Cattles posts delayed results

Batley-based Cattles made a 745.2m loss before tax which has led to a loss per share of 156.38p. Unaudited results for 2008 reported last year revealed a loss of 555.3m.

The group has been hit by accounting failures, which meant bad debts were not properly accounted for. It has dismissed a number of executives over the matter and has been forced to sell Cattles Invoice Finance for 70.4m and make hundreds of staff redundant.

Cattles has halted further lending in its Welcome Finance division and is collecting out the loan book.

The shortfall in the group's impairment provisions is estimated to be 850m.

Last December, the lender said that it had secured a "standstill and equalisation agreement" from its key creditors, who are owed around 2.7bn.

The deal has given Cattles a chance to restructure and means its creditors will not force it into administration or demand the cash they are owed until July 2011.

However, shares in Cattles are still suspended, the publication of its 2008 results were delayed, and chairman Margaret Young today apologised to shareholders.

She said: "I know that some of our shareholders had a substantial proportion of their savings invested in Cattles' shares. Many of you have lost money that you have told me you could ill afford to lose. These facts make it all the more painful for me to present this annual report.

"I share your anger about what has happened. Like you, I feel very let down by certain former executives. I also share your frustration about the time that it is taking to establish responsibility for the problems which we have experienced. However, these matters are extremely complex and cannot be resolved quickly.

"I can only assure you that the current board continues to co-operate as fully as possible with all interested regulators and to consider with our legal advisers all possible avenues for potential claims against third parties in relation to the impairment problems which finally came to light in February 2009."

Cattles hopes to announce its 2009 results in the near future.

Grant Thornton has been appointed as the group's auditor in place of PricewaterhouseCoopers, which has resigned, and has found the need for further impairment provisions.

It is expected to take two to three years to collect Welcome's loan book. Cattles' smaller businesses, Shopacheck and The Lewis Group, will carry on trading as normal.

Ms Young added: "The events that unfolded during 2009 have been extremely difficult for the group and its employees. As part of our programme to simplify the group's operations we have had to release a significant number of people during 2009 and again in the first quarter of 2010.

"Furthermore, at the end of 2009 we had to inform the Welcome employees that we intend to pursue a strategy of collecting out the customer loans over the next two to three years, as a result of which they are unlikely to have a long-term future with the business.

"I have been impressed with the professionalism and dedication of our employees in very difficult circumstances and, on behalf of the board, I wish to thank them for their continuing contribution to the business.