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PCF Pcf Group Plc

0.00 (0.00%)
21 Jun 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Pcf Group Plc LSE:PCF London Ordinary Share GB0004189378 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.95 0.60 1.30 - 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Pcf Share Discussion Threads

Showing 4876 to 4898 of 5625 messages
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According to the RNS of 9th December 2020 Garry Stran was originally hired as COO designate in July 2020.
Why is he still Interim Chief Executive ? An acknowledgement he is not up to it ? If he is the one to lead the team ( in the Conclusion it reads "I am proud to be leading the PCF team towards a brighter future" and above that "our remediation plan....will take a further 18-24 months".

Your team ? Not yet mate.....and the RNS refers to "Strengthen the....Change functions". Was that not his role ?

Next job, which I have not done as it is Christmas, is compare the recent RNS with the Dec 2020 RNS. What has been restated ? But also check what has been restated for 2018 and 2019. We were told these were the years of regulatory breaches, so presumably restated. Yet from two weeks ago RNS you would not know that. There is a tiny asterisk on 2019 p&l that refers to impairments, but it does not say anywhere in big bold letters that they have been restated. And there is no such asterisk on the balance how has that not been restated if the P&l has ?

I've not had the time or energy to do all the comparative. Next week will try to summarise what has actually changed......happy new year.....

Graham - totally! Just remember what Gary Stran’s role was before his interim appointment ‘Head Of Transformation’; was it not? So what exactly was this project of ‘transformation’ all supposedly about and what exactly was he doing in the six month run up to suspension? Was it the customer experience, On-line experience, expansion, product development, branding, diversification - No! Could this whole scennario be what the transformation has been leading up to insofar as a new board, a new auditor, a new finance team, new chair, new culture, new regime - new governance all bought about by design and not default, with incompetence and blame being the catalyst, which let’s face it, is only what we have only really heard about. The question is who ultimately orchestrated it?
One of my fears (and hopes) is that it never was a bad as suggested. They got a banking license, with significant scrutiny. David Bull was (we thought) highly regarded and experienced.

There is a possibility (careful I do not libel anyone) that the new CEO and FD are not the right people to take this forward. It is possible that the new broom has created many of the problems themselves? I can imagine new people wanting to impose "their way" on PCF, and changing everything, even if it did not need changing. We all know that accounting rules can be interpreted many ways, and a new auditor, or FD, could insist on a completely different approach, even if the old approach was not fundamentally flawed. Creating a whole disaster zone, when actually, a slight tightening up of the original system would have been sufficient.

We all know CEOs/FDs who like to flex their muscles, show off, justify their salaries, enjoy crying wolf, and want to come out of a process as heroes for fixing something......that may not have been fundamentally broken.

And if those very people are out of their depth, pedantic, slow or incompetent, even the process of change can take months and months, and not necessarily improve matters. It is tempting to think that a super confident and competent team could have sorted this out months and months ago......I wonder if Scott, Somers, etc are not shouting "what have you done to our business ?".

My point? Is there a chance that the significant problem lies with the new team, not the old ? What reassurance do we have that the new CEO and FD are "best in class"? Their Interim/Board status took months to resolve......are they the ones we want to take this forward ? We just do not know. Is there a possibility we have had a period of mind boggling incompetence, now have new systems we never fundamentally needed, and are led by the wrong people?

Just Sunday morning speculation ......and none of us know the answer......

hippo: around 6 is the norm.

Guessing: That would have cost somewhere in the region of £150k to £200k.

Forward audit plans are agreed annually with the Audit Committee.

Not all aspects of the business are audited every year. Most should not need it.

Financial Controls and Regulatory Reporting were audited by GT in 2019 with, it seems, no significant issues unearthed by them. It is to be expected, given their experience, that GT would have known which information is required for such an audit. Were they given it all? Was it accurate? If not, why?

The full annual report for 2020 now refers to errors and mis-statements in reporting between Dec 18 and June 19. Why were these not picked up by GT, I wonder?

