Cattles profits up as it makes strong start to year

CATTLES, which lends to lower income consumers, has seen a near 25% rise in pre-tax profits and said it has made a strong start to 2008.

The Leeds-based group saw pre-tax profits increase 24.9% to £165.2m from £132.2m which chief executve David Postings said had been “underpinned” by strong income growth of 32.7% to £822.2m.

“Critically, this has been achieved without compromising credit quality: instalment arrears improved to 7% of receivables,” he said.

“Extensive experience in our markets enables us to continue lending responsibly, taking full account of customers' ability to repay. So, as many lenders

withdraw from these markets, we remain committed to meeting the needs of customers, as evidenced by continuing investment in our branch network, systems and people.

“The group has made a strong start to 2008. Demand for the group's consumer finance products continues to be buoyant and credit quality remains sound. I

look forward to the completion of another successful year and view the group's prospects with confidence, ” added Mr Postings, who joined the board last September from his role as managing director of Lloyds TSB Commercial to replace the retiring Sean Mahon.

Cattles increased earnings per share 15.3% to 32.3p and has raised its total dividend 10% to 19.3p.

The group reduced its cost-income ratio to 31.4% from 35.5%.

Chairman Norman Broadhurst commented: “I believe our strategy for enhancing shareholder value through disciplined lending growth, robust credit quality and improving operational and financial efficiency remains sound and appropriate to current market conditions…I look forward to another successful year in 2008.”

Cattles' Welcome Finance business saw “strong growth” in customer numbers of 25.7% to 514,000 while Welcome Car Finance grew income 75.8% to £106.1m as it increased its car sales by 53% to 13,763 vehicles.

Cattles Invoice Finance grew income 15.6% to £16.9m from £14.6m and increased its number of clients by 11.4% to 725 but saw pre-tax profits fall 6.9% to £2.5m because of provisions for three accounts.