Emerging markets lender International Personal Finance has warned that the problems of established markets may spill over into the markets in which it does business.

In the company's interim results release, chief executive officer, John Harnett, said the company has seen good growth in credit issued and in the number of customers and that the company is "on course to deliver a good performance for the year as a whole," as the economies of the markets in which it operates are performing strongly.

However, he added: "The risk remains that these markets may be impacted adversely by the difficulties being experienced in other, more established economies, particularly in Europe. As a result, we continue to monitor economic conditions carefully and will maintain a cautious setting on our credit management systems, which we know from previous experience can be adjusted very quickly to respond to adverse changes in economic conditions."

Underlying profit before tax in the first half of 2011 was up 17% to £35.7m from £30.5m a year earlier, as a result of good growth, lower impairment and further improvements in cost efficiency, and after absorbing the impact of higher funding costs and early settlement rebates of £11.4m.

Revenue, net of early settlement rebates, increased by 7% from a year earlier to £326.7m (2010: £302.7m). The number of customers rose by 8% year-on-year to 2.3m while credit issued rose by 14%.

Impairment as a percentage of revenue reduced by two percentage points to 30.1% of revenue, while the cost-income ratio improved by 0.8 percentage points to 41.2%.

"As expected, following our refinancing of the business during last year, finance costs have increased by £7.2m on the first half of 2010. Agents' commission costs, which are largely variable, increased by 7% to £36.2m in line with growth," the company said.

Adjusted earnings per share increased by 14% to 10.13p from 8.89p at the interim stage last year. The interim dividend has been hiked by 19% to 3.00p from 2.52p last year.

The shares opened 6p lower at 348p on the day the results were announced.
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