Highlights
Strong group performance supports further dividend increase
First half adjusted profit before tax up 34.5% to £126.6m (2014: £94.1m) and adjusted earnings per share up 29.9% to 70.4p (2014: 54.2p).
First half statutory profit before tax up 23.3% to £111.1m (2014: £90.1m) and basic earnings per share up 19.3% to 61.8p (2014: 51.8p).
Return on assets strengthened to 15.6% (2014: 14.9%) due to the successful repositioning of the home credit business.
Interim dividend per share up 15.0% to 39.2p (2014: 34.1p).
Robust funding and liquidity position
Group fully funded until May 2018.
Gearing remains unchanged from December 2014 at 2.4 times.
Strong growth and returns in Vanquis Bank
UK profit before tax up 29.6% to £88.5m (2014: £68.3m).
Customer numbers and average receivables growth of 15.5% and 23.2% respectively, reflecting strong momentum from developing the under-served non-standard credit card market.
UK risk-adjusted margin of 33.3% (2014: 33.6%), ahead of minimum target of 30%, with arrears at record lows.
Sale of Polish receivables book agreed in April with completion in early August, resulting in residual loss of £1.8m (2014: loss of £4.6m).
Successful repositioning of CCD
First half adjusted profit before tax up 2.7% to £38.0m (2014: £37.0m).
Successful repositioning of the home credit business as a smaller but leaner, better-quality business focused on returns:
- Year on year customer numbers reduced by 19.2%, with over half attributable to the sale of low value delinquent balances to third party debt purchasers;
- Period-end receivables reduced by 18.0% due to tighter credit standards and shortened duration of the book; and
- Annualised risk-adjusted margin increased to 78.2% (2014: 62.9%) due to significant improvement in credit quality.
Investment in Satsuma stepped-up to support the development of the substantial market opportunity.
Sharp uplift in new business at Moneybarn
Adjusted profit before tax of £9.4m in first half of 2015, ahead of internal plans, and 38.2% higher than pro forma 2014 first half profits.
Significant year on year growth in new business volumes of 88%, reflecting access to the group's funding.
Stable default rates and unchanged risk-adjusted margin of 24.6% (2014: 24.5%).
