Pcf Share Discussion Threads

[hopespr1ngseternal] 02/6/2022 23:10

Castle and PCF look like complementary businesses and the combination offers significant synergies. It does feel a bit as though PcF is being fattened up for slaughter but take some comfort from the fact that Somers’ interest is largely coincident with ours except that Somers are liable to be more comfortable than individual investors with an unlisted investment. If the Castle deal does not materialize big question is whether minority shareholders will support the Open Offer. Will we be throwing good money after bad? And someone made the excellent point that Somers appear content to suffer dilution if the Open Offer of 6m pounds is taken up in full.

[hopespr1ngseternal] 02/6/2022 22:59

As of 30th September 2021 total equity was just under 50m pounds and there were about 250m shares in issue = NAVPS of about 20p. Current share price is heavily influenced by the gravitational pull of the 5p Open Offer IMV and/or the prospect of being acquired cheaply by a private equity owned unlisted entity thereby eliminating any liquidity premium.

[dandigirl] 02/6/2022 22:31

hopes: Any thoughts on NAVPS? I make it around 10p now.

...and good spot re Marian Martin. Maybe Castle has had an interest for some months now given that she resigned last December and the now straight-up people at PCF thought they ought to say something lest it leak out.

[hopespr1ngseternal] 02/6/2022 12:41

FWIW Marian Martin is a director of Castle Trust Capital

[hopespr1ngseternal] 01/6/2022 22:09

The Report of the Board Audit Committee states that PCF Bank is deemed to be worth no less than 32m pounds being its carrying value in the books of the parent company

[davidosh] 01/6/2022 11:19

Money can leave the company in so many ways if you are controlling the bank whilst the processes or governance are lacking.

The simple fact that large bonuses were paid out based on targets that in reality were never met means money left the company that should not have done.

It troubles me that a banking licence was achieved which in itself means huge numbers of eyes were checking and double checking everything that is needed for financial regulatory purposes and yet months later the bank collapses into a heap of a mess that cannot be explained to the owners.

Should shareholders be questioning whether it should ever have received a banking licence?

[cc2014] 01/6/2022 10:31

#there's the rub David. The directors walked away from this when they decided to let the auditor IIRC offer no opinion on the financial statements. They appear at least from the outside unable to evidence either way whether there was fraud or manipulation of numbers. They've even gone so far as to say they don't believe any money left the company although again how they evidence that I don't know.

[davidosh] 01/6/2022 10:14

the Group has authorised the commencement of recovery action (where it is commercially sensible and legally feasible to instigate such action) to recover previously paid remuneration (and consequential losses) from individuals in the context of certain findings


I would go further....shareholders have lost millions and so if there has been any manipulation of the accounts to achieve bonuses or any suggestion of fraud then legal action should commence not just recovery....Without any action and justice this will happen regularly and shareholders are always the losers.

[cc2014] 01/6/2022 09:44

"In light of the delays in the Financial Statements 2020, the Group has authorised the commencement of recovery action (where it is commercially sensible and legally feasible to instigate such action) to recover previously paid remuneration (and consequential losses) from individuals in the context of certain findings
of the various investigations undertaken by the Group. RemCo is overseeing such recovery actions.

Hmm

[georgelees] 31/5/2022 15:41

Well if a bunch of private capital people want to buy, it must be a steal. So it can only go up from the depths the accountants and management had dragged it. Think it is actually still a good business once its clear of this.

[seasidehippo] 31/5/2022 15:27

Sold my last few.
Over and out
GLA

[dandigirl] 31/5/2022 14:36

That's my assumption.

There is a sentence in the statement which reads ........

"Under the terms of the Possible Offer, it is expected that PCF shareholders would have a small minority position in the combined group".

It costs hundreds of thousands of pounds to list which is why I think this is an attraction to Castle. The new "owners" would have to satisfy the regulators but looking at their website there already is a Castle Bank so the basics of running a bank should be understood.

[cc2014] 31/5/2022 12:13

#3984.

The question is why PCF/Somers want to inject £2.75m today and then another £1.5m in late June, although in regard to the latter "willingness to invest" does not mean the same as "intention to invest". Perhaps the second £1.5m only goes in if the OO application is low, which imho it's likely to be.

Why not inject the capital all at once?

Castle Trust Capital has a loan book of £394m and equity of £91m so strongly capitalised. It could eat up PCF. But, it's loan book is not much more than PCF so it would be a substantial move, albiet help is likely to be available from the parent.

[solarno lopez] 31/5/2022 11:27

Thanks Dandi and we assume the listing will remain

[topvest] 31/5/2022 11:17

Feeling relieved I exited earlier, but still indirectly impacted through UIL which owns a majority stake in Somers. Yes, agreed - this has gone really pear shaped.

