PCF Group PLC Trading Statement (6848E)
October 22 2018 - 2:00AM
UK Regulatory
TIDMPCF
RNS Number : 6848E
PCF Group PLC
22 October 2018
22 October 2018
PCF Group plc
("PCF", the "Company" or the "Group")
Trading Statement
Record new business originations, trading in line with market
expectation and a recent acquisition provides added momentum
PCF Group plc, the AIM-listed specialist bank, issues an update
for the year ended 30 September 2018 and is pleased to report that
trading is in line with market expectations.
We can report that new business originations are 75% ahead of
last year at GBP148m (2017: GBP85m). We are also pleased to report
that the quality of originations has met management targets with
70% of originations being in our prime credit grades. The lending
portfolio has grown to approximately GBP219m compared to GBP146m at
30 September 2017, an increase of 50%. Our portfolio has continued
to increase rapidly and we are confident that our target to grow
the lending portfolio, through organic growth in existing products,
to GBP350m by September 2020 is on track.
The successes in new business origination reflect the benefits
of a banking model and our reputation for excellent customer
service. The months of August and September 2018 were consecutive
record new business origination months for the Group. Our increased
lending to the prime sector is a strategic decision enabled by
reduced cost of funds and aligned to our risk appetite and our
cautious outlook for the UK economy.
As referenced in previous announcements, the prime lending
markets for consumer motor finance and business asset finance are
competitive arenas and so, while we have seen an anticipated
reduction in net interest margin, there are inbuilt advantages to
competing in the larger prime markets that will improve future
profitability. Firstly, lending to prime borrowers leads to lower
levels of loan delinquency later and secondly, increased scale of
our lending book in proportion to our fixed costs improves our
operational gearing. Key in our drive for increased profitability
is our continued investment in technology to ensure we promote
efficiencies and meet the needs of our customers.
Following our success in achieving the Savings Champion Award
for 2018 Best New Provider, we have built our retail deposit base
to GBP190m (2017: GBP53m). We are also a participant in the Bank of
England's Term Funding Scheme which has further diversified our
funding base and helped to reduce funding costs.
On 8 October 2018, PCF announced the acquisition of Azule
Limited, a UK market leader in the provision of specialist funding
and leasing services to the broadcast and media industry. The
acquisition is a diversification of the Group's asset classes and
offers a new route to market with an origination capability of over
GBP50m per annum. The acquisition is subject to FCA approval for
change of control.
Scott Maybury, Chief Executive of PCF, commented:
"A diversified banking model is proving a great strength and our
first full year as a bank has been extremely encouraging. We have
made excellent progress against ambitious targets and our focus on
organic growth through existing lending markets has now been
supplemented with an earnings enhancing acquisition.
"We look forward to reporting our Final Results on 5 December
2018."
- end -
For further information, please contact:
PCF Group plc Tel: +44 (0) 20 7222
Scott Maybury, Chief Executive Officer 2426
Robert Murray, Managing Director
David Bull, Finance Director
Tavistock Communications Tel: +44 (0) 20 7920
Jos Simson / Simon Hudson / Edward Lee 3150
Panmure Gordon (UK) Limited Tel: +44 (0) 20 7886
Atholl Tweedie - Corporate Finance 2500
Charles Leigh-Pemberton - Corporate Broking
Stockdale Securities Tel: +44 (0) 20 7601
Robert Finlay / Richard Johnson - Corporate 6100
Finance
Henry Willcocks - Corporate Broking
Note
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
About PCF Group plc (www.pcf.bank)
Established in 1994, PCF Group plc is the AIM-quoted parent of
the specialist bank, PCF Bank Limited. With the advent of a banking
operation, the Group has the capability to increase its lending
portfolio significantly, with target portfolio sizes of GBP350
million in 2020 and GBP750 million in 2022. The Group will retain
its focus on portfolio quality and has the capability to lend
increasingly to prime segments of its existing finance markets. The
Group will also seek to diversify its lending products and asset
classes through acquisition.
PCF Bank currently offers retail savings products for
individuals and then deploys those funds through its two lending
divisions:
-- Consumer Finance which provides finance for motor vehicles to consumers; and
-- Business Finance which provides finance for vehicles, plant and equipment to SMEs.
The Group has a track record of strong financial performance and
an efficient and scalable business model, with significant room to
grow. Utilising its technologically advanced platform, the Bank
provides both depositors and borrowers with a high level of service
and a straightforward, simple range of products tailored to suit
their needs.
For media enquiries please contact media@pcf.bank
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END
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