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MCB Finance Group

  • BY: Andrew Hore |
  • POSTED: 16/05/2011 |

Personal credit provider MCB Finance Group says that strong trading in the first four months of 2011 means that pre-tax profit should be better than expected this year.

The positive trend has continued on from the second half of 2010. All of its four main markets (Finland, Lithuania, Estonia and Latvia) improved last year and MCB restarted lending in Latvia near the end of the period. Edison Investment Research had forecast a profit of £1.6m for 2011. If the current trends continue then the profit will be much higher than that figure, helped by higher than expected write backs of former bad debts.

The shares jumped 9.5p to 39p, which values MCB at £6.78m.

The principal lent so far this year is 45% higher than in the same period of 2010.

MCB swung from a loss of €619,000 to a profit of €534,000 in 2010 even though revenues fell from $15.7m to $11.8m. There was a sharp fall in the impairment charge as the management has been careful to increase credit quality. There have also been write-backs of previously written-down loans.

MCB has extended its credit facility to March 2012 and increased it to €12m. MCB was using less than 50% of the facility at the end of 2010 so there is plenty of scope to expand. MCB plans to move into a new market this year.

MCB has switched its nominated adviser and broker from Macquarie to Merchant Securities.

Download the May 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFMay2011_20.pdf

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