expected to be announced by the Issuer by 21 October 2020 via a Regulatory News Service
- Early Deadline is on 28 October 2020 Final Deadline for voting is 3 November 2020
- The EUR Meetings are to be held at 4.00 p.m. and 4.15p.m. (London time) on 5 November 2020
- RNS to follow as soon as practical following so either Friday 6th (or worst Monday 9th)
Naysayers will point to the impairment due to Covid in the Mexico Home Credit, IPF digital as well as the Hungarian temporary debt repayment moratorium till 30 June 2021. This however is built into the sp which has a 52-week high of 179p vs current sp of 58p. So even accounting for an impairment of 55% this still is looking as oversold at this level.
Wrong footed by IR still saying on Friday that Q3 update and trading update only on 29th. Added again therefore only yesterday and today. Shame but still some legs to go as quite a dense RNS and think the market is still working through it.
The price of bond is now nearly 100% so with strong trading stating that collections effectiveness improved to 95% of pre-Covid expectations in Q3 and refinancing is online to be resolved this still looks cheap. Expecting to reach back to 70s in sort order.
https://www.londonstockexchange.com/stock/47AV/international-personal-finance-plc/company-page
It’s a great RNS indeed.
Remarkable thing is this is still trading at little over 1/3 of it’s pre-Covid price. Massive upside still to come.
The rns is good news. If they’re successful on the refinancing without having to set a high coupon then the five year stable financing should boost the share significantly. Roll on 5th November (which I think is when everything is done and dusted from what I could tell).
Remember if you get a chance to watch/listen to the investor and analyst call at 9. As recorded you can always watch after.
Investor and analyst conference call
International Personal Finance will host a conference call for investors and analysts at 09.00hrs (BST) today, Wednesday 14 October 2020.
I agree
Surprise Q3 results coming out early but a nice surprise. Excellent results. Strong performance, solid cash position and the Eurobond looks to be on it's way to being resolved.
Remember to subscribe and watch/listen to investors results call today. Always really informative in my opinion.
1. Return to profitability driven by continued positive momentum in operational performance.
2. Strong collections effectiveness improved to 95% of pre-Covid expectations in Q3.
3. Prudent relaxation of credit settings resulted in a 55% increase in credit issued in Q3 compared to Q2.
4. Group annualised impairment as a percentage of revenue 38.1% (HY 2020:37.5%); improved underlying impairment performance
5. Strong capital and short-term liquidity position - £348 million of cash and headroom on current debt facilities.
6. Remain committed to the health and safety of our colleagues and customers, and well-developed contingency plans for Covid-19 second wave in place.
7. 2021 Eurobond exchange offer launched today alongside a consent solicitation process for our SEK and sterling
Agree, really happy with this and they highlighted their ready for the next lockdown and prepared.
I think sp will like this
Looking good
Strong performance, solid cash position and the Eurobond looks to be resolved.
Couldn’t ask for more.
May be it is due to small volume of transactions. BTW I would not be suprised if IPF was on buying side
Sorry corrected links below
https://www.londonstockexchange.com/stock/47AV/international-personal-finance-plc/company-page
https://www.boerse-frankfurt.de/bond/xs1054714248-international-personal-finance-plc-5-75-14-21
Any ideas why there's two different prices being shown for the bond price between these 2 quotes?
https://www.londonstockexchange.com/stock/47AV/international-personal-finance-plc/company-pagehttps://www.boerse-frankfurt.de/bond/xs1054714248-international-personal-finance-plc-5-75-14-21
If they can’t get the finance sorted and known that would be announced. So they are still working on it, no news until we get news is fine!
Problem is that IR have confirmed no trading update till the 29th Oct with Q3 update though this may change. Even as a holder with no expected new, very bleak national news affecting sentiment and low trading volumes I can see this being walked down, perhaps even as low to an intraday low of 48p, in the next week to generate volume before the rise towards the end of the month.
Arch- well put. In addition to the financing update, think shareholders keen to see collection ratios still good and understand levels being loaned. If this is positive would expect to see a significant rise above 100p as even at those levels would be very undervalued.
I saw the rise back up as just a partial correction of the over-reaction we’ve seen to the going concern risk.
Little over a month ago we were at over 70p, so a rise from the mid 40s to mid 50s doesn’t strike me as very meaningful in its own right. What we need is for confirmation they’ve sorted the bond refinance and then we should see a large recovery and hopefully return of momentum back towards £1 again. Fingers crossed.
Looks like a little bit of a shake today but there's resistance at 52 level. There's been some speculation elsewhere of a potential update before th1 15th October which hasn't been commented either way by IR.
Dunno I read that rise as a belief that something re bond was afoot. Again probably stretching the evidence to fit my own wishful thinking. I read the company RNS again over the weekend and thought it’s in a strong position considering pandemic effects on collections and feel it’s crash was more due to the cities dislike of the financial model as a whole and its longevity due to legislative changes but it’s markets particularly Mexico should continue to be profitable/grow.
Strange thing for the sp to rise then nearly 10p in advance of a trading statement only scheduled to come at end of month?
I think SP has been battered so if an October RNS contains positive update on refinancing/hopefully announcing it’s been done. And as long as collections are still high could see a short term spike back to 73-77p? Long term I feel it’s a slow recovery to the £1 mark. Pray no more ‘going concern’ statements too haha. Also hard to stay objective as obviously hoping it recovers like this for my own investment. Everyone else’s thoughts?
Should head back towards NAV - 150p? - if it coincides with a general market rotation to cyclicals/financials should be a strong few months (all fingers crossed)