Pcf Dividends - PCF

Pcf Dividends - PCF

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Pcf Group Plc PCF London Ordinary Share GB0004189378 ORD 5P
  Price Change Price Change % Stock Price Last Trade
1.00 4.0% 26.00 10:30:02
Open Price Low Price High Price Close Price Previous Close
25.00 25.00 26.00 25.00
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Industry Sector

Pcf PCF Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

cc2014: ok, I'll put it another way. The risk weighted asset calculation as part of pillar3 requirement is going to look pretty bad. I apologise for the word destroyed. Over the top on my part. Because of this it's going to change their priorities for the next period of time and there certainly won't be spare cash around for acquisitions. I would guess the best phrase might be "regrouping" and delaying expansion plans. I'm sure in due course PCF will get to where it was going to. It's just going to take much longer as Covid got in the way.
graham1ty: If the right portfolio of loans came along, of course they would look. But PCF has done this only once before ( think that is right). Infinitely more important is concentrating on the existing business. I do think PCF remains very cheap, but we need to see the impairments in the final results in a couple of weeks to see what real impact Covid has had on their loan book. I would be very, very surprised if they made an acquisition
geraldus: PCF will be looking for an acquisition.
stav13: hTTps://www.experian.co.uk/blogs/latest-thinking/identity-and-fraud/pcf-bank/
the millipede: FWIW I have made the mistake of believing bad news is priced in too many times now. I don't think it ever is really, especially on aim. It makes sense if you think about it I guess - before disaster strikes there is always some chance it won't happen, and the share price will normally reflect that chance, even if only a bit. I think it is worse on AIM though because with small free floats a few small sellers can shift the price downwards quite a large amount. (The converse is also true - a few small buyers can sometime shift the price upwards significsntly.) Anyway, that said I think there are reasons to be cheerful. Used motor finance might become more popular if wages go down and people want to spend less on a car. Meanwhile the housing market is booming, at least round here. Increasing unemployment might well lead to a general increase in defaults but it is entirely possible still that a lot of this thinking is unnecessary catastrophising. Indeed, quite a lot of people have more disposable income because of the lockdowns and restrictions. And some firms are finding their employees willing to take pay cuts to save jobs. I think a well run, small and nimble disrupter like PCF could prosper in those conditions.
sharesoc: The PCF Stockopedia report and presentation from our recent company webinar can be found in our members area here: hTTps://www.sharesoc.org/seminar/sharesoc-webinar-with-pcf-bank-pcf-2-july-2020/ To access the presentation, you'll need to be a full member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join here: hxxps://www.sharesoc.org/membership/ Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the presentation (and presentations on 100s of other meetings). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here: hxxps://www.sharesoc.org/contact-us/
igoe104: Simon Thompson update PCF’s contrarian value proposition This morning’s first half pre-close update from Aim-traded specialist bank PCF (PCF:21p) was much as I had previewed three weeks ago when I rated the shares a bargain buy at 17p (‘Deep value buying opportunities’, 8 April 2020). Namely, Covid-19 has had a limited impact in the six months to 31 March 2020. New business originations increased by 26 per cent to £153m on the same stage a year earlier, and over 80 per cent were in prime credit grades. The £400m loan book is backed by £340m of retail deposits (mainly fixed term), around £60m of shareholder’s equity capital, £30m of wholesale funding under a revolving credit facility, and £25m of the Bank of England’s low-cost Term Funding Scheme. PCF’s common equity tier 1 ratio (CET1) of 17 per cent is well ahead of the regulator’s minimum requirement. Of course, demand for loans from PCF’s consumer and SME targeted customer base was bound to soften in the current environment, falling short by 26 per cent against growth targets for March and 65 per cent below target in April to date. Customers representing a third of the loan book by value have made requests for payment holidays and/or reduced payments, but that was to be expected as the FCA’s latest guidance to both lenders and consumers allows borrowers to request a three-month payment freeze on certain credit agreements without impairing their credit ratings. It’s only sensible that many have done so even to preserve cash until the UK's lockdown ends. However, the vast majority will not default and trash their credit records. And even when some do, PCF can take possession of the valuable collateral it has lent against (cars, motor homes, machinery, houses etc). It’s still my view that the market is expecting a far higher level of delinquencies than is likely to be the case. Indeed, Panmure 2020 pre-tax profit estimate of £10.7m already factors in £3.7m of impairment losses. Moreover, even if that provision were to surge by 70 per cent then PCF would still match its 2019 pre-tax profit of £8.1m and earnings per share of 2.8p. With the shares trading on 0.9 times book value and on a 2019 price/earnings ratio of 7.5, the market is implying profits will be wiped out completely. I beg to differ. Ahead of the half-year results in June, PCF's shares are a recovery buy.
