Pre-tax profits up at Iveco Finance,
while A&L’s revenues drop 14 percent
Jason T Hesse
Go deeper with GlobalData
Iveco Capital Limited
Following its change of name from Iveco
Finance in April last year, Iveco Capital reported strong results
in the year ending 31 December 2008.
The lessor, a joint venture between Barclays
and Iveco, reported a pre-tax profit of £5.8 million (€6.7
million), up by 73 percent on 2007’s results. Lease revenue at
Iveco Capital was up by 15 percent, totalling £21.5 million at
year-end.
In terms of credit risk, the lessor said it
had “significant concentrations of credit risk” in certain
sectors.
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By GlobalDataThe largest exposure was of £122 million in
advances to trade dealers, followed by £53 million in other retail
lending, and £19 million in the transport, storage and distribution
sectors. But credit risk exposure was cut by half in the
construction sector, to £1 million, by year-end.
In the future, Iveco Capital’s directors said
that there would be a stronger emphasis on credit risk control and
protecting income, as well as improving service levels and better
supporting Iveco’s dealer network.
“Growth will come from increasing penetration
of Iveco sales due to improved product offering and market leading
service levels and also from the growth of Iveco in the market,” a
spokesperson said.
Alliance & Leicester Commercial
Finance plc
In the year ending 31 December 2008, Alliance
& Leicester Commercial Finance, which acts as a lessor and
financier for the corporate and public sectors, saw revenue fall to
£142.9 million at year-end, a 14 percent decrease.
This led to the company recording a pre-tax
loss of £61 million, down from the £20 million pre-tax profit it
saw in 2007. The losses were sustained due to higher impairments of
£61.6 million, higher administrative expenses of £14.3 million, and
more hedge ineffectiveness of £8.4 million.
The company also recognised an impairment of
£3.9 million during the year, relating to various acquisitions of
subsidiaries, and a write-off in relation to its investment in
Hansar Finance Limited. At £103.8 million, profit from operations
was still strong, though lower than the previous year’s £150.2
million.
The company’s directors said that they were
not expecting any significant change in the level of business, and
that they had a “reasonable expectation” that the business has
adequate resources to continue operating in the foreseeable future,
despite its parent’s acquisition by Abbey National plc in early
2009.
Clydesdale Financial Services
Limited
At fellow bank-owned lessor Clydesdale
Financial Services, which specialises in point of sale finance
under the Barclays Partner Finance brand, losses were also
recorded.
The Barclays-owned lessor, which works in both
the consumer and business spaces, made a pre-tax loss of £32.1
million in the year ending 31 December 2008, down from its profit
of £1.3 million in 2007.
The losses were attributed to a “significant
decline” in its interest rate swaps due to the Bank of England’s
base rate cuts, and the subsequent impact of IAS 39 on fair value
and hedging.
However, the company’s directors said that the
economic downturn was also providing opportunities, with
competitors either exiting the market or increasing their
pricing.
“Trading conditions will remain difficult in
the high street for some time and promotional credit is one of the
tools available to the company to assist making its products and
services more appealing,” they said.
The directors added that profitability would
become the key deciding factor on whether a deal is acceptable or
not, and said that they remained confident that the business would
be profitable in 2009.
Lombard North Central plc
Reporting on a “satisfactory” year, Lombard
North Central saw revenue grow by 19 percent to £484 million in the
year ending 31 December 2008. Pre-tax profit fell by 88 percent,
however, from £86 million in 2007 to £10.7 million at year-end –
largely due to impairments in subsidiaries and high operating
charges.
Revenue at the company – which acts as the
parent to many Lombard subsidiaries such as Lombard Vehicle
Management, Lombard Business Management, and Lombard Corporate
Finance – was largely driven by hire purchase income (£336.2
million). The company recorded no revenue from operating
income.
Regarding the company’s outlook, Lombard’s
directors said that they would be guided by their parent company,
the Royal Bank of Scotland, in seeking further opportunities for
growth.
Bibby Financial Services
Ltd
Meanwhile, business finance provider Bibby
Financial Services reported a strong year ending 31 December
2008.
New business hit an all-time high at the
company, growing by 21 percent year-on-year, while pre-tax profit
for 2008 was £20.5 million, up by 24 percent on 2007’s £16.5
million. Turnover also grew by 25 percent, to £115.8 million.
In addition to setting up a German subsidiary,
Bibby made several major acquisitions in 2008 including Arbuthnot
Commercial Finance Limited, and the single invoice factoring
business of Siemens Financial Services Limited. The company also
launched an internal improvement programme, called ‘Explorer’,
which has already started in the UK and Ireland, and is being
rolled out across the company’s global sites during the remainder
of 2009.
“We continue to be optimistic about the
future,” Bibby’s directors said. “2008 has seen us expand,
restructure and adapt to a challenging financial climate.
“We continue to set aggressive growth targets
and remain confident we will deliver to clients, employees and
shareholders alike.”
UKlessors – P&L
account
|
|
2008 (£m) |
2007 (£m) |
% change |
|
Iveco Capital Limited |
|||
|
Turnover |
£21.5 |
£18.7 |
15 |
|
Operating (loss)/profit |
£16.7 |
£12.8 |
30 |
|
Pre-tax (loss)/profit |
£5.8 |
£3.3 |
73 |
|
After-tax (loss)/profit |
£4.2 |
£2.2 |
91 |
|
Alliance & Leicester Commercial |
|||
|
Turnover |
£142.9 |
£166.7 |
(14) |
|
Operating (loss)/profit |
£103.8 |
£150.2 |
(31) |
|
Pre-tax (loss)/profit |
(£61) |
£20 |
(405) |
|
After-tax (loss)/profit |
(£45.2) |
£14.9 |
(403) |
|
Clydesdale Financial Services |
|||
|
Turnover |
£140.4 |
£102.1 |
38 |
|
Operating (loss)/profit |
£64.1 |
£46.1 |
39 |
|
Pre-tax (loss)/profit |
(£32.1) |
£1.3 |
(2,569) |
|
After-tax (loss)/profit |
(£37.4) |
£107,000 |
(34,853) |
|
Lombard North Central plc |
|||
|
Turnover |
£484 |
£407.9 |
19 |
|
Operating (loss)/profit |
£235.9 |
£275.9 |
(14) |
|
Pre-tax (loss)/profit |
£10.7 |
£86 |
(88) |
|
After-tax (loss)/profit |
£22 |
£71.4 |
(69) |
|
Bibby Financial Services |
|||
|
Turnover |
£115.8 |
£92.9 |
25 |
|
Operating (loss)/profit |
£38.7 |
£33 |
17 |
|
Pre-tax (loss)/profit |
£20.5 |
£16.5 |
24 |
|
After-tax (loss)/profit |
£14.9 |
£11.9 |
25 |
|
Source: Leasing Life |
|||
