Cattles, the specialist consumer lender which raised £200 million from a rights issue, has said the credit squeeze was affecting business.
In a trading update to the end of May the company said it tightened credit criteria to new business in light of higher inflation.
This has resulted in a lower receivables growth of 14.4 per cent in the group’s main lending business, Welcome Finance, compared with 19.5 per cent growth in May 2007.
As a result of lower growth, Cattles, based in Yorkshire and with an operation in Birmingham, said: “The traditional split of profits between half one and half two will be less pronounced this year”.
Robin Savage at KBC Peel Hunt said he expects more than 45 per cent of profits will be reported in the first half, compared with 36 per cent for the past two years.
Cattles, which provides consumer credit to non-standard customers in the United Kingdom, said acceptance rates have dropped from 6.3 per cent to 5.3 per cent year-on-year.
The financial services group said it views its prospects for the year with confidence.
Shares in Cattles fell four per cent to 142p in early trading on Thursday.
At the start of June, Cattles said take-up on the rights issue was 96.7 per cent in its nine-for-20 issue at 128p per new share. The capital raising will bolster the group’s capital base and support its application for a banking licence.
A further £100 million of new debt funding is still required to meet the group’s 2008 targets.