PCF.L Regulatory News (PCF)

15 Mar 2005 07:30

Private & Commercial Fin Group Plc15 March 2005 Private & Commercial Finance Group Plc ('PCFG' or 'the Group') PCF.L / Index: AIM / Sector: Speciality & other finance PRIVATE & COMMERCIAL FINANCE GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Private & Commercial Finance Group Plc, the AIM quoted finance house, announcesits results for the year ended 31 December 2004. Overview: •Consumer finance division growing following NIG case •Karma Cars sales improving after a difficult start •Strong growth in business finance division •Actively seeking acquisitions CHAIRMAN'S STATEMENTThe Group is undergoing a process of rebuilding following the successfulconclusion of our protracted damages claim against National Insurance &Guarantee ("NIG"). The case affected our performance in 2003 and 2004, mainlybecause we believed it prudent to rein back new business growth and allow ourportfolio of motor finance receivables to decline in case the court ruledagainst us. Importantly, following the ruling, we have been steadily rebuildingthe portfolio month on month and we believe that there are significantopportunities going forward. Accordingly as expected, the result for the full year ending 31st December 2004is a net loss of £2,207,330 (2003 net loss of £989,477) on turnover of£31,123,906 (2003: £31,350,712). The loss per share was 15.0p (2003: (6.5p)). Consumer Finance DivisionWe have built a business based on sound principles. We continue to use a networkof agents and brokers which results in a costs structure in proportion to thebusiness introduced to us in contrast to the traditional model of having abranch network entailing high fixed costs. The rebuilding of the portfolio, following the successful outcome of the NIGcase in June 2004 is proceeding despite the intense competition for new businessand the slow down in consumer spending in recent months. The portfolio grew by7% in the second half of 2004, a satisfactory performance in the currentclimate. We will be rolling out a Personal Contract Purchase ("PCP") product, fordelivery via the internet-based proposal system operated by this division inApril, which we believe will also increase sales. Karma Cars Karma Cars, our retail operation based in Watford, Hertfordshire, began tradingat the beginning of the fourth quarter of 2004. The timing of the opening wasdictated by the ultimately successful outcome of the application for planningpermission. This was not the ideal time to launch the venture as it istraditionally the lowest quarter of the year for car sales. The fall in consumerspending, which began in October, proved an additional drag on sales andexacerbated the teething problems normally associated with opening a newventure. This resulted in a significant loss in its first three months inaddition to the significant setting-up costs expensed in the year. In December we commissioned Graham Dry, a former managing director of PerryMotor Group, to review the business and following his report we retained him tooversee the implementation of measures to improve sales and margins. In Januarywe replaced the general manager and his successor is working closely with Mr Dryon the turnaround plan. Each successive month since the business opened has seen an increase in thenumber of cars sold. We remain confident in the original business model behindthe venture, that is of creating a vertically integrated car retail and financeoperation. However, its success obviously depends on sufficient volumes of carsales and we are monitoring the situation closely. We will keep shareholdersfully informed of developments. Business Finance Division The division maintained the strong growth seen in the third quarter. Newbusiness in the second half was 46% higher than in the first half and the fourthquarter was an all-time record for the division. As a result new businessvolumes increased for the seventh year in succession. The growth has continued apace into 2005. The prospects for this division arehighly encouraging and we expect it to make another positive profit contributionto the Group this year. Our confidence has been cemented by the recruitment ofnew staff to ensure that we maintain our levels of customer service. Dividend It is not the board's intention to recommend the payment of a final dividend forthe year. Summary The last two years have been exceptionally difficult due to the problems imposedon us by the actions of NIG which have interrupted our previous regular patternof year on year profits growth. I believe we have finally turned the corner andthat the business will recover to its former levels in the not too distantfuture. I would like to thank all those who have been exceptionally supportive duringthis past period, which besides our hard-working staff, includes our bankersparticularly Barclays Bank who fund the Motor Finance Division. We have a successful track record of acquisitions of both portfolios offinancial receivables and companies. In order to accelerate our return toacceptable levels of profitability we are considering a number of possibleopportunities with the aim