Final Results for the Year ended 31 May 2011

RNS Number : 6953K

1PM PLC

20 July 2011

 



20 July 2011                                                                                                                                                                   AIM: OPM

1PM PLC

("1pm" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2011

1pm plc (AIM: OPM), the AIM listed independent provider of asset finance facilities to the SME sector, announces final results for the year ended 31 May 2011.

Financial Highlights:

·     Revenues up 43% to £1.91m (FY10: £1.33m)

·     Profit before tax of £0.20m (FY10: £0.40m loss)

·     Bad Debts and Provisions down 46% to £0.19m (FY10: £0.35m)

·     Lease portfolio up 66% to £10.10m from £6.10m

Operations Highlights:

·     64% of lease portfolio now under £10,000

·     Number of unique customers up 79%

·     Robust lending and collection criteria

·     Improved relationships with broking partners

·     Reduced exposure to individual bad debts

Regarding outlook, Michael Johnson, Chairman, said:

"The board believes that an increasing amount of good quality business is available to be written, especially as larger banks continue to restrict lending to our customer base.  This is evident from the quantity of business the company is processing month on month.

"We have strong relationships with our existing funders and will continue to look for new and alternative funding options.  The more resources available to the Company the more it can lend on to customers. The Directors believe that the Company's return to profitability should facilitate the agreement of additional funding lines.

"In summary, the Company is in a great position to take full advantage of the constraints currently placed on the UK banking industry and is confident that, with the right support, it will continue to gain strength."

Contacts:  

1pm plc
Mike Johnson, Chairman Maria Hampton, Managing Director	0844 967 0944 0844 967 0944
WH Ireland (NOMAD)
Mike Coe Marc Davies	0117 945 3470
Walbrook PR Ltd	020 7933 8780
Paul McManus/Helen Westaway (Media Enquiries)
Paul Cornelius (Investor Enquiries)

CHAIRMAN'S STATEMENT

The last few years has seen one of the most challenging trading environments for many years  Weak consumer confidence, combined with constrained bank lending has made for an uncertain business climate.  However, I am pleased to report that this year your Company has delivered a resilient, consistent and much improved performance.

1pm has returned to an annual profit of £202k (FY2010: £402k loss) and revenue is 43% up on FY2010. The level of new business written during the year was £6.1m (FY2010: £2.4m) and the lease portfolio has risen to £10.1m (FY2010: £6.1m).  As a result of the increased portfolio the Company is now able to fund a proportion of its new lending from its own receivables.

Business

The Company lends between £1,000 and £30,000 over an average term of three years.  The Company's average lease agreement is £7,500 and around 64% of the lease portfolio consists of lends under £10,000. In recent years the Directors have made a decision to reduce the average lease value as this reduces the Company's exposure to significant, individual bad debts.

The number of unique customers has increased by 79% and the Company hopes to continue this trend by improving its relationships with its lease broking partners and customers, and by continuing to improve its incentives and services available, whilst maximising margins.

All customers must meet our very strict underwriting criteria which is reviewed regularly.  Our collection procedures are also continually assessed and I'm pleased to report that since 2007 the Company has collected £1.8m of the bad debts that had previously been written off.

The strength of the business model ensures that we are able to continue our organic growth without over-stretching our resources.  The reputation we have formed has proved instrumental in the success of the business. We are delighted with the progress of the business this year and look forward to the future.

Staff

As always the enthusiasm from 1pm staff has been constant and their passion for, and belief in, 1pm is admirable. The Board is grateful for their continued commitment.

Shareholders

Our focus towards shareholders remains fixed on building a financially secure platform, which will enable the business to grow further in the coming years.  Tight financial controls are in place and lessons have been learned from the recent economic down turn.

Looking ahead, you can be sure that the Board will continue both to support and challenge the Company, ensuring that the long-term interests of the Company and its shareholders are looked after.

Outlook

The board believes that an increasing amount of good quality business is available to be written, especially as larger banks continue to restrict lending to our customer base.  This is evident from the quantity of business the company is processing month on month We have strong relationships with our existing funders and will continue to look for new and alternative funding options.  The more resources available to the Company the more it can lend on to customers. The Directors believe that the Company's return to profitability should facilitate the agreement of additional funding lines.

