1pm, the independent Bath firm providing asset finance to small firms, has reported a 238% rise in pre-tax profits to £214,000 in the six months to November 30. It was achieved on revenue up 31% from £880,000 to £1.15m while its total lease portfolio increased from £9.19m to £10.85m.
Highlights included a reduction in bad debt provisions and write-offs as a percentage of the total lease portfolio to a level now well below management expectations. Meanwhile the company has moved to new premises with enough capacity to meet medium-term growth expectations and launched a new website disclosing preferred financial terms.
Typically 1pm, which is quoted on the London Stock Exchange's AIM market, lends between £1,000 to £40,000 for between 12 and 60 months to customers with clear credit histories. Assets leased are business critical.
Pointing out that the interim profits exceeded last year’s full-time results, chairman Mike Johnson said the company had written £2.59m of new leases in the first half. He said bank borrowing still remained difficult to obtain for many SME businesses and the implication for 1pm was continued demand for its leasing facilities.
While the market in general had experienced a slight downturn over the past four months, 1pm had seen improvement during December and January.
Meanwhile the company is to increase its maximum lending amount for established businesses from £30,000 to £40,000 and is expanding its lending to cover Northern Ireland to meet demand. The board will continue to assess market demand and adjust its operations accordingly, Mr Johnson added.
During the six-month period 1pm agreed an increase in an existing funding facility of £1m which will support continued growth of its lease portfolio. New business continued to be partially-funded internally using surplus cash. In broad terms this meant that as its lease portfolio grows, so does the amount of cash available to reinvest in the business.
The investor section of 1pm’s website now features details of the terms on which the company is typically prepared to deal with individual debt funders or SIPP funds interested in providing funding. A highly-competitive fixed rate of return of up to 9.25%, depending on the amount borrowed, on the basis of individually negotiated secured loan terms, will typically be available.
Mr Johnson said that meanwhile the company had sufficient cash for its current requirements and is confident that further funding lines will be available if required. “Cash is 1pm’s raw material, the more it has available the more it can lend on to customers, thus increasing profits and earnings per share,” he said.
He said the company had now been profitable for 18 consecutive months and with funding in place for 2012 the directors are confident that this will continue. “The board believes that 1pm has excellent growth prospects for 2012, even in these uncertain economic times, and is constantly exploring new ways to deliver this,” he concluded.
