Spectacular figures from Arbuthnot

And by being fleet of foot and relying on retail customers to fund loan growth, Arbuthnot is on the up. Not that investors realise this fact: its current market value at £76m is still less than half the £156m market cap of Secure Trust Bank, a company in which Arbuthnot owns a 75 per cent shareholding.

Equally unusual is Arbuthnot’s latest half-year results. The big jump in profits includes an £8.5m goodwill gain engineered by the takeover of Everyday Loans by Secure Trust. Instead of a cash or equity deal, Arbuthnot bought Everyday for £1 and then redeemed £34m of debt owned by private equity and refinanced £37m of Barclays’ debt. That goodwill will reverse itself through the profit & loss account over the next two to three years.

However, with Everyday earning high interest returns on two to three-year consumer loans, and Aruthonot free of Arbuthnot Securities following the sale to Westhouse, broker Numis expects full-year pre-tax profits to rise from £5.1m to £17.1m after including the reverse goodwill gain above. Perhaps 2013’s projected profits figure of £19.8m is an even better guide as this produces EPS of 71.3p.