graham1ty: Ok update. Neither very positive, nor more importantly very negative. Hints that one of the major impacts will be the newish accounting standards on impairments: driven by economic modelling, not the actual level of impairments. However, with a mainly Prime loan book ( and the conscious decision a few years ago to move more Prime) PCF appears to have cushioned itself against an economic downturn. PCF have grown so fast that three years ago, the loan book was only £122m. So loans currently coming to the end of their term ( probably three years of cars, and five years for business loans) might be of the order of say, £50m ( ie those were the new loans written in 2015-17 that are just getting paid off in full. To stand still, PCF just needs to write that amount of new business, a fraction of earlier forecasts. Ok, it would not be growth ( and the argument about £750m in 2021 or 2022 has been blown out the water.......). PCF also has £75m of unearned future contracted income ( ie the interest payments still due on all existing loans). Even if a position of no growth, PCF has significant income ( and the cost of servicing those loans is very low: interest on bank deposits). Let us see how this unfolds. We will all know more ( will we ?) about this virus by June, will have a better feel for the end of lockdown, and may have some picture of the national economic impact. Until then much is guesswork. But PCF is better prepared than most.
sev22: Just a reminder that PCF is one of Simon Thompson's 10 Bargain Shares for 2020 (write up below from three weeks ago). These are massively under-valued, despite market conditions. Aim-traded specialist bank PCF (PCF) made it into his 2018 Bargain Shares portfolio when the shares were priced at 27p, and they offer an even more attractive investment proposition now given the significant operational progress made by the company in the past two years. Annual results released in early December revealed a 55 per cent hike in the company’s lending portfolio in the 12 months to 30 September 2019, almost hitting the board’s £350m lending target 12 months ahead of schedule. Importantly, an increasing proportion of new business originations are to prime borrowers, representing almost three-quarters of all new loans made in the 12-month trading period. This has helped to diversify the loan book, which is now spread across 21,250 customers, up from 17,000 customers at the same stage in 2018. A key driver in the improvement in the quality of PCF’s loan book has been the lower cost of funding provided by its banking licence. PCF’s retail deposit base surged from £191m to £267m in the 2018-19 financial year, thus enabling PCF to recycle the low-cost funding – on average the bank’s 6,250 (4,500 in 2018) retail deposit customers earn an interest rate of 2.2 per cent on a deposit of £42,400 over a term of almost three years – into both business lending to small and medium-sized enterprises (SMEs), mainly for vehicles, plant and equipment, and consumer lending concentrated on nearly new and used carsImportantly, credit quality remains sound. Impairments remain unchanged at 0.8 per cent of receivable balances, a satisfactory level of write-downs at this point of the credit cycle after taking into account the accelerated portfolio growth rate. It’s worth noting, too, that PCF’s net interest margin (NIM) only dropped from 8.2 per cent to 7.8 per cent year on year even though there was a higher proportion of lower-margin and lower-risk prime lending in the mix. Successfully diversifying lending lines: PCF’s business finance loan portfolio has been the key driver of the growth, increasing from £121m to £178m last financial year. The fact that 71 per cent of all new business originations are from prime borrowers is reassuring, as is the move to diversify revenue streams. For instance, the autumn 2018 acquisition of Azule, a specialist funding provider to individuals and businesses in the broadcast and media industry, generates annual fee income of £1m through its hybrid brokerage and ‘own book’ business model. PCF has also dipped its toe into residential property bridging finance, making £14m of loans last financial year. In consumer finance, PCF’s core used car market has been much more resilient to the