Interim Results

RNS Number : 5566U

1PM PLC

19 January 2017

 

                                                                                                                19 January 2017

1pm plc

(the "Group" or the "Company")

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 NOVEMBER 2016

Further profitable organic and strategic growth delivered;

Revenue increased 52%; Profit before tax increased 23%;

Positive outlook for the full year

1pm plc (AIM: OPM), the AIM listed independent specialist provider of finance facilities to the SME sector, announces financial results for the six month period ended 30 November 2016 ("Interim Results").

The Interim Results consolidate the results for 1pm (UK) Limited (trading as Onepm Finance ("Onepm")), Academy Leasing Limited ("Academy") and Bradgate Business Finance Limited ("Bradgate"). Each of the Group's three trading subsidiaries continue to experience high levels of demand for finance from the SME sector across the range of products offered, comprising asset finance (finance lease and hire purchase) for 'hard' and 'soft' assets, business loans and vehicles broking.

Financial Highlights:

·      Group revenue increased 52% to £7.99m (H1 2016: £5.25m)

·      Group profit before tax increased 23% to £2.05m (H1 2016: £1.66m)

·      Basic earnings per share increased 5.8% to 3.08 pence (H1 2016: 2.91 pence)

·      Net Assets at 30 November 2016 increased 12.1% to £26.8m (31 May 2016: £23.9m)

·      Bad debt write-offs in the period were £0.25m (H1 2016: £0.15m)

·      At period end, total bad debt provisions were £1.22m representing 1.64% of total receivables (H1 2016: £0.92m representing 1.57% of total receivables)

·      £15.1m of deferred income, i.e. future revenue, as at 30 November 2016 (31 May 2016: £14.3m)

Operational Highlights:

·     Total Group asset, loan and vehicles business origination in the six-month period to 30 November 2016 increased 82% to £36.4m (H1 2016: £20.0m)

·     Maintained flexibility to either fund on 'own-book' or generate cash commissions from broking; approximately 24% of new lease contracts brokered for commission income at Academy and Bradgate.

·      Combined 'own-book' assets and loans portfolio of £71.8m (31 May 2016: £66.5m),

·      Funding facilities available to the Group of £62.0m at 30 November 2016 (31 May 2016: £62.2m)

·      Operational progress at each subsidiary in line with management's expectations and objectives

Commenting on the Interim Results, John Newman, Chairman, said:

"These Interim Results demonstrate the continuing trend of profitable organic growth at Onepm finance, the original company within the Group and the anticipated strong growth from Academy and Bradgate, the acquired businesses. The Board is committed to increasing shareholder value by delivering sustainable growth and is actively pursuing further organic and strategic opportunities in the current financial year. Accordingly, the Board looks forward to the second half of the financial year with optimism and confidence."

For further information, please contact:
1pm plc
Ian Smith, Chief Executive Officer	01225 474230
Helen Walker, Chief Financial Officer	01225 474230
Cenkos (NOMAD)
Max Hartley (NOMAD), Julian Morse (Sales)	0207 397 8900
Walbrook PR	0117 985 8989
Paul Vann	07768 807631
	[e-mail]

About 1pm:

The Company was admitted to AIM in August 2006.

1pm plc is a group of established independent finance companies 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.

Mission Statement - 'Helping the UK economy grow by supporting SMEs'

More information is available on the Company website www.1pm.co.uk

CHIEF EXECUTIVE OFFICER'S STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 NOVEMBER 2016

Financial Results

I am pleased to report that the Group continued to make good progress during the first half of the current financial year. The financial results achieved for the six months ended 30 November 2016 ("the period") give cause for optimism in the outcome of the full year to 31 May 2017.

Group revenue amounted to £7.99m (H1 2016: £5.25m). This comprised £4.23m (H1 2016: £3.74) at Onepm Finance, an organic increase of 13.1% and £3.76m at the acquired subsidiaries, Academy and Bradgate (H1 2016: £1.51m). Included in revenue at Academy and Bradgate is £1.03m of commission income in respect of the broking-on of equipment and vehicle contracts.

Profit before tax increased to £2.05m (H1 2016: £1.66m). Profit after tax in the period rose to £1.64m (H1 2016: £1.31m). Earnings per share ("EPS") increased 5.8% to 3.08p (H1 2016: 2.91p). EPS has been calculated on a weighted average basis taking into account the issue of 1,960,270 new ordinary shares on 6 October 2016 in connection with the earn-out arrangements relating to the acquisition of Academy Leasing Limited in 2015. At the period end a total of 54,523,771 ordinary shares were in issue.

