Pcf Share Discussion Threads

[cc2014] 09/11/2022 11:12

I find the statement about delisting the shares to save costs a bit naughty.

I can't dispute it's accuracy but methinks it's more about reducing scrutiny. No more PI's to deal with and no more investor meets and more or less only a set of accounts to be produced once a year. Somers can quietly wind it down without all the scrutiny, hopefully get out without putting any more money in and move on.

[zxie] 09/11/2022 08:40

INSP shares jump soon

[graham1ty] 09/11/2022 08:29

Garry has presented this as an inherited problem, something to he took on.

Well, who was Chief Operating Officer for almost a year prior to the suspension ? Step forward Garry Stran, who joined PCF in July 2020.

He must have seen the business and systems, and worked with them, and in them, for almost a year prior to uncovering the issues. Yet, lo an behold, when historic problems emerged, it was Garry who led the charge to change everything: systems, accounting, auditor, reporting, staffing levels.

This collapse is presented, by Garry and Caroline, as caused by the accounting fiddles ( yes, naughty, but not criminal, and neither incident effecting cash, profits, or the underlying business). No, what has destroyed this business is the remediation. The measures they have taken “to rescue” PCF have actually destroyed it. Does anyone think that the PRA wanted PCF to go under ? Does anyone really think that this was the purpose of the remediation ?

And, because of the appalling communication with shareholders, none of actually know what happened. But, in slow motion, between very rare RNS, we watched millions, tens of millions, of overhead getting spent on making PCF so bloated that it was no longer viable.

Garry talks of cutting costs: so all those myriad new staff members, recruited at enormous cost, now get made redundant…..at enormous cost.

And Garry still thinks he has done well. I have only met him once and I just thought “ego”. Smug, complacent, casual, incapable of self reflection.

[tomboyb] 09/11/2022 08:07

Major shareholder owns 70% -

So I presume the support means sum of parts is possible -

[dandigirl] 09/11/2022 07:58

Note to Chairman Moore. Start acting like a Chairman should please.

Start reducing the number of board members to reduce costs.

[cc2014] 09/11/2022 07:52

My thoughts go out to all holders. A sad end to a sad story.

[graham1ty] 09/11/2022 07:21

The irony in the RNS “This is particularly so given the considerable progress made over the last 18 months to remediate the issues that gave rise to the suspension in trading”

Quite clearly there has not been considerable progress, or this would not have happened.

I feel sorry for employees, for Scott and Rob, for all those thousands of hours building this business, getting the banking license, taking PCF to where it had got to.

And now, shareholders just destroyed. I hope the Board, the Executives are capable of feeling shame

[graham1ty] 09/11/2022 07:17

This should become a case study in how to destroy a business.

I hope Garry never works again

[dandigirl] 08/11/2022 08:02

Gary is nothing more than a pawn content to enjoy his plunder while he can.

It is to SOMERS that we must look.

So much for that rights issue indicated long ago now.

I too must now admit to the view that things must be dire.

[graham1ty] 08/11/2022 07:09

Five weeks since the bid was withdrawn.

And silence.

Garry, you are taking the Mickey……

[cc2014] 04/11/2022 11:33

I have looked at the equity recently.

Firstly Castle walking away is not good. They would have been able to strip out the non-exec Board costs, a proportion of duplicated compliance staff and all manner of other overhead. Knowing this and having had full access to the books they still walked away. I appreciate when they walked away funding costs were going through the roof due to Trussenomics but it does put a ceiling on the share price which isn't very high.

It leads me to think that there are more problems at PCF than we are aware of. I don't mean more compliance problems or anything untoward, more just an inefficient company which would take a long time to sort out or perhaps poor risk analysis on the loans or perhaps just a poor customer base. Something anyway, I'm not sure what, or maybe just hundreds of small annoying things which individually mean nothing but together become considerable hassle to sort out. All conjecture of course in this paragraph but my gut is telling me something is just not quite as it should be else Castle would have done the deal a long time ago.



Then, I did some maths. I took the net assets and tried to work out what would be left if PCF was run down to say 10% of it's existing loan book within 5 years and then selling the rest to a third party at this point. The current net assets are quite strong on this basis because of the amount PCF has to hold for regulatory capital which gets released as the long book shrinks

I found this quite difficult but I drew up some assumptions about writing down intangibles, writing off the tax credits available and then plugging in some numbers for losses for the next couple of years. Then I added a wild guess at redundany costs as the business shrinks. The trouble I ran into was trying to guess the impairment number in relation to a debt collection from a demotivated team. Selling the loan book to a third party was an alternative.

