PCF.L Regulatory News (PCF)

26 Sep 2006 14:07

Private & Commercial Fin Group Plc26 September 2006 The following amends the interim results announcement released today at 07.00hours under RNS number 4483J. The figure for "Creditors: amounts falling dueafter more than one year" should be 76,296 and not 79,296. All other detailsremain unchanged and the full amended announcement appears below. Private and Commercial Finance Group Plc Ticker: PCF / Index: AIM / Sector: Speciality & other finance 26 September 2006 Private and Commercial Finance Group Plc ('PCFG' or 'the Group') Interim Results Private and Commercial Finance Group Plc the AIM-traded finance house, announcesits results for the six months ended 30 June 2006. Overview • Loss before taxation reduced to £56,000 (2005: £2,221,000) • Strong new business volumes - Consumer Finance Division up 69% to £18.4 million and Business Finance Division up 62% to £12.8 million • JV agreed to launch website in October offering range of new cars on finance • Enhanced service levels and efficiencies in Business Finance Division due to roll-out of web-based proposal system • Focused on organic growth • Reviewing the securitisation of the Group's portfolio • Continued improvement expected in the second half CHAIRMAN STATEMENT In the Annual Report for 2005 I said that I looked forward to what I hoped andbelieved would be a substantial turnaround on 2005 and I am pleased to reportexcellent progress in this regard. This £2 million improvement is a significantmilestone on the road back to an acceptable return on shareholders' investment. Consumer Finance Division New business in this division has grown strongly in the period, increasing by69% to £18.4 million as compared to the corresponding period in 2005. Not onlyhave we been able to hold down increases in overheads as the portfolio hasgrown, but also the percentage of customers paying their instalments on time bydirect debit is the highest we have so far achieved. We have signed a joint venture agreement with a supplier, which will enable usto offer a range of new cars on finance at very attractive prices through ourown web-site, www.pcfshowroom.co.uk. I would emphasise that we will not carrystock nor take on premises - this is a 'virtual showroom' and our role will beconfined to providing finance to car buyers in the usual way. The web-site isscheduled to start operating in October. Although we have looked at a number of portfolio acquisition opportunities, theyhave not met our demanding criteria and we consider that we are better offgrowing our portfolio organically, unless an acquisition is truly exceptional.We know that the business we generate ourselves has gone through our rigorouschecks and therefore meets our standards for credit quality, documentation andincome margin. Business Finance Division New business volumes in this division during the first half of 2006 increased by62% to £12.8 million as compared to the corresponding period in 2005, resultingin the portfolio of net receivables increasing to £31 million. In spite of theusual competition in our market place, we have been successful in maintainingour interest rate margins on new business written. In June we completed the implementation of our web-based proposal system forthis division which, in a short space of time, has already proved its worth byenhancing service levels and efficiencies. As we roll-out this system to ourbroker network during the latter half of the year, we expect to see furtherefficiencies which should result in increased new business volumes. In order to continue the growth of our Business Finance portfolios, we haverecently signed an increased banking facility. Results The result for the six months ended 30 June 2006, somewhat ahead of ourexpectations, is a loss before taxation of £56,000, compared to a loss beforetaxation of £2,221,000 (including discontinued businesses) in the correspondingperiod in 2005. The scale and trend of the improvement is extremelyencouraging. Dividend It is not the Board's intention to recommend the payment of an interim dividend. Accounting Reference Date In order to take advantage of a saving in audit costs if we move our accountingyear-end from 31 December, we have decided to elect for 31 March and thereforethe current accounting period will be extended to 15 months. Summary Both divisions have grown substantially in the first half of the year againstthe background of relatively buoyant growth in the UK economy. With the recentincreases in interest rates and energy prices, we expect to see a slow down indemand in the second half which, in any event, is seasonally less strong formotor finance than the first half of the year due to the summer holiday seasonand the Christmas period. We have also noted that in June the monthly increasein credit card borrowing was at its lowest level for almost twelve years,another indication that consumers are reining in their spending. If we canmaintain the same levels of growth in the second