New setback for ailing Cattles

SUB-prime lender Cattles delayed the release of its results today and warned that profits would be “substantially” below City expectations.

The increasingly-troubled company, which is cutting 1,000 jobs to reduce costs, said it was reviewing the adequacy of its impairment provisions. The news sent the shares, which have already crashed 90% in the last 12 months, down a further 53% today to 6.28p.

The delay is yet another blow for the group, which last month confirmed it was dropping plans for a banking licence that would have allowed it to take deposits.

Cattles, which has an invoice discounting business based in Manchester, said it had withdrawn its application for permission to take retail deposits after it was told by the Financial Services Authority that a licence was unlikely to be granted until the “unprecedented turmoil in the financial markets has stabilised” and the terms of its renegotiation of £635m of bank facilities has been finalised.

It is understood too to have failed to agree a deal to buy London Scottish Bank, just before its collapse last year.

Cattles said discussions are ongoing with its bank syndicate regarding the refinancing of facilities due for repayment in July.

Despite the woes of the overall group, the invoice financing arm said this month it had recorded a 21.3% increase in completed transactions in the final quarter of 2008, writing 91 new deals compared to 75 in the same period of 2007.
The division is understood to be up for sale.