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1PM PLC (OPM)

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Wednesday 20 July, 2011

1PM PLC

Final Results for the Year ended 31 May 2011

RNS Number : 6953K
1PM PLC
20 July 2011
 



 

20 July 2011                                                                                                                                                                   AIM: OPM

1PM PLC

("1pm" or the "Company")

 

FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2011

 

1pm plc (AIM: OPM), the AIM listed independent provider of asset finance facilities to the SME sector, announces final results for the year ended 31 May 2011.

Financial Highlights:

·     Revenues up 43% to £1.91m (FY10: £1.33m)

·     Profit before tax of £0.20m (FY10: £0.40m loss)

·     Bad Debts and Provisions down 46% to £0.19m (FY10: £0.35m)

·     Lease portfolio up 66% to £10.10m from £6.10m

 

Operations Highlights:

·     64% of lease portfolio now under £10,000

·     Number of unique customers up 79%

·     Robust lending and collection criteria

·     Improved relationships with broking partners

·     Reduced exposure to individual bad debts

 

Regarding outlook, Michael Johnson, Chairman, said:

"The board believes that an increasing amount of good quality business is available to be written, especially as larger banks continue to restrict lending to our customer base.  This is evident from the quantity of business the company is processing month on month.

 

"We have strong relationships with our existing funders and will continue to look for new and alternative funding options.  The more resources available to the Company the more it can lend on to customers. The Directors believe that the Company's return to profitability should facilitate the agreement of additional funding lines.

 

"In summary, the Company is in a great position to take full advantage of the constraints currently placed on the UK banking industry and is confident that, with the right support, it will continue to gain strength."

 

Contacts:  

1pm plc

 

Mike Johnson, Chairman

Maria Hampton, Managing Director

0844 967 0944

0844 967 0944

 

 

WH Ireland (NOMAD)

 

Mike Coe

Marc Davies

0117 945 3470

 

 

Walbrook PR Ltd

020 7933 8780

Paul McManus/Helen Westaway (Media Enquiries)

 

Paul Cornelius (Investor Enquiries)

 

 

 

 

CHAIRMAN'S STATEMENT

 

The last few years has seen one of the most challenging trading environments for many years  Weak consumer confidence, combined with constrained bank lending has made for an uncertain business climate.  However, I am pleased to report that this year your Company has delivered a resilient, consistent and much improved performance.

 

1pm has returned to an annual profit of £202k (FY2010: £402k loss) and revenue is 43% up on FY2010. The level of new business written during the year was £6.1m (FY2010: £2.4m) and the lease portfolio has risen to £10.1m (FY2010: £6.1m).  As a result of the increased portfolio the Company is now able to fund a proportion of its new lending from its own receivables.

 

Business

The Company lends between £1,000 and £30,000 over an average term of three years.  The Company's average lease agreement is £7,500 and around 64% of the lease portfolio consists of lends under £10,000. In recent years the Directors have made a decision to reduce the average lease value as this reduces the Company's exposure to significant, individual bad debts.

 

The number of unique customers has increased by 79% and the Company hopes to continue this trend by improving its relationships with its lease broking partners and customers, and by continuing to improve its incentives and services available, whilst maximising margins.

 

All customers must meet our very strict underwriting criteria which is reviewed regularly.  Our collection procedures are also continually assessed and I'm pleased to report that since 2007 the Company has collected £1.8m of the bad debts that had previously been written off.

 

The strength of the business model ensures that we are able to continue our organic growth without over-stretching our resources.  The reputation we have formed has proved instrumental in the success of the business. We are delighted with the progress of the business this year and look forward to the future.

 

Staff

As always the enthusiasm from 1pm staff has been constant and their passion for, and belief in, 1pm is admirable. The Board is grateful for their continued commitment.

 

Shareholders

Our focus towards shareholders remains fixed on building a financially secure platform, which will enable the business to grow further in the coming years.  Tight financial controls are in place and lessons have been learned from the recent economic down turn.

 

Looking ahead, you can be sure that the Board will continue both to support and challenge the Company, ensuring that the long-term interests of the Company and its shareholders are looked after.



