The group’s mortgage broking firm, 1st Stop Mortgages, along with its debt management business Adcroft Hilton and its lender arm 1st Stop Financial Services will continue to trade.
Alex Mollart, joint managing director at 1st Stop Group, says the demise of the credit brokerage was 100% down to Cattles owned lender Welcome Finance pulling the plug on lending in January.
Mollart says: “1st Stop Finance made a £1.3m profit last year, but when Welcome stopped lending it was such a large part of our business we could not carry on.
“The majority of brokers have been paid their commissions, but once the administrators came in we had to stop doing business and unfortunately some commission payments are still outstanding.”
Mollart says it can sympathise with brokers because it is owed money itself.
He says: “We were Welcome’s master packager, as soon as it stopped lending we tried to salvage the broker business but were unable to and have had to make 120 of the 140 staff redundant.”
Mollart says the other businesses have separate funding and are continuing to operate well.
Cattles issued a second profit warning this morning and revealed that it has suspended three directors after accounting errors were discovered by its auditors.
Cattles chief executive David Postings has taken direct control of the firm’s main operating entity, Welcome Financial Services.
John Blake, managing director, Peter Miller, finance director, and Mick Belcher, operations director of Welcome Financial Services, have all been suspended pending the outcome of a separate inquiry which is also being conducted by Deloitte.