News blog
MCB Finance Group
- BY: Andrew Hore |
- POSTED: 22/08/2012 |
Personal credit provider MCB Finance Group reported a lower interim profit due to investment in new markets which should pay off in 2013 and 2014.
In the six months to June 2012, revenues rose 60% to €12.7m, while operating profit from established businesses increased 65% to €1.82m. Underlying pre-tax interim profit has fallen from €1.6m to €1.1m.
The established businesses are in Finland, Estonia, Latvia and Lithuania and all of these economies are growing. There was €46.2m lent in those markets in the first half of 2012. The greatest growth in lending was in Latvia, which is the smallest market. Bad debt charges of 19.8% of revenues were just below the target range.
MCB has invested €810,000 in new markets, so far this year. The new Australian business should be profitable within 18 months. There are 22m people in Australia, compared with 12m in existing markets.
At 69p a share, MCB is valued at £12.2m.
Edison forecasts a 2012 profit of €2.2m after the costs of entering Australia, rising to €5.1m in 2013. Despite a fall in profit compared with the €3.7m reported in 2011, Edison expects an unchanged dividend of 3.5p a share this year. The long-term dividend cover target is likely to be around four times.
The shares are trading on just under 11 times prospective earnings for 2012, falling to four times in 2013.
IIU Nominees increased its stake in MCB to 14.6% after it acquired RB Investments’ stake. Conils Ltd increased its stake to 3.86%.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFAugust2012_35.pdf
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