 

Outlook

The board believes that an increasing amount of good quality business is available to be written, especially as larger banks continue to restrict lending to our customer base.  This is evident from the quantity of business the company is processing month on month We have strong relationships with our existing funders and will continue to look for new and alternative funding options.  The more resources available to the Company the more it can lend on to customers. The Directors believe that the Company's return to profitability should facilitate the agreement of additional funding lines.

 

In summary, the Company is in a great position to take full advantage of the constraints currently placed on the UK banking industry and is confident that, with the right support, it will continue to gain strength.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MAY 2011

 

 

Note

2011

2010

 

 

£

£




 




 

REVENUE

 

1,906,262

1,331,922

Cost of sales


 (1,122,283)

 (1,184,547)

 


 

 

GROSS PROFIT


783,979

147,375

 




Administrative expenses


(555,357)

(516,978)

 


 


OPERATING (LOSS) / PROFIT

2

228,622

(369,603)

 


 


Finance income


152

303

Finance costs


(26,444)

   (33,116)

 


 

 

(LOSS) / PROFIT BEFORE TAX


202,330

(402,416)

 


 


Income tax expense

5

(48,083)

       64,656

 


 

 

(LOSS) / PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR


154,247

    (337,760)

 


 

 

Attributable to equity holders of the company


154,247

   (337,760)





Profit per share attributable to the equity

 


 

holders of the company during the year

 


 

- basic and diluted

6

0.00483p

(0.017678)p

 

 

 

 





 

All of the activities of the company are classed as continuing.

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 MAY 2011

 

 

Notes

2011

2010

 

 

£

£




 




 

ASSETS



 

NON CURRENT ASSETS



 

Deferred income taxes

 

111,881

159,964

Property, plant and equipment

 

      30,253

     36,478

 


    142,134

   196,442

CURRENT ASSETS

 



Trade and other receivables

7

9,289,129

6,548,773

Cash and cash equivalents


          353

   305,211

 

 

 


TOTAL CURRENT ASSETS

 

9,289,482

6,853,984

 



 

TOTAL ASSETS


9,431,616

7,050,426

 




 




EQUITY




Share capital

10

2,236,725

2,153,791

Share premium account

10

1,567,249

1,565,035

Retained earnings

11

 (272,136)

 (426,383)

 


 


TOTAL EQUITY


3,531,838

3,292,443

 




LIABILITIES

 


 

CURRENT LIABILITIES

 


 

Trade and other payables

8

2,786,056

1,917,510

Bank overdrafts


94,248

80,324

Interest bearing loans and borrowings

 

   130,000

   250,000

 

 

3,010,304

2,247,834

NON CURRENT LIABILITIES

 


 

Trade and other payables

9

2,889,474

1,510,149

 

 

 

 

TOTAL LIABILITIES

 

5,899,778

3,757,983

 


 


TOTAL EQUITY AND LIABILITIES


9,431,616

7,050,426

 



CONSOLIDATED STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED 31 MAY 2011

 


Notes

2011

2010


 

£

£


 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Cash generated from operations

 

(242,227)

(528,845)

Interest Paid

 

(26,444)

(33,116)

 

 


 

Net cash from operating activities

 

(268,671)

(561,961)

 

 


 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Purchase of tangible fixed assets

 

(15,411)

(6,059)

Interest received

 

        152

       303

 

 


 

Net cash generated from investing activities

 

(15,259)

(5,756)

 

 


 

 

 


 

CASH FLOWS FROM FINANCING ACTIVITIES

 


 

New loans in year

 

-

250,000

Loan repayments in year

 

(120,000)

-

Share Issue

 

    85,148

1,042,320

 

 

  

  

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 

(318,782)

724,603

 

 


 

CASH AND CASH EQUIVALENTS AT THE

 

 

 

BEGINNING OF THE YEAR

 

224,887

 (499,716)

 

 


 

CASH AND CASH EQUIVALENTS AT THE

 


 

END OF THE YEAR

12

(93,895)

 224,887

 



