Good news. Buy-to-let mortgage specialist Paragon has managed to slash its interim dividend by 87.5 per cent to a penny, while simultaneously bringing profits down from £43.3m to £26.4m and cutting earnings per share from 44.2p to 15.7p. New mortgage business has been chopped by more than half, staff layoffs are going to plan and new lending is being restricted to existing customers.
Mission accomplished!
Of course, Paragon’s situation was looking terminal during the darkest moments of the Crunch, before UBS arranged a £287m rescue rights issue and a refinancing of its mortgage book.
The company now reports improving conditions for its landlord customers as rental yields rise and professional buy-to-letters hoover up what they believe is cheap property. And it is also looking for new sources of income.
But whether this work out was actually worth it remains to be seen.
Related links
Interim results – Paragon statement
Paragon resumes dividend after rights issue – FT.com