Close Leasing Limited
Equipment lessor Close Leasing
Limited made a pre-tax loss of £885,572 (€956,080) in the year
ending 31 July 2008, according to financial statements published by
the company last month.
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The lessor, whose immediate parent is Close
Asset Finance, only started trading in November 2007. However, in
its directors’ opinion, it had “achieved satisfactory results in
the year which were in line with the plan”.
“The outlook for the continuing development of
the business is positive,” the directors said. “The balance sheet
shows that the company remains well capitalised despite the
start-up losses incurred in the period.”
Indeed, the balance sheet at 31 July 2008 was
healthy, with equity worth £1.4 million. The lessor had just over
£9 million of debtors falling due within one year, and over £12
million after more than one year.
Although, as with all leasing companies,
credit risk was the principle risk that the company faces, Close
Leasing’s directors also said that it was faced with the risk of
damage to the company’s reputation as well as competitive
pressure.
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By GlobalData
SG Equipment Finance
Limited
At the bank-owned lessor SG
Equipment Finance Limited, the “highly competitive” business
environment was also highlighted as the main risk, with tighter
margins as a result.
For the year ending 31 December 2007, the
lessor reported a pre-tax profit of £1.3 million, up by a
significant 77 percent on 2006’s £745,000, according to documents
published last month.
With new business up by over £40 million to
reach £164.2 million, the company’s directors said they anticipate
“further growth” in the new financial year, although different
levels of business and profit would depend on the “timing, source
and nature” of the transactions.
The growth in new business was largely
attributed to the expansion of existing and new business lines,
which was also the “principal driver in the increase of the profit
level”.
Return on the total portfolio rose from 6.2
percent in 2006 to 6.9 percent in 2007, which, according to the
company, was a reflection of the increase in interest rates in the
new business written.
Additionally, SG Equipment Finance’s parent,
Franfinance SA, the specialised financial services arm of Société
Générale, has committed itself to providing the company with cash
resources to cover its expenses and obligations for the next year,
giving the lessor guarantees for the future.
Arval UK Group
Limited
Meanwhile, the fleet contract hire
and fuel card subsidiary of one of Société Générale’s competitors,
Arval UK Group Limited, part of BNP Paribas Lease Group, also
reported its annual figures.
Turnover grew both organically and by
acquisition at Arval, to reach £2.6 billion.
Indeed, in the year ending 31 December 2007,
the lessor acquired Allstar Business Solutions Limited and its
subsidiary Dialcard Fleet Services Limited, which together
contributed £70.6 million to group turnover.
Arval saw pre-tax profit rise slightly to
£35.5 million, up on 2006’s £33.9 million, while operating profit
reached £48.9 million, compared with the previous year’s £46.7
million.
Northridge Finance
Limited
At commercial vehicle lessor
Northridge Finance Limited, although results were down compared to
the previous year, the company was far from making a loss.
Profit before tax decreased to £2.8 million,
down a considerable 48 percent on 2007’s figures, where pre-tax
profit was over £5 million.
Total operating income also decreased, by 6
percent, to £9.9 million, while costs rose by 36 percent to £7.1
million. The company increased staff numbers to 50, up from 37 in
2007 – which also led to rising costs, up 51 percent to reach £2
million.
“This increase in costs is to support the
growth of the business,” Northridge’s directors said.
Loans and advances to customers increased to
£745.9 million, up from £519.5 million in 2007, matched by a loan
from its parent company, Bank of Ireland.
Commenting on the future of the company, its
directors said that they “will continue to seek every opportunity
to increase profitable turnover”.
International Decision Systems
Limited
In the leasing portfolio management
software industry, companies are also being hit by the economic
turmoil, with International Decision Systems Limited (IDS)
reporting a loss of £304,201 for the year ending 31 December
2007.
Despite recording a loss, IDS did see turnover
increase by around 6 percent, to £3.9 million in 2007.
However, the company highlighted that
competitive pressure in the UK was “a continuing risk” that could
result in it losing sales to key competitors.
“The current economic conditions create
uncertainty, particularly over the level of demand for the
company’s license fee contracts,” IDS’ directors said, emphasizing
that the company would manage the risk by maintaining strong
relationships with its customers.
Bynx Limited
However, Bynx Limited, also a
software system provider, saw pre-tax profit rise by 16 percent to
£638,182. Turnover at the company was also up, by over £1 million,
reaching £6.1 million in the year ending March 31 2008.
“[We] will continue to pursue the global
market place in its chosen market sector,” said the directors.
“Bynx will strive to develop more partnerships with organisations
that complement the Bynx product offering and therefore provide
more value to clients.”
