Half Yearly Report

Private & Commercial Finance Group plc

("Private & Commercial Finance", "PCF" or the "Group")

Interim Results for the six month period ended 30 September 2014

Private & Commercial Finance Group plc (AIM: PCF), the AIM quoted finance house, today announces its unaudited interim results for the six month period ended 30 September 2014.

Financial Highlights:

· Profit before tax up 69% to £0.85 million (2013: £0.50 million)

· Profit after tax doubled to £0.65 million (2013: £0.33 million)

· Annualised return on average assets up 50% to 1.8% (2013: 1.2%)

· Diluted earnings per share up 50% to 0.6p (2013: 0.4p)

· Net assets up 12% to £11.1 million (2013: £9.9 million)

· Diluted net assets per share of 12.3p (2013: 11.7p)

· Loan loss provisioning charge fell by 16% to £0.9 million (2013: £1.1 million)

· £22.2 million of unearned finance charges to contribute to income in future years (2013: £19.6 million)

Business Highlights:

· The total portfolio has grown 9% to £94 million (2013: £86 million)

· 4% increase in new business originations in the period to £28.3 million (2013: £27.3 million)

· 19% increase in returning customers, representing 12.6% of originations

· Committed facility headroom of £11.8 million to fund portfolio growth, which has increased by a further £8 million since period end

Commenting on the results David Anthony, Chairman of PCF, said:

"We are pleased to announce that Private and Commercial Finance has delivered a robust set of results in the first half, with significant improvements in both profitability and loan book quality. I remain confident in management's ability to continue growing the business and deliver shareholder returns."

Scott Maybury, CEO of PCF, added:

"The Group has gone from strength to strength in the period, building on last year's performance. With portfolio growth up 9% and profit before tax up 69% we are on track to achieving the targets we set out last year and we are set to reach our short-term goal of a 2% return on assets in 2015. The anticipated timetable for obtaining a Banking Licence has been affected by our recent office move, but we are confident that our proposition remains a compelling one. With a strong balance sheet and greater facility headroom, we are well positioned to continue with the progress that has been demonstrated in the last 18 months."

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For further information, please visit www.pcfg.co.uk or contact:

Enquiries:

Private & Commercial Finance Group plc Tel: +44 (0) 20 7222 2426

Scott Maybury, Chief Executive Officer

Robert Murray, Managing Director

Zane Kerse, Finance Director

Panmure Gordon (UK) Limited Tel: +44 (0) 20 7886 2500

Fred Walsh / Peter Steel / Atholl Tweedie

Westhouse Securities Limited Tel: +44 (0) 20 7601 6100

Nick Ellis / Darren Vickers / Henry Willcocks

Tavistock Communications Tel: +44 (0) 20 7920 3150

Chris Munden / Niall Walsh / Lucia Caprani

About Private & Commercial Finance Group plc

Established in 1994, Private & Commercial Finance Group plc is an AIM-quoted finance house which has two main operating 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 highly efficient and scalable business model, utilising its specially developed internet-based proposal system to service national networks of brokers and suppliers.

Chairman's statement

Group profit before tax for the period ended 30 September 2014 increased strongly by 69% to £847,806 (2013: £503,277). Profit after tax doubled to £652,806 (2013: £327,133)

The strategies we have put in place to improve the profitability and quality of the portfolio are continuing to bear fruit. Return on assets during the period increased by 50% to 1.8% and we expect to achieve our initial target of 2.0% in 2015, when we intend to set ourselves a new and ambitious medium term target reflecting our confidence in the Company's continued growth.

The portfolio grew by 9% in the period to £94 million (2013: £86 million) and the resultant operational gearing has contributed to the improved profitability. The growth of the portfolio, however, has not been at the expense of credit quality or margins, with the gross profit margin increasing to 30.0% (2013: 29.3%) and the loan loss provision falling by 16% to £0.9 million (2013: £1.1 million). We remain committed to further improving the quality of the loan book, as well as growing it in size.

In October, we relocated our offices to the City of London. We agreed an early termination of the lease of our existing premises and took the opportunity and the incentives on offer to secure premises which are commensurate with our future ambition and appropriate for our planned growth.

Financial review 

Turnover in the period increased in line with new business growth and, as the portfolio grows, the amount of finance charges attributable to future periods continues to increase. We now have £22.2 million (2013: £19.6 million) of unearned finance income on the balance sheet, which will underpin profits over the next three years.

In the period, basic earnings per share increased by 100% to 1.2p (2013: 0.6p) whilst our fully diluted earnings per share showed 50% growth to 0.6p (2013: 0.4p). The dilution takes into account the conversion of all unsecured convertible loan notes in accordance with the terms of their issue.

