Kensington Group, a UK provider of specialist mortgage products, has reported a 24% rise in H1 earnings.
The firm’s pre-tax earnings for the six months to May 31, 2006, reached GBP30.3 million. However Bloomberg reports that the firm’s shares crashed by 11% after it warned of the potential deleterious impact of bad debts on its business.
Kensington targets individuals outside the mass mortgage market, such as the self-employed or contract workers. These consumers carry a higher risk of default, meaning that the news of a near doubling in Kensington’s bad debt ratio hit its shares hard.
We do not expect market conditions to get any easier during the rest of the year, said chief executive John Maltby in a statement reported by Bloomberg.