Regulatory reporting should be a piece of cake with the right software and a couple of bodies familiar with reporting requirements and procedures. It should not have needed to be audited again for a while.

We have not been informed which audits were undertaken in 2020.

The spotlight remains firmly on the Audit Committee and GT, as the IA.

SOMERS ought to be asking for some important disclosures.

I didnt know whether to laugh or cry when i read the paragraph about the Internal Audit Service!! Are only 6 internal audits in the year appropriate for a company of this size and nature?
Are those Audit opinions a little dated now?. I couldnt see where it said whether or not the controls at the heart of the problems were audited or even included in the internal audit plan to be covered in futute years because they were deemed to be of lower risk!!! Did this years Turkey have more than one Parson's Nose?

I didnt know whether to laugh or cry when i read the paragraph about the Internal Audit Service!! Are only 6 internal audits in the year appropriate for a company of this size and nature?
Are those Audit opinions a little dated now?. I couldnt see where it said whether or not the controls at the heart of the problems were audited or even included in the internal audit plan to be covered in futute years because they were deemed to be of lower risk!!! Did this years Turkey have more than one Parson's Nose?

i don't know about the Parson's Nose but the 2020 annual report was surely a Curate's Egg. The numbers, apart from the impairments, seemed generally good with operating income up 15% to 26.7m, PBT (excluding impairments) up slightly to 11.4m, very significant growth in the net loan book to 427m from 339m (including 272m of new business versus 276m in 2019). Future strategy is promising with the CEO stating that once our planned remedial actions have been completed we will be well placed to return to a strategy of controlled and prudent growth. The bad were of course the impairments and the disclosure predicted by Dandi that the company would need to raise capital. Also disturbing to note that funding is not truly diversified: the vast bulk of funding 300m+ comes from the retail market with the balance in the form of Term Funding from the BofE. There is a 25m facility with Nat West but no other bank financing to speak of at the moment. The ugly is the disclaimer of audit opinion by EY. the implications of which I am simply not qualified to explore.

It has now become relatively clear that the operational capability was not in place to support the toll taken on the resources of the business by the combined effect of rapid growth and conversion to a bank with the highly onerous regulation that goes with it. Not an unprecedented phenomenon.

The key to the group's survival and subsequent prosperity obviously depends on the willingness of Somers to inject more capital into the business. Why would they not? It is an excellent business which tried to run before it could walk. We were all assuming that since May 2021 Somers has been fully aware of what is going on and I am inclined to assume (albeit without evidence) that the expressions of confidence in the Annual Report reflect positive vibes from Somers. I have in mind the statement in the Stakeholder Engagement Report that the Board are confident that our proven business model will deliver once again an attractive return on equity in the medium to long term and the statment that I cannot immediately locate that once remediation is complete PCF will be unrecognisable.

It remains my view that the biggest concern for the minority shareholders is that Somers will try to take us out on the cheap. Nothing to suggest that they will but it is clearly a possibility against which we must be on guard.

I have just seen that Dandi has posted. I have not yet read her post - wanted to get this out first.

hopes: your 3733. My tuppence worth - we have a snap shot of figures that are now 15 months out of date. They and the narrative surrounding them pretty much confirm the speculation on this board. The 03/21 interims if/when the Board get around to publishing them won’t add much, if anything, more.

We have affirmation of a huge failure of governance. Many of us invested because we liked the narrative as espoused by Maybury and Murray. The blame for the situation we are now in should start with them IMV. We then have regulatory and governance failure by the Board. They took too much on trust. Why wouldn’t they? Maybury and Murray built the business. EY were external audit. GT were internal audit. Both big names. Moreover, as per a previous post, GT had undertaken an internal audit of regulatory reporting in 2019 and found it okay.

This is not to exonerate Franklin and the Board, however. They should have questioned more than they did.

