TIDMOPM
RNS Number : 1967S
1PM PLC
22 September 2014
22 September 2014
1PM PLC
("1pm" or the "Company")
FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2014
Record revenues, profits and earnings per share;
Strong trading momentum maintained; complemented by increasing
levels of new business
1pm plc (AIM: OPM), the AIM listed independent provider of
finance facilities to the SME sector, announces final results for
the year ended 31 May 2014.
Ian Smith, Non-executive Chairman commented: "In the year to 31
May 2014 1pm has delivered strong results through a combination of
factors including its unwavering commitment to the SME sector at a
time when other sources of finance for SME businesses remain
difficult to source, adherence to a rigorous underwriting process,
the loyalty of a growing network of over 100 finance brokers and
the hard work and dedication of the entire 1pm staff."
Financial Highlights:
-- Revenues up 35.6% to GBP4.2m (FY13: GBP3.1m)
-- Profit before tax up 73% to GBP1.35m (FY13: GBP0.7m)
-- GBP11.3m of new funding raised (FY13: GBP4.1m)
-- Bad debts and provisions as a percentage of the portfolio stood at 6.6 % (FY13: 8.97%)
-- EPS up 36.2% to 3.54p (FY13: 2.60p)
Operational Highlights:
-- Number of customers increased by 24.2% to 2,995 (FY13: 2,380)
-- New business written during the year increased 58.4% to GBP10.8m (FY13: GBP7.8m)
-- Increased number of partnerships formed with finance brokers
-- Introduced two new products (HP and Business Loans)
Chief Executive, Maria Hampton added:"The Company has now been
profitable on a monthly basis for 50 consecutive months; a
reflection of the hard work and dedication from the staff and the
Board.
"Demand for finance from SMEs continues to grow and the GBP11.3m
of new funds raised during the year has helped the Company to
provide a record amount of funding to new customers.
"1pm is in an excellent position to continue to grow against the
backdrop of the prevailing commercial lending environment within
the UK banking industry."
Contacts:
For further information, please
contact:
1pm plc
Ian Smith, Chairman 0844 967 0944
Maria Lewis, CEO 0844 967 0944
WH Ireland (NOMAD and Broker)
Mike Coe / Ed Allsopp 0117 945 3470
Winningtons Financial PR 07768 807631
Paul Vann paul.vann@winningtons.co.uk
About 1pm:
At the second Annual Small Cap Awards held in May 2014, the Company won
two awards including the most prestigious category "Company of the Year".
Chief Executive, Maria Lewis and Finance Director, Helen Walker were
also jointly awarded Small Cap Executive Director of the Year.
The Company was admitted to AIM in August 2006.
1pm plc is an established independent finance company focused on providing
SMEs with accessible funding to add value to their businesses. All customers
must have good credit histories and proven ability to repay their finance
commitments.
1pm currently provides assets finance from GBP1,000 to GBP50,000 for
a period of between 12 and 60 months and GBP1,000 to GBP25,000 for business
loans (repaid over 3-36 months).
Mission Statement - 'Helping the UK economy grow by providing funding
to businesses'
More information is available on the Company website www.1pm.co.uk
CHAIRMAN'S STATEMENT
I am delighted to begin my first annual report to shareholders
as Chairman of the Board by being able to congratulate the Company
on another very successful year. This is reflected in the financial
results for the year ended 31 May 2014, with revenue growth of
35.5%, an increase in profit before tax of 73.7% and an increase in
earnings per share of 36.0% to 3.5 pence. At 31 May 2014, the value
of the lease portfolio was GBP19.93m, an increase of 34.5% over the
prior year.
The business has delivered these strong results through a
combination of factors including; its unwavering commitment to the
SME sector at a time when other sources of finance for SME
businesses remain difficult to source, adherence to a rigorous
underwriting process, the loyalty of a growing network of over 100
finance brokers and the hard work and dedication of the entire 1pm
staff.
In relation to the staff effort, I would like to take this
opportunity to congratulate the Company on winning the 2014 Small
Cap Company of the Year award and Maria Lewis, Chief Executive
Officer, and Helen Walker, Finance Director, for jointly winning
Small Cap Executive Director of the Year 2014. In recognition of
the performance of the team, I am pleased to announce plans for
executive and staff share incentive schemes to be introduced in the
current financial year.
The Company operates in an environment where it has to meet the
challenges of increasing regulation, stronger competition and
innovation in the provision of finance to business. Your Board is
confident the Company can continue to succeed in this environment
by retaining and continuously improving its focus on providing
lease finance and loan products to SMEs. At the same time, these
industry challenges in themselves present opportunities for further
growth. The Board has therefore set out a strategic and operational
plan to develop the business over the next three to four years
which includes an appropriate mix of organic growth, new product
introductions and consideration of merger and acquisition
opportunities as they arise.
