MCB Finance Group Plc (MCRB.L), a consumer finance company, reported Friday a return to profit in fiscal 2008, as revenues surged 230% reflecting an increase in principal lent.
Profit before tax for the year was EUR 209 thousand, compared to a pre-tax loss of EUR 3.08 million in the previous year. Proforma pre-tax profit for the year was EUR 0.48 million, in comparison with a pre-tax loss of EUR 2.62 million a year ago. The proforma figures exclude non-cash reserves arising on employee share options granted and certain extraordinary expenses.
Profit attributable to the equity holders was EUR 127 thousand or EUR 0.0074 per share, compared to a loss of EUR 3.08 million or EUR 0.2200 in the prior year. Proforma net profit for the year was EUR 0.40 million, in comparison with a net loss of EUR 2.62 million last year.
Revenues for the year increased to EUR 13.05 million from EUR 3.95 million in the earlier year, in line with company's expectations. Principal lent for the year rose to EUR 56 million from EUR 24 million last year. The rise in lending volumes compared to 2007 reflects a large increase in applications during the period, the company noted.
Direct operating expenses, including provisions and variable costs related to the company's lending operations, were EUR 6.07 million, up from EUR 2.31 million in the prior year. Administrative expenses increased to EUR 5.5 million from EUR 4.13 million last year. Net finance costs were EUR 0.98 million, larger than EUR 0.13 million in the previous year.
The company's credit loss provisioning for the year amounted to EUR 4.03 million, or 31% of revenue, compared to EUR 1.38 million or 35% of revenue in the year 2007.
MCB noted that economic conditions in Finland were more stable last year, even though the company expects weaker economic conditions in all markets during 2009.
"The worsening economic environment may lead to higher impairment levels going forward, although we expect the Company to adapt its lending criteria to the economic conditions and continue the good progress made during 2008," said Bertil Rydevik, chairman.
MCRB last traded at 135 pence on the London Stock Exchange.
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