Despite that, the shares are still 31% cheaper than they were a year ago. The price-to-earnings ratio remains in single-digits. So, is this a buying opportunity for my portfolio?

Why the IPF share price soared

What was behind last week’s price action? The company released its half-year results – and investors clearly liked them.

The business performance was actually mixed, in my view. Customer numbers only increased by 2.3% compared to the same period last year. Reported profit before tax shrank by 21.9%.

But the interim dividend was increased by over a fifth to 2.7p per share. Last year, the full-year dividend came in at 8p per share. So if the final dividend grows in line with the interim one, the total dividend per share for 2022 could come in at around 9.8p. Given that the IPF share price is currently around £1, that means the prospective dividend yield here is almost in double-digits. That sort of income opportunity certainly sounds attractive to me as an investor.

IPF business challenges

Does that make the shares attractive to me, though?

The dividend increase looks good, but if business does not stay strong, the dividend could always be cut again, as it was in 2019. The company’s revenues have fallen sharply over the past couple of years. In 2019, for example, they stood at £889m, but by last year they were down to £549m. The business suffered badly during the pandemic.

So do the latest results show that it is bouncing back? Revenue in the first half soared by 43.5%. But impairments grew far faster, rising 265% to £31m. However, that reflects an unusually low figure in the first half last year after money that had been set aside for possible impairments in the pandemic was released. Excluding that, the impairment rate in the first half was 7.5% compared to 6.5% last time round.

For a personal finance company, a worsening economic outlook could mean higher impairments as defaults rise. That is a key risk for IPF in the current environment. However, although impairments in the half rose, the increase was not so big as to shake the investment case, in my view.

My move

The dividend yield here is certainly tasty and I think the sharp increase at the interim stage is a strong sign of management confidence in the business. The Chief Financial Officer has also been spending his own money on shares on multiple occasions over the past several months.

But it feels like a risky time to be running a personal finance business in markets like Poland and Mexico, as IPF does. If the global economy gets worse, defaults could rise. I think that could really hurt profitability at the company. Even after rallying last week, the yield on the current IPF share price still looks attractive to me. But given my concerns about the potential impact of economic slowdowns on future profits, I will not be investing.

I have been looking for high-quality corporations with the potential to expand rapidly over the next couple of years. Here are three companies that I think meet my criteria. 

Undervalued growth stocks

International Personal Finance (LSE: IPF) provides credit services to consumers in the UK and internationally. The firm’s profits slumped during the pandemic as it was forced to write off some loans to customers. However, growth may return over the next two years.

Based on current City estimates, the stock is trading at a forward price-to-earnings (P/E) ratio of just 5.8. Further, earnings per share could grow by 26% this year. Based on these numbers, the stock looks cheap compared to its growth potential. 

Still, the last two years are a warning for investors. A sudden spike in loan losses could decimate the corporation’s bottom line. Shareholders may have to foot the bill if it needs to raise more capital to strengthen the balance sheet.

As such, while I would buy this company for my Stocks and Shares ISA as an undervalued growth investment, I will be keeping an eye on the potential challenges it faces going forward. 

Aside from these risks, analysts also believe that the corporation can pay out a 6.2% dividend yield for its 2022 financial year. So not only does the company appear cheap compared to its growth potential, but it also has strong income credentials. 

Stocks and Shares ISA buy 

Another undervalued growth stock I would buy for my portfolio is the news publisher Reach (LSE: RCH). Over the past couple of years, this business has been moving away from its legacy print news business towards online journalism. The transition is just starting to yield results. 

After a mixed couple of years, the firm is expected to report a net profit of £116m for its 2021 financial year and £117m for fiscal 2022. Based on these estimates, the stock is trading at a forward P/E multiple of 6.4.

I think this figure looks incredibly cheap compared to the company’s growth potential over the next few years. Analysts also reckon the enterprise has the potential to pay a dividend yield of 3.1% in the current year.

