Euro Sales Finance, the invoice and factoring group that issued a profit warning back in April, has come into play after receiving indicative offers in excess of its net book value. "We must be looking at a price that's at least as much as the NAV, and that's 500p," said sector analyst Justin Bates, of Numis Securities. News of the talks has already helped boost the shares by roughly 30 per cent to 478p. But that's well below last autumn's share price high of 1,570p.
Euro Sales Finance's woes began after robust expansion in France and Germany helped double the company's pre-tax profits. But that heady pace also strained its funding arrangements, leaving its bankers nervous about financing further expansion. The banks demanded a halt to new business and a focus on settling existing accounts. While Euro Sales has reopened for business in the UK, provisions against the German book have been raised by GBP1m. The pace of growth leaves the City worried about credit quality...