The Group paid a single final dividend in respect of the financial year ended 31 May 2016. It is the Board's intention to continue this policy in the current financial year with one dividend payment, being a final dividend, in respect of the current financial year ending 31 May 2017.

At the period end, the Group's consolidated net assets stood at £26.8m (31 May 2016: £23.9m), an increase of 12.1%.

Operations

In the period, the Group continued to experience strong demand across its product range from its core SME customer base. It originated £36.4m of new lease, hire purchase, loan and vehicles contracts, an 82% increase over the same period last year (H1 2016: £20.0m). This comprises the net effect of increases in lease and vehicles contracts and the anticipated reduction in loan contracts origination, which amounted to £1.7m. All of the vehicles contracts and approximately 24% of new lease and hire purchase contracts originated in the period by the Group were broked-on to generate commission income at Academy and Bradgate.

At the period-end the Group's combined 'own-book' lease and loan portfolios stood at £71.8m, comprising £42.0m at Onepm Finance, £20.5m at Academy and £9.3m at Bradgate. The average contract value in the portfolio in the period was £14.2k (H1 2016: £10.8k) with no single customer representing more than 0.35% of the total portfolio value (H1 2016: 0.21%). During the period, the Group's strict credit and underwriting controls were maintained, with £0.25m written off as bad debt (H1 2016: £0.15m). Total provisions at 30 November 2016 were £1.22m, representing 1.64% of total receivables (H1 2016: £0.92m representing 1.57% of total receivables).

Strategy

The stated goal of the Group's current strategic plan formulated in late 2014 is to achieve a market capitalisation of £100m. The objectives that will enable this goal to be achieved and which shape the strategic plan are:

  -  operating a model of distributed separate subsidiary entities

  -  having a multi-channel and multi-product offering for business lending to SMEs

  -  maintaining risk mitigation through having both funding and broking capability

  -  being 'digitally capable'

  -  strictly adhering to underwriting policies and credit control procedures

  -  being geared appropriately with cost-effective funding facilities

Current levels of business activity throughout the Group give the Board confidence in pursuing its further strategic growth plans. These will include the addition of complementary products, further development of financial technology, an expanded funding mix to include a wider range of borrowing facilities and consideration of potential further acquisitions.

In summary, the Board is maintaining an unwavering commitment to support the SME sector, whilst pursuing ambitious, but risk-assessed growth plans to deliver increased shareholder value.

Board Changes

As announced on 22 June 2016, Helen Walker will be leaving the Company's employment on 31 May 2017. The Company has made significant progress towards the recruitment of a Chief Financial Officer to replace Helen and anticipates being able to provide a specific market update in the near future.

Risks and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The directors do not consider that the principal risks and uncertainties have changed since the publication of the annual report for the year ended 31 May 2016. A detailed explanation of the risks summarised below, and how the Group seeks to mitigate the risks, can be found on page 37 of the annual report which is available at www.onepmfinance.co.uk.

Credit Risk:

The directors believe that credit risk is limited due to debts being spread over a large number of receivables contracts.

Interest rate and liquidity risk:

No liabilities are subject to variable rates of interest.

Going Concern

As stated in note 1 to the condensed financial statements, the directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Responsibility Statement

We confirm that to the best of our knowledge:

a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

b) the interim management report includes a fair view of the information required by Disclosure and Transparency Rules ("DTR") 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) the interim management report includes a fair view of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Outlook

Demand for finance from SMEs, whether it is for their business-critical assets, vehicles or general purpose loans, continues to be strong. The Board sees opportunities for further organic growth, both from cross-selling its products into its expanding customer base, and from new business origination. There are also opportunities for further strategic growth from new product introductions, the application of financial technology and value enhancing acquisitions. Your Board looks forward with confidence to the continued success of the business in the remainder of the current financial year.