Despite these optimistic forecasts, Reach does face some challenges. The online news business is incredibly competitive. Its revenue is also dependent on advertising income from the tech giants, which could disappear at a moment’s notice. If this vital revenue stream is closed down, the firm may struggle to survive. 

Nevertheless, considering Reach’s current valuation, I believe the stock could make a great addition to my Stocks and Shares ISA as an income and growth stock. If the company continues to reinvest in its operations and build an increasing readership base, I reckon profits will continue to grow. 

What is going on here? 

Upbeat update

The latest increase follows a company release earlier today, where it said that “operational performance continues to be positive”. It also said that while it had expected weakening in performance in the first quarter of 2021 because of the pandemic, the actual performance has been “very strong”. It now expects a “significantly stronger rebound in profitability in 2021” than it had earlier. 

I think these are some of the most positive remarks I have seen from any company I’ve covered since the lockdown eased. Clearly, it has also had an impact on investor sentiment. 

The story so far

But the International Personal Finance share price was gaining ground even earlier. Like all financials, it was hit hard by the lockdowns last year. It was probably hit even harder than most, because it lends to customers who are otherwise less likely to get credit. It provides small, unsecured cash loans for everyday necessities in emerging markets like Eastern Europe and Mexico. 

As it restricted lending during the pandemic, the company’s loans issued almost halved from the year before, its revenues tumbled, and it ended up clocking a loss. However, investors gave its share a thumbs up anyway when it released its full-year results. This was probably because it became profitable in the second half of the year once again. 

These results were released in March and followed by a positive trading update in April, when the share price rallied again. In a nutshell, it is evident the International Personal Finance share price is highly responsive to positive company developments. We have seen it three times this year.

The downside

The easing of lockdowns, expected improvement in the economy, and its own outlook indicate clearly that the company will likely show robust growth this year. I am, however, cautious of a few risks as well.

First, the pandemic continues. Its severity may have reduced, but we have not yet put it behind us. Also, International Personal Finance is still doling out loans cautiously because it has a focus on profits. This means that the amount of credit issued could remain restricted. 

Further, the risk of bad loans remains. In its trading update, International Personal Finance says that impairments as a percentage of revenues have reduced in the first quarter of 2021 compared to full-year 202 numbers. But I think they are still quite high at 32% and also higher than the 2019 levels. 

My takeaway for the International Personal Finance share price

On balance though, I am positive on the stock for the medium to long term. It has a history of strong performance and has rebounded fast from the pandemic. I also like that it serves the social goal of creating greater financial inclusion. It is a buy for me. 

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.

What’s more, the dividends have been covered more than 2.5 times by earnings, so what’s not to like?

First up, these super yields have arrived as a result of a collapsing share price. Over the past five years, International Personal Finance shares have lost almost 80% of their value. That’s pushed the dividend yield up from just 2.7% in 2014, even though in cash terms it’s only gained 3% over the total period.

Legal changes

What happened Friday? The sudden price drop comes after the firm revealed changes to consumer credit legislation in Poland. The country has been proposing to lower the current non-interest charges that lenders can levy on consumer borrowers, and the Council of Ministers has now made further amendments.

The government is now considering a level cap of 10% of a loan’s value, down from the existing 25%, and to cut the per-annum cap from 30% down to 10% too. The overall total of such charges would not be allowed to exceed 75% of the value of a loan, a cut from the existing 100% cap.

We’ll have to wait and see what effect this will have on forecasts and whether the mooted big dividend will hold up. But I have wider concerns as governments are increasingly tightening up on high-margin lending operations, and I wouldn’t be surprised at all to see further legislative crackdowns in the coming years.

Woodford favourite

Provident Financial (LSE: PFG) has suffered similarly, since its share price crashed by 60% in August 2017 when the firm withdrew its interim dividend in the face of a number of problems with its home credit business.

It was a blow for Neil Woodford, whose flagship Woodford Equity Income Fund was recently suspended following a run on withdrawals, and he’s been unfortunate to put cash into a handful of duds now. His other spectacular recent failure is Purplebricks, whose overstretched business has now lost 80% of its peak value.

