Pink breached FSA rules and PTFS parent made a £3.3m loss last year

4 October 2010 | By Natalie Thomas

Personal Touch Holdings and Pink Home Loans both made losses of over £3m in 2009, their accounts reveal.

PTH, the parent company of Personal Touch Financial Services, posted a pre-tax loss of £3.3m, but its network arm PTFS made a profit before tax of £2.6m for the year, its accounts show.

Pink Home Loans lost £3.2m before tax in 2009, a slight improvement on last year’s £3.3m loss.

The accounts for Advance Mortgage Funding, which trades as Pink Home Loans, show the network breached Financial Services Authority capital requirement levels in 2009. But in February 2010 it issued preference share capital of £600,000 to meet regulated capital requirements.

The network, which is owned by Skipton Building Society, blamed the capital requirement shortfall on an impairment of £1.4m which the company made against its subsidiary BDS Mortgage Group, which it acquired in 2008.

In the directors’ report it says: “As at December 31 2009 the company had breached its regulated capital requirement levels, prin-cipally as a result of providing impairment against its holding in its subsidiary undertakings.

“The company issued further share capital in February 2010 and fore-casts show that the com-pany will be in excess of its regulatory capital thres-hold for the foreseeable future.”

The accounts reveal that Skipton will continue to provide financial support to the network.

David Copland, managing director of Pink, says: “The outlook for 2010 is a lot better. We have reduced our costs in line with our income and we are lucky that Skipton has been supportive, which has put us in a much stronger position. We have maintained our appointed representative numbers and are back on budget.”

Copland could not comment on whether the network is in talks to be acquired.

Meanwhile, Doug Crawford, chief executive of PTFS, says the fact that the network is continuing to record profit growth is testament to its ability and dedication to the adviser community.

He adds: “While this perfor-mance is pleasing, it is more significant that we have achieved this level of growth while retaining our strong cash position.

“We have cash reserves of £3.4m and are £4.9m ahead of our mini-mum capital adequacy require-ments. This, coupled with a lack of bank debt, puts us in the enviable position of being protected from unforeseen economic conditions while also being able to react quickly should acquisition oppor-tunities arise.”

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