FNFC warns of bigger losses: Company rescue specialist to replace chief executive

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The Independent Online
FIRST National Finance Corporation, the troubled consumer finance group that refinanced pounds 1.3bn of its own bank debts in the summer, yesterday warned that losses in its commercial lending division would be worse than the market expected.

It also said its chief executive, Tom Wrigley, was retiring early to be replaced by George Cracknell, a former senior Barclays executive whose last job before retirement was to mastermind a series of big company rescues.

Martin Mays-Smith, chairman of FNFC, said there was no connection between Mr Wrigley's departure and the disclosure that commercial lending losses would be 'somewhat higher' than last year's pounds 19m. The change was due to be announced anyway, and as 'analysts' forecasts did look a bit wrong we thought it right to correct their thinking'.

Analysts have been expecting reduced losses of pounds 14m-16m. As a result of the warning the shares fell 11p to 75p.

Mr Mays-Smith said it was hard to value the commercial property FNFC held as security and the problem would continue until the market recovered.

Philip Gibbs, an analyst at Barclays de Zoete Wedd, said the announcement was bad news but he did not regard it as disastrous.

Mr Mays-Smith also said the consumer credit division would continue to show good results. This is the part of the business that will continue. Commercial lending is being wound up on the insistence of the company's bank lenders.

In the half-year to April, FNFC lost pounds 3.4m before tax compared with a loss of pounds 17.4m in the preceding six months. The full-year results are due in January.

Mr Cracknell joined the board as a non-executive director in February and is becoming executive vice- chairman, taking overall executive responsibility but working three days a week. He was deputy managing director of Barclays' banking division and his responsibilities included the intensive care unit.

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