TIDMOPM
RNS Number : 8088Z
1PM PLC
15 January 2020
15 January 2020
1pm plc
(the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 30 NOVEMBER 2019
Record new business origination during half-year; Balance Sheet
further strengthened; Investment in senior personnel and operations
in line with stated plans;
Increased interim dividend declared
1pm plc, the AIM listed independent specialist finance provider
of funding facilities to UK SMEs and consumers, is pleased to
announce interim results for the six-month period ended 30 November
2019 ("Results" or "Interims").
The Interims reflect continued demand for finance from UK SMEs
and consumers across a comprehensive range of products offered by
the group. The results are underpinned by the Group's prudent
underwriting and provisioning policies which are continuously under
review, given the extended period of uncertainty experienced in the
wider macro-economic environment. The Group remains resilient and
profitable thanks to its ability to offer a complete range of
finance products (asset, vehicles, loan and invoice finance) to UK
SMEs; its flexible business model which enables it to act as either
a funder or a broker in order to maintain margins and manage credit
risk, and its current focus on increasing Group synergies and
operational efficiencies.
Highlights:
-- Deal origination increased 7% to GBP87.8m (H1 2018/19:
GBP82.3m), 65% of which was brokered to other lenders for
commissions (H1 2018/19 60%)
-- Group revenue of GBP15.6m (H1 2018/19: GBP16.0m), reflecting slight change in product mix
-- Group operating profit before exceptional items of GBP3.2m (H1 2018/19: GBP4.1m)
-- Fully Diluted EPS of 2.70 pence per share (H1 2018/19: 3.14 pence per share)
-- Net Assets increased 4% to GBP56.1m at 30 November 2019 (31 May 2019: GBP53.8m)
-- 'Own-book' lending portfolio increased 1% to GBP143.5m at 30
November 2019 (31 May 2019: GBP141.7m)
-- Funding facilities increased to GBP170.7m at 30 November 2019 (31 May 2019: GBP167.1m)
-- The blended cost of borrowings in the period was 3.9% (year to 31 May 2019: 4.0%)
-- Bad debt provisions prudently increased to 2.2% (GBP2.7m) of
the total net portfolio (31 May 2019:1.9% or GBP2.4m)
-- Interim dividend declared up 29% to 0.36 pence per share (Interim 2019: 0.28 pence per share)
-- Significant investment in senior personnel and business
functions in line with strategy; integration progressing as
planned
Commenting on the Interim Results, John Newman, Non-Executive
Chairman, said:
"Given the macro-economic and political uncertainty experienced
in the UK throughout 2019, including the run-up to December's
General Election, which clearly dampened business activity levels,
we are satisfied with the trading momentum maintained across the
Group during the first half. The Board believes that the Group's
strategy of being a multi-product provider of finance to UK SMEs
and consumers, allied to the flexibility of our "hybrid" operating
model of either funding or broking-on new business origination
remains sound and will facilitate future growth as well as
mitigating the risks associated with any future economic downturn.
This has enabled the Group to generate robust levels of demand
whilst being able to maintain margin, control credit and spread
risk. As a result, the Group remains strategically and
operationally well positioned to deliver future growth.
I am also pleased to confirm that, in line with our progressive
dividend policy, the Board is declaring an interim dividend of 0.36
pence per share for the half year period ended 30 November 2019.
The dividend will be paid on 12 May 2020 to shareholders on the
register at 17 April 2020."
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 474 230
James Roberts, Chief Financial Officer 01225 474 230
Cenkos (NOMAD)
Max Hartley / Ben Jeynes (NOMAD) 0207 397 8900
Julian Morse (Sales)
Walbrook PR 0207 933 8780
Paul Vann
07768 807631
About 1pm:
1pm's strategy is to focus on providing or arranging the finance
UK SMEs require to fund their businesses and arranging vehicle and
property-backed finance for consumers. The multi-product range for
SMEs includes asset, vehicle, loan and invoice finance facilities.
The Group operates a "hybrid" lending and broking model enabling it
to optimize business levels through market and economic cycles.
