Trading statement
09 December 2008
General Capital Group plc (AiM: GENC) announces that, further to the trading update contained within its Interim Results announced on 26 September 2008, the Group has continued with its efforts to recover the historic Venture Finance portfolio debts. However market conditions have continued to deteriorate, negatively impacting on this recovery process. A number of corporate clients have been unable or unwilling to meet repayment dates at the end of their contract period and consequently they have gone into arrears. As a result, the Group has notified its bankers of an arrears covenant breach. Whilst not formally waiving any breach, the Group's bankers have approached the matter in a constructive manner and are working with the Group to determine the appropriate way forward with a view to maximising their recoveries from the portfolio.
In parallel with the Group continuing to pursue the long term collection of the Venture Portfolio preliminary offers have been sought and received from a number of parties interested in an outright acquisition of this portfolio and due diligence is due to commence this week.
The Group's core Commercial Asset Finance and Property Finance divisions, which have in aggregate over £25 million of advances outstanding to more than 1,000 UK SMEs, both continue to trade well and continue to write new business against quality assets and business covenants.
The cost cutting measures implemented in the summer of 2008 and the re-organisation of the finance department is leading to further operational efficiencies which, the Directors are confident, will benefit the Group in the future.
Further announcements will be made as and when required.
For further information:
| General Capital Group Plc |
|
| Steve Hartley, Chief Executive | Tel: +44 (0) 1603 610610 |
| steve.hartley@generalcapital.co.uk | www.generalcapital.co.uk |
| Collins Stewart Europe Ltd | |
| Mark Connelly / Adam Cowen | Tel: +44 (0) 20 7523 8350 |
| www.collins-stewart.com |
Media Enquiries:
| Abchurch Communications | |
| Heather Salmond / George Parker | Tel: +44 (0) 20 7398 7700 |
| george.parker@abchurch-group.com | www.abchurch-group.com |