On forecasts, Provident Financial shares command a P/E of 8.3 and offer a dividend yield of 7.2% for the current year, and those figures would move to 6.7 and 9.4% respectively in 2020. Dividend cover by earnings is around 1.6 times for each of the two years.

Tough choice

On those fundamentals, the shares look good value, but the market is having none of it right now. The share price blipped up on 5 June after the failure of a hostile takeover attempt from Non-Standard Finance, and for a few days it looked as it that might have been the signal for an upwards re-rating of the share price — takeover bids often come along when a company is significantly undervalued.

But that turned out to be a false hope, the brief gain was quickly reversed, and the shares have since slid further.

I’m torn, looking at attractive fundamental valuations on one hand, but a sub-prime lending industry that’s becoming a bit of a political pariah on the other. With my fears that the sector could be hit by further legislation in the next few years, I’m keeping away.

Whether or not you share my bearish opinion, I would encourage you to consider looking closely at these two dividend heroes before the FTSE 100 bank. They even carry bigger forward yields than the 5.6% Lloyds currently offers.

Safe as houses

Despite the stream of cracking trading releases still coming from across the housebuilding spectrum, the Telford Homes (LSE: TEF) share price has failed to gain the traction of its peers.

It’s not a surprise to see the AIM-quoted firm continue to struggle, even though low forward P/E ratio of 8.6 times gives it plenty for bargain hunters to get stuck into. Meanwhile its gigantic 6.1% dividend yield makes it one of the biggest-paying builders out there.

Telford has been the victim of slowing demand more recently, reflecting its strong bias towards the struggling London market. Problems here caused it to shave £10m off its full-year profits forecasts for the period to March 2019 in late February. And it’s possible things could remain difficult through the remainder of the current fiscal year, at least.

Having said that, I would argue long-term investors should consider capitalising on the 40%-plus slide in Telford’s share price over the past 12 months.

In response to its recent troubles, the business has vowed to redouble its efforts in the fast-growing build-to-rent market, a segment which is expected to represent 50% of the company’s development pipeline by the close of the calendar year.

In particular, Telford’s focus on the capital bodes particularly well as rental levels boom. Business campaigning group London First predicts by 2025, some 40% of all households in London will live in the private rented sector, versus 28% as of a few years ago.

Fancy some yields above 7%?

There’s plenty of upside for Telford’s profits to grow once confidence in the London property market improves. But if you’re not convinced, why not take a look at International Personal Finance (LSE: IPF) instead?

Unlike the housebuilding giant, IPF sources no profits from these shores and is, instead, geared primarily towards Central and Eastern European nations such as Poland, Hungary and Czechia. The prospect of runaway economic growth in these emerging nations isn’t the only reason to expect the financial giant’s bottom line to thrive, either, because of the success of its push into the fast-growing digital credit market (credit issued at its IPF Division unit soared 33% in the first quarter).

Currently, IPF sports bigger yields than Telford (and Lloyds for that matter), the business yielding an enormous 7.6% for the current fiscal period. It also trades on a dirt-cheap forward P/E ratio of 5.8 times. For those seeking big dividends on a budget, it’s a pretty terrific stock to buy, in my opinion.

In poker parlance, it’s not always easy to know when to hold and when to fold.

One FTSE 100 stock I would definitely hold on to is Asia-focused insurance firm Prudential (LSE: PRU). Although the shares are down by more than 20% from their January high of 1,992p, I see no reason to sell.

I’ll explain why I’m keen on Prudential in a moment, but first I want to consider a smaller financial stock where the picture seems less certain.

Regulators are tightening the leash

International Personal Finance (LSE: IPF) is a sub-prime lender operating in markets outside the UK, including Poland, Romania and Mexico. Historically, it’s been a profitable business paying generous dividends. But profits have slipped in recent years, and the dividend hasn’t risen since 2015.

In a trading update today, the company said that new lending rose by 6% during the third quarter, led by a 39% increase in online lending.

