Final Results
1PM PLC
('1PM' or the 'Company')
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MAY 2008
Dated: 30 June 2008
THE CHAIRMAN'S STATEMENT
It is a pleasure to present my report as Chairman of the 1pm Group.
Financial highlights
· new management delivers turnaround success following revised focus on the
small ticket leasing market
· results ahead of our expectations with business momentum building into the
next financial year
· operating profit of £86,061 compared to an operating loss of £217,306 for
the year ended 31 May 2007
· new business volumes for the year up 53.7 % compared to 2007
· four major funding partners in place with significantly increased
facilities enabling further growth
· credit crunch accelerating growth with record levels of new business
secured
· the Board is confident of future prospects as significant market
opportunities exist
Overview
I am delighted to report an exceptional set of results, which indicates the
success of 1pm's restructuring under new management in tandem with the Company's
revised focus on the small ticket leasing market.
The Company has delivered a significant turnaround performance moving from an
operating loss of £217,036 for the year ended 31 May 2007 to delivering an
operating profit of £86,061 for the year ended 31 May 2008. Whilst the Board
has provided strong and clear leadership and direction, the successful
turnaround has been achieved due to the stability, conscientiousness and
dedicated operations team led by Maria Hampton.
During October 2007 the Company raised £675,000 via a placing, with the Board
investing heavily to the extent of almost 50% of total monies raised. This
demonstrated our confidence both in our strategy for growth as well as the
potential of our target market. In addition, it sent out a strong message to
our funding partners, which has been very beneficial in terms of their ongoing
support.
Testimony to this is the fact that we now have facilities in place, via four
major funding partners, of over £3.5 million as opposed to just £750,000 for the
previous comparable period. We recently announced, post period end, the
securing of £900,000 of funding bringing a total of £1.65 million of new debt
finance being raised over the last three months.
1pm now has the capability to significantly scale up its business, secure new
clients and in turn drive growth and profitability.
Indicative of this success is the fact that new business volumes increased by
53.7 % during the year ended 31 May 2008 compared to the year ended 31 May 2007.
I expect this momentum to continue due to significant opportunities in our
target market to provide funding to well established, small businesses with
proven payment histories.
Business turnaround
The turnaround in the business has been achieved by the new management team's
action of withdrawing from the sub-prime market, terminating all aligned broker
relationships and the subsequent appointment of thirty new brokers personally
known to the management team. In addition, the appointments of Rod Channon as
Finance Director and Paul Connell as non-executive director, both of whom have a
strong leasing background, have strengthened the Board.
Operational controls
Further to our financial restructuring, Maria Hampton, Operations Director, was
appointed to the Board during the year and introduced an effective collection
policy, which has been strengthened by the appointment of two specialist
lawyers. These actions have resulted in the recovery of £583,000 during the
period under review (this is compared to £413,000, for the respective period in
2007). In addition, our arrears' position is currently running at 1%, which is
well below the market target of 3%. This is a key factor in the improved
performance of the Company, and the Directors anticipate this will continue
going forward. Maria Hampton also implemented the introduction of a new
underwriting policy designed specifically to exclude any form of adverse credit
and which is contributing significantly to the strong performance of the
Company.
These fundamental changes that underpin our business model have created a secure
operating platform that will enable the Group to take full advantage of its
emerging position within the small ticket-leasing environment.
On behalf of the Board I would like to express my sincere thanks to our loyal
and dedicated staff for their hard work and commitment during the year.
Outlook
We now have a well-established, multi-talented team in place, underpinned by
strong administrative and operational support. With increasing funding lines in
place, we are now in a position to capitalise on the significant opportunities
that exist in our core market.
In my previous Chairman's statement, I referred to a "New Start"; I believe that
this is well and truly underway. I expect further success in the current year as
we continue to grow our market share by offering "Simple Finance For Smart
Business".
I look forward to reporting further progress in due course.
M R JOHNSON
CHAIRMAN
Enquiries
Mike Johnson, Chairman 1pm plc 08707 397 397
Ian Callaway, SVS Securities plc (Broker) 020 7638 5600
Nick Harriss, Blomfield Corporate Finance (Nomad) 020 7489 4500
Shane Dolan, Biddicks 020 7448 1000
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2008
Note 2008 2007
£ £
REVENUE 848,477 871,965
Cost of sales (291,933)(792,711)
________ ________
GROSS PROFIT 556,544 79,254
Administrative expenses (470,483)(296,560)
________ ________
OPERATING PROFIT/(LOSS) 2 86,061 (217,306)
Finance income 2,602 5,971
Finance costs (8,795) (12,372)
________ ________
PROFIT/(LOSS) BEFORE INCOME TAX 79,868 (223,707)
Income tax expense 4 - 83,238
________ ________
PROFIT/(LOSS) FOR THE YEAR
79,868 (140,469)
________ ________
Attributable to equity holders of 79,868 (140,469)
the company ________ ________
Profit per share attributable to
the equity
holders of the company during the
year
- basic and diluted 5 0.0248p (0.11)p
________ ________
5 0.0248p (0.11)p
________ ________
All of the activities of the company are classed as continuing.
