ISP Finance engages investment banker to accelerate acquisition plans

ISP Finance Services Limited (ISP) has taken another step towards expansion through acquisition, announcing that it has engaged an investment banker to explore and structure potential growth opportunities. The move signals the microlender’s continued ambition to diversify its portfolio and strengthen its market position.

The internet services provider has long viewed acquisitions as a growth strategy, with CEO Dennis Smith previously hinting at the upcoming deals during the company’s 2022 annual general meeting. Although negotiations were delayed at the time, the company’s recent financial results suggest it may be better placed to realize these ambitions.

“The ISP remains committed to exploring growth opportunities through acquisitions or mergers. To that end, we have retained an investment banker to structure potential opportunities,” Smith said in the company’s just-released annual report.

For the second quarter ending June 30, 2024, the internet service provider reported strong financial results, driven by both revenue growth and cost containment. The ISP’s focus on managing operational costs has had a key impact on its profitability. Despite a modest 2.9 percent increase in operating costs, the company’s cost control measures resulted in a significant reduction in personnel costs, which decreased by 28.6 percent, or $9.3 million. This helped increase the company’s profit to $21.2 million, a staggering 341% increase compared to the same quarter in 2023.

Earnings per share (EPS) also reflected the company’s improved financial health, which increased to $0.202 at the end of the second quarter of 2024, an increase of 339.3% compared to $0.046 in the same period last year. However, the increase in profitability was somewhat tempered by an increase in allowances for credit losses, which increased by 37.4% to $43.5 million.

The company’s loan portfolio continues to grow, although at a slower pace.

Net lending increased 4.0 percent to $997 million in the second quarter of 2024, compared to $959 million in the same quarter last year. The company’s total assets now stand at $1.18 billion, up 9.1% year-over-year.

ISP’s 2023 Annual Report further highlighted the company’s achievements, noting that its net loan portfolio crossed the JD 1 billion mark for the first time, reaching JD 1.025 billion at year-end, an increase of 34% compared to the previous period.

The ISP says it remains focused on disciplined cost management while maintaining a high standard of customer service. The company says it will expand its lending offering to meet the needs of its core customer base, which mainly consists of public sector workers. These loans are intended to cover household expenses, educational needs and health care.

“Looking ahead, we plan to introduce new products that we believe will increase shareholder value,” Smith said.