Despite its volatile home market in debt recovery and lending,
Cattles Plc announced a pre-tax profit increase of 24.9 per cent to
£165.2m, underpinned by strong income growth of 32.7 per cent for
year-end 2007.

David Postings, chief executive of Cattles said the company’s
strong survival was due to “lending responsibly” and “taking full
account of customers’ ability to repay”.

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 Cattles’ invoice financing (CIF) arm, which provides
working capital financing through its factoring services, saw
income increase by 15.6 per cent to £16.9m and client numbers grow
by 11.4 per cent to 725 for year-end 2007. However, CIF’s loan-loss
charge increased from £1m to £2.5m and the loan-loss ratio rose to
2.2 per cent for 2007, which meant the division’s strong income
growth was not reflected in its pre-tax profit of £2.5m.

“Impairment provisions on three specific accounts meant the
pre-tax profit for CIF was down 6.9 per cent,” Paul Marriot,
account director at financial dynamics, said.

However, Marriot said, as a company overall, Cattle’s bad-debt
charges were within the targeted range and it was not seeing
increased pressure from the market’s problems.

Cattle’s financial services arm, Welcome Finance, which also
includes hire purchase, reported a customer increase of 105,000 to
514,000 and a growth rate of 42.5 per cent in total loan volumes.
Despite the hire-purchase market remaining flat in 2007, according
to FLA statistics, Cattles achieved a volume increase of 41.5 per
cent to £415.8m for year-end 2007.

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