The company has no recognised gains or losses other than the results for the
period as set out above.
CONSOLIDATED BALANCE SHEET
31 MAY 2008
Notes 2008 2007
£ £
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 66,091 42,512
________ ________
CURRENT ASSETS
Trade and other receivables 6 4,559,142 2,826,951
Cash and cash equivalents 25,097 6,104
________ ________
TOTAL CURRENT ASSETS 4,584,239 2,833,055
________ ________
TOTAL ASSETS 4,650,330 2,875,567
======== ========
EQUITY
Share capital 9 298,773 99,925
Share premium account 9 1,303,112 871,369
Retained earnings 10 (60,601) (140,469)
======== ========
TOTAL EQUITY 1,541,284 830,825
________ ________
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 7 1,664,440 1,382,366
NON CURRENT LIABILITIES
Trade and other payables 8 1,444,606 662,376
Deferred tax liabilities - -
________ ________
TOTAL LIABILITIES 3,109,046 2,044,742
________ ________
TOTAL EQUITY AND LIABILITIES 4,650,330 2,875,567
======== ========
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 MAY 2008
NOTES 2008 2007
£ £
CASH FLOWS FROM OPERATING
ACTIVITIES
Consumed by operations 11 (808,756) (692,199)
Taxation (19,464) (54,756)
________ ________
Net cash generated from operating (828,220) (746,955)
activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest received 2,602 5,971
Interest paid (8,795) (12,372)
Purchase of property, plant and
equipment (42,948) -
________ ________
Net cash generated from investing (49,141) (6,401)
activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Dividends paid - -
Issue of shares net of cost 630,591 921,294
________ ________
Net cash generated from financing
activities 630,591 921,294
________ ________
NET INCREASE IN CASH AND CASH
EQUIVALENTS (246,770) 167,938
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR
(100,627)(268,565)
________ ________
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR
(347,397) (100,627)
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 MAY 2008
Share Share Retained Total
Capital Premium Earnings Equity
Balance at 1 June 2007 99,925 871,369 (140,469) 830,825
Profit for the year 79,868 79,868
Movement in share 198,848 431,743 630,591
capital
Other movements - - - -
________ ________ ________ ________
Balance at 31 May 2008 298,773 1,303,112 (60,601) 1,541,284
======== ======== ======== ========
NOTES TO THE PRELIMINARY RESULTS
YEAR ENDED 31 MAY 2008
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 2008 will be delivered to shareholders and to
the Registrar of Companies in the week commencing 30 June 2008 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
December 2007 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.
Adoption of new and revised standards
The financial statements have adopted the requirements of International Financial Reporting Standards
and International Accounting Standards as endorsed by the EU (collectively IFRSs') for the first time in
these consolidated financial statements for the year ended 31 May 2008. Transitional disclosures from
United Kingdom Generally Accepted Accounting Practice to IFRS are provided in note 12.
Basis of preparation
The financial statements have been prepared in accordance with IFRS and with the Companies Act 1985.
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
Assets leased to customers on finance leases are recognised in the Balance Sheet and present them as a
receivable at an amount equal to the net investment in the lease. Receipts from finance lease contracts
contain a capital element which reduces the debtor and an interest charge which is credited to revenue
using the "rule of 78". In addition 5% of total interest charges are credited to revenue in the year of
inception of each lease to cover initial administration costs.
All turnover arose within the UK.
2. OPERATING PROFIT / (LOSS)
Operating profit / (loss) stated after charging:
2008 2007
£ £
Depreciation of property, plant 19,369 10,644
and equipment
Auditors remuneration 13,260 9,087
Staff costs 295,990 370,416
Operating costs:
Other 15,218 15,000
====== ======
3. DIRECTORS' REMUNERATION
The directors' aggregate emoluments in respect of qualifying services were:
2008 2007
£ £
Aggregate emoluments 158,253 186,559
Value of company pension
contributions to money
purchase scheme 8,867 31,792
________ ________
167,120 218,351
________ ________
The number of directors who accrued benefits under company pension scheme was as
follows:
2008 2007
No No
Money purchase schemes 2 2
==== ====
4. INCOME TAX EXPENSE
(a) 2008 2007
Current tax £ £
UK corporation tax charge - (3,683)
Deferred tax - (79,555)
________ ________
Current tax - (83,238)
======== ========
Corporation tax is calculated at 20% (2007: 19%) of the estimated assessable
profit for the year.
The charge for the year can be reconciled to the Income Statement as follows:
(b) 2008 2007
£ £
Profit / (loss) on ordinary
activities before tax 79,868 (223,707)
====== ======
Loss on ordinary activities by rate 15,974 (62,872)
of tax
Capital allowances for the period in (2,362) (1,864)
excess of depreciation
Operating income non-taxable - (20,366)
Unrelieved losses - 61,499
Utilisation of loss relief (23,105) -
Underprovision of current tax (525) -
Unexplained difference 4 -
Other short term timing differences 10,014 19,920
________ ________
Total current tax (note 4(a)) - (3,683)
________ ________
5. 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.
