IPF’s 2025 results: steady profit, faster growth, and a take‑private offer at a chunky premium
International Personal Finance (IPF) delivered another year of solid execution in 2025, pairing faster loan book growth with tight credit control and a higher dividend. The Board has also recommended a cash acquisition by BasePoint at 250 pence per share (inclusive of a 15 pence special dividend) – a c.40% premium to the 179.2 pence share price on 29 July 2025. Eligible shareholders also keep the newly declared 9.0 pence final dividend on top.
Here’s what jumped out at me, why it matters, and how I’d think about the offer and outlook.
Key numbers investors should know
| Metric | FY-25 | FY-24 | Comment |
|---|---|---|---|
| Pre-exceptional profit before tax | £88.6m | £85.2m | +4.0% (+7.7% at constant FX) |
| Statutory profit before tax | £85.3m | £73.3m | +16.4% |
| Pre-exceptional EPS | 26.3p | 24.9p | +5.6% |
| Customers | 1.729m | 1.652m | First growth in a decade (+4.7%) |
| Customer lending | £1,342.0m | £1,214.5m | +11.8% (CER) |
| Closing net receivables | £1,061.3m | £870.0m | +13.9% (CER) |
| Impairment rate | 9.0% | 9.6% | Improved despite faster growth |
| Cost-income ratio | 61.1% | 61.0% | Broadly flat |
| Full-year dividend | 12.8p | 11.4p | +12.3%; final 9.0p proposed |
| Funding headroom | £129m | not disclosed | Good capacity for growth |
| Equity to receivables | 51% | 54% | Above 40% target – robust capital |
Operational momentum: more customers, bigger book, controlled risk
IPF lent more, to more people, and still kept the credit line tight. Customers grew 4.7% to 1.7 million and net receivables passed the £1 billion mark, up 13.9% at constant currencies. That’s meaningful operating leverage potential for later years.
Crucially, the impairment rate edged down to 9.0% from 9.6%. Quick jargon check: under IFRS 9 accounting, lenders book expected losses up front when they write new loans. Growing fast can therefore depress current profits because you recognise those day‑one costs immediately. The fact IPF still improved the impairment rate while accelerating lending is a clear positive.
Divisional colour: where the growth is coming from
Provident Europe – Poland and Romania driving
- Pre-exceptional PBT: £63.2m (2024: £57.4m).
- Customer lending +13.2% (CER); closing net receivables £575.4m (+15.8% CER).
- Impairment rate 0.7% (2024: 1.1%). Management expects this to normalise towards the 8%-10% target as growth resets.
Poland’s credit card push is the star: nearly 200,000 active cards and about half the Polish receivables now in cards, with a fully digital card launched late in the year. Romania’s retail partnerships and hybrid digital channels are scaling well. Revenue yield dipped to 44.8% due to rate‑cap dynamics, but as card penetration rises, yield should recover.
Provident Mexico – back on track and expanding
- Reported PBT: £26.6m (2024: £26.0m); +15.7% at constant FX.
- Customer lending +7.5% (CER); receivables +11.5% (CER) to £191.2m; customers up 3.7% to 705,000.
- Impairment rate improved to 27.1% (2024: 30.1%).
After last year’s tech upgrade disruption, momentum returned, with new branches opened in Monterrey and Ensenada and a growing retail‑finance channel. Yield softened as IPF lent more to proven customers (longer, bigger loans tend to carry lower yield but better risk). Expect impairment to trend back towards c.30% as new‑to‑brand growth increases.
IPF Digital – scaling in Mexico and Australia, near‑term margin trade‑off
- PBT: £14.1m (2024: £17.0m).
- Customers +16% (CER) to 286,000; lending +12.6% (CER).
- Impairment rate 11.6% (2024: 8.6%) reflecting portfolio growth and mix.
Mexico and Australia are the engines here (lending +32% and +19% at CER, respectively). IPF is leaning into brand and tech investment to capture share; costs rose, but the cost‑income ratio still improved 2.4 ppts to 51.2%. Returns should strengthen as scale builds.
Funding, capital and dividends: set up to keep growing
IPF finished the year with £750m of total debt facilities and £129m of headroom. It broadened funding with a SEK 1bn senior unsecured bond due 2028 and lowered the blended funding cost to 12.2% (2024: 13.3%). Credit ratings were reaffirmed (Fitch BB Stable; Moody’s Ba3 Stable). Gearing sits at 1.2x and interest cover covenant at 2.6x, both comfortably within limits.
The equity-to-receivables ratio of 51% is well above the 40% target, giving flexibility to fund growth while maintaining a progressive dividend. The Board proposes a 9.0 pence final dividend (ex‑dividend 26 March 2026; record 27 March; payable 8 May 2026), taking the full‑year payout to 12.8 pence, up 12.3% year on year.
Strategy update: Next Gen products are landing
Management’s “Next Gen” plan is clearly gaining traction. Beyond Polish credit cards and Romanian partnerships, IPF rolled out short‑term digital loans (£100‑£200 over 30‑60 days) in Mexico and Poland, and continued geographic expansion in Mexico. Australia, a focus for the digital business, delivered 17% customer growth and 23% receivables growth after increased brand investment.
There’s more spend coming: an extra £5m per annum on growth initiatives for the next two to three years, plus higher capital expenditure of £45m to £50m in 2026 and 2027 (before moderating thereafter). Near term, that could trim returns, but it should support sustained customer and receivables growth.
The BasePoint offer: what holders could receive
- Offer value: 250 pence per share in cash, inclusive of a 15 pence special dividend (235 pence cash + 15 pence special dividend).
- Premium: approximately 40% to the 179.2 pence closing price on 29 July 2025.
- Plus: eligible shareholders remain entitled to the 9.0 pence final dividend declared today (the “Permitted Dividend”).
- Process: Court and General Meetings expected on 11 March 2026. Completion is stated as aiming for end Q2 2026 in one section of the RNS, with another reference indicating Q3 2026 – timing remains subject to regulatory and court approvals.
My take: the price looks full relative to the pre‑offer trading range, especially given IPF’s improving growth and strong capital position. The extra 9.0 pence permitted dividend sweetens it further for eligible holders. On the flip side, if you believed IPF’s multi‑year growth runway (Mexico, Australia, Poland cards) would re‑rate the shares more meaningfully over time, the scheme caps that upside in the public market.
Risks and watch‑outs
- Regulation: EU Consumer Credit Directive II is being implemented across markets, with potential changes to fee caps, rate caps (including a Czech proposal), affordability rules and advertising. IPF has a track record of adapting, but pricing and product mix could shift.
- Yield pressure: Group revenue yield fell 2.2 ppts to 52.5% due to lower base rates and caps. Management expects a mix benefit from higher‑yielding products (notably cards) over time.
- Execution: additional growth spend (£5m p.a.) and higher capex will weigh on returns in 2026‑27. That’s sensible investing, but it raises the bar on delivery.
Bottom line: a stronger platform, a credible premium
IPF exits 2025 with faster growth, excellent credit quality, and a well‑funded balance sheet. Divisional performance is broadly positive, with Poland’s card strategy and Mexico’s recovery standing out. The Board’s recommended 250 pence offer from BasePoint delivers a clear cash outcome at a substantial premium, with the 9.0 pence final dividend on top for eligible holders.
For investors, this boils down to preference. If you want certainty and income, the scheme consideration plus dividends is attractive. If you were backing the longer‑term compounding story in receivables, cards and digital, you’ll weigh whether the premium fairly captures that potential. On the fundamentals alone, 2025 shows a business with improving momentum and ample capacity to grow – whether public or private.
