Chairman’s statement
IPF pre-tax profit growth 2006 – 2008 (£m)
We have a proposition that our customers clearly like; we have a resilient business model; we have a clear growth strategy for developing the business in the future; and the business is well financed. Over the medium and long term these key elements will drive the creation of shareholder value.
Preparing for the economic downturn
The global economic climate deteriorated rapidly during 2008 with the US sub-prime mortgage crisis moving from being a relatively local problem in the first half of 2008 to a full-blown international liquidity crisis during the second half of the year. By the late summer it was clear the world’s developed economies were heading for a major recession. We took the view that the emerging markets in which we operate would also be significantly impacted by this with increased levels of unemployment and a more testing credit environment in 2009. We therefore drew up plans to manage our business through the downturn. We decided to act quickly and substantially tightened our credit controls in October 2008, slowing the intake of new customers and the volume of repeat lending to existing customers. We also reviewed our new market entry strategy and decided to defer any new country entry until economic conditions stabilised.
Customer focus
We recognise that our long-term success depends on us putting our customers first. We have therefore started work to align the business to the Financial Services Authority’s Treating Customers Fairly (‘TCF’) principles. This is a clear indication of our desire to be a truly customer focused organisation.
Looking forward
Our leadership team has done an exceptional job and John Harnett’s role in this was deservedly recognised with his appointment as Chief Executive Officer in October. I would like to thank everyone in the Group for their hard work during the year. I am delighted that the executive team will be further strengthened by the appointment of Craig Shannon as Development Director, who will be proposed for election at the forthcoming annual general meeting in May.
In the short term we expect conditions in 2009 to be challenging but we have made thorough preparations and believe we are well placed to weather the impending economic downturn and to prosper and grow when conditions improve. This is because:
- we have a proposition that our customers clearly like;
- we have a resilient business model;
- we have a clear growth strategy for developing the business in the future; and
- the business is well financed.
Over the medium and long term these key elements will drive the creation of shareholder value.
Christopher J Rodrigues
Non-executive Chairman