International Personal Finance share price rockets 11%! Should I buy in?

The International Personal Finance (LSE: IPF) share price has torn higher in Tuesday business. At 140.6p per share, the small-cap is up 11% from Monday’s close.

IPF’s share price has exploded after the doorstep lender upgraded its forecasts for the full year. The company has leapt an impressive 130% in value during the past 12 months.

Another excellent trading update

Today, International Personal Finance said trading has remained positive since the release of first-quarter numbers on 29 April. The amount of credit issued by the business is broadly in line with its expectations, it added. This comes despite the tightening of Covid-19 restrictions in a number of its markets.

IPF had been anticipating its collections performance to weaken during the first half of 2021 as further waves of coronavirus infections swept in. However, the company said “our actual collections performance has continued to be very strong” in recent months. As a consequence, it’s enjoyed a faster-than-anticipated improvement in impairment as a percentage of revenue.

Expectations upgraded again

The company also said that while it remains cautious in light of the ongoing public health emergency, “the faster-than-anticipated improvement in impairment in April and May is expected to result in a further improvement in the full-year impairment charge.”

The UK financial share also reckons it’ll enjoy a “significantly stronger rebound in profitability” in 2021 than it had predicted in April.

Back then, IPF had predicted “a stronger rebound in profitability” for the full year, thanks to a lower-projected bad loans charge in 2021. It had also celebrated strong collections helping it to reduce impairment costs as a percentage of revenue by 5.2%, to 32.2%. Finally, IPF also saw the amount of credit it had issued improve markedly in the first quarter. This was down 18% year-on-year, much better than the 31% drop reported in the final quarter of 2020.

Should I buy International Personal Finance?

IPF is clearly on a roll, then. And as a long-term UK share investor, there’s a lot to like about the financial giant. I like its focus on emerging markets in Eastern Europe and Latin America, regions where rapid wealth growth is supercharging demand for financial products.

I also like the work IPF is undertaking to embrace the fast-growing digital end of the market. For example, 2020 saw the rollout of its new mobile wallet in Latvia, as well as the launch of digital operations in the Czech Republic.

That said, there are a few things stopping me from buying IPF shares for my own portfolio today. The threat to its recovery posed by the rolling Covid-19 crisis is one. But a longer-term concern to me is the rising threat that doorstep lenders in particular face from regulators.

And I don’t think these threats are baked into the firms valuation at current prices. I’d much rather buy other UK shares today.