That sounds promising. But the firm also warned of regulatory changes that could put pressure on profits. In Romania — which accounts for about 12% of group profits — new rules limiting debt-to-income ratios are expected to reduce sales.

The firm’s management also admitted that a proposed interest rate cap at 18% APR would have “a material adverse effect on our Romanian business.”

Meanwhile, tax changes being proposed in Poland would affect cross-border transactions. The firm says this could increase the entire group’s tax rate from 34% to 42% in 2019. I estimate that would represent an 8% cut to earnings per share.

A 5.7% yield to buy?

IPF shares are down by 5% at the time of writing. The outlook does seem uncertain, but I suspect the business will adapt to these changes and continue to prosper. Indeed, with a forecast P/E of 7 and a prospective yield of 5.7%, this could prove a profitable time to buy.

However, with markets uncertain, I’m more interested in businesses with a consistent track record of growth.

A buy-and-forget stock

IPF isn’t a stock I’d be happy to buy and forget for 10 years. But that’s exactly the approach I’d take if I added Prudential to my portfolio, which I’m tempted to do.

This insurance group is benefiting from the growing wealth of Asia’s middle classes. Although its share price has fallen this year, its profits have been rising. Recent half-year results showed that the Pru’s operating profit rose by 9% to £2,405m during the first half of 2018.

This growth was led by its Asia unit. The value of new business generated by this division rose by 11% to £1,122m, while underlying surplus cash generation climbed 14% to £590m.

Too cheap to ignore?

Prudential generated a return on equity of 18% last year. This measure of profitability puts it ahead of most UK peers.

The group is also in the process of de-merging its slow-growing, UK-focused asset management business, M&G. My colleague Rupert Hargreaves recently explained why he believes this could lead to a bid for the firm’s Asian business.

With the shares now trading on a 2018 forecast price/earnings ratio of 10.3, and offering a 3.2% yield, I believe Prudential may now be too cheap to ignore.

Britain’s blue-chip index has long proved a happy hunting ground for investors seeking market-busting yields and stocks with impressive records of lifting shareholder reward. Indeed, I spend much of my time discussing some of the best income bets that the Footsie has to offer.

It’s easy to be tempted to narrow your focus on the FTSE 100 given the vast amounts of media and broker coverage that such businesses attract, giving share pickers the best chance of making the right investment decision. But restricting your search to London’s main markets means that a lot of top-class companies slip through the net.

Money master

International Personal Finance (LSE: IPF) is a little-known small cap that could fall into this category.

Sure, the business may have paid a full year dividend of 12.4p per share for three consecutive years, with City analysts predicting an identical payout for 2018 as well. But this dividend still yields a very handsome 5.5%.

What’s more, this forecast payout also looks pretty secure, being covered 2.5 times by predicted earnings (inside the widely-accepted security area of two times and above).

Added to this, a suspected return to profits expansion in 2019 leads to City expectations that it will finally have the strength to lift the dividend again, a 12.6p reward currently anticipated. This yields 5.5% and is covered 2.6 times by anticipated profits.

It’s easy to see earnings, and thus dividend expansion, accelerating beyond next year too, as it embarks on its ambitious growth strategy (issued credit growth in IPF Digital’s new markets climbed 33% from January to June, for example).

Another secret dividend star

I’m convinced that Empiric Student Property (LSE: ESP) should also continue delivering yields above the broader market.

As I noted last time out, the UK’s universities have a reputation for being the best in the world and as a consequence, students from all around the world flock here in massive numbers. And Empiric is expanding its operations to benefit from this rush.

The company operates in almost 30 of the best university locations up and down the country, and in the first fiscal half it boosted the number of assets on its books to 95 following the acquisition of a location in Southampton. As of June, it operated 9,398 beds versus 9,158 in the corresponding 2017 period.

Back in November, Empiric announced its intention to pay reduced dividends as part of a bid to build dividend cover, and advising that it would follow last year’s 5.55p per share reward with a 5p reward in the current period.

It’s worth noting, though, that such a figure still yields a mighty 5.1%. And City projections for an identical payment in 2019 means that the yield remains elevated.

