Cattles adds £850m to bad loans book

Books reviewed after suspension of executives

Cattles, whose market value is just £18m, said advisers including the accountancy firm Deloitte have reported back after re-examining its books in the wake of the discovery of errors. It will now add £700m to its previous bad loan provisions. If a different accountancy standard is used, this would add a further £150m still, said the company, which is in talks with its lenders after breaching loan agreements and finding accounting irregularities. "The management's focus is now on working closely with its debt providers to sustain their support for the Group's programme of action to stabilise its financial position," said Cattles.

The action includes a reshuffle of management, as well as asset sales and the "controlled" collection of debts outstanding, the company said, adding that the collection programme has so far generated net cash receipts in 2009.

The revelations are the latest in a long string of bad news for the company. Cattles said on 18 December that trading was in line with expectations for £174m of pre-tax profit last year. But since then it has become clear that with the change in year the company is truly having an annus horribilis. It gave up its application in January for a banking licence – which would have given it access to retail funding – then found under-reporting of bad debts at its main business, Welcome Financial Services.

The sub-prime lender then revealed on 10 March that it had breached its banking covenants, and after issuing its second profits warning in as many months, the company said it had suspended three senior directors at Welcome Financial Services.

Its finance director, James Corr, was suspended over accounting errors, along with Ian Cummine, the chief operating officer, and Adrian Cummings, the head of compliance for Welcome's lending business. Three other directors have also been suspended.

Cattles was founded in 1927 by Joseph Cattle in Hull. It listed on the London Stock Exchange in 1963, and now operates under three brands. Welcome provides personal loans, Lewis is a debt recovery and investigations business, while Cattles Invoice Finance lends to small and medium-sized businesses.

Shares in Cattles fell another 2 per cent to 3.38p yesterday, less than 1 per cent of their value in mid-2007, when doorstep lending was an integral part of the credit boom. In January Cattles' shares fell sharply after it failed in its attempt to win a banking licence. On 20 February, they dived again as Cattles issued a profits warning and put its results on hold, followed by the review of its bad loans provisions.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
i100
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little