The raw material for the business is cash. The Company
successfully raised GBP11.3m in the year ended 31 May 2014 from a
number of sources and I would like to thank each provider of funds,
whether in the form of equity or debt, for their support for the
Company. Our plans for growth will naturally require further
funding. I am therefore pleased to report that the Company will
announce on the 22nd September 2014 a placing and open offer to
raise up to approximately GBP4.016 million (before expenses)
through the issue of up to 6,582,995 new ordinary shares at a price
of 61p per share. The proceeds of the fundraising will be used to
part fund the continued expansion of the Company's operations in
terms of business development, people, premises and systems as well
providing additional funding for the loan book.
Furthermore, given the strength of the financial results
delivered and the outlook for the future, the Board has decided
that a dividend will be considered for the first time in the
current financial year and a progressive dividend policy will be
introduced.
Your Board is confident of the Group's prospects and sees a
positive outlook for further growth in the current financial
year.
R I Smith
Chairman
19(th) September 2014
STRATEGIC REPORT
1PM PLC (1pm, the Company) is a specialist independent provider
of finance to the UK SME sector. Founded in 2000 and based in Bath,
the Group was admitted to the Alternative Investment Market in
August 2006. Over the past 14 years 1pm has grown organically and
helped nearly 6,000 customers, providing an invaluable service to
the UK SME market by helping to fill the funding gap left by the UK
banking industry.
Since 2010 the Company has been transformed. For the year ended
31 May 2010 the Company reported a GBP0.4m loss and at 31 May 14 it
has reported a profit before tax of GBP1.35m (FY13: GBP775k). Over
the same period the loan book has increased from GBP14.8m to
GBP20.4m and the Company's market capitalisation has increased from
GBP6.5m to GBP21m.
Staff numbers have increased to 17 and include 3 apprentices
from Bath College. The Company expects to recruit up to an
additional 20 staff over the next two years. The Company has a
distinctive culture and staff members have a genuine sense of
loyalty to the business. A number of benefits are provided
including flexible working hours, childcare vouchers, income
protection, life insurance, private healthcare and a pension
scheme. The Company's staff members always strive to act in a
professional manner to colleagues, clients, business partners,
shareholders and visitors and offer a prompt and efficient
service.
The Company's core business is finance leasing. During September
2013 a new business loan product was introduced and in June 2014
the provision of asset finance through Hire Purchase was also added
to our product offerings.
The Company regards itself as a responsible lender, follows a
strict policy when it comes to treating customers fairly and aims
to structure deals to give the client the best possible
outcome.
The Company follows strict lending criteria. However as 1pm is
an independent lender it has the flexibility of being able to
tailor deals to meet the customer's needs. All proposals are
underwritten manually and therefore the underwriters can take a
commercial decision, as opposed to solely using an automated
autoscore system. The maximum lend amount is currently GBP50,000
per customer.
At a time when many businesses are struggling to raise finance
through conventional sources, 1pm's unwavering commitment and focus
on supporting the SME sector has allowed the business to grow
significantly, and the introduction of the new Loan and Hire
Purchase products should enable the business to expand further and
to reach a more diversified market.
The Board has recently adopted ambitious, but robust and
risk-assessed plans aiming for significant growth over the next
three to four years, which are intended to result in the combined
portfolio reaching approximately GBP75m.
CHIEF EXECUTIVE OFFICER'S REVIEW
Financial Results
The financial year ended 31(st) May 2014 saw significant growth
and was the fourth consecutive year of increased profit and
revenue. Moreover, the Group out-performed market's original
expectations for the year.
Total revenue for the year increased 35.6 per cent. to GBP4.2m
(FY13: GBP3.1m), with profit before tax increasing by 73.7 per
cent. to GBP1.35m (FY13: GBP0.775m). Earnings per Share increased
by 36 per cent. to 3.55p (FY13: 2.60p).
The Group's balance sheet has continued to strengthen during the
year with net assets as at 31(st) May 2014 standing at GBP7.00m
(FY13: GBP4.56m) a 53.6 per cent. increase.
Portfolio performance
The lease portfolio has also grown significantly during the
year, increasing by 34.5 per cent. to GBP19.93m (FY13: GBP14.82m).
However, no single customer accounts for more than 0.31 per cent.
of the total portfolio value, with an average capital lend of
GBP8,200. Notwithstanding the current economic climate, defaults
are at an all-time low of less than 0.7 per cent. of the portfolio
balance and bad debts and provisions as a percentage of the
portfolio stand at 6.6 per cent (FY13: 8.97 per cent.). These
figures reflect the Group's continued focus on credit
management.
