Kensington Group
NO RECOMMENDATIONSub-prime mortgage lender Kensington delivered very strong interim figures, building a fine set of full-year results. In the six months to May profits rose by 28% to £13.3m, with earnings per share climbing 37% to 17.4p. An interim dividend of 1.5p per share will now be paid. While the business has been growing rapidly, its directors have been careful to avoid the reckless over-expansion that has dogged other financial companies. New loans rose by 51% to £415m, but the quality of customers has improved, with fewer loans to people with County Court judgments against them. Kensington also offered more affordable mortgage repayments than the industry average. Its sponsorship of TV coverage of England's cricket tour of India and Sri Lanka is said to have been successful in raising awareness among mortgage advisers and there is the possibility of expansion via acquisitions. The shares picked up 5% on the news. They look good value.
Market cap: £115m
PE Forecast: 5.9
Share price: 201p
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