More information is available on the Company website
www.1pm.co.uk
CHIEF EXECUTIVE OFFICER'S STATEMENT
FOR THE SIX-MONTH PERIODED 30 NOVEMBER 2019
Introduction
The 1pm group is a multi-product speciality finance business
providing funding for UK SMEs as a lender and arranging funding for
both UK SMEs and consumers as a broker. The Group comprises four
operating divisions, namely Asset Finance, Vehicle Finance, Loan
Finance and Invoice Finance. Following the completion of a recent
buy-and-build phase of expansion, the current strategic focus is on
integration as a group and investment in order to lay the
foundations for the next phase of organic and inorganic growth
through to 2024.
Financial Results
Against a backdrop of uncertain macro-political and economic
conditions, which have undoubtedly impacted UK business activity
levels during the entire financial period under review, it is
pleasing to report ongoing progress in the first half of the
current financial year, with revenues delivered in line with
budget. New business origination increased 7% to GBP87.8m in the
half-year ended 30 November 2019, compared with GBP82.3 million for
the same period in the prior year. Furthermore, new business
origination in the 12-month period ended 30 November 2019 totalled
GBP166.6m, compared with GBP153.1m in the preceding 12 months, an
annualised increase of 9%.
Group revenue in the half-year ended 30 November 2019 amounted
to GBP15.6m compared with GBP16.0m for the same period in the prior
year, a marginal decrease of 2.5%. This reflects a slight change in
the mix of revenue in the half-year, with less interest and related
income from lending activities, and more income generated from
broking activities, which has a lower margin, compared to the same
period in the prior year. This, in turn, reflects the higher
proportion of origination brokered-on, which was 65% of total new
business in the half-year compared with 60% in the prior year. The
Group's ability to choose between lending and broking-on, i.e.
utilisation of the "hybrid" operating model, continues to be both a
differentiator and a key business advantage, enabling the Group to
robustly manage credit risk whilst maintaining net interest margin,
which was a blended 12% in the first half, in line with 12% for the
same period in the prior year.
Profit before tax and exceptional items in the half-year
amounted to GBP3.2m compared with GBP4.1m in the prior period. This
reflects the planned investment in both personnel and operations in
the current financial year, highlighted in the Annual Report for
the year ended 31 May 2019, together with the policy decision to
further increase impairment provisions. At 30 November 2019, these
provisions stood at GBP2.7m, or 2.2% of the receivables' portfolio,
compared with GBP2.4m, or 1.9%, of the portfolio at 31 May 2019.
The lending portfolio continued to grow and, at 30 November 2019,
amounted to GBP143.5m compared with GBP141.7m at the prior year
end. The Balance Sheet has also been strengthened with Net Assets
at the period-end amounting to GBP56.1m compared with GBP53.8m at
the prior year end and GBP50.8m at 30 November 2018.
Earnings per share and interim dividend
Earnings per share for the first half of the financial year were
2.76 pence compared with 3.62 pence per share in the comparable
period for the previous year. Notwithstanding this reduction, the
Board has determined to maintain its progressive dividend policy
and is pleased to declare an interim dividend of 0.36 pence per
share for the half-year ended 30 November 2019, an increase of 29%
from 0.28 pence per share declared in the prior period. This will
be paid on 12 May 2020 to shareholders on the register at 17 April
2020. The shares will be marked ex-dividend on the 16 April 2020.
The Group paid a total dividend in respect of the financial year
ended 31 May 2019 of 0.84 pence per share.
Funding
The Group's capital management objective is to maintain a strong
capital base to support its current operations and planned growth
whilst continuing to reduce the cost of capital in order to provide
returns for shareholders and benefits for other stakeholders. The
Group increased its funding facilities during the period to
GBP170.7m at 30 November 2019 compared with GBP167.1m at the prior
year end, 31 May 2019. The increase in facilities includes the
renewal and extension of the Group's key block discounting
facilities for leasing and the addition of a further loan note
facility for funding secured business loans.
The Group's blended cost of borrowing in the first half
marginally improved to 3.9% from 4.0% for the year ended 31 May
2019.
Strategy and Outlook
The Group remains committed to providing a comprehensive range
of finance solutions to support the UK SME sector and UK consumers
whilst aiming to deliver profitable growth in order to increase
shareholder value. The Board is satisfied with the progress made
during the first half, laying the operational foundations for
delivering the next phase of its strategic development through to
2024.
Demand for business-critical asset, loan and invoice finance
from UK SMEs and cost-effective vehicle and property finance for
consumers continues to increase. The levels of demand the Group is
able to generate is encouraging given an increasingly competitive
market for bank and alternative finance and against the background
of political and economic uncertainty which has prevailed for the
past 12 months. The Board continues to see opportunities for
further organic and strategic growth as certainty returns to UK
markets.
