Davenham future in doubt as group posts £55m loss

Davenham future in doubt as group posts £55m loss


Manchester-based specialist lender, Davenham Group, has admitted that its prospects are bleak as it posted a pre-tax loss of £55.4 for the year to June 30.

The jump in impairment charges from £3.8 million in the previous year to £49.2 million has been blamed on an “unprecedented” rise in bad property loans.

Property loans currently account for more than 63% of the group’s loan book, with many of its property developer clients defaulting on loans as they find themselves unable to sell their properties amid the downturn in the market.

Now the company has hinted that it may sell or break-up the business, hiring corporate finance advisers, Hawkpoint Partners, to evaluate the options available in order to “maximise shareholder value.”

Last year Davenham took measures to streamline the business and stem impairments, which included closing sales offices in




, Liverpool and


, halting lending to property and professional clients and cutting 29% of its staff.

The group downsized its loan book by a third to £193 million in a damage-limitation exercise, but warned that it could be forced to renegotiate its banking agreements.

Chief executive, David Coates, has said: “We do not see a significant uplift in the economic environment currently, and we will continue to focus on collecting out our property book.”

He added: “Our banks continue to show support for the group.”

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