In summary, the Company is in a great position to take full advantage of the constraints currently placed on the UK banking industry and is confident that, with the right support, it will continue to gain strength.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MAY 2011

	Note	2011	2010
		£	£
REVENUE		1,906,262	1,331,922
Cost of sales		(1,122,283)	(1,184,547)
GROSS PROFIT		783,979	147,375
Administrative expenses		(555,357)	(516,978)
OPERATING (LOSS) / PROFIT	2	228,622	(369,603)
Finance income		152	303
Finance costs		(26,444)	(33,116)
(LOSS) / PROFIT BEFORE TAX		202,330	(402,416)
Income tax expense	5	(48,083)	64,656
(LOSS) / PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR		154,247	(337,760)
Attributable to equity holders of the company		154,247	(337,760)
Profit per share attributable to the equity
holders of the company during the year
- basic and diluted	6	0.00483p	(0.017678)p

All of the activities of the company are classed as continuing.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 MAY 2011

	Notes	2011	2010
		£	£
ASSETS
NON CURRENT ASSETS
Deferred income taxes		111,881	159,964
Property, plant and equipment		30,253	36,478
		142,134	196,442
CURRENT ASSETS
Trade and other receivables	7	9,289,129	6,548,773
Cash and cash equivalents		353	305,211
TOTAL CURRENT ASSETS		9,289,482	6,853,984
TOTAL ASSETS		9,431,616	7,050,426
EQUITY
Share capital	10	2,236,725	2,153,791
Share premium account	10	1,567,249	1,565,035
Retained earnings	11	(272,136)	(426,383)
TOTAL EQUITY		3,531,838	3,292,443
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	8	2,786,056	1,917,510
Bank overdrafts		94,248	80,324
Interest bearing loans and borrowings		130,000	250,000
		3,010,304	2,247,834
NON CURRENT LIABILITIES
Trade and other payables	9	2,889,474	1,510,149
TOTAL LIABILITIES		5,899,778	3,757,983
TOTAL EQUITY AND LIABILITIES		9,431,616	7,050,426

CONSOLIDATED STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED 31 MAY 2011

	Notes	2011	2010
		£	£
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations		(242,227)	(528,845)
Interest Paid		(26,444)	(33,116)
Net cash from operating activities		(268,671)	(561,961)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible fixed assets		(15,411)	(6,059)
Interest received		152	303
Net cash generated from investing activities		(15,259)	(5,756)
CASH FLOWS FROM FINANCING ACTIVITIES
New loans in year		-	250,000
Loan repayments in year		(120,000)	-
Share Issue		85,148	1,042,320
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		(318,782)	724,603
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR		224,887	(499,716)
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR	12	(93,895)	224,887

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MAY 2011

CONSOLIDATED GROUP

	Share	Retained	Share	Total
	Capital	Earnings	Premium	Equity
	£	£	£	£
Balance at 1 June 2009	1,035,639	(88,623)	1,640,867	2,587,883
Changes in equity
Issue of share capital	1,118,152	-	(75,832)	1,042,320
Total comprehensive income	-	(337,760)	-	(337,760)
Balance at 31 May 2010	2,153,791	(426,383)	1,565,035	3,292,443
Changes in equity
Issue of share capital	82,934	-	2,214	85,148
Total comprehensive income	-	154,247	-	154,247
Balance at 31 May 2011	2,236,725	(272,136)	1,567,249	3,531,838

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 31 MAY 2011

1.       ACCOUNTING POLICIES

The financial information set out in this announcement does not constitute the company's statutory accounts.

Statutory accounts for the year ended 31 May 2011 will be delivered to shareholders and to the Registrar of Companies in due course and will be available on the Company's website (www.1pm.co.uk). The report of the auditors on the statutory accounts for the year ended 31 May 2011 was unqualified and did not contain a reference to any matters which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act 2006.

Basis of preparation

The financial statements have been prepared in accordance with IFRS as adopted by the European Union and with the Companies Act 2006. The company is a UK domiciled public limited company.

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to May each year. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

          Leased assets and turnover recognition

          Assets leased to customers on finance leases are recognised in the Statement of Financial Position at the amount of the Company's net investment in the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company's net investment outstanding in respect of the leases.

