Intl Personal Finance profits hit by FX volatility

FTSE 250 doorstep lending firm International Personal Finance (IPF) has revealed that the global economic volatility has taken its toll on the firm's profit and loss account in 2011.

The group highlights the significant unpredictably in foreign exchange (FX) markets over the year and notes a weakening of its trading currencies against the sterling. As such, IPF current FX rates will have a 14% negative impact on reported profits.

"Our business is in good shape, with a resilient operating model and a robust balance sheet, and so is well positioned to deal with these challenges," the statement said.

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Nevertheless, the group assured that it will still deliver a "good result" in the 12-month period, with credit issued growing by 4% in the last quarter. "In addition, by carefully balancing growth with a prudent policy on credit, we have maintained good credit quality," IPF said.

Meanwhile, the group noted Hungary's decision in 2010 to cut the rate of corporation tax from 19% to 10% from 2013. Due to the reduction in value of a deferred tax asset, this resulted in a one-off increase in IPF's effective tax rate for 2010.

However, seeing as though the Hungarian government has now repealed this reduction, IPF's tax rate should come down from 28% to 24% in 2011, before reverting to 28% from next year.

BC