As at the 31(st) May 2014 the loan portfolio stood at just over
GBP0.5m with no arrears or bad debts. The average loan term is 21
months and the average loan amount is GBP14,400.
Operations and Business Development
New business written during the year amounted to GBP10.8m (FY13:
GBP7.8m), an increase of 38.5 per cent, with record monthly sales
of GBP1,084,213 produced in January 2014. In the current financial
year, the Company has launched a new commercial Hire Purchase
product due to strong demand.
The Group's relationship with its network of over 100 finance
brokers across the UK continues to be of upmost importance. 1pm
regularly reviews its customer service experience in order to
provide the best possible service. The systems, policies and
procedures are reviewed regularly to ensure 1pm is working as
efficiently as possible.
The Company plans to implement a new accounting and billing
system during the second quarter of the current financial year with
the aim of increasing efficiency, productivity and customer
service.
To help deliver the strategic plan, the Group has sourced larger
offices in Bath and expects to relocate towards the end of
September 2014.
Staff
Six additional members of staff have been recruited during the
financial year. The Company plans to increase staff numbers to
around 36 over the next one to two years (an increase of 20) in
line with its development and growth objectives.
On behalf of the Board and Shareholders, I would like to thank
all staff for their continued hard work and commitment to the
Group.
Finance
I am pleased to report that the Group raised GBP11.3m of new
funding (FY13: GBP4.14m) during the financial year from a variety
of sources including commercial banking institutions and high net
worth individuals. This funding is used solely for the purpose of
writing new business. The Board will continue to seek additional
funding sources in order to continue to support and satisfy the
continuing demand from the UK SME market.
Shareholders
In June 2013, following the prior financial year end, the Group
raised GBP1.5m before costs from Henderson Global Investors Ltd
("Henderson") by way of a placing of new Ordinary shares. The Board
is very pleased to have an institution such as Henderson supporting
the Group.
Outlook
Trading in the current year has commenced satisfactorily and is
ahead of the equivalent period last year. In overall terms the
current financial year is now expected to be a year of modest
growth as the platform for future significant growth is
established. The Placing and Open Offer to be announced on 22(nd)
September 2014 will allow investment in additional people, new
premises and systems, this investment will impact profits growth in
the current financial year and the increased number of shares in
issue following the Fundraising will restrict earnings growth in
the year. The benefits of the increased investment are expected to
impact in the later part of the current financial year and into the
following financial year
The Board continues to see significant potential and opportunity
over next three to four years to continue to grow the business and
take advantage of the widely-publicised lending constraints in the
banking sector. This will include introducing new financial
products and consideration of mergers and acquisitions. The Board
views the future with great optimism and the Company will continue
to strive to be the leading independent provider of finance to the
SME market.
Maria Lewis
Chief Executive Officer
19(th) September 2014
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2014
Notes 2014 2013
GBP GBP
CONTINUING OPERATIONS
Revenue 2 4,211,569 3,106,612
Cost of sales (1,994,239) (1,651,194)
------------ ------------
GROSS PROFIT 2,217,330 1,455,418
Administrative expenses (844,978) (663,179)
------------ ------------
OPERATING PROFIT 1,372,352 792,239
Finance costs (26,386) (17,100)
Finance income 558 148
------------ ------------
PROFIT BEFORE INCOME
TAX 3 1,346,524 775,287
Income tax (297,326) (172,219)
------------ ------------
PROFIT FOR YEAR 1,049,198 603,068
============ ============
Profit attributable
to:
Owners of the parent 1,049,198 603,068
============ ============
Earnings per share expressed
In pence per share: 4
Basic 3.54510 2.60490
Diluted 3.54510 2.60490
============ ============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 MAY 2014
2014 2013
GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, Plant and
Equipment 72,873 40,761
Investments - -
----------- -----------
72,873 40,761
----------- -----------
CURRENT ASSETS
Trade and other receivables 17,324,246 12,899,718
Cash and cash equivalents 2,713 12,894
----------- -----------
17,326,959 12,912,612
TOTAL ASSETS 17,399,832 12,953,373
=========== ===========
EQUITY
SHAREHOLDERS EQUITY
Called up share capital 2,996,933 2,315,132
Share premium 2,287,540 1,569,340
Retained earnings 1,723,555 679,357
----------- -----------
TOTAL EQUITY 7,008,028 4,563,829
=========== ===========
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 4,404,874 3,112,199
