Pcf Share Discussion Threads

[graham1ty] 27/4/2020 14:05

Scott pretty upbeat on Proactive.

A collateral backed prime portfolio with average small average balances and a wide spread of risk is as good as you can get in a crisis like this

[igoe104] 27/4/2020 13:17

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.

[igoe104] 27/4/2020 13:15

Interview with Scott Maybury.

[graham1ty] 27/4/2020 12:16

Simon Thompson retips. Price rises

[igoe104] 27/4/2020 11:24

eentweedrie what do you know about shares anyway ? I see your holding hurricane energy continue to crash. 75% YTD

[eentweedrie] 27/4/2020 11:12

Back to 10p soon

[this_is_me] 27/4/2020 07:51

New business down 65% in April. Large increase in customers having difficulty. This will quickly become a serious situation if house arrest doesn't end soon.

[graham1ty] 27/4/2020 07:33

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.

[brownie69] 20/4/2020 13:26

Closed period always covers results. It does not cover all RNS's, far from it. However if its a material RNS that is expected to affect the share price any director would be very foolish to trade.

[bori5] 10/4/2020 00:18

guys can someone please advise here.

for director buys: does the close period only apply to 60days before Half and FY results.

or, as some pi's say, does it also apply to 60 days before an RNS?

Do you see what I am saying here?

[123davidgwilym] 09/4/2020 20:00

I’m pleased the share price is recovering. It’s going to be tough for every bank, but PCFG is well placed to weather the storm (forgive the cliche) as it has several times in the past.

[igoe104] 09/4/2020 19:28

The Company was informed on 9 April 2020 that Marian Martin, a director, completed the purchase of 22,532 ordinary shares of 5 pence each in the Company ("Ordinary Shares") at a price of 22.19 pence.



Following this transaction, Ms Martin's beneficial ownership is 37,303 Ordinary Shares, representing approximately 0.01 per cent of PCF's Ordinary Share capita

[igoe104] 07/4/2020 08:29

positive update by the company, deserves a decent jump in the s/p. Divi being paid also.

[1 nhs] 03/4/2020 08:17

No matter how good the company the public are not going to pay back debts.

It has started worldwide

It’s over

[graham1ty] 03/4/2020 08:09

Are u short bricky ? PCF has moved as far towards the prime end as it can, and is a well run, prudently run, business. Of course this crisis will hurt, but it is hardly going bust.....

[bricktycoon] 03/4/2020 07:46

This is bust fd walking the man who crunches the numbers new what was coming what happens to a business that is dependent on monthly recurring revenues for its own cash flow and all its debtors go on 3 month payment holiday and maybe at the end still can't pay this is going to zero very quickly

[123davidgwilym] 02/4/2020 21:25

What nonsense.
Like every bank their defaults will increase. But their quality control is good, much better than it was some years ago, so they will do better than most banks.
I don’t know why David Bull left, but am pretty sure it wasn’t connected with business quality or integrity issues.
The executive directors are of undoubted integrity.

[bricktycoon] 02/4/2020 20:54

This is doomed fd walking was the first sign this debt dog is going down the pan zero equity for shareholders with fraudulentcy and complacency and greed taking the board over in the glory days this is about to fold they banked on the credit bubble built from the carnage of 2008 silly guys 0 p next week when the market gets to here that when all your loans go on 3 month holiday your bust

[graham1ty] 30/3/2020 16:24

This is so depressing !

How about some Director buying !! They bought c165,000 at 30p in the Placing.

Must be attractive at 15p ........

[cc2014] 19/3/2020 20:05

Seems to kick off after interest rates are cut but can't understand why

[graham1ty] 19/3/2020 18:58

Late unexplained jump ?

[typo56] 17/3/2020 08:38

Motor finance perhaps not a sector you'd wish to be exposed to right now?

[the big fella] 16/3/2020 16:11

Trouble is with the global measures to combat CV in place it will almost certainly bring on a global economic depression. Banking will not be immune and a few of the challenger banks may well go under. It will be a tough time being a bank for a while.
Given that 98% of those that catch CV will only have mild effects one wonders when we look back at the economic disaster caused by the measures put in place, which will impact everyone, was it all worth it.