(Alliance News) - PCF Group PLC's share price tumbled on Tuesday after it resumed trading on AIM, following the delayed release of interim results for the first half of financial 2021.
The London-based specialist bank was suspended from trading in May following the identification of previous accounting errors and misstatements.
Tuesday marks the first day shareholders were given the opportunity to respond a huge loss now reported for financial 2020. PCF shares were down 31% to 16.47 pence each in London on Tuesday morning, having fallen as low as 10.55p, a new 52-week low.
PCF had first reported a pretax profit of GBP3.9 million for financial 2020, which had ended September 30, 2020, before saying that "no more than a GBP750,000" reduction would need to be made as an adjustment. The company later revealed in December the year had actually come in at a pretax loss of GBP4.8 million, owing to credit impairment charges of GBP15.3 million, and a doubling of operating expenses at GBP31.6 million.
The results for the half-year that ended March 31, 2021 show that pretax profit had halved to GBP1.2 million from GBP2.6 million the previous year. However, this is a comparative on pre-pandemic times. When compared to the losses seen in financial 2020 overall, the first half of financial 2021 was a return to profit.
"The reduction on the prior year predominantly reflects higher operating expenses as a result of the focus on remediation activities and the need to invest in order to ensure that the business can support automation and future growth," said PCF Interim Chief Executive Garry Stran.
Net operating income increased by 4% year-on-year to GBP14.7 million in the recent half-year from GBP14.2 million a year before. Its net loans and advances remained fairly steady at GBP425.8 million, from GBP427.3 million in the first half of financial 2020. New business originations dropped by 20% year-on-year, as the pandemic impacted demand.
PCF estimates an overall reduction in the size of its loan book for the full financial year 2021, which will have a negative impact on profit and capital generation. It said it will continue remediation activity, and investments in culture, governance and controls, and technology as part of its growth strategy.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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