Empiric’s forward P/E ratio of 28.6 times means it is far costlier than International Personal Finance, the latter sporting a corresponding readout of 7.4 times. I am convinced that both are great selections for those looking to generate a fortune by retirement, however.

Britain’s small-cap index is jam-packed with exceptional income shares so I’ve picked out even more for you to consider, placed in no particular order. Count them down; you won’t be disappointed.

6. International Personal Finance

International Personal Finance’s(LSE: IPF) share price has spiked in recent sessions amid news of better-than-expected collections in its European marketplaces in the first six months of 2018, a situation that prompted the doorstep lender to advise that full-year profits would beat all forecasts.

While impressive, it is the huge revenues possibilities over at its Mexican home credit and IPF Digital arms that I am really excited about — the amount of issued credit in these areas rose 13% and 44% respectively during January-June, and demand here looks set to continue booming.

Now City analysts are expecting the dividend to remain on hold at 12.4p per share yet again in 2018. The good news is that this figure still yields 5.2%, however.

To put an even bigger smile on your face, International Personal Finance is expected to bounce back into earnings growth in 2019, meaning that the Square Mile is confident that the firm should lift the dividend to 12.6p. This means that the yield stomps to a staggering 5.3%.

5. 4Imprint Group

The yields at 4Imprint Group (LSE: FOUR) may not be as mesmerising as those of International Personal Finance. But the rate at which dividends are growing (up 111% over the past five years alone) should make income-seekers sit up and take notice.

It’s not likely that dividend expansion is set to slow any time soon either, given the rate at which its cups, bags and other promotional products are being snapped up. Revenues grew 16% and order intake jumped 15% year-on-year during the first four months of 2018, and a strong US economy should help sales to keep spiralling skywards.

Earnings at the firm are expected to continue swelling by double-digit percentages through to the close of 2019, keeping City brokers expectant of further dividend leaps too. Last year’s 58.1 U cents per share reward is expected to skate to 63.5 cents this year and 72 cents next year, resulting in handy-if-unspectacular yields of 2.5% and 2.8% respectively.

4. Bloomsbury Publishing

The publisher of the Harry Potter series of books, Bloomsbury Publishing (LSE: BMY), can always rely on the evergreen popularity of the boy wizard to keep driving dividends higher.

It may be two decades since the Hogwarts hero first hit bookshelves, but his popularity with young and adult readers alike remains undiminished. The franchise ranked amongst Bloomsbury’s hottest sellers in the four months to June, and the publisher continues to capitalise on its broad acclaim by bringing out new editions on a regular basis.

Harry Potter isn’t the only reason to expect profits and dividends to keep growing, however. The small-cap is also in a good place thanks to the vast amounts it is investing in building its position in the academic and professional digital resources sphere.

With earnings expected to keep rising City brokers are predicting dividend growth to hit as much as 8p per share in the 12 months to February 2019, from 7.51p last year, and again to 8.4p next year. This means that yields stand at an inflation-topping 3.6% and 3.8% for these respective years.

3. Devro

Sausage-casings manufacturer Devro (LSE: DVO) has been forced to keep the dividend locked at 8.8p per share for what appears to be an age. A lengthy period of earnings fluctuations has seen it lack the confidence (and the balance sheet strength) to hike payouts, but things could be about to change.

City analysts expect the firm to deliver robust profits growth through to the end of next year, meaning that Devro is expected to raise the dividend to 9p this year and again to 9.3p in 2019. Subsequent yields clock in at 4.5% and 4.7%.

There’s a lot of reason for the number crunchers to be optimistic. Devro is a rare firm in that it’s seeing its costs dropping through the floor (down £7m in 2017, beating forecasts), at the same time as its sales are marching on, particularly in hot growth territories like Russia and China. There’s a lot to like about Devro and its self-help strategy right now.

2. MJ Gleeson

News that MJ Gleeson (LSE: GLE) remains on course to supercharge home sales over the next five years has got me very excited.

