Pcf Share Discussion Threads

[topvest] 25/1/2022 20:03

What's happening on the customer deposit side?

[the big fella] 25/1/2022 19:37

Glad it’s come back as I have a large fixed term deposit maturing in August (it was an industry leading rate at the time of placement) which they would not let me close early. I will most certainly be moving elsewhere. I may not be alone in my thinking which potentially may cause them a problem.

[toptomcat] 25/1/2022 17:55

ST comments in ICPCF's recovery potential revealedThe Aim-traded specialist bank has finally resumed trading again and its long-awaited results highlight an undervalued profitable business with a solid loan bookPCF's recovery potential revealed· Net loans and advance down slightly to £425m· New business originations a fifth lower at £122.9m· Less than 4 per cent of portfolio in forbearance at 31 March 2021· Interim pre-tax profit halves to £1.2m due to sharp rise in cost-to-income ratioShares in Aim-traded specialist bank PCF (PCF:15p) finally returned to trading this week, having been suspended since last summer ('PCF's financial control failings exposed', 28 June 2021).Previous management's failure to properly report PCF's exposure from funding provided by PCF Bank to its wholly owned subsidiary Azule led to an Independent Review that also identified several deficiencies and failures in PCF Bank's financial control and reporting function. It has been a tortuous process for the new management team to put in place the requisite reporting and compliance procedures as part of the overall remediation process. It has come at a cost, too.Although the net interest margin dipped only slightly to 6.8 per cent in the six months to 31 March 2021, and net operating income rose 4 per cent to £14.7m, PCF's cost-to-income ratio ballooned from 48.2 to 66.3 per cent as operating expenses rose 40 per cent to £9.8m. The upshot being that although the credit impairment charge declined from £4.7m to £3.8m, the additional £2.8m of operating expenses meant that pre-tax profit fell from £2.5m to £1.2m. However, there are several positives.Firstly, the impairment charge included an additional £3.2m provision for defaulted receivables that were either seriously in arrears or where the assets acting as security have been sold. It looks like a kitchen sink exercise to clean up the loan book.Secondly, PCF's stable capital ratio of 16.7 per cent remains comfortable as does its liquidity coverage ratio of 488 per cent. The £425m loan book is being funded by £338m of low-cost customer deposits, £59.6m of drawings against the Bank of England's ultra-low interest rate Term Funding Schemes, and the balance is from £54.9m (21.5p a share) of shareholders' equity.Thirdly, impairment charge on the £186m consumer loan book (mainly used car loans) was minuscule (£0.4m) and is likely to remain low given that used car prices have soared in the past 12 months, so even if a customer defaults there is hefty security. PCF's £64m bridging finance loan book is high quality (nil impairments) and is well diversified, too. Moreover, with 93 per cent of new business originations in prime credit grades, then default risk has diminished.Fourthly, the £175m business loan book incurred slightly lower impairments of £3.1m, but the majority of the charge represented the kitchen sink exercise.Investors need to wait the release of the annual results (to 30 September 2021) for when the board will reinstate financial targets and guidance. However, PCF remains profitable even at this low point, has successfully navigated through the Covid-19 pandemic and a major overhaul of its management and financial controls, and retains a solid loan book which generates a stable net interest margin.Priced on a 31 per cent discount to book value, the shares offer recovery potential. Hold.

[dandigirl] 25/1/2022 17:27

A J Bell still not inserting a price in our portfolios. Hmm.

[dandigirl] 25/1/2022 17:12

hopes: I loved that too. So £12.4m of impaired loans, supposedly £1.7m after Expected Credit Losses, sold for £2.8m giving a profit of £1.1m! Accounting jiggery-pokery IMV.

But the real action is in the second half and we still have to wait for this until publication of the full year's figures. New targets also eagerly awaited with Annuals or soon thereafter.

Suspect that the suspension has been lifted in order to help with the pricing of the RI. Closed at 13p.

[georgelees] 25/1/2022 16:40

Looks like progress. Will watch the Q&A on Thursday with interest. Good there is a profit, without the exceptionals even better.... I presume the huge spread is putting off buyers and there is a backlog of forced sellers, which will clear. So hopefully give it a bit of time. I rather hope the Investors Chronicle write it up again, they were big fans, and that should not have changed, if anything it is better value and now has stronger processes in place.

[topvest] 25/1/2022 16:16

Yes, doesn't look too bad.

[hopespr1ngseternal] 25/1/2022 15:37

Profit of 1.1m on sale of defaulted receivables!

