Trading Update
10 December 2007
Highlights
- Completed business roll-out in all four Fenno-Baltic markets
- Positive trends in both customer acquisition and lending volumes
- Major markets nearing profitability
- Significant improvements in repayment and collection performance
- Appointment of Group Credit Officer
- Full year turnover expected to be in line with expectations
- Net loss expected to be slightly above expectations
- Significant further growth anticipated in 2008
Mobile Credit Baltic plc, the online provider of consumer loans to borrowers in Finland, Estonia, Latvia and Lithuania, provides the following update in advance of its results for the 12 months to 31 December 2007, due to be announced in March 2008.
Business update
In line with its original plans for 2007, Mobile Credit Baltic has now completed the launch of its consumer lending operations in all four Fenno-Baltic markets, the most recent being Latvia. In most markets the Company's Credit24 brand is now well recognised as a provider of flexible loan products. Overall lending volumes are strong, the customer base is growing rapidly, and MCB is experiencing a high rate of repeat business.
The Company has completed the roll-out of a full range of short-term loan products in all markets. In accordance with its business plan, MCB recently introduced a range of larger loans with principal amounts in excess of ???1000, longer repayment terms and additional credit checks. The extension of the product range opens up a significant new target market for the Company, and initial indications show strong demand. Large loans will gradually be rolled out in all markets.
The Company has experienced improved customer repayment performance and good collection of receivables in arrears. Regular monitoring of credit performance has allowed MCB to refine its credit extension criteria, and the Company recently hired a Group Credit Officer with significant experience to support its growth going forward.
Financial outlook
Turnover in the current year is expected to be in line with expectations. Net loss is expected to be slightly above expectations as a result of accelerated marketing and additions to operating expenses in preparation for further growth in 2008. The company's largest markets are at or trending towards operational profitability. Provisions for bad debts are expected to be in line with or below expectations as a result of the above mentioned repayment improvements. In addition, the sale of certain aged receivables has allowed the Company to validate its provisioning levels.
Business outlook
The Company expects significant further growth in 2008, subject to the continued availability of equity and debt financing at reasonable terms, in addition to its current facility. The market potential in MCB's segment of the consumer credit market has become increasingly clear, and the Company will continue to focus on expanding its lending and related activities.
In the medium term, MCB expects to complete a larger senior credit facility to finance its growing loan portfolio. The Company will keep under review all areas of expansion, including the launch of services into other Eastern European markets during 2008.
Rami Ryhanen, Chief Executive of Mobile Credit Baltic plc, said: "The Company has progressed successfully from start-up in 2006, through the IPO and is now an established business in four countries, with recurring revenues, robust growth and significant opportunities for continued expansion. We remain as confident as ever about the operational outlook for the business."
Enquiries
| Mobile Credit Baltic plc | |
| Rami Ryhänen Henry Nilert, Chief Financial Officer | +372 5300 8332 +358 451 370 065 |
| www.mobilecreditbaltic.com | |
| Nominated Adviser: | |
| Libertas Capital | +44 (0) 20 7569 9650 |
| Andrew Raca / Stephen Pickup | www.libertascapital.com |
| Media enquiries: | |
| Capital MS&L | |
| Peter Curtain / James Madsen | +44 (0) 20 7307 5330 |
| james.madsen@capitalmsl.com | www.capitalmsl.com |