http://www.pcfg.co.uk

Trading at a significant discount to current NAV. Recently put 4M in the bank. Two brokers notes out from August for BUY and ACCUMULATE.

Company also pays a dividend.

Seems to have been forgotten so maybe now is the time to BUY.

SP 38p

NAV 50p

Market cap 5.6M

Turnover 31M

Would have been in profit for the tenth year in a row if NIG hadn't come along. Recouped 4M from NIG and hoping to get costs back.

Growing

Paying a divi

Liked by the city.

2 broker notes both suggesting to buy.

This was taken from the SUS results released 16th Sept ;

Advantage Finance, our motor car finance subsidiary, which I launched from scratch some five years ago in July 1999, made a significant advance in profit before tax for the half year from #768,000 to #1,096,000. Advantage has proved outstandingly successful and is trading ahead of budget which is very encouraging indeed. In addition, Advantage has increased its deferred revenue from #8.0m to #10.4m.
Advantage, our motor finance business, goes from strength to strength. With turnover up over 20%, the company produced record profits at half-year up 40% and slightly above budget. It is encouraging that most of this increase in business comes from deepened relationships with our key dealers which impacts both upon efficiency and the subsequent quality of our revenue. Indeed for the first time ever Advantage achieved over #1m of collections (excluding settlements) every month this year. New products have been introduced, brokerage income increased and insurance accreditation obtained so as to improve still further the overall finance package we offer our dealers. I anticipate further growth in the second half of the year.

Now it is really worth looking at the financials of SUS in comparison with PCF. I am not an accountant but the turnover and shares in issue are very similar to PCF. The market cap of PCF is 5.6M compared to SUS which is ....wait for it.....66M ! However SUS are making a profit of 9M compared to the usual profit of PCF of 1.3M (2002) and -1.56M in 2003 but only due to the NIG problem which has been rectified in favour of the company. Share in SUS were trading at....over a fiva ! This shows the potential upside of PCF.

So with PCF's results,which have been bought forward, due on 30th Sept. I am certainly looking for a significant mark-up in the share price.

Results comming up Thursday.Keep it on your monitor

Nice start to the day.

If this company has great potential why has the price dropped consistently. There are no buyers today (or sellers) according to money am. Won't the increase in interet rate make things worse for this company?

Happy1 - Have you tried to understand why SUS is on a different rating, rather than just use its figures as a ramp??

This statement of yours, comparing the market caps and shareprices of SUS and PCF, is extremely underhanded and practically a con IMO:

Now it is really worth looking at the financials of SUS in comparison with PCF. I am not an accountant but the turnover and shares in issue are very similar to PCF. The market cap of PCF is 5.6M compared to SUS which is ....wait for it.....66M ! However SUS are making a profit of 9M compared to the usual profit of PCF of 1.3M (2002) and -1.56M in 2003 but only due to the NIG problem which has been rectified in favour of the company. Share in SUS were trading at....over a fiva ! This shows the potential upside of PCF.


Firstly, the two companies' turnovers may be in the same ballpark but the profit generated by simlar turnover levels are extremely different due to many factors but especially gearing:

The turnover of SUS is roughly equivelant to its assets, so it isn't paying out a massive proportion of its gross profit in interest to a third party.

PCF turnover is many times its assets and is effectively reloaning out money that it has borrowed. It therefore pays out enormous amounts of interest, greatly reducing any profit made on the financing.

The figures therefore suggest that SUS is operating a higher margin, safer business and potentially has more growth potential, if they choose to increase their book with additional gearing, in a similar fashion to PCF.

SUS post tax profit is approximately 6.3mln per year and growing. With 11.7mln shares this gives a rough PE of 10.

Working backwards, a PE of 10 applied to PCF's current sp implies that PCF needs to make a profit of approx 550k to justify its current price.

Here is estimated profit after tax for the next two years from the Seymour Pierce broker note:

2004E 2005E
-518k 557k

As you can see PE is irrelevant for this FY as a loss is expected again.
PE for 2005 is 10, comparable to SUS.
Should PCF really be on a similar rating, with its dependance on massive levels of borrowing?
What happens after 2005? Well there is clearly risk associated with PCF's new ventures, so we'll wait and see how they get on shall we?

Rgds
dell

P.S. PCF's results were only brought forward as the original announced date was in contravention of AIM rules(require interims to be published within 3 months of period end). Such a c*ck-up hardly inspires confidence in the FD or NomAd IMO..

dell as I have already answered your question on ADVFN regarding the sector and the growth factor for PCF I will not answer again.Someone told me you are a shorter dell !! Back to MT. with you

Angi the reason for the drop was due to the NIG problem which has now been remedied with PCF winning 4M + costs. Angi please also read the broker notes of the PCF website.