 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MAY 2011

 

CONSOLIDATED GROUP

 

 

Share

Retained

Share

Total

 

Capital

Earnings

Premium

Equity

 

£

£

£

£

 

 

 

 

 

Balance at 1 June 2009

1,035,639

(88,623)

1,640,867

2,587,883

 





Changes in equity





Issue of share capital

1,118,152

-

(75,832)

1,042,320

Total comprehensive income

-

(337,760)

-

(337,760)

 

 

 

 

 

Balance at 31 May 2010

2,153,791

(426,383)

1,565,035

3,292,443

 

 

 

 

 

Changes in equity

 

 

 

 

Issue of share capital

82,934

-

2,214

85,148

Total comprehensive income

-

154,247

-

154,247

 





Balance at 31 May 2011

2,236,725

(272,136)

1,567,249

3,531,838

 

 

 

 

 

 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 31 MAY 2011

 

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 2011 will be delivered to shareholders and to the Registrar of Companies in due course 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 May 2011 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.

 

Basis of preparation

The financial statements have been prepared in accordance with IFRS as adopted by the European Union and with the Companies Act 2006. The company is a UK domiciled public limited company.

 

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 recognition

          Assets leased to customers on finance leases are recognised in the Statement of Financial Position at the amount of the Company's net investment in the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company's net investment outstanding in respect of the leases.

 

          Funding payables and cost of sales - interest

          Finance received from funding providers is classified as payables in the Statement of Financial Position. Payments to the funding providers contain a capital element which reduces the creditor and an interest charge is debited to the cost of sales using the "rule of 78". Due to the relatively short term of the funding creditors the directors are satisfied that this method of apportioning interest is not materially different to the effective interest method.

 

         Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of ownership to the lesee. All other leases are classed as operating leases.

 

Assets held as finance leases are recognised as assets at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease.

 

The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

 

Operating lease rentals are charged to the income statement on a straight-line basis over the term of the lease.

 

 

2.       OPERATING PROFIT

 

Operating profit stated after charging:

 

 

 

2011

2010

 

 

£

£

 

 

 

 

Depreciation of property, plant and equipment

 

21,636

24,232

Auditors remuneration (see below)

 

12,200

11,900

Staff costs (see note 3)

 

360,019

334,174

Operating lease costs:

 


 

Rent

 

     19,800  

     29,911  

 

 

Auditors' remuneration:

 

 

 

2011

2010

 

 

£

£

Audit services

 

 

 

Statutory audit

 

8,750

8,500

Non audit  services

 

 

 

Other services pursuant to legislation

 

   3,450

   3,400

 

 

 

 

Total

 

 12,200

 11,900

 



 

3.       STAFF COSTS

 

 

 

2011

2010

 

 

£

£

 

 

 

 

Wages and salaries

 

338,866

317,786

Social security costs

 

20,103

15,338

Other pension costs

 

     1,050

     1,050

 

 

 

 

 

 

 360,019

 334,174

 

 

The average number of staff employed by the company during the financial period amounted to:

 

 

 

2011

2010

 

 

No

No

 

 

 

 

Administrative

 

6

6

Management

 

            1

            1

 

 

 

 

 

 

            7

            7

 

 

 

4.       DIRECTORS' REMUNERATION

 

The directors' aggregate emoluments in respect of qualifying services were:

 

 

 

2011

2010

Aggregate Emoluments

 

£

£

M Johnson

 

65,000

85,547

M Hampton

 

70,000

70,000

H Walker

 

46,143

37,240

R Channon

 

15,000

17,816

R Russell

 

10,000

10,776

P O'Connell - resigned 29.05.09

 

          0

    3,000

 

 

206,143

224,379

Value of company pension contributions to money purchase scheme

 

 

 

M Hampton

 

     1,050

     1,050

 

 

 

 

 

 

 225,429

 215,979

 

The number of directors who accrued benefits under company pension scheme was as follows:

 

 

 

2011

2010

 

 

No

No

Money purchase schemes

 

     1

     1

 



 

5.       INCOME TAX EXPENSE

 

 

(a)

 

2011

2010

Current tax

 

£

£

 

 

 

 

UK corporation tax charge

 

-

-

Movement in deferred taxation

 

48,083

(81,103)

Under provision in prior years

 

           -

 16,447

 

 

 

 

Current tax

 

 48,083

 (64,656)

 

Corporation tax is calculated at 21% (2010: 21%) of the estimated assessable profit for the year.

