Independent lender
moving into ‘period of growth’. Charles Wheeldon
reports.
Go deeper with GlobalData
Independent
lender Private and Commercial Finance Group (P&C) has announced
the end of a two-year period of stagnation, unveiling a full-year
pre-tax profit of £455,336 and plans for a new funding
facility.
“It has been hard going,
especially for independents and for our competitors who have been
driven out of business, but we have moved from a period of
stagnation to one of growth,” said P&C managing director Robert
Murray.
Although P&C’s profits
are 14% down on 2010’s full year result of £528,361, Murray puts
this down to the company’s inability, until recently, to secure new
funding – a situation which led to a 13% reduction in P&C’s
book size.
“Last year we spent a lot of
time canvassing banks and looking at alternative lending facilities
and we finally signed a new £7m funding facility on 27 June,”
Murray said.
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By GlobalData“This is a positive step
because the senior debt market has been difficult in the past two
years, but this has thawed, especially from non-UK banks. UK banks
have had a number of issues, so we have cast our net wider – and we
hope [the new funder] will look to growing their facilities with us
in time.”
P&C CEO Scott Maybury
added the new facility is provided by an overseas bank with UK
representation.
The tie-up is a new
relationship for the company, although the bank is not new to the
sector, and offsets the preoccupation of some traditional lenders
with the uncertainties around Basel III and the resulting lack of
new facilities.
“It is a case of finding
banks who are new to us and who see an opportunity in the sector,”
Maybury said.
“A lot of banks recognise
this as an opportunity as they realise the traditional lenders –
including some of the Irish banks – are no longer interested or
involved in the sector.
“But you have to bring [the
new banks] around to the way it is done and that it is a secure
area to lend into. It is a different sector to what they are used
to.”
The funding will allow
P&C’s consumer finance division, which sources business through
motor finance brokers, to provide more finance for car retail
customers.
Meanwhile, its business
finance division will increase provision of hire purchase products
for vehicle and plant assets. Murray said he will make use of the
facility during the current financial year through to March
2012.
Murray expects profit to grow
to £650,000 next year, although he will revise this if a current
attempt to acquire a £6m portfolio of finance receivables is
completed later this month.
Murray said cost-cutting
measures taken during the last financial year had not yet
manifested themselves on the company’s balance sheet, thereby
adversely affecting profit.
While P&C’s Croxley Green office in Hertfordshire has
been closed, it remains on lease until this month, while a
reduction in headcount from 65 to 52 had generated redundancy
costs.