Where I ended up surprised me in that there was more left than my best guess before I started the analysis, but it's very dependent on the impairment number. I also had to consider the opportunity cost of investing elsewhere which realistically is now in excess of 10%.

I haven't bought, there wasn't enough in the trade given the unknowns to entice me. But what it did show is that there is an exit here for Somers without them losing face. They can close it down without putting any more cash in and stay on the right side of the PRA. They have other businesses and whilst they are commercially seperate they wouldn't want the stain of a bailed out bank on their reputation. Along the way once PCF is significantly derisked I'm guessing there might be opportunities to sell it for £1 or £1m or £5m or whatever.

I'm not saying this is going to happen, but given PCF aren't writing new business effectively we are at the start of this, with possible divergent options along the way, if somewhere along the line they can stabilise the business. From the outside stabilising the business should be possible, their competitors make a profit, but then I return to Castle walking away.

[cjd190573] 04/11/2022 11:08

So is there a connection between, Sergeant’s appointment, suspension of lending, Castle walking away and, so called ’review’? all seems to have happened in a two week window.

[dandigirl] 04/11/2022 10:57

CC: Re Sergeant. That hadn't occurred to me. Good thought. You are probably correct.

As regards equity, I find it hard to accept that Richardson's NAVPS of 16.5p of only a few months ago has been reduced to zero?

[cc2014] 04/11/2022 10:27

No equity to dispose of...

[tomboyb] 04/11/2022 09:48

Any chance PCF will start lending again or an equity disposal - ?

50k max at 1.9p so hardly any stock online -

[cc2014] 04/11/2022 09:44

I suggest Sergeant was put in by PRA as someone well known to them.


Carol has nearly 50 years' experience in banking, notably spending 24 years at the Bank of England and seven years as Chief Risk Officer at Lloyds Banking Group. Carol held various roles at the Bank of England, including being responsible for the worldwide supervision of major UK Banking Groups. Additionally, Carol spent five years at the UK Financial Services Authority first as Director for Banking Supervision and latterly as Board Member and Managing Director for Strategy, Risk, Authorisation and Enforcement.

[dandigirl] 04/11/2022 07:28

and if there isn’t a plan, for what purpose has Sergeant been taken on?

If I were Somers, I would clear them all out and bring back Scott Maybury!

[graham1ty] 03/11/2022 19:29

I will comment at greater length tomorrow.

Any options need a plan. There has been no evidence of a plan of any sort.

The Board has willingly ( I was going to say sleep walked, but no, it was with eyes wide opened) added rafts and rafts of costs, knowing full well that they would cause ever growing losses unless (how ?) the loan book could be lifted to close to a billion.

I asked Garry “at current overhead levels what loan book do you need for profitability ?” And, if I recall correctly, he did not answer: it was as if it was a question that had not crossed his mind.

Is there no plan ? Of any sort ?

[cc2014] 03/11/2022 14:30

Good post Goddamitmaverick.

My view.

1. They can't. Losses are affecting their regulatory capital position
2. Possible but depends on their being some critical volume at which they are sustainable
3. Failed
4. Somers/ICM/UTL capital position looks questionable to me based on what I see of the interwoven sister company transactions. I'm not sure they can support it given their current and future costs of debt
5. They can't afford wholesale funding

imho only option is structured wind-down, which is pretty much where the Board they have indicated they are as they aren't writing new business.

[goddamitmaverick] 03/11/2022 14:05

So what are your strategic options in these circumstances ?
1. Keep going, hope for shareholder support, maintain business at levels you can, pay costs of remediation . ( pretty much what they have done )
2. Slash costs and shrink back to clean core with a license , oven ready for sale to a third party with a new strategy .
3. Trade sale ( tried and failed )
4. Clear management message to shareholders early in process” commit new capital for path to viability or we start wind down process.
5. Surrender bank license , revert to wholesale funded finance co.
Think I’d go for 4. Or 2 .

[graham1ty] 02/11/2022 18:43

Four weeks after the offer was withdrawn, and the PCF Board continue to treat shareholders with contempt

[dandigirl] 02/11/2022 03:48

That’s cheerful.

With competent management, PCF should have been more like SUS.

Another month has gone by. What on earth is being reviewed?

[manual dexterity] 01/11/2022 12:57

Looking at cineworld anything is possible in this market.

[dandigirl] 01/11/2022 09:03

Wonder what SOMERS are deliberating on that they can’t make up their minds.

So much for big shot private equity.