FNFC loss halved to pounds 23m

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The Independent Online
PRE-TAX losses more than halved to pounds 22.8m last year at First National Finance Corporation, the credit company bailed out by its bankers last summer. In 1992 the company lost pounds 57m, writes Peter Rodgers.

A big turnround from a pounds 4.6m loss to a pounds 19.7m profit at the key consumer credit division and lower losses in the property business more than outweighed higher bad debts on commercial lending.

Refinancing costs amounted to pounds 13m, including pounds 9.3m in upfront fees to the company's 107 banks, a cost to the profit and loss account being spread over four years.

FNFC's interest margin has been raised 0.8 of a percentage point by the refinancing of the company's debts, which have been cut to pounds 910m from pounds 1.25bn in 1992.

The company signalled its confidence by paying a 1p final dividend with an enhanced scrip dividend alternative worth 1.5p.

It said there was some recovery of the market for housing sites and new homes, but very little market in smaller commercial properties. As a result commercial provisions rose from pounds 14.2m to pounds 20m.

Martyn Mays-Smith, chairman, said the tougher line on provisions was partly because the year-end was October and signs of a pick-up in property had been very recent.

There was also a pounds 4.5m provision against losses in associated companies including an investment in a Spanish venture capital concern.

Future strategy is to build on the successful consumer credit business, which has a lending book of pounds 1.1bn, though a return to commercial lending has not been ruled out.

The shares rose 1p to 71p.

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