Ian Smith
Chief Executive Officer, 1pm plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER
2019
Unaudited Unaudited Audited
6 months to 6 months 12 months
30 November to 30 November to
2019 2018 31 May
2019
Note GBP'000 GBP'000 GBP'000
REVENUE 15,570 15,967 31,814
Cost of sales (5,537) (5,245) (10,271)
------------- ---------------- -----------
GROSS PROFIT 10,033 10,722 21,543
Administrative expenses (6,794) (6,634) (13,292)
------------- ---------------- -----------
OPERATING PROFIT BEFORE EXCEPTIONAL
ITEMS 3,239 4,088 8,251
Exceptional items (122) (89) (221)
Share-based payments (51) (110) (3)
------------- ---------------- -----------
OPERATING PROFIT AFTER EXCEPTIONAL
ITEMS 3,066 3,889 8,027
Finance income 2 46 67
Finance expense (58) (79) (218)
------------- ---------------- -----------
PROFIT BEFORE TAXATION 3,010 3,856 7,876
Adjusted earnings before interest,
tax, exceptional items and
share-based payments 3,183 4,055 8,100
Exceptional items (122) (89) (221)
Share-based payments (51) (110) (3)
------------- ---------------- -----------
PROFIT BEFORE TAXATION 3,010 3,856 7,876
----------------------------------------------- ------- ------------- --- ---------------- --- -----------
Taxation (572) (728) (1,524)
------------- ---------------- -----------
PROFIT AND TOTAL COMPREHENSIVE
INCOME 2,438 3,128 6,352
============= ================ ===========
Attributable to equity holders
of the company 2,438 3,128 6,352
============= ================ ===========
Profit per share attributable
to the equity holders of the
company during the Period
Pence per Pence per Pence per
share share share
- basic 6 2.76 3.62 7.30
============= ================ ===========
- diluted 6 2.70 3.14 6.61
============= ================ ===========
All of the above amounts are in respect of continuing
operations.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
FOR THE SIX MONTHS TO 30 NOVEMBER 2019
Unaudited Audited
6 months to 12 months
30 November to
31 May
2019 2019
GBP'000 GBP'000
NON-CURRENT ASSETS
Goodwill 27,847 27,847
Intangible assets 430 493
Property, plant and equipment 1,380 1,418
Trade and other receivables 43,599 50,710
Deferred tax 958 945
------------- -----------
74,214 81,413
------------- -----------
CURRENT ASSETS
Cash and cash equivalents 2,294 1,851
Trade and other receivables 87,291 74,432
------------- -----------
89,585 76,283
------------- -----------
TOTAL ASSETS 163,799 157,696
============= ===========
EQUITY
Called up share capital 8,899 8,760
Share premium account 25,360 25,134
Employee Shares 298 298
Treasury Shares (300) (300)
Retained earnings 21,828 19,888
------------- -----------
TOTAL EQUITY 56,085 53,780
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 30,744 29,805
Financial liabilities - borrowings - 469
Provisions - 801
------------- -----------
30,744 31,075
------------- -----------
CURRENT LIABILITIES
Trade and other payables 71,335 67,563
Financial liabilities - borrowings 3,425 3,278
Provisions 745 691
Dividends payable 498 -
Tax payable 967 1,309
------------- -----------
76,970 72,841
------------- -----------
TOTAL LIABILITIES 107,714 103,916
------------- -----------
TOTAL EQUITY AND LIABILITIES 163,799 157,696
============= ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 NOVEMBER 2019
Unaudited
6 months Unaudited
to 6 months
30 November to 30 November
2019 2018
GBP'000 GBP'000
Cash generated from operations
Profit before tax 3,010 3,856
Depreciation and amortisation charges 364 637
Finance costs 58 79
Finance income (2) (46)
Decrease/(Increase) in inventory - (119)
Decrease/(Increase) in trade and
other receivables (5,748) (60)
(Decrease)/Increase in trade and
other payables 4,711 (2,688)
Movement in non-cash items 15 (42)
-------------- ------------------
2,408 1,617
Cash flows from operating activities
Interest paid (58) (79)
Tax paid (913) (759)
-------------- ------------------
Net cash generated from operating
activities 1,437 779
-------------- ------------------
Cash flows from investing activities
Interest received 2 46
Contingent consideration paid (367) (536)
Purchase of software, property, plant
& equipment (261) (451)
-------------- ------------------
Net cash generated from investing
activities (626) (941)
-------------- ------------------
Cash flows from financing activities
Loan repayments in period (621) (651)
Loans issued in period (inc overdrafts) 300 326
Dividends paid - (560)
-------------- ------------------
Net cash generated from financing
activities (321) (885)
-------------- ------------------
