Image of hand with pencil and calculator on sheet of figures, captioned: 'PCFG - the numbers add up'AIM-quoted finance
house Private & Commercial Finance Group (PCFG) is among the
few companies to have weathered the economic storm, emerging at the
end of the year to 31 March with pre-tax profits at double their
2009 level.

The group released its results for the year ending
31 March 2010 at the end of June, posting a pre-tax profit of
£528,361 as well as strengthening its balance sheet with £1.4m of
new share capital and the repayment of £2.3m of loan stock.

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Its profit increased despite a reduction in its
portfolio of receivables, dropping 9.4% to £121.9m.

Turnover, gross profit and operating profit
dropped, but profit before tax rose about 101%.

Profit after tax rose almost 138%, from about
£159,000 in 2009 to £378,000 in 2010.

Its business finance division advanced £27m of new
business during the year. The group’s leasing activities fall
within the business finance division, and 80% of these are in
wheeled assets, including cars and light commercial vehicles.

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Robert Murray, managing director of the group’s
motor finance and business finance divisions, said: “Profit was
effectively double what it was a year ago and that was
significantly ahead of market expectations.

“This was because of a combination of a number of
factors – in addition to benefitting from revaluations of our
interest rate swap portfolio, there has been a reduction in bad
debt over the last 24 months and we have seen improvement in the
quality of business we’ve written. There were also better margins
because of the space vacated by other players coming out of the
market.”

However, Murray added that there had been an
overall reduction in portfolio size, caused by the reduced
availability of senior debt in the market.

“The majority of the banks we deal with have been
supportive and offered us extended facilities until October 2011
which is about as long as we would expect to get with the current
climate. However, it restricts our ability to push the business
forward.”

He is nevertheless confident of future growth,
however, saying there is sufficient demand to warrant seeking new
funding lines.

With access to additional funding, the group will
also be looking at portfolio acquisitions in the near future,
Murray said.

PCFG has also launched a new IT platform,
implemented in September last year, encompassing administration,
accounting and collections.