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PCF Pcf Group Plc

0.00 (0.00%)
14 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 4901 to 4925 of 5625 messages
Chat Pages: Latest  201  200  199  198  197  196  195  194  193  192  191  190  Older
Topvest: so Somers have used the suspension price.
Somers valuation at Q4 was $37.5M for their c65%:

Somers’ total assets decreased over the quarter to $715.4 million (September 30, 2020: $508.6
million) due to the valuation decreases and currency movements outlined above. The
investment portfolio was $660.7 million as at September 30, 2021 (September 30, 2020:
$500.9 million) with equity investments ($652.0 million) accounting for 98.7% of this total. The
remaining portfolio investments consisted of other financial investments. Total assets included
a loan of $52.8 million to Provident Holdings relating to the sale of BCB. Within investments,
Resimac at $376.3 million, Waverton at $117.2 million, and PCF at $37.5 million together
represent 80.4% of total investments. Somers’ net asset value per share ended the quarter at
$27.70 (September 30, 2020: $19.78).

The 2021 and 2022 accounts will also be qualified, so the issues will be around for a long while yet. The 2021 audit opinion is likely to include a disclaimer on the results for the year and a qualification on the closing balance sheet on the grounds of a lack of comparability versus the 2020 numbers which are effectively unaudited. The 2022 accounts will also be qualified.

The best case scenario for the 2021 audit in all likelihood is that the auditors get comfortable with the Sep 2021 balance sheet only.

The new auditors will not be able to sign off on the 2021 results (i.e. the income statement) unless they can get comfortable with the Sep 2020 opening balance sheet.

I am not a banking expert and so I am not sure what this means in relation to their ability to lend, take deposits and raise finance. However, it all looks a bit of a disaster. Maybe they can just sell their business (not the company) to another banking business to side-step the obvious issues? Whether there are any buyers is another question. I can't see any upside for any party other than Somers.

Presumably it is not clear whether the manual adjustment was justified/justifiable or not, stating it unjustifiable would involve accusing a named individual and start all manner of legal processes? Going further and stating it was fraud would require a high degree of proof, which presumably does not exist otherwise the police etc would be involved. So all we have is a manual adjustment, which as they say can be an indicator of fraud but is not necessarily, and in this case presumably not. I would imagine that it was a debatable entry and someone decided (wrongly) to override the system. But the accountants don't want to rule out fraud for liability purposes. So all in all its a fairly valueless report.
I see it like this.

The auditors have said in their report their are indicators of fraud. The Board decided in July not to provide further information to evidence whether fraud occurred or not. Without the evidence how do they assure themselves never mind the auditors. It's bizarre. This is a bank we are discussing.

Thanks Graham. The accounts seem to list all manner of things they wish to judge the accounts by, but say very little.............

As to 'fraud' it says......"The independent forensic investigation identified
certain manual adjustments made by the Group for internal management, financial and regulatory reporting purposes. We concluded that certain of these matters were indicators of fraud.".............. Which is not a finding of fraud - if that means theft - we know that no money left the company. Its somebody trying bodge the accounts for one reason or another. I remain hopeful that the wider problem is all a lawyer/accountant created issue, but the longer it goes on its creates more problems.

Graham: to describe manual alteration of accounting records to secure a particular objective as indicia of fraud is to all intents and purposes a tautology. We have known this since June and it is not being suggested that the fraud has been material..
CC, I started going through the accounts, and, in the detail, there are 101 red flags. I did not print it off, to save my little printer (PS, could someone on here alert us when they see an actual hard copy).

Of the detail, it was unclear whether it is driven by backside covering lawyers, throwing absolutely everything into disclosure, or an attempt to blind us with the sheer complexity of the disclosures. Taken individually, some of the disclosures are absolutely awful (George, it does say fraud.....), yet in the covering statement from the Company (the RNS) it does not mention fraud.

Modern Accounts with 50 pages on Risks, 50 pages on Governance, 50 pages on ESG, etc etc, do nothing for shareholder protection and we end up with a document so unwieldy that it is next to useless and it is impossible to separate the red flags from unnecessary scare mongering. The prime example: they have produced a massive document, effectively 16 months out of date, and it still does not address: what value is there left for shareholders ? Fundamental questions such as: are you in rundown ? Has the PRA limited your activities ? Do you need more capital ? These all remain unanswered........quite an achievement after producing a 122 page document....

CC: I agree with the broad point made in your 3763 regarding shrinkage.
However, IMV there is no point in getting exercised now about accounts that are over 15 months old - although the content may be worth a reference against 2021's figures, when available.
By the by, the 2020 accounts are still not showing as filed at Companies House.
Records at Companies House show that PCF's accounts are normally filed by the following Jan/Feb.
Issuing 2021 accounts must be vital part of any next step.
Suspect that we will be hit with the 2021 accounts and a prospectus of some sort simultaneously, hopefully later this month.
Wouldn't be surprised if the AGM is postponed, though.
SOMERS have a big role to play whatever.

