Savings bank PCF Group in takeover talks with Castle Trust Capital

PCF Group in takeover talks with Castle Trust Capital as embattled savings bank finally ends AIM share listing suspension

  • PCF Group in is early talks with Castle over a potential takeover deal
  • PCF’s shares now trading on AIM on the LSE once again following suspension 

PCF Group has revealed early-stage talks with Castle Trust Capital over a possible all share offer for the savings bank.

Talks emerge as the trading suspension of PCF shares is finally lifted, following the publication of delayed financial results and details of a new recapitalisation. 

Under the terms of the possible Castle offer, it is expected that PCF shareholders would have a small minority position in the combined group.

Talks: PCF Group has confirmed it is in early-stage talks with Castle Trust Capital

Last year, AIM-listed PCF suspended its shares after its chief executive of 13 years suddenly resigned ahead of a review of its ‘financial controls and reporting processes’.

PCF shares were down 5.88 per cent or 0.50p to 8.00p in late morning trading.

PCF said: ‘A further statement will be made as appropriate.

‘This announcement is made without the approval of Castle Trust Capital plc.’

Castle has until 28 June to either make an offer or walk away under UK Takeover Panel rules. 

For the year to 30 September, PCF posted a £3.1million statutory loss and an adjusted profit before tax of £700,000, whilst operating income rose 1 per cent year-on-year to £26.8million.

The company noted that its business and financial performance was hit by the remediation of legacy governance and control issues.

During the period, net loans and advances fell by 15 per cent to £364million, new loan origination totalled £187million and credit impairment charges amounted to £6.7million.     

PCF announced it would also raise £2.74million via the issue of some 54.8million new shares which would represent 21.9 per cent of the company’s existing share capital.

The placing shares are being bought by Somers Ltd, PCF’s majority shareholder, and will see its interest in the company rise to 73.3 per cent, up from 64.4 per cent. 

PCF said Somers remains supportive of the company and has indicated its willingness to support a further £1.48million equity subscription next month.

Simon Moore, chair of PCF, said: ‘Though the 2021 financial year was a difficult one for the PCF Group, with significant events and subsequent change taking place in the business, I am pleased to report that since the end of this reporting period, amidst a challenging social and economic backdrop, the Group has achieved major milestones in its recovery programme”.

‘With strong progress made against our remediation and enhancement objectives, the Board and Executive Team can once again begin to focus on driving increased levels of automation and exploring product development to diversify and develop our franchise.”

‘I am pleased that Garry has now been appointed as CEO of the Company. Garry and the Executive team will continue the work started in the previous year, making PCF Bank ready for both the challenges and opportunities that lie ahead. His appointment provides the certainty and stability that are needed at the Group going forward.’