half, we will be doingexceptionally well. We are commencing a review of the benefits and practicalities of securitisingour portfolio. Securitisation is a means by which companies can finance itsreceivables and it can take a variety of forms. We conducted a similar exercisethree years ago and received two offers, but concluded that the costs ofsecuritising meant that the exercise was not worthwhile at that time because theportfolio was too small. The benefits of securitisation include reduced fundingcosts and a lower weighted average cost of capital. If securitisation is nowviable with our much larger portfolio, the result should show through inincreased earnings per share. It needs to be understood that in our business the income on new financeagreements is taken over the duration of the agreement and so the growth in ourportfolio experienced this year will really show through in 2007, because a fullyear's income will be enjoyed. Therefore, while we expect to see continuedimprovement in the second half, it is in future years that the benefits of thehard and successful work, which is resulting in our growing portfolio, willreally become apparent. Michael R Cumming Chairman 26 September 2006 Group Profit and Loss AccountFor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 unaudited unaudited audited £000's £000's £000's TurnoverContinuing operations 18,643 15,716 32,684Discontinued operations - 1,907 3,064Group turnover 18,643 17,623 35,748Cost of sales (12,304) (12,699) (25,442) Gross profit 6,339 4,924 10,306Administrative expenses (4,167) (5,458) (10,452)Operating profit/(loss)Continuing operations 2,194 1,043 1,584Discontinued operations (22) (1,577) (1,730)Group operating profit/(loss) 2,172 (534) (146)Interest receivable - 1 2Interest payable (2,228) (1,688) (3,631) Loss on ordinary activities before taxation (56) (2,221) (3,775)Tax credit on loss on ordinary activities 10 185 619Loss on ordinary activities after taxation (46) (2,036) (3,156)Dividends - - -Retained loss (46) (2,036) (3,156) Loss per 5p ordinary share - basic 0.0p (13.4p) (19.4p) Group Balance SheetAt 30 June 2006 30 June 30 June 31 December 2006 2005 2005 unaudited unaudited audited £000's £000's £000'sFixed assetsIntangible assets 377 398 397Tangible assets 657 988 820 1,034 1,386 1,217Current assetsDebtors:Amounts falling due within one year 20,599 21,894 25,061Amounts falling due after one year 59,085 35,178 40,806 79,684 57,072 65,867 Cash at bank and in hand - - -Deferred taxation 2,307 1,694 2,307 81,991 58,766 68,174 Creditors: amounts falling due within one year 3,136 5,133 4,551Net current assets 78,855 53,633 63,623Total assets less current liabilities 79,889 55,019 64,840Creditors: amounts falling due after more than one year 76,296 51,902 61,893Total assets less liabilities 3,593 3,117 2,947 Capital and reservesCalled-up share capital 4,943 3,799 4,749Share premium account 2,972 2,474 2,474Capital reserve 74 74 74Own shares (243) (243) (243)Profit and loss account (4,153) (2,987) (4,107)Equity shareholders' funds 3,593 3,117 2,947 Group Statement of Cash FlowsFor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 unaudited unaudited audited £000's £000's £000's Net cash outflow from operations (12,752) (2,410) (11,008) (12,752) (2,410) (11,008) Net cash outflow from returns on investmentsand servicing of financeInterest paid (2,481) (1,614) (3,309)Interest received - 1 2 (2,481) (1,613) (3,307) Tax received/paid 123 (64) 20Capital expenditure and financial investmentPayments to acquire tangible fixed assets (18) (232) (438)Receipts from sales of tangible fixed assets 62 - 11 Net cash (outflow)/inflow from capital expenditure and financial investment 44 (232) (427) Net cash outflow from equity dividends - - - FinancingProceeds from issue of ordinary share capital 692 - 950Proceeds from borrowings 14,403 3,960 15,232Repayments of borrowings (489) (501) (1,796) Decrease in cash (460) (860) (336) Notes 1. There are no recognised gains or losses other than the profits for the year. 2. The interim results are unaudited and do not constitute statutory accounts as defined by section 240 of the Companies Act 1985. The comparative figures for the financial year ended 31 December 2005 have been extracted from the statutory accounts of the Group for that financial year and have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 3. The interim results have been prepared on the basis of the accounting policies set out in the Annual Report and Accounts for the year ended 31 December 2005. 4. A copy of the Interim Report is being sent to all shareholders and convertible loan noteholders. Further copies can be obtained from the Secretary of the Company at 39 Victoria Street, London SW1H 0EU or can be downloaded from our website, www.pcfg.co.uk. Enquiries: Tony Nelson PCFG Tel: 020 7222 2426Isabel Crossley/ Felicity Edwards St Brides Media and Finance Tel: 020 7242 4477 This information is provided by RNS The company news service from the London Stock Exchange