All that said, and to try to respond to the latter part of your post…

It seems to me that every effort is now being made to stabilise and re-establish the business in order that some of the bad things that could happen, will not. In particular, the lifting of the suspension. Unfortunately, it appears that it is no expense spared which will hit the bottom line both immediately and ongoing.

The one surprise to me and, I think, to others, is the time all this is taking. Far too long, IMV.

Finally to SOMERS, who must be as ticked off by this as the rest of us. I wouldn’t be surprised if they aren’t taking legal advice, especially as regards the role played by GT. Outsourced Internal Audit by the likes of GT is not cheap. All shareholders deserve better.

We should all ready ourselves for what will more than likely be a relatively significant capital raising. This is required to bolster the balance sheet for the associated losses and costs but also to enable economies of scale. The ongoing costs will be significant which require an increase in business to pay for them and more capital to enable this. Yes, it will take at least two years to show real progress in what is likely to be less certain market conditions.

We all will face a loss, I think. How big? - anyone’s guess. But we will have to decide whether or not to subscribe to the new business plan. I look forward to reading the prospectus in due course. January should be an interesting month. Sorry to be Eeyore’ish.

Millaree: although Marian Martin did not cover herself in glory I would want to know whether the outsourced internal auditors Grant Thornton did their job before passing judgment. And what was the Committee being told by the two finance directors prior to Richardson?
Graham: I don’t think you are being cynical at all. I think the conclusion is inescapable.
Marian was on the Audit Committee.......

She goes, by Chair Christine, does not.....

Also, shareholders must call up and get their accounts. I know HL does not send on accounts, even if you tick every box. Unless it is a "corporate action", accounts just do not get to shareholders these days, lost in the bottomless pit of nominee holdings.

Call up, get the accounts, and get a letter fromm yr nominee allowing you to attend and vote

Graham: I had the same problem. It’s in the second RNS
On a quick, read again of the statement, I cannot refind the date of the EGM. Something like 4 Feb. This will be a crunch meeting, and Covid willing, a chance to eyeball the Board. The notice of meeting will (apparently) be sent with the Annual Report
This was a ‘Friday news dump’ in spades. On the face of it the absence of an audit opinion from EY is very troubling. Does it mean that PCF remains in breach of AIM rules - hence the rider that the LSE has full discretion to give dispensation from the rules. And what (if any) are the implications for the banking license? Way out of my depth. Anyone have any thoughts.
The question I'm asking myself this morning is what information is it that PCF cannot provide as evidence of the figures in the accounts?

It only really does one thing. Takes money off savers and lends it to borrowers.

So, are we saying PCF can't substantiate how much money is has lent to who? because the ledger which looks after that is a mess?

Which might if I'm stretching explain why the annual report suggests it will take another 12-24 months to sort out, because again if I'm stretchig more recent loan agreements are now being done correctly and poor quality records will over time become less and less.

My mind also turns to the business viability. We know it's not been taking savers deposits at all since the end of September and in the 3 months before that the rates offered were generally so poor that it's now 6 months since they've had any cash in from this. We also know from page 17 in the annual report that the £60m it's borrowed from the Treasury it's now at risk of having to repay early because the collateral provided against the loan is becoming of the wrong type due to Covid.

So, the business is shrinking every month as that's the best way to deal with the regulatory capital position. As the business shrinks though, economies of scale are lost, overheads have to be cut and that costs money.

Leading to a recapitilisation requirement of course, which can only come from Somers as no-one else would be interested with such a dominant shareholder. Somers have a choice. Put more money with the potential to get it back or just let it drift.

Hi Topvest

It’s not that sort of bank though is it? A lot of depositors would have entered into long term fixed rate bonds (for example) when PCF were offering market leading rates back in March 2021 for 5-7 year products. The media have been remarkably, extremely, humongously quiet on the PCF front, even with enough ammunition to be quite damaging - but they haven’t. PCF have kept their banking licence throughout, and up until the end of September were still accepting deposits. This is just a small, specialised, not so well run asset backed challenger bank that needs a slapped bottom and boy have they had one! Let’s also face it, had this not been suspended, it would have been shorted down to piddly pence anyway like everything else in AIM. GLA everyone for 2022.

