(Adds comments from CEO & analysts, details, share movement)
By Abhiram Nandakumar
July 30 (Reuters) - Consumer credit provider International Personal Finance Plc said it was expanding into Spain, where it may take longer to break even than its eastern European strongholds.
Shares of the FTSE-250 company, which provides small personal loans in eastern Europe and Mexico, fell as much as 3.9 percent on Wednesday to 563 pence on the London Stock Exchange.
"Due to the nature of the market and the potential scale of opportunity, Spain's development will require both a higher level of investment and a longer period to break even compared to our recent new markets of Lithuania and Bulgaria," the company said in a statement.
The Spanish expansion, while positive, is likely to cause consensus downgrades until the country starts contributing to IPF's profit, RBC Capital Markets analysts said.
Chief Executive Gerard Ryan said he expected the first loan in Spain to be issued early in 2015 and to build a portfolio of about 400,000 customers or more at maturity, which could take five to eight years.
Numis Securities analysts said in a note that they expect Spain could contribute over 24 million pounds at maturity.
"We believe there isn't a strong competitor, if any, for us there (Spain)," Ryan told Reuters on phone, adding that there was strong consumer interest in borrowing small sums.
The company, which provides small loans to 2.6 million borrowers in eastern Europe and Mexico, expects to invest about 11 million pounds in Spain through 2015 and anticipates to break even in 2018.
IPF services customers with questionable or no bank records through its 30,000 agents. The company delivers cash and collects repayments on some loans at borrowers' doorsteps.
IPF reported a 55 percent fall in pretax profit at 24.5 million pounds, hurt by a one-time loss, investment costs and weaker foreign exchange rates.
The company said it booked a loss of 22.6 million pounds related to the repurchase of existing eurobonds, which was about 2.6 million pounds more than analysts expected.
Pretax profit before exceptional items was 47.1 million pounds for the six months ended June 30, up 11 percent from a year earlier.
The company, which raised its interim dividend to 4.2 pence per share from 3.8 pence, reported a 17 percent rise in revenue at 394.1 million pounds. ($1 = 0.5906 British Pounds) (Reporting by Abhiram Nandakumar and Richa Naidu in Bangalore; Editing by Gopakumar Warrier and Robin Paxton)