Pcf Share Discussion Threads

[blobby] 02/5/2012 14:25

Just to clarify the trading statement, I understand that "The results are expected, subject to audit, to be in line with our expectations" means that trading is in line with the latest broker reports on the website:



These indicate an earnings per share of 0.7p (up from 0.1p)

With a current share price of 4.5p this looks far too harsh.

[grlz] 01/5/2012 15:07

GBP15m of new funding facilities secured in the financial year - not bad imho

[empirestate] 01/5/2012 07:21

the ts looks ok, hopefully there will be some relief push north in the share price considering the recent discount

[grlz] 30/4/2012 14:33

interesting buying over the last few days

[knowing] 27/4/2012 23:57

Yes cannot see why they took such a stake without some sort of plan.

[empirestate] 26/4/2012 07:57

should be due a trading statement here in the next two weeks. have picked up a few recently as i reckon bank of bermuda will take a more pro-active position sooner or later.

[grlz] 24/4/2012 16:17

Blobby

Investors have been gambling on PCF for years.

[blobby] 24/4/2012 14:32

grlz,

Interesting posts. Research from Westhouse suggests that PCF are targeting a 2% return on average portfolio of assets which might suggest that passing on a portfolio returning only 1.3% seems like a good idea.

All financial stocks seem to be being hit at the moment which might explain the current 5p share price

Seems like there is a trading update due (April) so this is a good time to take a gamble and see a quick result if you are that way inclined.

[grlz] 23/4/2012 18:04

Knowing
The figures are in the RNS dated 8/3/12 - £11.5m portfolio of lending risk that has produced £151,000 in profit - a staggering 1.3% return on capital!

Had a couple of loans in that portfolio defaulted that meagre profit would have been wiped out as equipment leasing assets depreciate in value over time.

The question that concerns me is why are PCF profit margins so slim?

Two scenarios:

- are PCF's banking terms punitive, meaning PCF is doomed forever to operate on low margins while the funding Bank rakes in the reward while PCF's balance sheet underwrites the risk?

- is PCF sacrificing margin to buy-in business from brokers / loan originators by offering overly competitive terms to their customers?

Eitherway by any stretch of the imagination a 1.3% margin leaves little room for error - and PCF risk management has been tested and failed once before leading to years of legal dispute.

all imho / DYOR

[knowing] 22/4/2012 23:37

grlz it would be good if you could back up your figures instead of leaving us to second guess where they came from.

Nice 200K buy was reported Friday I see.

[grlz] 20/4/2012 16:41

problem is the £11.5m book they just sold was only worth £151,500 in profit or 1.3% profit margin, better off depositing their funds in a Barclays cash ISA - its as I suspected PCF are chasing the market again and cutting margins to the bone

PCF is a lot of risk for micro sized profits that would quickly vanish had the book suffered a couple of failures.

No wonder the share price has the jitters as PCF's management are not exactly known for getting things 100% right when it comes to credit management..

[knowing] 20/4/2012 13:55

Cheap at 5p. I suppose no other companies have any debt. LOL

[argy2] 08/3/2012 15:33

"£3.4M market cap and just got £11.5M cash"

Which helped pay off some of their debt.Keep it real.

[solarno lopez] 08/3/2012 15:26

But think of the debt and the slim margins it works on !

[knowing] 08/3/2012 15:22

RNS Number : 9216Y

Private & Commercial Fin Group Plc

08 March 2012

PCF.L/Index: AIM/Sector: Speciality & other finance

8 March 2012

PRIVATE & COMMERCIAL FINANCE GROUP PLC

SALE OF LEASING RECEIVABLES

The Directors of Private & Commercial Finance Group ("PCFG" or the "Company") are pleased to announce that the Company's wholly-owned subsidiary, PCF Equipment Leasing Limited, has agreed to sell its portfolio of leasing receivables to Aldermore Bank plc. The sale will complete on 12 March 2012.

The consideration for the sale is GBP11.5 million which represents a premium over the book value of the receivables. The consideration will be received in cash and the proceeds of the sale will be used to repay senior debt, reduce the equity gearing ratio and further strengthen the Company's balance sheet.

The sale of the receivables accelerates a profit that would have otherwise been attributed to future accounting periods. A profit, net of fees, of GBP151,500 arising from the sale will be recognised in the current financial year and will result in profits exceeding market expectation. The sale also benefits the Company by crystallising a deferred tax asset in PCF Equipment Leasing Limited. The Company was advised on the transaction by FTI Financial Services.

Scott Maybury, CEO of PCFG commented:"This transaction, which boosts our profitability in the current year, is another step in our strategy to extract value from all areas of the balance sheet and to further enhance the rate of return on assets employed. The Company will continue to operate in the sector and will grow a similar portfolio of high yielding leasing receivables which will be funded by the new and increased facilities announced in our recent Interim Accounts."


£3.4M market cap and just got £11.5M cash

[solarno lopez] 28/2/2012 06:53

It is isn't it

[knowing] 27/2/2012 23:47

Cheap again

[maytrees] 14/12/2011 11:17

A couple of chunky buys - instit increasing stake perhaps?

All imho so DYOR

[solarno lopez] 13/12/2011 13:44

Buy in cheaply and wait for the good times. Could be that BOB will make a bid to give it scope in the UK

[grlz] 13/12/2011 13:40

Most of PCF's similar sized peers went out of business because they over-expanded their balance sheets using cheap warehouse credit during the boom. PCF dodged that bullet as they where neck deep in litigation over an insurance claim so where unable to leveraged their balance sheet during the boom - if fact they where running off their book fighting for survival!

Now PCF is the last man standing, at best a double edged sword as general economic activity is negative and PCF's organic growth is flat with the bottom line being boosted by the purchase of small loan books.

The main problem going forward is major lenders re-entering the market and placing more risk on the table which will make PCF uncompetitive and erode margins.

PCF has no access to cheap organic credit, its business model is wholley dependent upon commercial credit lines - that its never found easy to obtain.

Makes sense for BoB to acquire PCF to lever its own depoist base to PCF's operations, doubtful shareholders will see anything as most micro lenders like PCF tend to sell out for 10x earnings meaning the share price is near fully priced imho.

[maytrees] 13/12/2011 13:19

TX Crawford

[crawford] 13/12/2011 11:36

maytrees,
some competitors reentering according to the comments in the commercial sector but PCF should be able to make good margins currently.

I noticed they bought back some loan notes well below par recently, with interest on them at 8%, that is a good deal.

[blobby] 13/12/2011 09:27

* Seems like Bermuda Commercial Bank really is a shareholder.

I still don't understand this connection though. Why would a bank buy shares in PCF?

* Net assets now 15.5p per share.

If return on portfolio assets can be increased from 0.5% to 2.0% as targeted then there should be a big turn around in profits.

Does anyone know how this is calculated? Return on average portfolio assets increased to 0.5 % (2010 – 0.3%)

Are average portfolio assets about the same as adding current and non-current Loans and receivables together e.g. £102 million? If so would the return be about £500K, but I can't see this figure.

[solarno lopez] 13/12/2011 09:25

I would like to know what the Bank of Bermuda intends to do which I think is more to the point

[maytrees] 13/12/2011 09:22

Greetings Crawford

Fair point but: Admin expenses down, funding ok and competitors reducing, augur well imho although the negative economic outlook more generally doesn't help.