I don't think we know very much:
1. We don't know (unless I missed it) that the PRA is investigating or has imposed restrictions on lending - that might be inferred but would that not have to be disclosed.
2. We don't know there is fraud, in fact they said no money has left the company. Misstatements on accounts but not 'fraud' as I would understand it.
3. We don't know they are running down their lending due to a lack of deposits. They may have had more than they could cope with? It may be a capital ratios issue on the type of funding?
4. We don't know they need more capital - that is speculation, they were meeting their ratios in the admittedly old accounts.
We do know they are not good at communicating, but hopefully that is because there is little to communicate and they want to get it all done and move on? Admittedly that involves a lot of hope....

Agreed Hope. It's a strange world but I agree the accounts are audited.

I took another look at the Independent Auditor's Report on page 65 onwards. For me also this is the first time I've ever seen an audit report with no opinion. I'm struggling a bit with the whole concept tbh. Perhaps what I struggle with most is that it appears the audit opinion given it's seriousness is not promoted to page 1 one of the annual report.

I've read it several times and there are a few things I've drawn from it below.
1. The auditors say it was a result of their enquiries which led the FD to identify errors and mistatements.
2. The independent forensic investigation identified manual adjustments for internal, financial and regulatory reporting purposes. The auditors see these as indicators of fraud.
3. The auditors inform us that that Board in July 2021 decided only to provide information to provide a disclaimer. I'm really struggling with this one. The market was not informed and this took 5 months to do. That seems a very long time.
4. The auditors were unable to determine whether certain disclosures around directors remuneration were not made. I am actually banging my head against the table on this one. To me this means the whole Board should go apart from the two new appointments. The fact they haven't resigned suggests to me Somers will vote them back in.

Edit: This is a bit flippant but the only way you guys are ever going to get fair treatment over this whole mess by removing the whole Board apart from Caroline Richardson and Garry Stran. I do not know if that is possible as Somers hold more than 50%.

Under AIM rules PCF must submit audited financial statements for y/e sept 2021 by end May 2022 - six months plus 2 month Covid extension.
CC: not being pedantic because it is important. The accounts have been audited but the auditors have issued a disclaimer. These are still audited accounts. I am no accountant and have not come across this situation before so may be wrong but do not think these are unaudited accounts.
Happy New Year to you all.

Some great posts recently.

My view, much of which I have said before. The directors have been constrained from lending by the PRA for some time, albeit no official enforcement action has taken place. PCF is a regulated bank which has failed to file a set of audited accounts on time and everything flows from there. How for example is the PRA to make decisions on PCF's capital ratios if PCF cannot provide sufficient evidence to the auditors to get them signed off as a going concern?

Every month for the last three months, savers fixed rate bonds are maturing and their cash is being returned to them. Indeed the rates were so low before September that it's been happenning for many months before that. In addition PCF are locked out of the wholesale market and the accounts show that the BOE may be requiring some of it's money back early as PCF may not be able to provide sufficient collateral to support the BOE loan.

Effectively PCF is being slowly wound up and I believe this will continue until there is audited set of figures for Sept 2021. So, it's a race against time. Every month that PCF is constrained from lending, PCF is losing gross margin to support the overheads and underlying profit becomes pressurised.

Graham: rereading your post 7349 the regulatory breaches did not involve any adjustments to the accounts. One was temporary and self correcting and the other involved regulatory capital disclosures
Topvest: if I have read note 29 to the accounts correctly I very much doubt that they have a cash flow problem. And last time I looked PCF represented around 4% of the Somers portfolio and has since been written down. It is not a huge deal for them financially. That said a good business doesn’t turn into a bad business overnight and I would expect Somers to share the view that this is a good business which has grown too fast and has hit a spot of turbulence as a result - which it will get through via an injection of funds from Somers and other supportive shareholders, including myself, who see value in the business. I also wish to take the opportunity to endorse in full the remarks by 123davidgwylim about Scott and Robert.
Another Uropygium?
If it needs a rescue equity fundraise that will likely involve an issue at a highly dilutive price, which will wipe-out all existing equity value in my view. I do think the only party to salvage value is likely to be Somers, or existing shareholders taking a hit and investing big in any equity raise. Of course, getting a rights issue away with qualified accounts may not actually be possible. The disclaimer of audit opinion does cause a major problem.

Somers may end up taking it private if they cannot raise external funding. The qualification is less of a problem for them as they don't consolidate the results but treat all subsidiaries as investments.

