Half Yearly Report

Private & Commercial Finance Group plc

("PCFG", "Private & Commercial Finance", the "Company" or the "Group")

Interim Results for the six months ended 30 September 2015

Excellent portfolio performance drives strong growth in profitability

Private & Commercial Finance (AIM: PCF), the AIM-quoted finance house, today announces its interim results for the six months ended 30 September 2015.

Financial Highlights:

· Profit before tax up 80% to £1.53 million (2014 - £0.85 million)

· Adjusted profits before tax and banking project costs were £1.59 million (2014 - £0.85 million)

· Basic earnings per share up 75% to 2.1p (2014 - 1.2p)

· Fully diluted earnings per share up 50% to 0.9p (2014 - 0.6p)

· Return on average assets ('ROAA') increased by 61% to 2.9% (2014 - 1.8%)

· Fully diluted after tax return on equity ('ROE') up 49% to 14.0% (2014 - 9.4%)

· £25.7 million (2014 - £22.8 million) of unearned finance charges to contribute to earnings in future years

· Trading for the full year anticipated to be ahead of current market expectations

Business Highlights:

· 13% increase in H1 new business volumes to £32.1 million (2014 - £28.3 million)

· Total portfolio growth of 15% to £108 million (2014 - £94 million)

· Over 14% of new business originations coming from direct channels (2014 - 12%)

· Record low level of impairments as portfolio quality continues to improve

· Regulatory Business Plan for a banking licence has been submitted to the PRA/FCA

· Committed debt facilities of £120 million (2014 - £98 million) with headroom of £32 million (2014 - £12 million) to fund portfolio growth

· Preparations complete to return the Company to the dividend list

Commenting on the results Scott Maybury, Chief Executive of PCFG, said:

"We have delivered excellent profits growth, ahead of management expectations, through strong new business origination and continued improvements in both operational gearing and portfolio quality."

"The net assets of the Group have recently almost doubled to £21.5 million following the early conversion of loan notes by our majority shareholder Bermuda Commercial Bank ('BCB'), and we see this as an important step in strengthening the capital base ahead of our banking licence application, which continues to progress. We are also looking forward to developing closer ties with BCB as the two businesses provide the opportunity for synergies on costs, funding, infrastructure and expertise."

"We have significant headroom in our existing funding lines to support ongoing growth and a good pipeline of new business. With these components in place and with year-to-date trading strong, we anticipate that the current financial year will be ahead of market expectations."

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About Private & Commercial Finance Group plc (www.pcfg.co.uk)

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

Profit before tax for the six months period ended 30 September 2015 increased by 80% to £1.53 million (2014 - £0.85 million) and profit after tax increased by 87% to £1.22 million (2014 - £0.65 million). These results were achieved after expensing £67,000 of costs relating to our banking licence application.

The improved profits were due to strong portfolio performance in terms of both quality and margin. The portfolio grew by 15% in the period to £108 million (2014 - £94 million). Gross profit increased by 12.6% while administration expenses, thanks to a reducing impairment charge, fell by 2.6%. The operating profit margin increased to 16.4% from 14.4%.

Fully diluted earnings per share increased by 50% to 0.9p, up from 0.6p in 2014, and our key performance indicators of return on average assets ('ROAA') and fully diluted after tax return on equity ('ROE') reached record levels. ROAA increased by 61% to 2.9% (2014 - 1.8%) and ROE increased by 49% to 14% (2014 - 9.4%). These indicators are ahead of our medium-term targets, but will moderate as additional infrastructure and capital are introduced to support our strategic objective of becoming a bank.

We now have £25.7 million (2014 - £22.8 million) of unearned finance income on the balance sheet which will underpin earnings for the next three years. Portfolio performance remains good and impairment levels remain low, reflecting the expertise of our staff in underwriting, risk evaluation and credit control.

Balance sheet

In the period, our largest shareholder Bermuda Commercial Bank Limited ('BCB') converted their holding of convertible unsecured loan notes into equity. This resulted in the issue of new shares to the value of £8.5 million which contributed significantly to the Group's net assets, almost doubling them to £21.5 million (2014 - £11.1 million). The enhanced net asset position and a more conservative gearing ratio of 409% (2014 - 769%) will provide the resources and balance sheet strength necessary for transition into a regime of capital adequacy and liquidity regulation.

We are looking forward to developing closer ties with BCB as the two businesses provide the opportunity for synergies on costs, funding, infrastructure and expertise. These initiatives, including the possible alignment of our accounting reference date, will deliver considerable benefit to both companies and work has begun to deliver these synergies.

On 18 November 2015, following the resolutions passed at the Annual General Meeting, the legal mechanism to reclassify the share premium account and capital reserve to distributable profits was approved by the court, which completed the preparations necessary to pay a dividend. The Board is committed to returning to the dividend list at the appropriate time, after taking into account the Group's capital needs, including the response to our capital model from the regulatory authorities.

Funding and banking licence application

Available facility headroom in the period increased to £32 million (2014 - £12 million). This headroom and the total available committed facilities of £120 million (2014 - £98 million) provide the necessary funding for our current growth plans.

We have submitted our Regulatory Business Plan to the Prudential Regulation Authority and the Financial Conduct Authority and, further to some revisions and the imminent lodgement of capital and liquidity plans, the pre-application phase of the banking licence application process should be completed in the near future. The regulatory business, capital and liquidity plans are an agreed framework for operating as a regulated bank and include the creation of a more robust control structure in terms of internal audit, compliance and governance.

Staff

I would like to thank all our staff for their commitment and effort throughout the period.

Nick Winks left the Board at the end of October and I would like to thank him for his highly regarded advice and contribution as a non-executive director over the last four years.

I am delighted to welcome three new members to our board. David Bull joined as our new Finance Director in August and we are already benefitting from his previous experience at a UK 'challenger' bank and, before that, at the Bank of England.

Andrew Brook and Mark Brown have taken up their appointments as non-executive directors with immediate effect and will add extensive knowledge and experience as we enter the next stage of our development.

Current trading and outlook

New business levels remain buoyant with a 13% increase in originations in the period to £32.1 million (2014 - £28.3 million). As always, there is a competitive environment in both the consumer and business finance markets, however, healthy progress in the UK economy has supported UK car sales and the demand from businesses for business-critical assets. The outlook for both our markets is positive with increases in real incomes and corporate profits expected to support sustained growth in our origination levels.

We have delivered excellent profits for the first six months of the year and anticipate that trading for the current financial year will be ahead of market expectations. The business is well placed to deliver further scale and profitability growth as we execute our strategies to diversify funding sources and expand our new business channels. As a result, we are confident of the Group's long-term prospects.

D G Anthony

Chairman

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 2015 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 2015.

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 20%, representing the best estimate of the annual effective tax rate applied to

operating profit before tax for the six month period.

7. The calculation of basic earnings per ordinary share is based on a profit of £1,219,782 for the period on 59,061,612 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 £1,451,827 for the period, before deducting interest on the convertible loan notes of £290,057, on 170,378,204 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 £107,505,905 is reported net of unearned future finance income of £25,708,562.

9. The 2015 Interim Report will be posted to all shareholders and convertible loan note holders on 7 December 2015. 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.