Private & Commercial Finance – 5p

27 November 2012 – interim results

The finance house has announced excellent interim results covering the six months to 30 September, with pre-tax profit increasing by 40% to £340k (2011: £242k) whilst earnings per share doubled to 0.4p (2011: 0.2p), helped by a lower tax charge.  Of great significance has been the conclusion of the fund raising through the issue of £8.9m of unsecured convertible loan notes and the renewal of the £55m loan facility with Barclays for three years.  The issue of the loan notes will allow the group to replace the existing convertible loan notes maturing in September 2013 at a much improved interest rate.  The group should also benefit from the withdrawal of ING (Lease) UK from SME asset-based lending as the latter accounted for 40% of the broker market.  Net asset value per share is now 17.6p and we believe that for the first time in some years the group now looks well-placed for a period of sustained growth.  BUY.

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