One other concern is going concern where multiple uncertainties are raised in note 1.2 , but not in the audit opinion. Its an absolutely rubbish audit opinion from EY as it really doesn't tell the story. Surely it should reference the material uncertainties on going concern rather than just disclaiming after clocking up £860k (with no doubt more to come)!? They will no doubt point to Auditing Standards and the fact that they are disclaiming, but any good audit opinion would reference going concern in this situation.

Actually, the risks are higher given the need for additional funding. There could well be a run on the bank (i.e. the retail deposits) given its situation and that would be game over! It would be interested to know what the retail deposits number is today. Surely, maturing cash deposits are going to exit if there is any adverse media coverage?

Sorry, yes, stupid of me. I did know that
Dandi: you called. I am following with interest and will post as soon as I have managed to collect my thoughts. You were certainly right about capital constraints.
Hi Graham. I've posted several times before but I tend to refer to it as UTL as that's the tickerUIL is an IT. 40% of the fund is in SomersAll a tortuous web with common pools of directors with ICM
I have had a little looksee at the Report.
We all take different things of interest to us from it - and there are lots of little nuggets of interesting information.
I took a particular interest in Internal Audit where IMV there has been a massive failure to whistle blow. Throughout these shenanigans I had wondered why IA had not picked up on any of this.

In the Audit and Risk Committee Report, p40, it reads:

""The Board has outsourced its internal audit function to Grant Thornton. The ARC/BAC is responsible for agreeing and overseeing the internal audit plan. Grant Thornton completed six internal audits during the year and their overall assessment was that, based on their internal audit work over the twelve months to 18 November 2020, one report was rated Needs Improvement, one report was rated Some Improvement Required, two reports were rated Satisfactory and two reports were Unrated, in relation to the work performed, Grant Thornton stated that, ’the governance and risk and control framework is operating effectively to support PCF Group in adhering to its agreed risk appetite’. This view was based on the work performed in the preceding twelve months"".

Consequently, I thought I would look at the same Report for 2019. On page 30, it reads:

""Internal audit - The audit reports completed by Grant Thornton this year covered Senior Manager and Certification Review (‘SMCR’), IT General Controls, Disaster Recovery Planning and Crisis Management, Third Party Management, Financial
Controls and Regulatory Reporting. Management has already implemented a number of the recommendations made, with timely plans in place to address those remaining"".

There would have been follow-up by GT to ensure their recommendations were complied with. The RNS of 28/06 refers to Errors and Omissions in Regulatory Reporting between December 2018 and June 2019.

So, not so very long ago, GT as Internal Auditors reviewed Financial Controls and Regulatory Reporting and did not observe any of the issues that have now seen the light of day. Looks to me that the IA function cannot be trusted and needs to be overhauled.

A second aspect of interest to me was capital and funding so I went looking. On page 105, there is mention of a 10 years loan facility from the British Business Bank at 8%!! fixed. Why pay 8% when there were cheaper funds available? - because it meets the conditions for Tier 2 capital. So, to a degree, capital has been reinforced by this facility.

There is mention of other bank loans in Note 21.

Note 22 shows a big jump in retail deposits from £267m to £342m for the period. It will be interesting to see the figures for 2021.

Overall, it can be concluded that Franklin and his Board were not up to the task of running a bank. We are all having to pay a big price for their shortcomings.

Shame on those involved with the mis-reporting to the Regulators. I hope that if the Bank is fined, the individuals will be fined personally too and barred from future office.

I also tend to agree with the view that this could have been handled much, much better and discretely in-house. It has been an exercise in bottom covering at enormous cost to shareholders with more costs to come.

Stand by for a significant rights issue and it is to be hoped that SOMERS and the other large shareholders support it.

and finally, hopes, where are you? Springing eternally?

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