Foreign exchange losses blamed for
profit plunge at Bank of Scotland Structured Asset Finance
Limited
Go deeper with GlobalData
SG Equipment Finance
Limited
French-owned lessor SG Equipment
Finance Limited had a successful year ending 31 December 2008,
seeing its portfolio grow by over 10 percent to £182.7 million
(€206.1 million).
While pre-tax profit decreased 12 percent,
from £1.9 million to £1.7 million, the lessor’s return on the total
portfolio grew from 6.94 percent in 2007 to 7.30 percent in
2008.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“The increase in this yield reflects the
change in the composition of the portfolio as the level of smaller
ticket deals contained within the portfolio continued to increase,”
the company’s directors said.
Funded entirely by Société Générale, the
French bank, SG Equipment Finance provides hire purchase and lease
finance for a wide range of asset types.
The directors said: “The business environment
in which the company operates continues to be highly competitive,
as a result of which margins continue to be tight.
“However, during the year, the pressure on
margins eased slightly as the UK leasing market was impacted by the
onset of recession, and the repositioning in the market of
competitors.”
Turning to 2009-10, the directors added that
they anticipate “further growth”.
Royal Bank Leasing
Limited
Another bank-owned lessor, Royal
Bank Leasing Limited – which incorporates finance companies such as
RBS Industrial Leasing and Lombard Corporate Finance – reported
strong results for the year ending 30 September 2008.
Royal Bank Leasing saw pre-tax profit grow by
86 percent to £143 million last year – although this came largely
from income from shares in group undertakings, which increased from
£39.6 million to £168.3 million.
Revenue at the lessor was fairly flat,
however, dipping from £13.1 million in 2007 to £12.6 million in
2008.
At the end of September 2008, Royal Bank
Leasing’s total assets totalled £7.9 billion, up 21 percent on the
previous year’s results.
Although the directors prepared the financial
statements on a going concern basis, they added that the company
has “considerable financial resources together with long-term
contracts for the receivables within both the company and its
subsidiaries”.
Furthermore, they said that the company has
transactions in a wide range of industries, meaning that currently
it is “not heavily exposed to any particular sector”.
Bank of Scotland Structured Asset
Finance Limited
Meanwhile, at Bank of Scotland Asset
Finance Limited, results were less positive.
Indeed, the third-party lessor saw pre-tax
profit tumble from £11.9 million to a loss of £57.1 million at the
end of 2008. The steep fall in profit was largely due to foreign
exchange losses, which brought profit down by £57.1 million.
“The dollar/sterling exchange rate decreased
considerably in the last quarter of the year, contributing to the
significant loss,” the directors said.
“The company takes actions to ensure that all
balances in foreign currencies are managed effectively,
however.”
In terms of the lessor’s assets, results were
essentially flat year-on-year, with the company reporting total
assets worth £1.7 billion at year-end.
Despite the heavy losses last year, the
directors said that they “remain committed to the business of
leasing assets to third parties and may write new business in the
future”.
Exclusivebenefits Limited
Professions-financier
Exclusivebenefits Limited was hit hard by the economic turmoil in
the year ending 31 March 2009, seeing turnover fall from £839,996
to £352,460.
Exclusivebenefit’s directors explained that
the company’s panel of lenders had not only reduced in size, but
“the capability and appetite to take on new business has been
drastically reduced in the remainder”. This, therefore, directly
impacted the company’s turnover, they said.
The company’s bottom-line was also hit hard,
recording a pre-tax loss of £59,775, as opposed to the £141,939
profit the company recorded in 2008.
Looking forward, the directors said they
expect the downturn in demand will “continue to be felt”.
They added: “While turnover will remain
subdued, cost savings and focus for marketing activity are such
that we are confident the new financial year will show a return to
profitability.”
Indeed, they said they were confident that the
overhead savings, combined with new business contracts in place for
the new financial year will “allow a return to profit in this next
financial year”.
Neopost Finance Limited
In the captive market, Neopost
Finance Limited managed a healthy year ending 31 January 2009.
Indeed, both the company’s pre-tax profit, of
£7.8 million, and turnover, of £12 million, were flat year-on-year,
despite the difficult economic conditions.
Neopost Finance, which provides sales aid
support to its parent Neopost – a distributor and servicer of
mailroom equipment – added that it expects the performance of the
company to continue for the foreseeable future.
CNH Capital Europe
Limited
At CNH Capital Europe Limited, a
joint operation between BNP Paribas Lease Group and CNH Global, the
agricultural and construction equipment manufacturer, results were
positive in the year ending 31 December 2008.
The captive joint venture saw revenue grow by
31 percent last year, to £12.9 million, while pre-tax profit grew
26 percent to £5.2 million.
Total assets at the company totalled £81.4
million, up on the previous year’s £63.5 million.
“CNH Capital Europe has achieved satisfactory
results in the year, has traded successfully in its chosen markets,
and is expected to continue to do so for the future,” the company’s
directors said.