Financial liabilities
- borrowings:
Interest bearing loans
and borrowings 100,000 100,000
----------- -----------
4,504,874 3,212,199
CURRENT LIABILITIES
Trade and other receivables 4,806,519 4,109,327
Financial liabilities
- borrowings:
Bank overdrafts 403,085 520,077
Interest bearing loans
and borrowings 380,000 400,000
Tax payable 297,326 147,941
----------- -----------
5,886,930 5,177,345
----------- -----------
TOTAL LIABILITIES 10,391,804 8,389,544
=========== ===========
TOTAL EQUITY AND LIABILITIES 17,399,832 12,953,373
=========== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2014
Called Retained Share Total
up Earnings Premium Equity
Share
Capital GBP GBP GBP
GBP
Balance at 1 June
2012 2,315,132 76,289 1,569,340 3,960,761
Changes in equity
Total comprehensive
income - 603,068 - 603,068
Consolidation of - - - -
share capital
---------- ---------- ---------- ----------
Balance at 31 May
2013 2,315,132 679,357 1,569,340 4,563,829
---------- ---------- ---------- ----------
Changes in equity
Issue of share capital 681,801 - 818,200 1,500.001
Fees incurred - - (100,000) (100,000)
Consolidation of
share capital - (5,000) - (5,000)
Total comprehensive
income - 1,049,198 - 1,049,198
---------- ---------- ---------- ----------
Balance at 31 May
2014 2,996,933 1,723,555 2,287,540 7,008,028
========== ========== ========== ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2014
2014 2013
GBP GBP
Cash flows from operating
activities
Cash generated from operations (1,039,033) (812,142)
Interest paid (26,386) (17,100)
Tax paid (147,941) -
------------ ----------
Net cash from operating activities (1,213,360) (829,242)
------------ ----------
Cash flows from investing
activities
Purchase of tangible fixed
assets (55,388) (16,962)
Interest received 558 148
------------ ----------
Net cash from investing activities (54,830) (16,814)
------------ ----------
Cash flows from financing
activities
New loans/(repayments) in
year (20,000) 400,000
Share issue 1,400,001 -
Share consolidation (5,000) -
------------ ----------
Net cash from financing activities 1,375,001 400,000
(Decrease/increase in cash
and cash equivalents 106,811 (446,056)
Cash and cash equivalents
at beginning of year (507,183) (61,127)
------------ ----------
Cash and cash equivalents
at end of year (400,372) (507,183)
============ ==========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2014
1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards (as adopted by the
European Union) and IFRIC interpretations and with those parts of
the Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the
historical cost convention.
2. SEGMENTAL REPORTING
The company has one business segment to which all revenue,
expenditure, assets and liabilities relate.
3. PROFIT BEFORE INCOME TAX
The profit before income tax after
charging:
2014 2013
GBP GBP
Other operating leases 16,020 16,020
Depreciation - owned assets 23,276 14,822
Auditor's remuneration 10,350 10,050
Non audit services 3,450 3,450
------- -------
53,096 44,342
======= =======
4. EARNINGS PER SHARE
The calculations of earning per share are calculated by dividing
the earnings attributable to ordinary shares by the weighted
average number of shares in issue during the year. For diluted
earnings per share, the weighted average number of ordinary shares
is adjusted to assume conversion of all dilutive potential ordinary
shares. There are no dilutive ordinary shares.
2014 2013
Profit/(loss) attributable to equity GBP1,049,198 GBP603,068
shareholders
============== ==============
Pre Consolidation
Weighted average number of shares 4,340,824,248 3,395,618,769
Basic and diluted earnings per share 0.02475p 0.01760p
Post Consolidation
Weighted average number of shares 29,595,740 23,151,329
Basic and diluted earnings per share 3.54510p 2.60490p
5. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this announcement does not
comprise the Group's statutory accounts for the years ended 31 May
2014 or 31 May 2013. The financial information has been extracted
from the statutory accounts of the Company for the years ended 31
May 2014 and 31 May 2013.
The auditors' opinion on those accounts was unmodified and did
not contain a statement under section 498 (2) or section 498 (3)
Companies Act 2006 and did not include references to any matters to
which the auditor drew attention by the way of emphasis.
The statutory accounts for the year ended 31 May 2013 have been
delivered to the Registrar of Companies, whereas those for the year
ended 31 May 2014 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
6. ANNUAL REPORT AND ANNUAL GENERAL MEETING
The Annual Report will be available from the Company's website
www.1pm.co.uk from 22nd September 2014 and will be posted to
shareholders on or before 24 September 2014. The Annual Report
contains notice of the Annual General Meeting of the Company which
will be held at the Francis Hotel, Queens Square, Bath, BA1 2HH on
17 October 2014 at 12.30 p.m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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