Increase in cash and cash equivalents 490 (1,047)
Cash and cash equivalents at the
beginning of the period 331 2,070
-------------- ------------------
Cash and cash equivalents at the
end of the period 821 1,023
============== ==================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2019
Share Share Retained Treasury Employee Total
Capital Premium Earnings Shares Shares Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 May
2019 8,760 25,134 19,888 (300) 298 53,780
Total comprehensive
income - - 2,438 - - 2,438
Transactions with
owners
Dividends
- - (498) - - (498)
Issue of share
capital 139 226 - - - 365
Balance at 30
November
2019 8,899 25,360 21,828 (300) 298 56,085
======== ======== ========= ========= ========= ========
Share Share Retained Treasury Employee Total
Capital Premium Earnings Shares Shares Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 May
2018 8,621 24,721 14,342 (300) 295 47,679
Total comprehensive
income - - 3,128 - - 3,128
Transactions with
owners
Dividends
- - (560) - - (560)
Issue of share
capital 139 413 - - - 552
Balance at 30
November
2018 8,760 25,134 16,910 (300) 295 50,799
======== ======== ========= ========= ========= ========
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 2019 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 2019. 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
2018 and the six-month period to 30 November 2019 are unaudited
and do not constitute the Group's 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.
Recent Accounting developments
IFRS 16, 'Leases' addresses the recognition of leases on the balance
sheet. The standard is effective for accounting periods beginning
on or after 1 January 2019. The standard eliminates the classification
of leases as either operating or finance leases and results in
operating leases being treated as finance leases. This has resulted
in previously recognised operating leases being treated as property,
plant and equipment and a finance lease creditor. The issue of
the standard has increased the value of property, plant and equipment
and the finance lease liability on the balance sheet, but the
adoption of this standard has not had a material impact on the
profit of the Group.
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 2019 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 4 September 2019 the Company issued 1,388,888 Ordinary GBP0.10
shares at GBP0.2625 per share, being deferred consideration to
the vendors of Positive Cashflow (Holdings) Limited, as part of
the Share Purchase Agreement entered into on 29 June 2017.
6 EARNINGS PER ORDINARY SHARE
The earnings per ordinary share has been calculated using the profit for the period and the weighted
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 6 months 12 months
to to to
30 Nov 31 May
30 Nov 2019 2018 2019
GBP'000 GBP'000 GBP'000
Earnings attributable to ordinary
shareholders 2,438 3,128 6,352
Basic EPS
Weighted average number of shares 88,264,309 86,503,533 87,048,483
Per-share amount pence 2.76 3.62 7.30
Diluted EPS
Weighted average number of shares 90,375,095 99,617,558 96,058,428
Per-share amount pence 2.70 3.14 6.46
7 DIVIDENDS
Dividends provided for or paid during the half year:
6 months 6 months 12 months
to to to
30 Nov 31 May
30 Nov 2019 2018 2019
GBP'000 GBP'000 GBP'000
Ordinary shares of GBP0.10 each
Final 498 561 561
Interim - - 245
------------------------------------ ------------ --- ---------- --- ----------
Total 498 561 806
On 12 December 2019 the company paid a final dividend of GBP498,317
for the financial year ending 31 May 2019, being 0.56 pence per
Ordinary GBP0.10 share. This was in addition to a maiden dividend
for the year of GBP245,269 (0.28 pence per share) which was paid
on 1 May 2019. Taken together the total dividend for the year
ending 31 May 2019 was thus GBP743,586 (total 0.84 pence per share).
GBP560,349 was paid by the company on 1 November 2018 being 0.65
pence per share for the financial year ending 31 May 2018. Since
the end of the half-year the Board have recommended the payment
of an interim dividend of 0.36 pence per share for the period
ended 30 November 2019. This is expected to be paid on 12 May
2020.
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: 2(nd) Floor, St James House, The Square, Lower Bristol
Road, Bath, BA2 3BH
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
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END
IR SFLEELESSEIF
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