I see today that they buying has picked up a little.

Happy1 - If I was shorting this(I think the mkt cap is too small anyhow), I'd be happy to tell you.

I'm not.

Your answer on ADVFN was nonsense IMO. I hoped you might do better over here.

Anyway, I think your belief that PCF turnover dropped purely because of the NIG case is simply naive.

There is much media reporting on the fact that internet loan providers are squeezing POS car finance lenders.

PCF's venture into new areas suggests that they are concerned about the prospects of growth with their existing model. You don't mess with a successful formula...

As for the suggestion that the fall in turnover was solely due to the NIG case:

1)Rank and file at PCF would have been unaffected by the NIG case and they are the ones who generate the turnover. It fell significantly.

2)There has also been the argument put forward that NIG reduced lending because the possibility of losing the case constrained their cash. I don't see that as credible, bearing in mind that they recently increased their bank facility to 75mln.

3) If the NIG case really was such a distraction, won't launching a new business be similarly distracting??

Rgds
dell

All IMO, DYOR

dell

As the broker notes state the drop in SP was due to NIG and the management having to re-route funds,as a precaution,and concentrate on the case. Subsequently they won and the money is in the bank.

Now the management have time on their hands they can certainly look at new ventures such as Karma where they,the company,and the brokers see a good growth potential.

What do you expect them to do sit on their hands and maintain a constant turnover ?

As you may have read they will have two businesses. One will be lease hire where they will also finance the deals and then at the end of the lease period the cars will be sold through Karma thus generating additional revenue and also the possibility of further finance.

Online prices coninue to move higher so expect a move with a few further buys.

A BLUE DAY !

Results tomorrow. ;-)

Keep your eye's on this one tomorrow.

Overview:

* Resumption of strong organic growth with over 20% rise in sales in the third
quarter
* New Karma Cars site open
* Loss for the first half, as previously advised
* Interim dividend of 0.25p per share

Chief Executive Tony Nelson said: "It's great to be back on our customary growth
track. Both our new businesses are up and running and our established divisions
grew sales strongly in the third quarter.

Visitors to our first Karma Cars superstore which opens in Watford today
(30 September), will see a superb site in an excellent location.

The business model, which combines the sale of the car with the provision of the
finance, is compelling for a number of reasons not least of which is the extra
depth of the customer relationship and vastly increased potential for recurring
business."

A couple of quotes from today's results:


During the 18 months of the NIG case it was necessary for us, as a matter of
prudence, in case the decision went against us, to conserve cash by reining back new business growth and allowing our portfolio of finance receivables to decline.

Does this seem reasonable when they previously reported significantly increasing their loan facility?
Indeed, they refer to this in today's results:

Our larger banking facility has provided us with the capacity
to take on more business and has put us in a position to continue this growth.



The Group is moving progressively back towards profit although we still expect the second half to produce a loss.

The above statement doesn't fit well with their previous outlook suggesting that they hoped to near breakeven for the year.....

There's a lot of positive spin in these results but IMO, we need to see FY results before we can be sure that these guys are delivering.

Rgds
dell

dell what should be looked at is the 20% growth in core divisions and the opening of Karma which will now have a, hopefully, positive impact on year end figures. AS they said they can now concentrate of the way ahead after NIG I will tuck these away for a while. Divi of .25 as an interim covers the cost's of holding these presently.

Looking back this is the first interim dividend that the company is paying. A sign of what the future may bring I hope.

I think what will be interesting,given time, is how the car supermarket performs. As stated today this is now open and hopefully money shall start to roll in which will give a much better figure in months to come in terms of turnover and profit. This will be a model for further markets throughout the UK if this model works.

It was good to see that now the management can concentrate on the business in hand that it has grown 20%. Forward looking in these area's, which can be deemed PCFG's core area, are also growing and again will help them move back to profitability.

All good for the future and interim divi too. This shows faith to the shareholders and is also available in scrip form. It will be good to see any revised broker notes following the interims. If we hold longer term then final is alot nicer ;-)

Nice to see a blue start. Spread much better.Let's hope that it is the start of the turnaround.

Evryone going to sit on the side and watch this go to 50p in the autumn rally then ?

Looks like it even though the divi will be paid to holders on the 8th which would cover your dealing costs ;-)

Nice to see another move up today. Chart wise looks good with indicators positive .

She's on the road to recovery !

Seems like the 12K buy moved this 2.6% today ! No stock around !