London Forfaiting Co - Trading Statement

RNS No 4948m
LONDON FORFAITING COMPANY PLC
22nd January 1999


                        LONDON FORFAITING COMPANY PLC  
 
As a result of the year-end valuation of its portfolio of assets which the
Company has been conducting over the past two weeks and in the light in
particular of recent events in certain emerging market economies, the Company
expects the outcome for the year ended 31 December, 1998 to be a loss before
tax of some #57 million.

The year-end audit is currently taking place and the Company expects to issue
the preliminary statement of its results in the second week of February.

The Company continued to operate profitably throughout the year and operating
profits for 1998 amounted to approximately #23 million.  The overall loss is
attributable to downward valuations of its asset portfolio of some #80
million. Approximately, 60% of this is attributable to the Cyprus portfolio
which is principally syndicated loans and 40% to the London portfolio which is
principally forfaiting transactions. A large proportion of the revaluations
relates to our Russian assets; the balance covers a wide range of emerging
market assets.

The Company has progressively reduced the overall size of its portfolio of
assets over the last half year.  At the year-end the portfolio stood at
approximately #465 million (compared with #625 million in June 1998 and #608
million in December 1997). This takes into account the effects of the
revaluation exercise on the portfolio as well as the impact of new purchases,
sales and collections. Turnover, that is sales and collections, in the second
half of the year of #645 million remained on average at more than #100 million
per month.

The Company continues to comply with all the covenants which have been given
to its bankers. Year-end cash balances exceeded #40 million and some committed
syndicated and bilateral facilities remained undrawn. Shareholders' funds
after the loss are approximately #113 million or #1.08 per share.

In view of the portfolio revaluations and in order to conserve capital for the
development of the Company's operations, the Directors have decided not to
recommend a final dividend in respect of the year ended 31 December, 1998. A
dividend of 6 pence per share was paid at the interim stage. 

Trading this year has begun reasonably satisfactorily. Overheads have already
been the subject of a measured programme of containment. World trade tends to
grow even when the world economy is slowing. Margins over cost of funds are
higher than ever before and this can present highly profitable trading 
patterns. 

In Asia the opportunities for forfaiting are encouraging and the planned new
emphasis of the Hong Kong and Bangkok offices on forfaiting will mean that the
Company is well positioned to take advantage of this. 

Overall, there are improving prospects in forfaiting, where the Company's
position as world leader remains intact. The Directors believe that the skills
within the Company will ensure that operations develop at a satisfactory level
during 1999.

Any enquiries should be directed to:

          Jack A.G. Wilson     -     Chairman
          Stathis Papoutes     -     Chief Executive

          Tel No:   0171 481 3410 

END

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