Forfaiting knocked by crisis in Mexico

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The Independent Online
London Forfaiting, the specialist international trade finance company, saw its profit before tax fall 25 per cent to £16m for the 12 months to the end of December. The company blamed continuing uncertainty in the financial markets, particularly in Mexico.

However, the opening of new offices in eastern Europe, Scandinavia and the Far East resulted in substantial turnover growth.

The company supplies finance for international trade by buying debt from exporters. The debts are guaranteed by a bank in the importer's country.

As well as difficulties in international bond markets and the Mexican crisis, the company suffered from interest rate increases during the year, which cost £2m in charges.

The downturn in profit had been signalled by the company when it warned of difficult trading conditions in its interim statement in September.

Jack Wilson, chairman, said the underlying performance was good. "We have a rosy view for our business internationally and we think we are in a growing market. 1995 should better reflect the underlying growth of our business."

The company is moving up from the Unlisted Securities Market, which is due to shut down at the end of 1996, to the full list in spring.

Turnover in the year was up to £1,032m from £687m in the previous year.

Earnings per share are 11.51p, down from 16.15p in the previous year. The company is paying a final dividend of 6.1p per share, giving a total for the year of 9.3p - unchanged from last year.

The markets had expected the downturn in profits, so the shares were not adversely affected, closing up 6p at 145p.