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”.

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 that the division’s strong income growth
was not reflected in its pre-tax profit of £2.5m.

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

However, Marriot said that 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.