The announcements today appear to be inconsistent.

Firstly, a fundraise at 5p with Somers prepared to put in further cash in late June 2022 - is this a typo as its already 1st June tomorrow?

Secondly, the offer implies virtually no value to any shareholders including Somers, who are also a shareholder and why is the fundraising going ahead if there is an offer on the table. I presume, its to get the accounts away for the auditors Very poorly worded announcements albeit I have only glanced through.

"Under the terms of the Possible Offer, it is expected that PCF shareholders would have a small minority position in the combined group."

Underlines the point that investing in banks is always a risky business. This one had the backing of Somers which are a reliable prudent organisation, but its still gone pear shaped.

[dandigirl] 31/5/2022 10:34

solarno: Suspect it is the listing is the attraction to Castle. We would be a "small minority" - even smaller than we are now, I suggest.

[solarno lopez] 31/5/2022 10:16

Do we want shares in an unlisted entity if so where does that get the shareholders of PCF

[georgelees] 31/5/2022 09:58

PCF in takeover talks with Castle Trust Bank
PCF Group has announced that it is in "early-stage discussions" regarding a possible takover bid by Castle Trust Capital.

[georgelees] 31/5/2022 09:57

hxxps://www.financialreporter.co.uk/pcf-in-takeover-talks-with-castle-trust-bank.html

PCF in takeover talks with Castle Trust Bank
PCF Group has announced that it is in "early-stage discussions" regarding a possible takover bid by Castle Trust Capital.

[georgelees] 31/5/2022 09:56

hxxps://www.marketscreener.com/quote/stock/PCF-GROUP-PLC-4002011/news/Consumer-Lender-PCF-In-Talks-For-Possible-All-share-Combination-With-Castle-Trust-Capital-40591206/

"Consumer Lender PCF In Talks For Possible All-share Combination With Castle Trust Capital"

Is that true / good?

[graham1ty] 31/5/2022 09:15

“The Group takes it responsibility to communicate with shareholders extremely seriously. Following the publication of the 2021 full year results, it is anticipated that the Group will now move to a regular reporting timetable, with the 2022 interim results scheduled for the end of June. The executive team will host an 'Investor Meet Company' online meeting, as it has done previously, shortly after the announcement of those interim results to outline future plans for the business and to answer questions directly from investors. Further details of the exact timing of the event will be announced nearer to the time.“

Er, so why is there no meeting today ? What no chance to quiz the Board on this mess in the next few days ??

[graham1ty] 31/5/2022 09:06

I might later in try to add up all they call “remediation costs” over the last three years. And also, add up the impairments. Both will be horrific.

To an outsider, the Board has made a complete Horlicks of the whole process, and turned some minor accounting issues into a bloody great mess.

When I say “minor”, there has not been any findings of criminality or fraud that I am aware of. The 2019 accounts were audited by EY. If the systems were not good enough, that rests with the Audit Committee and the Board failing to make sure systems and processes were in place for the growth that PCF was achieving. But, to take two years, and tens of millions of ££ to change the record keeping and processes looks like making a complete hash of it…..

[cc2014] 31/5/2022 09:04

"The combination of these factors will give rise to a loss for the year which is anticipated to be significantly in excess of the loss for period ending 30 September 2021"

Somers prepared to put in £4.22m, but looking for OO of £6.85m which means Somers get diluted.

Which suggests to me Somers are prepared to put enough in to cover some losses and keep the capital ratio up but beyond that not alot.

The cash from the fund raise is going to disappear as all/most/some of the cash will disappear in losses.

The question would be if it's already known that accounts to Sept 22 are going to show a loss in excess of last year it's hard to see how they make a profit to Sept 23 and by then I suggest their impairments may be struggling again due the "cost of living crisis"

[che7win] 31/5/2022 08:53

The numbers look shocking to me.Whilst winding down the loan book, they've been winding up the fixed costs as per the below, why such a jump:Staff and operating expenses increased 56% to GBP21.2 million (2020: GBP13.6 million), due to increased headcount and professional services costs, which included GBP3.6 million of expenses related to the remediation of legacy issues.

[dandigirl] 31/5/2022 08:42

Graham: IMV the choices are simple. Sell or stay and see how matters unfold. We have elected for the latter.

No point in trawling all over the numbers. As we don’t get a real say as minority shareholders, might as well adopt a wait and see approach.

At least there is an exit now for those who wish to sell. Not many so far, it seems.

My first thought when perusing the numbers was that they are not as bad as I thought they might be.

The next month should be interesting with interims due by the end of June.