‘No decision’ on Cattles Invoice Finance

PARTS of the troubled lender Cattles are still performing albeit at a much reduced pace, it said today.

Manchester-based Cattles Invoice Finance is holding steady with client numbers remaining stable at 722. Net receivables however have dropped 10.6% since December to £77.4m.

The group added, “no firm decision had been reached” on expected sale of the division.

Cattles’ Lewis Group division, one of the leading players in the UK purchased debt market, saw collections rise 5.6% to £23m for the three months ended March 31.

Cattles, which last month announced the closure its car finance arm Welcome Car Finance in an attempt to save cash and increase liquidity in the business, said it was still exploring options in relation to the business including a potential disposal.

It added that discussions with its bankers and bondholders were ongoing as it tries to stabilise its financial position.

Earlier in the month Cattles said it would have to declare a further £700m in impairment provisions.

The sum will be additional to £400m already identified and confirms the West Yorkshire firm’s earlier fears of a “significant” pre-tax profit loss for the year ended December 31.

It has previously said an investigation by law firm Freshfields Bruckhaus Deringer and business advisers Deloitte had confirmed “there has been a breakdown of internal controls which has resulted in the group’s impairment policies being applied incorrectly”.

As a consequence, not only will last year’s accounts need to be restated, but Cattles has warned that previous year’s financial statements may also need to be adjusted as a result.

Cattles asked for its shares to be suspended because of fears it would not be in a position to publish its annual figures for the year ended December 31, 2008 by April 30, as the talks to refinance its debt continue.