THE fall-out of the withdrawal of First Plus from the secured home loans market continued today, as shares in troubled Bolton-based Loanmakers slumped to an all-time low.
Yesterday north west based price comparison website m oneysupermarket.com lost more than a third of its value as First Plus, a subsidiary of banking giant Barclays and the largest provider of secured loans, closed its doors to new business from August 9.
Loanmakers, already under pressure because of the decline in the IVA market and tough market conditions, said the First Plus move would have `an adverse' impact on its business.Shares collapsed 52 per cent, or 1.38p, to 1.25p on the news.A brief statement said: "First Plus is the leading provider of secured loans to Loanmakers, and its withdrawal from the market will adversely affect the company's business.
"Immediate review"
"The board will be undertaking an immediate review of the business to see how it can alleviate the impact of the announcement. This will encompass sourcing additional capacity from other providers, as well as a review of the current cost structure."After the heavy falls, money supermarket.com saw its shares recover nearly 10 per cent to 65p. The stock was 170p when the company floated last July. The First Plus situation will leave its sales down by £7m and underlying profits up to £5m lower.
Moneysupermarket, led by Simon Nixon and based at Ewloe, near Chester, earns fees when people take out products through its website.It said it would try to offset the loss of First Plus through tie-ups with other providers and by reviewing costs and advertising spending. First Plus's withdrawal will leave just seven players in the market, down from 18 last year.
First Plus, known for its adverts fronted by Carol Vorderman, said it would no longer be writing new business from August 9 due to a fall in demand.Home loans enable people to borrow money against the value of their property without increasing the size of their mortgage, although they are typically charged higher rates.
Source:http://www.manchestereveningnews.co.uk |
