Results of AGM and Trading update
22 May 2009
MCB Finance Group plc (AIM: MCRB.L) (the "Company" or "MCB"), the consumer finance company providing flexible credit solutions to retail customers in Finland, Estonia, Latvia and Lithuania, held its annual general meeting yesterday. All resolutions put to shareholders were duly passed.
The Company takes this opportunity to provide an update on trading. At the announcement of the results for the year ended 31 December 2008 on 13 March we said it was clear economic conditions in the Baltic states had weakened during 2008 and that weaker economic conditions were expected in all our markets during 2009.
Since the time of the announcement, economic conditions in all markets in which MCB operates have continued to deteriorate materially, though the extent of this trend varies among the countries. In the Baltic states this decline has accelerated quite rapidly with Latvia seeing the sharpest decline, followed by Estonia and Lithuania. Finland, where conditions had remained relatively stable, has seen a marked deterioration in the economic outlook since the beginning of the year.
As a result of the deteriorating economic conditions, the Company's collection performance in all Baltic markets has been below the Board's expected levels. In Finland, performance remains relatively stable, though this is being monitored carefully.
It is very likely that economic conditions will remain challenging throughout this year and, as a result, the Board is taking further action to align the business to market conditions. Credit criteria will continue to be tightened and lending volumes in the most challenging markets (being Latvia and Estonia) will be further reduced. Furthermore, MCB remains focused on its repayment and collection processes and the Company will continue to maximise the efficiency of the business.
The outlook for the year is difficult to predict at this stage in the year, particularly given the current environment. In light of the weaker than expected collection performance the Company has experienced recently, and taking into account possible further deterioration of economic conditions in MCB's territories, the Board therefore expects impairment charges to rise materially during 2009 and that the outcome for 2009 will be substantially below market expectations.
The Company recognises that it is facing increasingly difficult economic conditions, however the Board believes it is taking the necessary steps to adjust the business to these economic conditions and believes that MCB should be well placed to benefit from improved conditions when they occur.
Further information:
| MCB Finance Group plc: | |
| Rami Ryhänen, Chief Executive rami@mcbfinance.com |
+372 5300 8332 |
| Henry Nilert, CFO henry@mcbfinance.com |
+358 451 370 065 www.mcbfinance.com |
| Media enquiries: | |
| Allerton Communications: | |
| Peter Curtain | +44 20 3137 2500 |
| Nominated adviser and broker: | |
| Fox-Pitt, Kelton: | |
| Marc Milmo Jonny Franklin-Adams |
+44 20 7663 6000 |