weakening of consumer demand for cars, which has primarily hit new car sales. Around 96 per cent of lending here is on nearly new or used cars and PCF avoids taking on residual risk as it doesn’t offer a personal contract plan (PCP) product. The company’s success in consumer finance – the motor finance portfolio increased from £98m to £128m in the 2018-19 financial year – is in part due to a specialisation in niche, leisure vehicles such as horseboxes and motor homes, which helped boost consumer lending by 18 per cent to £73m in the latest 12-month trading period. The portfolio has a high customer retention rate, too, as 10 per cent of consumer finance volumes are derived from existing customers, implying a higher than average level of customer satisfaction. Solid trading prospects: Chief executive Scott Maybury, who has led the transformation of PCF, confirms that new business originations remain strong, and the company continues to maintain prudent underwriting standards, adopting a cautious risk appetite and offering customers sensible terms of business. The board’s goal is to generate sustainable returns from a lending portfolio that has a wide spread of risk with a focus on having a greater proportion of prime quality customers. Though not sanguine about the economic outlook, the directors feel the company’s larger scale, agility and well-established business model provide them with confidence for the future. They certainly have reason to feel this way as September was a record month for the company and the momentum continued in October. Also, SMEs are likely to feel more confident in their future capital investment plans when Brexit uncertainty recedes and the UK’s future trading arrangements with the EU are agreed. There is a real possibility that could happen later this year, thus unleashing pent-up loan demand and in turn underpinning the board’s next target of achieving a loan portfolio of £750m and return on equity of 15 per cent by September 2022. Critically, PCF has the capital in place to fund lending growth towards that target. The company’s NAV increased by 38 per cent to £58.8m following a £10.75m equity raise last year, and PCF’s Common Equity Tier 1 Ratio (CET1) of 18 per cent is comfortably ahead of the banking regulator’s minimum requirement. The capital position has been supplemented with a new £15m Tier 2 capital facility which can be drawn as required. Double-digit earnings growth being undervalued: Not surprisingly, with impairments low and the quality of the loan book improving, PCF is seeing a step change in its profitability, driven by the operational leverage of the business as lending volumes ramp up at a faster rate than the company’s cost base. Pre-tax profits surged by 54 per cent to £8m on revenue of £22.2m (2018: £14.7m) in the 12 months to 30 September 2019 to produce a post-tax return on equity of 12.6 per cent, ahead of the company’s medium-term target of 12.5 per cent. EPS surged by 35 per cent to 2.7p to support a 33 per cent hike in the dividend to 0.4p a share (ex-dividend date 19 March 2020). Analyst Shailesh Raikundlia at house broker Panmure Gordon is pencilling in 31 per cent growth in current-year revenue and pre-tax profits to £29.2m and £10.5m, respectively, based on the loan book rising to £450m by September 2020. These forecasts assume that PCF’s administration costs increase from £12m to £15m, and net loss provisions rise from £2.2m to £3.7m, the net £4.5m rise in these costs being less than the estimated £7m increase in interest income and fees earned. This explains why pre-tax profit is forecast to rise from £8m to £10.5m. On this basis, expect 2020 EPS of 3.5p and a payout of 0.6p a share, implying the shares are being rated on a modest forward PE ratio of 9.5, and offer a prospective dividend yield of 1.8 per cent. Trading on a current-year price-to-book value (PBV) of 1.3 times, I feel that the Brexit discount embedded in PCF’s modest valuation is set to unwind in the year ahead, driven by the ongoing strong operational performance and greater clarity on the UK’s departure from the EU. Offering almost 50 cent upside to my 50p fair value of the equity – equivalent to a September 2021 PBV of 1.6 times – and on a bargain rating of 0.6, PCF’s shares are worth buying.
