AIM-listed Private &
Commercial Finance Group (PCF) has withdrawn from the sales aid
small ticket leasing arena.
Managing director Robert Murray said the
company will focus on its core areas in order to maintain
profitability.
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“Sales aid was a relatively small part of the
business,” Murray said.
“On the business finance side, our core
strategy is to finance hard assets, whether vehicle or plant and
machinery.
“We have progressively tightened our
underwriting, and are trying to improve yields and the quality of
business, to write the best business as possible.”
The sales-aid segment represented around 10
percent of PCF’s monthly new business volumes.
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By GlobalData“In markets where there are restrictions on
the amount of funding available, we decided it would be better to
withdraw completely of an area that we don’t consider core, to
better concentrate on the rest,” Murray added.
He emphasised that the company is still open
to new business, however, and continues to operate in all other
areas.
“The company’s growth is dependent on living
within existing funding availability,” he said. “At this point,
banks are not willing to lend further, although our current
relationships continue to be very supportive of us.”
Thus far, PCF has maintained a good position
in the market, despite the challenging conditions.
In December, in its interim results, the group
posted a 15 percent increase in pre-tax profits, to £496,960
(€556,220) and a turnover of £31.9 million, up 36 percent
year-on-year.
“The overall market for credit has shrunk, but
our competitors have shrunk as well, leaving us in a neutral
position,” Murray added.
Chris Bragg, an analyst at Redmayne-Bentley, a
stock broking firm, said these results were “excellent”, given the
economic climate.
However, he cautioned that “in such
circumstances, even PCF’s carefully underwritten portfolio will not
be immune from what is happening in the wider economy”.
PCF, in which MAN Financial owns an 11.9
percent shareholding, expects the coming months to be
“challenging”, but is confident that it has “all the resources and
qualities needed to manage the business through the recession and
to prosper in the long-term”.
