Cattles is well positioned to do this, having moved up from the D and E social brackets to target the Cs. The market potential is huge, perhaps embracing 20 million customers.
Eddie Cran, Cattles' effusive chief executive, has said that he plans to deliver 20 per cent growth every year. To do this he has departed from the core business of door-to-door credit sales and has identified a new market among people with mildly blemished credit records but with bigger incomes than the traditionally impoverished customer base.
While its two main competitors, Provident Financial and London Scottish, have played it safe, Cattles has forged ahead, posting a 22 per cent rise in profits in the first half of 1998. Particularly successful was the purchase of Welcome, which sells personal loans through a branch network. Welcome's new business grew by 82 per cent over the past year.
Cattles is building a national network of branches, boosting business through newspaper advertisements and branch sales. Yesterday it also announced the sale of its corporate services business, allowing it to focus on expanding consumer credit.
Recession does affect business in this sector - but much less so than for other lenders. Lenders like Cattles and Provident Financial base decisions on ability to pay, often for people on modest incomes or drawing income support.
Cattles shares rose 27.5p to 563.5p yesterday. Charterhouse Tilney forecasts full-year earnings of pounds 47.8m, putting the shares on a forward PE ratio of 23. That's demanding, but Cattles is a growth business. Buy