1pm has issued a trading update ahead of its full-year results that show the businesses’ revenue has hit £31.8m, an increase of 6% on the year before.
The group originated £161m of deals, an increase of 12%, while its profits before tax, exceptional items and share-based payments were up 4% to £8.2m on the year before.
It’s other financial highlights included;
- Net assets in excess of £53m, an increase of more than 10% over the prior year.
- A similar level of net portfolio write-offs to the prior year at approximately 1% of the net lending portfolio, but provisions prudently increased to approximately 1.9%, up from 1.5% in the prior year
- Over 50% of revenue for the current year to 31 May 2020 already secured as “unearned income” providing a good degree of visibility on future earnings
- Aggregate borrowing facilities as at 31 May 2019 were £167 million, an increase of 2% over the prior year with the blended cost of borrowing maintained at approximately 4%
- Net interest margin maintained at approximately 12%
- Maiden interim dividend paid in accordance with stated progressive dividend policy
- 35% of deal origination was funded on the balance sheet and 65% was brokered-on compared with 44% and 56% respectively in the prior year.
- The lending portfolio as at 31 May 2019, stated gross of unearned interest income, is expected to be approximately £134m, compared with £142m in the prior year, the decrease reflecting the increased proportion of origination brokered-on for commission income
- Substantial investment in senior management positions, including leadership of each of the Group’s product divisions and core group functions
- Significant progress in marketing, branding and IT systems enhancements
- Synergies being delivered from the simplification of operations and policies in the Asset Finance division, which will deliver market-facing and processing improvements.
The group has also seen a change in management at Positive Cashflow after the team there earned their targets agreed at acquisition.
1pm said it was targeting growth through 2019 and 2020 to get its lending portfolio to £350m, and would hire more staff, and consolidate the group’s businesses into one brand.
This would also include continued investment in its IT and comms systems so it could sell online and work more efficiently.
As a result, it said costs were likely to rise in the next financial year.
“The Board is mindful of the continuing macro political and economic uncertainty and, therefore, taking these internal and external factors together, expects the financial year ending 31 May 2020 to be one of investment and consolidation with future benefits being derived from these actions in ensuing years,” it wrote.
Ian Smith, chief executive officer, said: “In current uncertain business conditions, we are delighted to be reporting year-on-year growth in revenue and underlying profits. The unaudited results for the year ending 31 May 2019 demonstrate the strength of our market position, our multi-product offering and operating model. We are determined to deliver our planned further strategic growth in order to increase shareholder value over the next five years and now is the time to lay the foundations for that further growth.”
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