cc2014: Tipped by Simon Thompson IC a few minutes ago Aim-traded specialist bank PCF (PCF:36p) has delivered shareholders the bumper set of annual results I had anticipated when I included the shares, at 27p, in my 2018 Bargain Shares Portfolio. In fact, the company has overdelivered. PCF increased full-year pre-tax profits by 44 per cent to a record £5.2m, all of which was organic growth and beating house broker Panmure Gordon’s forecast by 7 per cent, to lift earnings per share (EPS) by a third to 2p and support a 58 per cent hike in the payout per share to 0.3p. Having gained a banking licence in the summer of 2017, the challenger bank ended the financial year to 30 September 2018 with retail deposits of £191m, up from £53m at the same stage of 2017, from 4,500 bank customers who receive an average interest rate of 2.1 per cent on their money. PCF’s retail deposits have an average term of 2.5 years and by offering market-leading rates boast a high retention rate in the order of 70 per cent, thus providing a reliable low-cost funding source to ramp up the bank’s lending portfolio and target higher-quality prime customers. PCF also tapped the Bank of England’s Term Funding Scheme before it closed in February, which has given it an attractive four-year line of credit at a base rate of 0.75 per cent. Other wholesale funding costs average 4.75 per cent a year and PCF ended the 12-month period with balances of £49m outstanding on them, down from £79m in 2017. Expect these wholesale credit lines to run down materially over the course of the coming year as they are replaced by cheaper retail deposits. The bank’s loan book is growing strongly, too. Receivables increases by 50 per cent to £219m in the 12-month trading period, reflecting a 75 per cent rise in new business originations to £148m, of which 70 per cent is to the prime market. Around 60 per cent of the loan portfolio now represents loans to the small- and medium-sized enterprises (SME) market, principally for asset finance, and the balance is consumer lending. Interestingly, the company has been diversifying its customer base by targeting specialist markets within consumer finance, including lending on horse boxes and motor homes, a sensible decision given that these customers put down big deposits, have a good-quality asset and borrow for longer, around seven to eight years, according to PCF’s chief executive Scott Maybury. Around a third of the £62m new business originations in the financial year were from consumer specialist markets. Importantly, the company has no exposure to Personal Contract Plans (PCPs) within its consumer motor finance business, nor lends to the subdued new car market, and is focused on lending into the far healthier used car market. The fact that the impairment charge was unchanged at 0.5 per cent of loan portfolio highlights a low level of delinquencies and underlines strict financial discipline in making lending decisions. Diversifying the product mix mitigates execution risk The post-period-end acquisition of Azule, a specialist funding provider to individuals and businesses in the broadcast and media industry looks a smart deal and one that’s immediately earnings enhancing. Initial consideration of £4.1m (split £3.3m cash and £800,000 shares) and performance-related earn-out of £1.5m equates to seven times Azure’s pre-tax profits of £800,000 on revenue of £3.1m in its last financial year. Azule has capacity to generate north of £50m-worth of annual asset finance originations with very low impairments given the nature of its lending. It’s well on its way to achieve that target as Mr Maybury says that since acquisition Azule’s "like-for-likes are very good and can do even better". Mr Maybury also sees an opportunity to enter the direct to market property bridging finance market and is looking to achieve £20m of lending to this segment in the coming year. The risk weighting of property is lower than on its current lending lines, but it should achieve net interest margins of around 8 per cent, in line with PCF’s existing loan portfolio. Moreover, by limiting loan-to-value ratios to 70 per cent and taking a first charge on the client’s property, then the bank can protect itself from defaults and impairments. The combination of originations from both of these new credit lines and ongoing strong new business originations from PCF’s business and consumer segments explains why Mr Maybury believes that his company can hit its £350m lending target one year ahead of the 2020 target date. On this basis, Panmure Gordon anticipates another step change in the profitability by pencilling in a 50 per cent hike in pre-tax profit and EPS to £8.1m and 3.1p, respectively, in the 12 months to the end of September 2019 to support a 33 per cent hike in the dividend per share to 0.4p. This means that PCF’s shares are rated on a forward price-to-earnings ratio of 12, offer a prospective dividend yield of 1.1 per cent and are priced on 1.6 times forward price-to-book value. That’s not expensive for a fast-growing challenger bank that is over-delivering and diversifying its lending lines to de-risk execution risk. It’s also a low rating for a bank that’s just reported a post-tax return on equity of 10.3 per cent and has a 12.5 per cent target, and one that also boasts a common equity tier 1 ratio of 19 per cent to support the 50 per cent-plus lending growth targeted in the coming year. PCF’s Aim-traded shares have produced a total return of 27 per cent in the 10 months since I included them in my 2018 Bargain Shares Portfolio during which time the FTSE Aim All-Share Total Return index has declined by 15 per cent in value. I expect the shares to continue their outperformance and have a 12-month target price of 50p. Buy.
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