          Funding payables and cost of sales - interest

          Finance received from funding providers is classified as payables in the Statement of Financial Position. Payments to the funding providers contain a capital element which reduces the creditor and an interest charge is debited to the cost of sales using the "rule of 78". Due to the relatively short term of the funding creditors the directors are satisfied that this method of apportioning interest is not materially different to the effective interest method.

         Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of ownership to the lesee. All other leases are classed as operating leases.

Assets held as finance leases are recognised as assets at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease.

The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Operating lease rentals are charged to the income statement on a straight-line basis over the term of the lease.

2.       OPERATING PROFIT

Operating profit stated after charging:

		2011	2010
		£	£
Depreciation of property, plant and equipment		21,636	24,232
Auditors remuneration (see below)		12,200	11,900
Staff costs (see note 3)		360,019	334,174
Operating lease costs:
Rent		19,800	29,911

Auditors' remuneration:

		2011	2010
		£	£
Audit services
Statutory audit		8,750	8,500
Non audit  services
Other services pursuant to legislation		3,450	3,400
Total		12,200	11,900

3.       STAFF COSTS

		2011	2010
		£	£
Wages and salaries		338,866	317,786
Social security costs		20,103	15,338
Other pension costs		1,050	1,050
		360,019	334,174

The average number of staff employed by the company during the financial period amounted to:

		2011	2010
		No	No
Administrative		6	6
Management		1	1
		7	7

4.       DIRECTORS' REMUNERATION

The directors' aggregate emoluments in respect of qualifying services were:

		2011	2010
Aggregate Emoluments		£	£
M Johnson		65,000	85,547
M Hampton		70,000	70,000
H Walker		46,143	37,240
R Channon		15,000	17,816
R Russell		10,000	10,776
P O'Connell - resigned 29.05.09		0	3,000
		206,143	224,379
Value of company pension contributions to money purchase scheme
M Hampton		1,050	1,050
		225,429	215,979

The number of directors who accrued benefits under company pension scheme was as follows:

		2011	2010
		No	No
Money purchase schemes		1	1

5.       INCOME TAX EXPENSE

(a)		2011	2010
Current tax		£	£
UK corporation tax charge		-	-
Movement in deferred taxation		48,083	(81,103)
Under provision in prior years		-	16,447
Current tax		48,083	(64,656)

Corporation tax is calculated at 21% (2010: 21%) of the estimated assessable profit for the year.

Factors affecting the tax charge:

The tax assessed for the year is lower (2010 higher) than the standard rate of corporation tax in the UK. The difference is explained below:

(b)		2011	2010
		£	£
(Loss) / profit on ordinary activities before tax		202,330	(402,416)
Profit on ordinary activities by rate of tax		42,489	(84,507)
Capital allowances for the period in excess of depreciation		(144)	2,363
Unused tax losses		(42,345)	82,144
Under provision of current tax		-	16,447
Total current tax (note 5(a))		-	16,447

6.       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.

		2011	2010
		£	£
Profit / (loss) attributable to equity shareholders		154,247	(337,760)
Weighted average number of shares		3,195,491,908	1,910,595,524
Basic & Diluted Earnings per Share		0.004827p	(0.017678)p

7.       TRADE AND OTHER RECEIVABLES

		2011	2010
		£	£
Trade receivables		8,752,542	6,174,025
VAT recoverable		25,807	33,233
Other receivables		478,936	301,255
Prepayments and accrued income		31,844	40,260
Corporation tax		-	-
		9,289,129	6,548,773

Trade receivables wholly represent finance lease debtors.

		2011	2010
Gross receivables from finance leases		£	£
No later than 1 year		4,411,197	3,319,001
Later than 1 year and no later then 5 years		6,885,757	4,382,015
Later then 5 years		-	-
Unearned future finance income on finance lease		(2,544,412)	(1,526,991)
Net investment in finance leases		8,752,542	6,174,025
The net investment in finance leases may be analysed as follows:
No later than 1 year		2,927,584	2,392,623
Later than 1 year and no later then 5 years		5,824,958	3,781,402
Later then 5 years		-	-
		8,752,542	6,174,025

The cost of assets acquired for the purpose of letting under finance leases were as follows; 2011: £6,105,899 (2010: £2,484,952).