of enhancing shareholder value. Michael CummingChairman15 March 2005 Issued on behalf of Private & Commercial Finance Group Plc by St Brides Media &Finance Ltd, 46 Bedford Row, London WC1R 4LR Press Contacts:Tony Nelson PCFG Tel: 020 7222 2426Cliff Feltham/Isabel Crossley St Brides Media Tel: 020 7242 4477 Group profit and loss accountfor the year ended 31 December 2004 2004 2003 Notes £ £Group turnover 31,123,906 31,350,712Cost of sales (21,080,594) (21,235,678) ---------- ----------Gross profit 10,043,312 10,115,034 Administrative expenses (9,679,679) (8,492,914) --------- ---------Operating profit 363,633 1,622,120 Interest receivable 3,877 10,504Interest payable (3,068,006) (3,194,505) --------- ---------Loss on ordinary activities before taxation (2,700,496) (1,561,881) Tax credit on loss on ordinary activities 493,166 572,404 --------- ---------Loss on ordinary activities after taxation (2,207,330) (989,477)Minority interests: Equity - 33,876 --------- ---------Loss attributable to members of the parent company (2,207,330) (955,601)Ordinary dividends on equity shares 3 (38,315) (239,988) ---------- ---------Retained loss for the year (2,245,645) (1,195,589) ========= ========= Earnings per 25p ordinary share - basic 4 (15.0)p (6.5)p There are no recognised gains or losses other than the loss for the year. Group balance sheetat 31 December 2004 2004 2003 £ £Fixed assetsIntangible assets 437,879 493,556Tangible assets 1,437,798 638,745 ---------- --------- 1,875,677 1,132,301 ---------- ---------Current assetsStocks 1,324,925 - Debtors: amounts falling due: |----------| |----------|within one year |21,318,224| |27,221,145|after one year |33,071,186| |31,890,621| |----------| |----------| Cash at bank and in hand 54,389,410 59,111,766 1,353 1,114,003 ---------- ---------- 55,715,688 60,225,769Creditors: amounts falling due within one year 5,055,014 5,162,951 ---------- ----------Net current assets 50,660,674 55,062,818 ---------- ----------Total assets less current liabilities 52,536,351 56,195,119 Creditors: amounts falling due after more than one year47,383,450 48,766,106 Minority interestsEquity - 51,677 ---------- ----------Total assets less liabilities 5,152,901 7,377,336 ========== ========== Capital and reservesCalled up share capital 3,798,842 3,766,036Share premium account 2,474,051 2,411,848Capital reserve 74,394 74,394Other reserve (243,160) (169,361)Profit and loss account (951,226) 1,294,419 ---------- ----------Equity shareholders' funds 5,152,901 7,377,336 ========== ========== Group statement of cash flowsfor the year ended 31 December 2004 2004 2003 £ £ Net cash inflow/(outflow) from operations 4,175,924 8,612,976 ---------- ---------- 4,175,924 8,612,976 ---------- ----------Net cash outflow from returns on investments andservicing of financeInterest paid (2,988,041) (3,106,582)Interest received 3,877 10,504 ---------- ---------- (2,984,164) (3,096,078) ---------- ---------- Tax paid (102,589) (680,582) ---------- ---------- Capital expenditure and financial investmentPayments to acquire tangible fixed assets (1,344,633) (364,761)Receipts from sales of tangible fixed assets 209,076 560,452 ---------- ----------Net cash (outflow)/inflow from capital expenditureand financial investment (1,135,557) 195,691 ---------- ----------Net cash outflow from equity dividends (87,106) (328,638) ---------- ---------- FinancingProceeds from issue of ordinary share capital - 86,897Proceeds from issue of convertible loan notes - 2,908,112Payments to acquire ordinary shares in Employee Share Option Plan (73,799) (169,361)Proceeds from borrowings 3,872,242 35,327,439Repayments of borrowings (5,265,715) (41,499,348) ---------- ----------(Decrease)/Increase in cash (1,600,765) 1,357,109 ========== ========== Notes to the financial statementsat 31 December 2004 1. Financial Information - The financial information set out above does not constitute the Group's statutory accounts for the years' ended 31 December 2004 or 31 December 2003, but is derived from those accounts. The statutory accounts for 2003 have been delivered to the Registrar of Companies in England and Wales, and the auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The Accounts for 2004 will be delivered following the Company's annual general meeting. 2. Basis of Preparation - The figures included in this preliminary announcement have been prepared on the basis of the accounting policies set out in the 31 December 2003 financial statements. 3. Dividends - The board is not recommending the payment of a final dividend. 4. Earnings per Ordinary Share - The calculation of basic earnings per ordinary share is based on losses of £2,207,330 (2003 - loss £955,601) and on 14,747,310 (2003 - 14,811,899) ordinary shares, being the weighted average number of shares in issue during the year. Due to the level of the exercise prices and exercisable dates of the share options and convertible debt, they are not dilutive of earnings. 5. The 2004 Annual Report & Accounts will be posted to all shareholders on 5 April 2005. This information is provided by RNS The company news service from the London Stock Exchange