[rmillaree] 25/1/2022 13:11

Cheers peeps on reflection the better than i thought it would be comments should be taken in context of the likely later ramp up in spending and perhaps continued reduction in earned income - this being the case its really probably not any better than i expected if there is a decent chance they are making nil profits or may be loss making as we speak - re reading sketchy update today its pretty poor to give us no idea ref underlying profitabilty past march - its like them saying they havent added up the figures for subsequent 6 months yet. Perhaps i should be happy that they are trading again without immediate dilution - certainly no complaints from me if i choose not to sell and get well diluted from this point - at least i have the option to take what i have left and cut my losses - i do feel lack of update ref april onwards means we are at a disadvantage compared to the real money that will likely know more than us.

[seasidehippo] 25/1/2022 10:52

27% spread!! market doesn't know whether to go for a shave or a haircut.

We all need more information, which hopefully will be forthcoming by Thursday?

[geraldus] 25/1/2022 10:30

Better than I thought so far today.I wonder if we will hear from ST.

[dandigirl] 25/1/2022 08:42

Just woken up to find the email notifications. Hmmm.
That was a shocker as I thought lifting would be with the full year results.
Thought I would try to sell a few first.
Didn’t as the price offered was 11p and a bit.
Considered buying. Thought better of it.
Then came here for a little look.
Thought it would be interesting to get others’ views.
Back to glass half full, glass half empty, it seems.
We would all do well to remember that the period that matters is after 31/03.
The suspension was last May. It is after that the costs started to be incurred. Those costs will relate to the second half period and ongoing.
Board will have produced a new business plan for the regulators.
I am not in doubt that a RI will be necessary.
Costs will be humongous compared to current capital etc.
Company needs to set out its stall for shareholders to see in a prospectus.
And now to peruse the RNS which is already 9 months out of date.

[carcosa] 25/1/2022 08:35

Don't forget you can at least ask questions ahead of the Q&A session on Thursday.

[cc2014] 25/1/2022 08:33

The RNS is I think is good news for shareholders. A profit of £1m is at least something and means there is a business to rebuild, so with patience the share price will slowly recover, albeit I'm not sure how I can value it until I have some insight into where we are today vs interims which are a year out of date.

I suspect the loan book is down significantly, causing economies of scale issues, but nonetheless even if they spend the next 18 months breaking even whilst they continue to sort things out, from where we were in May that sounds a very good outcome to me. Profitability will flow in due course.

I await with interest the investor meeting later in the week where hopefully there will be some insight into where PCF are now and where it is going.

[cc2014] 25/1/2022 08:14

On basis of the interims they do not need to raise funds, because as long as they are making profits their capital ratios are ok. (Broadly anyway, the shift in business type may not have been helpful)

But these are the numbers at March 21. There was little insight in the RNS as to what the loan book looks like today (unless I have missed it). I would guess that whatever it is the capital ratio has been managed appropriately and means a fund raising is not required, or if it is would be small.

[rmillaree] 25/1/2022 08:07

This was not as bad as i was expecting , bit ridiculous they need to invest in what should have been their bread and butter from day one - ie how to add up the numbers and monitor that. But if they are making clean profits and can start to gain efficiencies once upgraded processes are bedded in then their is hope here. This company does need to be lean and mean at what it does long term so lets put and end to even thinking about how they go about the basics and concentrating on getting that bottom line number improved. For now making clean profits and not raising finances next 12 months and maintaining current solvency numbers (if they are good enough ??) is ok - worry about the rest later. No idea what shareprice will be short term.

Do others still think thye will need to raise funds ? that is the elephant in the room at present.

[graham1ty] 25/1/2022 07:37

On the face of it, the interims are not too bad. £1m statutory profit and 0.4p of eps.

Net interest income and net operating income both rise. Then personnel costs up £1.4m and another £3.75m of impairments ( could have been a lot worse).

If you believe the numbers, balance sheet and capital ratios still fine.

Warns that loan book will shrink a bit, and originations be lower than before, but there does appear to be the remains of a real business here……🤞🤞9310;

[graham1ty] 25/1/2022 07:23

12p, then heavy selling, touch 8p, end at 10p ? Or is that too optimistic ?

[graham1ty] 25/1/2022 07:19

Bloody hell. Trading starting again today……did not see that coming….

[geraldus] 25/1/2022 07:12

Suspension expected to be lifted today.

[graham1ty] 23/1/2022 22:01

No, they will be crossed out !!

[seasidehippo] 23/1/2022 17:43

Everyone to their own!! I doubt any amount of scribbling will change anything here. Nevertheless please feel free to scribble a large red ? Next to audit committee

[graham1ty] 23/1/2022 14:07

Seaside, doubt is I will get any…….

I do like to scribble all over hard copy, lots of red highlighter etc.

[che7win] 22/1/2022 22:36

Yes Graham, I got mine about a week ago

[seasidehippo] 22/1/2022 22:31

Does that mean you will end up with 3 hard copies?

Try using a soft copy it will help save the planet and the company some money.