Included within Trade receivables are the following receivables that are past due but not impaired as they are considered recoverable: less than three months old £67,984 (2010: £67,917), more than three months old £56,545 (2010: £51,801), all amounts are secured on the asset to which they relate. No other assets are past due or impaired.

8.       CURRENT LIABILITIES

		2011	2010
		£	£
Trade payables		2,669,208	1,787,867
Other taxation and social securities		7,170	5,613
Other payables		109,678	124,030
		2,786,056	1,917,510

Trade payables wholly represent funding creditors, which are secured on the value of finance leases.

The trade payables figure is made up of numerous funding blocks that are repaid by monthly

instalments. The length of the repayment term varies from 33 to 42 months and interest rates from 7.75% to 11%.

The company's banking facilities are secured by a mortgage debenture, dated 7 December 2007 incorporating a fixed and floating charge over all current and future assets of the company.

9.       NON CURRENT LIABILITIES

		2011	2010
		£	£
Accruals and deferred income		24,000	36,300
Trade payables		2,865,474	1,473,849
		2,889,474	-1,510,149

Other loans are £130,000 from UK Private Healthcare Ltd, which is repayable in June 2012, and is secured by a debenture over the assets of the company.

Trade creditors are secured as noted above, with the same repayment and interest rates.

Maturity analysis

The following analysis shows the contractual undiscounted cash flows (which differ from the discounted cash flow totals shown in Current and Non current liabilities above).

		2011	2010
		£	£
Trade payables:
On demand or within one year		3,029,901	1,996,111
More than one year but less than two years		2,012,699	1,264,900
More than two years but less than five years		1,067,111	284,554
Total		6,109,711	3,545,565

10. SHARE CAPITAL AND PREMIUM

Authorised:

The Articles of Association of the company say that there is an unlimited authorised share capital.

Issued:

	No of Shares	Ordinary Shares	Share Premium	Total
		£	£	£
At 1 June 2010	3,158,979,085	2,153,791	1,565,035	3,718,826
Movement	121,639,686	82,934	2,214	85,148
At 31 May 2011	3,280,618,771	2,236,725	1,567,249	3,803,974

Allotted and fully paid:

		No of Shares	Nominal Value	Total
			£	£
Ordinary Shares		3,280,618,771	0.0006818	2,236,725

Issue of shares

During the year the company issued 121,639,686 ordinary shares with a nominal value of £0.0006818 at £0.0007 per share.

The funds raised were used in 1pm (UK) Limited to finance continuing operations.

11.       RETAINED EARNINGS

		Group	Company
		£	£
At 1 June 2010		(426,383)	-
Profit for the year		154,247	-
Equity dividends		-	-
At 31 May 2011		(272,136)	-

12. CASH AND CASH EQUIVALENTS

		2011	2010
		£	£
Cash at bank and in hand		353	305,211
Bank overdrafts		(94,248)	(80,324)
Cash and cash equivalents		(93,895)	224,887

13.    TRANSACTIONS WITH DIRECTORS

A director Mr M R Johnson has given personal guarantees to: Svenska Handelsbanken plc of £350,000, Hitachi Capital Limited of £1,000,000, Venture Finance of £500,000, & Kingston Asset Finance Limited to the outstanding debt at the time of the agreement being terminated.

During the year the following directors invoiced the company for services rendered:

R Russell invoiced the company for £42,844

M R Johnson invoiced the company for £66,511

R Channon invoiced the company for £16,283

H Walker invoiced the company for £46,143

At the year end, included within Current liabilities are; £4,038 due to H Walker, £3,703 due to M R Johnson, £31 due to R Channon and £17,638 due to R Russell.

R Russell is a director and 25% shareholder of UK Private Healthcare Ltd, a company which has an outstanding loan balance of £130,000 (2010 £250,000), included within financial liabilities.

R Russell (Director loaned the company £600,000, interest is charged at 11%. The gross amount of £744,350 is repayable in forty eight monthly payments.

 

END

 

 

FR UKAARARABAUR