By order of the Board,

Ian Smith

Chief Executive Officer, 1pm plc

Independent Review Report to 1pm PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 November 2016 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated  Cash Flow Statement, the Consolidated Statement of Changes in Equity  and related notes 1 to 8.  We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 November 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Moore Stephens

Chartered Accountants and Statutory Auditor

30 Gay Street
Bath
Somerset

BA1 2PA
18 January 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER 2016
				Independently Reviewed 6 months to 30 November			Independently Reviewed 6 months to 30 November			Audited 12 months to 31 May
				2016			2015			2016
		Note		£'000			£'000			£'000
REVENUE				7,988			5,253			12,554
Cost of sales				(2,924)			(1,860)			(4,480)
GROSS PROFIT				5,064			3,393			8,074
Other operating income				-			-			2
Administrative expenses				(2,990)			(1,604)			(4,290)
OPERATING PROFIT BEFORE EXCEPTIONAL ITEM				2,074			1,789			3,786
Exceptional items				-			(99)			(368)
OPERATING PROFIT AFTER EXCEPTIONAL ITEM				2,074			1,690			3,418
Finance income				13			1			2
Finance expense				(40)			(32)			(74)
PROFIT BEFORE TAXATION				2,047			1,659			3,346
Taxation				(412)			(344)			(480)
PROFIT AND TOTAL COMPREHENSIVE INCOME				1,635			1,315			2,866
Attributable to equity holders of the company				1,635			1,315			2,866
Profit per share attributable to the equity holders of the company during the Period
				Pence per share			Pence per share			Pence per share
- basic		6		3.08			2.91			5.87
- diluted		6		2.84			2.91			5.50
All of the above amounts are in respect of continuing operations.
	CONSOLIDATED STATEMENT OF FINANCIAL POSITION
	FOR THE SIX MONTHS TO 30 NOVEMBER 2016
					Independently Reviewed 6 months to 30 November			Independently Reviewed 6 months to 30 November			Audited 12 months to 31 May
					2016			2015			2016
					£'000			£'000			£'000
	NON CURRENT ASSETS
	Intangible assets - goodwill				10,289			8,805			10,289
	Property, plant and equipment				1,325			1,052			1,251
	Trade and other receivables				43,555			28,517			33,166
	Deferred tax				363			244			208
					55,532			38,618			44,914
	CURRENT ASSETS
	Inventories				45			-			81
	Cash and cash equivalents				1,052			470			910
	Trade and other receivables				17,392			19,175			22,895
					18,489			19,645			23,886
	TOTAL ASSETS				74,021			58,263			68,800
	EQUITY
	Called up share capital				5,452			5,253			5,253
	Share premium account				14,128			13,064			13,077
	Employee shares				95			133			90
	Retained earnings				7,104			4,181			5,469
	TOTAL EQUITY				26,779			22,631			23,889
	LIABILITIES
	NON-CURRENT LIABILITIES
	Trade and other payables				22,030			15,777			19,664
	Financial liabilities - borrowings:
	Interest bearing loans and borrowings				484			533			399
	Provisions - contingent consideration				-			1,307			1,833
					22,514			17,617			21,896
	CONSOLIDATED STATEMENT OF FINANCIAL POSITION
	FOR THE SIX MONTHS TO 30 NOVEMBER 2016
	(CONTINUED)
					Independently			Independently			Audited 12
					Reviewed			Reviewed			Months to
					6 months to			6 months to			31 May
					30 November			30 November
					2016			2015			2016
					£'000			£'000			£'000
	CURRENT LIABILITIES
	Trade and other payables				21,267			15,386			19,979
	Financial liabilities - borrowings:
	Bank overdrafts				584			-			519
	Interest bearing loans and borrowings				633			614			729
	Provisions - contingent consideration				1,833			1,307			1,245
	Tax payable				411			708			543
					24,728			18,015			23,015
	TOTAL LIABILITIES				47,242			35,632			44,911
	TOTAL EQUITY AND LIABILITIES				74,021			58,263			68,800

