Amid current market turmoil, UK banking and wealth management
company, Arbuthnot Banking Group, has sold off its loss-making
commercial finance division for £1.6 million to Bibby Financial
Services.
It is also rumoured that Arbuthnot’s niche musical instrument
financing company (MIFCO), which was initiated in 2004, may also be
put on the market.
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MIFCO is one of Arbuthnot’s signature businesses,
offering operating leasing on behalf of conservatories and
universities and also provides point-of-sale (PoS) finance using
consumer hire arrangements in the retail music sector. However,
Arbuthnot’s marine finance division appears to remain stable and
profitable.
Arbuthnot’s commercial finance team, headed by Roger Taylor,
joined Bibby Financial Services as part of the acquisition.
Although Arbuthnot stated in its interim financial report that
the credit crunch had little impact on its balance sheet, the sale
of the commercial finance division was part of its strategy to
dispose of non-core or loss-making divisions within the group.
Arbuthnot also sold off its pension administration business at
the same time. The profit of both sales should be recognised on the
balance sheet in the second half of the year.
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By GlobalDataBibby’s acquisition of Arbuthnot commercial finance, which was
completed in early August, is a key part of the factoring company’s
UK and Irish expansion strategy.
The business has a staff of 28, a client base of 100, and has
operations in America, Poland, Australia, France, Canada, Ireland
and Germany.
Edward Rimmer, CEO of Bibby Financial Services Group UK and
Ireland, said: “We have set ourselves a challenging growth
objective.
“In order to achieve this we are continually looking for
opportunities to move the business forward.”
Arbuthnot Group’s pre-tax profit was £0.5 million in the first
half of 2008, down from £1.4 million in H1 2007, primarily a result
of its loss-making divisions.
However, despite tough conditions Arbuthnot has maintained a
strong commitment of £40 million to external banking lines, and its
assets grew by 11 per cent over the year, according to its
financial report.