It will certainly be interesting. I suspect a solution will be found with Somers holding most of the equity, but there is some risk of total collapse. Its 10% of Somers investment portfolio in the 2019 accounts.

Looking at the accounts £165.3m of their financial liabilities (including retail deposits) have already matured by 30 Sep 2021 versus £107m on the financial asset side, so with no new retail deposits coming in they have a very serious cash flow problem in my view. Same old story with banks: funded shorter term than its customer loans and so if the financing or retail deposits dry-up they have a major problem.

Personally, I would never deposit any cash into a dodgy bank FSCS guarantee or not.

I follow this thread with great interest, and am very impressed by the quality of the discussion.
I still don’t understand what happened, and expect I will not until the 2021 results are published.
Scott and Robert were highly experienced and had dealt with many issues over the years. I always had the greatest confidence in their integrity. I doubt they were responsible and think the business is diminished without them.
I have my own ideas what went wrong, some of which have been ably set out in this thread, but it would be speculation at the moment.

hippo, you missed me! How nice!

Happy New Year to you and all who post here - or are just interested watchers.

Let the fun really begin later this month. Let us look forward to the AGM; it is to be hoped that a physical meeting can be held where the Board - with or without Franklin - can be confronted.

However, lest I am considered as too glib, you should know that we, too, do have quite a lot of PCF shares, which were worth quite a lot of money, and we will suffer considerable pain and loss like all others. Our thoughts go out especially to the Reverend and his flock; he will have had a trying Christmas and like the rest of us be hoping for some clarity sooner rather than later.

From reading recent posts, it appears that thoughts are broadly aligned.

As I have posted, I too subscribe to the notion that all this has been somewhat overdone. However, the origins start with the failure to report accurately. This is seen as a heinous crime by the regulator. It is this that is likely to lead to a fine from the FCA later rather than sooner IMV. Such behaviour is not allowed, ever. And everything else followed from this failure.

It was this that did for young Maybury. Chairmen just love to have an opportunity to remove a CEO. It must make them feel very macho, more manly. Recent history is littered with examples, Stephen Hester, Rana Talwar, Martin Taylor and Malcolm Williamson are the sort of names that come to mind. Some deserved to go, others didn’t. In fairness, though, it was action that Franklin had to take. He would have been viewed in a bad light, had he not done the deed.

BTW, does anybody know if Mr Maybury is still here or has he skedaddled back to Aus?

I don’t think we should get fixated on the 2020 numbers. They are way out of date and a lot has happened since. We wait to learn whether or not the cure is worse than the disease.

topvest, I don’t think we should worry unduly about a run on the bank for a whole bunch of reasons. As has already been posted, funds raised are for fixed periods and cannot be withdrawn overnight. Secondly, there is the FSCS guarantee up to £85k to comfort depositors. Thirdly, the banking licence would have been suspended by now although it is not clear why PCF has stopped taking retail funds. Fourthly, PCF appear to have access to wholesale finds in case of need. Then there is the BoE as a provider of last resort. And the business now appears to be closely managed on both sides of the balance sheet in the full glare of oversight by the regulators. PCF will be on a watch-list and required to provide very frequent updates.

Because of the FSCS support, we would place funds with PCF in a heart beat if the rate is acceptable.

I think I have changed my mind regarding a SOMERS buy-out. I think every effort is being made to retain the listing. It cost a lot of money to become a bank; the quote is of value and something not to be given up lightly. Moreover, private equity is always looking for an exit; the listing provides one such. Without it, SOMERS options to off-load/reduce are limited to a third-party sale only. If the RI is underwritten only by SOMERS then there is indeed a risk that the SOMERS shareholding becomes too large. But there is some leeway, isn’t there? Could it not increase to a higher percentage - 80%? - and retain the listing. And much depends on whether the other shareholders stump up?

If the prospectus looks okay, we will.

Finally, I think a very big and bright light should be shone on GT as the IA. I hope that SOMERS are all over this with their legals. If we had the wherewithal, that is where we would begin.

Just need Dandigirl to comment now for a full house!! Lol
I am sure that Somers are very unhappy with the situation. Its interesting that both parties have said virtually nothing on the matter in both the UIL and Somers annual reports or Q4 releases. Any fundraising will likely see Somers take full control in my view as they would need to underwrite an equity raise and that would likely lead to PCF being delisted.
For what its worth, I think that Somers will tidy this up or merge it with Resimac, subject to their not being a run on retail deposit withdrawals. If they don't get new retail deposits whilst maturing deposits are switched-out, that would mark the end of PCF Group as the financing requirement would be too high.
cjd: I suppose my question is where is it stated that his original title was Head of Transformation.
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