2008 2007
£ £
Profit / (loss) attributable to
equity shareholders 79,868 (140,469)
________ ________
Weighted average number of shares 322,667,529 133,082,373
________ ________
Basic & Diluted Earnings per
Share 0.0248p (0.11)p
======== ========
6. TRADE AND OTHER RECEIVABLES
2008 2007
£ £
Trade receivables 4,048,367 2,625,960
VAT recoverable 174,761 36,580
Other receivables 210,151 68,983
Prepayments and accrued income 31,080 16,567
Deferred taxation 78,861 78,861
Corporation tax 15,922 -
________ ________
4,559,142 2,826,951
======== ========
Trade debtors wholly represent finance lease debtors.
2008 2007
Gross receivables from finance £ £
leases
No later than 1 year 2,569,267 2,514,956
Later than 1 year and no later 2,610,991 813,819
then 5 years
Later then 5 years
Unearned future finance income on
finance lease (1,131,891) (702,815)
________ ________
Net investment in finance leases 4,048,367 2,625,960
________ ________
The net investment in finance
leases may be analysed as
follows:
No later than 1 year 1,914,527 1,275,821
Later than 1 year and no later 2,133,840 1,350,139
then 5 years
Later then 5 years - -
======== ========
The cost of assets acquired for the purpose of letting under finance leases were
as follows; 2008: £2,999,524 (2007: £1,886,398).
7. CURRENT LIABILITIES
2008 2007
£ £
Bank loans and overdrafts 372,494 106,731
Trade payables 1,164,978 1,184,607
Corporation tax - 3,542
Other taxation and social securities 5,270 9,086
Other payables 83,687 7,330
Accruals and deferred income 38,011 71,070
________ ________
1,664,440 1,382,366
======== ========
Trade payables wholly represent funding creditors, which are secured on the
value of finance leases written during the financial year.
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 29 to 60 months and
interest rates from 8.2% to 12%.
8. NON CURRENT LIABILITIES
2008 2007
£ £
Bank loans and overdrafts -
Trade payables 1,444,606 662,376
________ ________
1,444,606 662,376
________ ________
Trade creditors are secured as noted above, with the same repayment and interest
rates.
9. SHARE CAPITAL AND PREMIUM
No of Ordinary Share Total
Shares Shares Premium
£ £ £
At 1 June 2007 146,561,469 99,925 871,369 971,294
Movement 291,650,760 198,848 431,743 630,591
_________ ________ ________ ________
At 31 May 2008 438,212,229 298,773 1,303,112 1,601,885
========= ======== ======== ========
Authorised:
No of Nominal Total
Shares Value
£ £
Ordinary Shares 880,001,738 0.0006818 299,993
========= ======== ========
Allotted and fully paid:
No of Nominal Total
Shares Value
£ £
Ordinary Shares 438,212,229 0.0006818 298,773
========= ======== ========
Issue of shares
On 25 October 2007, the company issued 291,650,760 ordinary shares at a price of
£0.00025 per share.
The funds raised were used in 1pm (UK) Limited to finance continuing operations.
10. RETAINED EARNINGS
Group Company
£ £
At 1 June 2007 (140,469) -
Profit for the year 79,868 -
Equity dividends - -
_______ _______
At 31 May 2008 (60,601) -
====== =======
11.NOTES TO THE STATEMENT OF CASH FLOW (Group only)
CASH FLOWS FROM OPERATING ACTIVITIES
2008 2007
£ £
Profit / (loss) before income tax 86,061 (217,306)
for the year
Adjustment for:
Depreciation 19,369 (24,112)
Trade and other receivables (934,039) (7,873)
Trade and other payables 19,853 (442,908)
________ ________
Cash generated from operations (808,756)(692,199)
======== ========
12. EXPLANATION OF TRANSITION TO IFRS
As stated in the basis of preparation, these are the group's first
consolidated financial statements prepared in accordance with IFRS. An
explanation of how the transition from UK GAAP to IFRS has affected the
group's financial statements is set out below:
Balance Sheet and Income Statement:
The adoption of the IFRS by the group has resulted in some reordering of the
presentation of certain balances within both the Income Statement and
Balance Sheet. In accordance with IFRS negative goodwill previously
recognised in accordance with UK GAAP has been derecognised. The audited
financial results to 31 May 2007 have been duly restated.
UK GAAP Presentation IFRS
Differences
£ £ £
Profit on ordinary activities (247,669) 107,200 (140,469)
after tax
Intangible assets - negative (107,200) 107,200 -
goodwill
Earning per share - basic and (0.19)p - (0.11)p
diluted
Cash Flow Statement:
Changes in the cash flow previously reported under UK GAAP are mainly
presentational. For the purpose of the cash flow statement, cash and cash
equivalents comprise cash on hand less overdrafts.
13. TRANSACTIONS WITH DIRECTORS
A director Mr M R Johnson has given personal guarantees to: Svenska
Handelsbanken plc of £350,000, Hitachi Capital Limited to of £10,000,000 &
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:
A F Williams invoiced the company for £5,400
P Connell invoiced the company for £7,770
M Johnson invoiced the company for £93,016
R Channon invoiced the company for £15,000
There were no balances at the year-end.
-END-
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