£30m loss at Davenham

FINANCE house Davenham said today it had dived into the red with losses of more than £30m.

The news come two days after Davenham, which provides loans of up to £5m to small and medium-sized companies, announced it had secured a £215m refinance package as it restructures the group.

In the six months to December 31, pre-tax losses were £30.4m compared to a profit of £5.8m last time, following a £31m write down of assets in the Manchester-based group’s property portfolio.

Davenham, which has been hammered by the downturn, added that its loan portfolio has reduced from £284m last June to £221m.

David Coates, chief executive of Davenham, which has axed more than 30% of its workforce, said: “The board’s decisive action in changing Davenham’s strategy has enabled the group to reduce its credit risks, operating costs and financial leverage as well as to optimise its property recoveries, thereby delivering it to a position where it has successfully gained the support of its banking group.

“The group’s ongoing core asset and trade divisions are expected to be able to steer a sensible but cautious route through the remainder of the current financial year. 

“The economic environment remains challenging but our successful refinancing positions Davenham to deliver on its new strategy.”