(€32.7 million) in the six months to the end of December 2008, the
company announced. It is understood the loss is largely due to a
£31 million impairment charge from its property finance
a new business strategy which will focus on its asset finance and
trade finance divisions.
Davenham has stopped writing new small ticket leasing deals,
however, due to the segment’s higher rate of default; and will
instead focus on larger asset-backed transactions.
“The group’s ongoing core asset finance and trade finance
divisions are expected to be able to steer a sensible but cautious
route through the remainder of the current financial year,” said
David Coates, the company’s chief executive.
Earlier this week, Davenham also announced it had successfully
refinanced £215 million of its banking facilities, arranged by the
Royal Bank of Scotland. Under the new agreement, Davenham’s cost of
funding will be 3 percent over LIBOR, which will be reflected in
the lender’s pricing with new clients.
To reflect its smaller scale, the company also reduced headcount
by 31 percent and closed sales offices in Scotland, Liverpool and
“The board’s decisive action in changing Davenham’s strategy has
enabled the group to reduce its credit risks, operating costs and
financial leverage, thereby delivering the group to a position
where it has successfully gained the support of its bankers,” said