Operational gearing has seen administrative expenses as a percentage of gross profit fall from 56.8% to 52.0% and we expect this reduction to continue as the portfolio grows.

Portfolio arrears continue to fall, reflecting the quality of the Group's lending criteria, underwriting and collection expertise.

Capital and funding

Net assets of the group increased by 12% to £11.1 million (2013: £9.9 million) and the balance sheet continues to strengthen, with the leverage ratio (excluding unsecured convertible debt) falling to 6.8 (2013: 7.2).

As at 30 September 2014, the Group had adequate funding resources for its immediate growth plans, with £11.8 million of headroom available from a total of £98 million of committed facilities (2013: £96 million) and, since that date, a further £8m of headroom has been documented and made available by our existing funders.

Following the unscheduled disruption of our office relocation, efforts will now be refocused on the strategic initiative of obtaining a Banking Licence. We are currently selecting suitable IT systems and completing the regulatory business plan, and whilst this project is approximately three months behind plan, we remain confident it will progress in the first half of 2015.

Current trading

There has been a distinct improvement in consumer sentiment as the economy improves. This is most apparent in our consumer finance division, where the strong performance in the UK car market has seen good levels of new business in the period, up by 10% to £17.4 million (2013: £15.9 million). This was slightly offset by a small decrease in business finance lending as a number of new entrants made market conditions more challenging, while at the same time investment in capital assets by businesses remains subdued. Originations in this division were £10.9 million (2013: £11.4 million). Overall new business lending for the Group was up 4% to £28.3 million (2013 - £27.3 million).

Repeat customers increased by 19% in the period, and they now account for 12.6% of all new business lending, representing a strong source of originations across both divisions.

From 1 April 2014, the Financial Conduct Authority (FCA) took over responsibility for the regulation of the UK consumer credit market. The Group has the required permissions to operate in this regulated environment and, whilst adding new compliance obligations, we see this as an opportunity for a business such as ours which has the infrastructure, knowledge and responsibility to operate within a regulated regime.

Staff

I would like to thank our staff for their efforts throughout the period. This cannot be better illustrated than by the professionalism and skill applied to an office relocation undertaken within a challenging timescale. This was achieved with no disruption to the ongoing business or our levels of customer service.

Outlook

We have delivered excellent profits growth in the period through portfolio growth, along with a focus on quality and cost control. For the future we intend to increase the scale of the business both by diversifying our funding and developing new routes to market. I anticipate satisfactory full-year results and have strong confidence in the longer term future of the business.

David G Anthony

Chairman

26 November 2014

GROUP INCOME STATEMENT

GROUP STATEMENT OF COMPREHENSIVE INCOME

GROUP BALANCE SHEET

GROUP STATEMENT OF CHANGES IN EQUITY

GROUP STATEMENT OF CASH FLOWS

NOTES TO THE INTERIM REPORT

1. The interim results are unaudited and do not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The comparative figures for the year ended 31 March 2014 are based on the statutory accounts of the Group for that period and have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2. The interim results have been prepared on the basis of the accounting policies set out in the Annual Report & Financial Statements for the year ended 31 March 2014.

3. These interim consolidated financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

4. The Group's turnover represents gross rentals and instalments from the hire, financing and sale of equipment, and the provision of related fee-based services, stated net of Value Added Tax.

5. The Group operates in the principal areas of consumer finance for motor vehicles and business finance for vehicles, plant and equipment. All revenue is generated in the United Kingdom.

Turnover, profit on ordinary activities before taxation, and loan loss provisioning charge are detailed below:

6. The income tax rate is 23%, representing the best estimate of the annual effective tax rate applied to operating profit before tax for the six month period. The effective tax rate for the period is higher than the standard rate for current Corporation Tax in the UK of 21% due to the effect of the reduction in the Corporation Tax rate on the deferred tax asset.

7. The calculation of basic earnings per ordinary share is based on a profit of £652,806 for the period on 53,022,537 ordinary shares, being the weighted average number of ordinary shares in issue during the period.

The calculation of diluted earnings per ordinary share is based on profit of £942,972 for the period, before deducting interest on the convertible loan notes of £290,166, on 170,377,367 ordinary shares, being the dilutive weighted average number of ordinary shares in issue during the period.

8. The Group's loans and receivables portfolio of £93,885,311 is reported net of unearned future finance income of £22,179,551.

9. The 2014 Interim Report and Financial Statements will be posted to all shareholders and convertible loan note holders on 3 December 2014. Further copies can be obtained from the Company Secretary at Pinners Hall, 105-108 Old Broad Street, London EC2N 1ER or can be downloaded from our website, www.pcfg.co.uk.