CONSOLIDATED INTERIM CASH FLOW STATEMENT FOR THE SIX MONTHS TO 30 NOVEMBER 2016
		Independently Reviewed 6 months to 30 November		Independently Reviewed 6 months to 30 November		Audited 12 months to 31 May
		2016		2015		2016
		£'000		£'000		£'000
Cash generated from operations
Profit before tax		2,047		1,659		3,346
Depreciation charges		249		125		354
Finance costs		40		32		74
Finance income		(13)		(1)		(3)
Increase in trade and other receivables		(4,850)		(7,934)		(12,649)
Increase in trade and other payables		3,548		6,910		11,996
		1,021		791		3,118
Cash flows from operating activities
Interest Paid		(40)		(32)		(74)
Tax paid		(325)		-		(637)
Net cash generated from operating activities		656		759		2,407
Cash flows from investing activities
Interest received		13		1		3
Acquisition of subsidiaries		-		(6,099)		(7,588)
Purchase of tangible fixed assets		(318)		(82)		(547)
Net cash generated from investing activities		(305)		(6,180)		(8,132)
Cash flows from financing activities
Repayment of loans		(11)		-		(179)
Issue of shares net of costs		-		6,365		6,769
Dividends paid		(263)		(129)		(129)
Net cash generated from financing activities		(274)		6,236		6,461
Increase in cash and cash
equivalents		77		815		736
Cash and cash equivalents at the beginning of the period		391		(345)		(345)
Cash and cash equivalents at the end of the period		468		470		391

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2016
		Share Capital			Share Premium			Retained Earnings		Employee Shares			Total Equity
		£'000			£'000			£'000		£'000			£'000
Balance at 31 May 2016		5,253			13,077			5,469		90			23,889
Issue of share capital		199			1,051					(18)			1,232
Credit to equity		-			-			-		23			23
Total comprehensive income		-			-			1,635		-			1,635
Balance at 30 November 2016		5,452			14,128			7,104		95			26,779
Balance at 31 May 2015		3,685			5,606			2,995		83			12,369
Issue of share capital		1,568			7,458			-		-			9,026
Credit to equity		-			-			-		50			50
Total comprehensive income		-			-			1,315		-			1,315
Dividend paid		-			-			(129)		-			(129)
Balance at 30 November 2015		5,253			13,064			4,181		133			22,631

1

BASIS OF PREPARATION

The financial information set out in the interim report does not constitute statutory accounts as defined in section 434(3) and 435(3) of the Companies Act 2006.  The Group's statutory financial statements for the year ended 31 May 2016 prepared in accordance with IFRS as adopted by the European Union and with the Companies Act 2006 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006. These interim financial statements have been prepared under the historical cost convention.

These interim financial statements have been prepared in accordance with the accounting policies set out in the most recently available public information, which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 31 May 2016. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. The financial information for the six months ended 30 November 2015 and the six month period 30 November 2016 are unaudited and do not constitute the Groups statutory financial statements for these periods. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements. Going Concern The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

2

SEGMENTAL REPORTING

The Group has one business segment to which all revenue, expenditure, assets and liabilities relate.

3

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). 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.

4

TAXATION

Taxation charged for the period ended 30 November 2016 is calculated by applying the directors' best estimate of the annual tax rate to the result for the period.

5

SHARE CAPITAL

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

Each share carries the entitlement to one vote.

On 6 October 2016 the Company issued 1,960,270 ordinary shares of nominal value 0.10p at 0.635p per share in deferred consideration for the acquisition of MH Holdings (UK) Limited.

On 15 November 2016 the Company issued 29,038 ordinary shares of nominal value 0.10p at 0.61p per share in relation to the employee share scheme.

6	EARNINGS PER ORDINARY SHARE
	The earnings per ordinary share has been calculated using the profit for the period and the weighted average number of ordinary shares in issue during the period. For diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of all dilutive potential ordinary shares.

			6 months to		6 months  to		12 months to
			30-Nov-16		30-Nov-15		31-May-16
			£'000		£'000		£'000
Earnings attributable to ordinary shareholders			1,635		1,315		2,866
Basic EPS
Weighted average number of shares			53,137,025		45,165,770		48,850,117
Per-share amount pence			3.08		2.91		5.87
Diluted EPS
Weighted average number of shares			57,662,332		45,193,568		52,132,369
Per- share amount pence			2.84		2.91		5.50

7

DIVIDENDS

			6 months to		6 months  to		12 months to
			30-Nov-16		30-Nov-15		31-May-16
			£'000		£'000		£'000
Ordinary shares of £0.10 each Final			-		-		391
The company paid a final dividend of £128,990 being 0.35 pence per Ordinary £0.10 share relating to the financial year ending 31 May 2015. The company paid a final dividend of £262,672 being 0.50 pence per Ordinary £0.10 share for the financial year ending 31 May 2016.

8	COPIES OF THE INTERIM REPORT
	Copies of the Interim Report are available from www.onepmfinance.co.uk and the Company Secretary at the registered office: 2nd Floor, St James House, The Square, Lower Bristol Road, Bath BA2 3BH

 

END

 

 

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