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March 3, 2009

Cattles issues second profit warning and suspends directors

by Gill Montia

Story link: Cattles issues second profit warning and suspends directors

Cattles, the unsecured loan specialist, has issued a second profit warning only days after the first.

The company, which trades as Welcome Financial and Shopacheck, warned late last month that 2008 pre-tax profit was likely to be substantially below expectations.

It also said publication of its full-year results, originally scheduled for 26th February, would be delayed.

Today the firm has announced that the managing director of Welcome Financial, John Blake, finance director, Peter Miller, and operations director, Mick Belcher, have been suspended.

The future of all three depends on the outcome of an inquiry by auditors, Deloitte; Cattles’ chief executive, David Postings, has stepped in to run the unit in the meantime.

Investigations so far have indicated that there has been a “breakdown in internal controls” in the division that has resulted in the incorrect application of impairment policies.

The lender recently withdrew its application to the Financial Services Authority to become a retail bank and is also in the process of refinancing its debt, with £500 million due in July and £135 million in December.

Cattles has over one million customers, many of whom are unable to secure credit easily because of poor credit histories.

Shares in the company have plummeted by around 98% since the beginning of the year.

 

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