TIDMOPM
RNS Number : 2634D
1PM PLC
25 June 2019
25 June 2019
1pm plc
(the "Group" or the "Company")
Trading update
Further year-on-year growth in revenue and profit.
Planned investment to support next phase of growth.
Unaudited results:
1pm plc, the AIM listed specialist finance provider to the SME
sector is pleased to announce the following trading update ahead of
the publication of its final audited results for the financial year
ended 31 May 2019, which are scheduled to be announced on 24th
September 2019.
The unaudited trading results for the year demonstrate further
growth with revenue up 6% and profit before tax, exceptional items
and share based payments ("PBTE") up 4% compared with the prior
year.
Financial highlights*
-- Deal origination of approximately GBP161 million, an organic increase of over 12%
-- Revenue for the year expected to be GBP31.8 million, an organic increase of 6%
-- PBTE for the year expected to be approximately GBP8.2 million, an organic increase of 4%
-- Fully diluted earnings per share of approximately 6.6 pence
following share issues to satisfy acquisition earn-out targets
being achieved, compared with 6.5 pence in the prior year, an
increase of 2%
-- Net Assets in excess of GBP53 million, an increase of more than 10% over the prior year
-- A similar level of net portfolio write-offs to the prior year
at approximately 1% of the net lending portfolio, but provisions
prudently increased to approximately 1.9%, up from 1.5% in the
prior year
-- Over 50% of revenue for the current year to 31 May 2020
already secured as "unearned income" providing a good degree of
visibility on future earnings
-- Aggregate borrowing facilities as at 31 May 2019 were GBP167
million, an increase of 2% over the prior year with the blended
cost of borrowing maintained at approximately 4%
-- Net interest margin maintained at approximately 12%
-- Maiden interim dividend paid in accordance with stated progressive dividend policy
*unaudited
Operational highlights
-- 35% of deal origination was funded on balance sheet and 65%
was brokered-on compared with 44% and 56% respectively in the prior
year.
-- The lending portfolio as at 31 May 2019, stated gross of
unearned interest income, is expected to be approximately GBP134
million, compared with GBP142 million in the prior year, the
decrease reflecting the increased proportion of origination
brokered-on for commission income
-- Substantial investment in senior management positions,
including leadership of each of the Group's product divisions and
core group functions
-- Significant progress in marketing, branding and IT systems enhancements
-- Synergies being delivered from the simplification of
operations and policies in the Asset Finance division, which will
deliver market-facing and processing improvements.
Our strategy of being a multi-product provider, allied to the
flexibility of either own-book funding or broking on, has created a
strong and diversified platform from which to grow. In the period
reported this strategic and market positioning has enabled the
Group to generate robust levels of demand whilst being able to
maintain margin, control credit and spread risk.
Outlook
In January 2019, strategic and operating plans were announced
for the next phase of the Group's growth through to the financial
year ended 31 May 2024 including adding scale through both organic
growth and carefully selected acquisitions in order to build a
lending portfolio of approximately GBP350m. In line with these
stated intentions, the Board has agreed to make further investments
in sales and new business personnel, to simplify its Asset Finance
operations and to rationalize the various businesses in the Group
into a single, nationally recognized, brand. The Group will also
continue the upgrading of its IT and communications systems to
deliver online offerings, improve processing times and make its
infrastructure more robust, enabling it to deliver future
growth.
These actions will result in certain additional costs being
incurred in the year ending 31 May 2020 some of which are
non-recurring. The Group's sound funding position enables these
actions to be taken and will support the investment required to
deliver the growth plan. The Board is mindful of the continuing
macro political and economic uncertainty and, therefore, taking
these internal and external factors together, expects the financial
year ending 31 May 2020 to be one of investment and consolidation
with future benefits being derived from these actions in ensuing
years.
Ian Smith, Chief Executive Officer, commented:
"In current uncertain business conditions, we are delighted to
be reporting year-on-year growth in revenue and underlying profits.
The unaudited results for the year ending 31 May 2019 demonstrate
the strength of our market position, our multi-product offering and
operating model. We are determined to deliver our planned further
strategic growth in order to increase shareholder value over the
next five years and now is the time to lay the foundations for that
further growth."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
For further information,
please contact:
1pm plc
Ian Smith, Chief Executive
Officer 01225 474230
James Roberts, Chief Financial
Officer 01225 474230
Cenkos (NOMAD)
Max Hartley, Julian Morse
(Sales) 0207 397 8900
Walbrook PR 0207 933 8780
Paul Vann/Tom Cooper 07768 807631
paul.vann@walbrookpr.com
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END
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