The urban regeneration specialist sold 1,225 properties in the 12 months to June, up by a fifth (or 20.9% to be exact) from a year earlier. It’s well on track to hit its target of 2,000 homes per year within the next five years, it said, and I wouldn’t bet on it missing expectations as it ramps up production (it aims to be active on 70 sites in the course of fiscal 2019 versus 65 today).

Dividends at the firm have jumped 860% over the past five years as earnings have shot through the roof, culminating in last year’s 24p per share reward. Payout expansion is expected to slow in the medium term, however, to 27.1p in the year just passed and 29p in the current year. But the builder and its meaty forward yield of 3.8% are not to be scoffed at, particularly as cash flows burst through the roof and profits look set to keep growing.

1. Headlam Group

Those hunting for blowout yields now and in the future could do a lot worse than splashing the cash on Headlam Group (LSE: HEAD).

A 26p per share dividend is anticipated for 2018, up from 24.8p last year and yielding 5.6%. The yield for next year moves even higher to 5.9%, thanks to the firm’s estimated 27.4p payment.

The floorcoverings giant has been hit more recently by tough conditions in its UK marketplace in 2018 so far, but its divisions in continental Europe continue to perform well. Like-for-like sales in Europe edged up by 1.8% in the six months to June. And it is a combination of robust economic conditions on the continent, plus the completion of Headlam’s shrewd acquisitions at home and abroad, that make me confident that this is one business that could provide you with a packet to retire on.

Some smaller and more specialist financial stocks have been stronger performers, so today I’m looking at two potential dividend buys from this sector.

A mixed picture

Shares of investment manager Charles Stanley Group (LSE: CAY) fell by nearly 5% in early trade on Monday, after the 226-year old City firm reported a 4.4% fall the value of clients’ funds.

The company said that Funds under Management and Administration (FuMA) fell from £24.9bn to £23.8bn during the three months to 31 March. This compares to a fall of 5.1% for the company’s chosen benchmark, the FTSE UK Private Investor Balanced Index.

It looks like the firm’s funds probably beat the market by a small margin, although the overall result was also boosted by £200m of net inflows during the period.

It’s good that the amount of money invested by clients is continuing to rise. But I think the real story here is the changing mix of business carried out by the firm.

Higher margin services

Stockbrokers such as Charles Stanley offer three types of service for private investors:

• Execution only – buys and sells stocks on your instructions only.
• Advisory – provide advice on which stocks and funds to buy and sell
• Discretionary – invest your money for you, e.g. managed funds

According to Charles Stanley, discretionary services carry “higher margins”. The firm is expanding its focus on this area. It says that clients are increasingly switching out of advisory services and into execution only or discretionary products.

City analysts expect this change to help boost profits over the coming year. They’re pencilling in a 49% increase in earnings for the year to 31 March 2019. That leaves the stock on a forecast P/E of 13 with a prospective yield of 3.6%.

I’d be happy to buy at this level, although it’s worth remembering that a big market correction could cause investors to withdraw cash and cut the firm’s profits.

This 5% yielder could do better

One downside of investment managers is that their profits are generally linked to stock market performance. That’s not the case for lenders, such as sub-prime specialist International Personal Finance (LSE: IPF).

This company’s focus is on doorstep lending and online loans in countries including Poland, Lithuania, Finland, Spain and Mexico. Shares of this group have risen by almost 20% this year following a strong set of full-year results.

Pre-tax profit rose by £9.6m to £105.6m last year. The accounts show that about 85% of this came from the group’s European operations, with Mexico the other main contributor.

IPF’s profits are supported by a large and mature home credit business, while its online operations are still lossmaking. But performance is improving and I expect this to become a valuable source of profits over the next few years.

Good value?

The current share price of 242p is equivalent to just 1.2 times the group’s net tangible asset value of 197p per share. Measured against earnings, the share price gives a forecast P/E of 8.2. There’s also a prospective dividend yield of 5.2%.

In my view IPF looks attractive at this level. I’d rate the shares as a buy.