Paragon Group Of Companies PLC
23 March 2005
THE PARAGON GROUP OF COMPANIES PLC
TRADING UPDATE
The Paragon Group of Companies PLC will shortly be meeting analysts ahead of the
close period for the half year ending 31 March 2005. The following is an update
of the trading position of the Group ahead of the end of the half year.
The Board expects the results for the six months to 31 March to be in line with
market expectations.
The trading environment has undoubtedly been more challenging than during the
first half of the previous financial year, a period which benefited from a surge
of activity after the war in Iraq. Borrowing behaviour has adjusted to increased
interest rates and confidence in the housing market has weakened.
As a consequence new business volumes have been lower than in the comparable
period last year, but with generally lower rates of redemption reflecting the
reduced activity, the loan book has continued to grow in line with our
expectations. Margins across the business are comparable with 2004 and, with a
larger portfolio, shareholders should expect to see strong growth in net
interest income in the first half.
The Group has maintained its conservative credit stance and the performance of
the buy-to-let book in particular remains exemplary. Increased borrowing costs,
together with the normal seasonal expenditures, have caused some deterioration
in payment performance in the consumer finance books, and an increased provision
charge is expected compared to the first half of last year.
Lower new business activity has had a favourable impact on costs, which remain
well controlled across the group. An improvement can be expected in the
cost:income ratio from last year.
The outlook for landlords remains positive, with increased rental demand
translating into higher rents and improving yields. As suggested by survey
evidence, landlords are taking a long term view of their property investments
and indeed redemption rates have fallen over the period. Application flows have
recovered over the past two months and the pipeline at the end of the period is
expected to be at a similar level to March last year. We expect professional
landlords to continue to take advantage of market weakness in building their
portfolios.
The Board intends to announce the interim results for the six months ending 31
March 2005 on 25 May and a full report on the progress of the Group will be
issued at that time.
For further information please contact:
Nigel S Terrington
Chief Executive - Telephone: 0121 712 2024
or
John L Wriglesworth
The Wriglesworth Consultancy - Telephone: 020 7845 7900
This information is provided by RNS
The company news service from the London Stock Exchange
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