Adverse market conditions continue to move against bombed-out loanbroking venture Loanmakers, formerly the beleaguered Individual Voluntary Arrangement (IVA) business known as Debtmatters.

Due to the ongoing woes in the sector, Debtmatters ditched its IVA operations (which suffered a sales reduction from £18.1m to £6.9m last year) for £7.2m in March of this year, changed its name and switched its focus to what was then the flourishing loanbroking business.

However, a recent update highlighted further troubles, with CEO Ges Ratcliffe flagging up the fact Barclays’ FirstPlus, the main secured loans provider to the company, had ceased accepting new business. In response, Loanmakers is looking to source extra capacity from other providers as well as cut costs further. As for the loanbroking business, this performed well in the half to September and even enjoyed a record November, but it has since suffered a trading downturn due to the tighter lending conditions arising from the credit crunch.

Given the recent restructuring, Ratcliffe insists that once conditions improve, ‘we will have the infrastructure and capabilities in place to capitalise’. He still sees good growth from the business in a consolidating market long term. For now, however, given market conditions and the fact the group swung from pre-tax profits of £7.8m to losses of £8.4m during the year to March, the shares remain high risk and should be avoided.

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