 

Factors affecting the tax charge:

The tax assessed for the year is lower (2010 higher) than the standard rate of corporation tax in the UK. The difference is explained below:

 

 

(b)

 

2011

2010

 

 

£

£

(Loss) / profit on ordinary activities before tax

 

 202,330

 (402,416)

 

 

 

 

Profit on ordinary activities by rate of tax

 

42,489

(84,507)

Capital allowances for the period in excess of depreciation

 

(144)

2,363

Unused tax losses

 

(42,345)

82,144

Under provision of current tax

 

             -

    16,447

 

 

 

 

Total current tax (note 5(a))

 

             -

    16,447

 

6.       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. There are no dilutive ordinary shares.

 

 

 

2011

2010

 

 

£

£

Profit / (loss) attributable to equity shareholders

 

         154,247

      (337,760)

 

 

 

 

Weighted average number of shares

 

3,195,491,908

1,910,595,524

 

 


 

Basic & Diluted Earnings per Share

 

 0.004827p 

 (0.017678)p

 

 

 

 

 



 

7.       TRADE AND OTHER RECEIVABLES

 



2011

2010



£

£




 

Trade receivables


8,752,542

6,174,025

VAT recoverable


25,807

33,233

Other receivables


478,936

301,255

Prepayments and accrued income


31,844

40,260

Corporation tax


               -

               -



 




9,289,129

6,548,773





 

Trade receivables wholly represent finance lease debtors.

 

 



2011

2010

Gross receivables from finance leases

 

£

£

No later than 1 year

 

4,411,197

3,319,001

Later than 1 year and no later then 5 years

 

6,885,757

4,382,015

Later then 5 years

 

-

-

 

 

 

 

Unearned future finance income on finance lease

 

(2,544,412)

 (1,526,991)

Net investment in finance leases

 

   8,752,542

   6,174,025

The net investment in finance leases may be analysed as follows:

 

 

 

No later than 1 year

 

2,927,584

2,392,623

Later than 1 year and no later then 5 years

 

5,824,958

3,781,402

Later then 5 years

 

                -

                 -



  8,752,542

6,174,025

 

The cost of assets acquired for the purpose of letting under finance leases were as follows; 2011: £6,105,899 (2010: £2,484,952).

 

Included within Trade receivables are the following receivables that are past due but not impaired as they are considered recoverable: less than three months old £67,984 (2010: £67,917), more than three months old £56,545 (2010: £51,801), all amounts are secured on the asset to which they relate. No other assets are past due or impaired.

 

8.       CURRENT LIABILITIES

 

 

 

2011

2010

 

 

£

£

 

 

 

 

 

 

 

 

Trade payables

 

2,669,208

1,787,867

Other taxation and social securities

 

7,170

5,613

Other payables

 

    109,678

    124,030

 

 

 2,786,056

 1,917,510

 

Trade payables wholly represent funding creditors, which are secured on the value of finance leases.

 

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 33 to 42 months and interest rates from 7.75% to 11%.

 

The company's banking facilities are secured by a mortgage debenture, dated 7 December 2007 incorporating a fixed and floating charge over all current and future assets of the company.

 

9.       NON CURRENT LIABILITIES

 

 

 

2011

2010

 

 

£

£

 

 

 

 

Accruals and deferred income

 

24,000

36,300

Trade payables

 

2,865,474

 1,473,849

 

 

2,889,474

-1,510,149

 

Other loans are £130,000 from UK Private Healthcare Ltd, which is repayable in June 2012, and is secured by a debenture over the assets of the company.

 

Trade creditors are secured as noted above, with the same repayment and interest rates.

 

Maturity analysis

The following analysis shows the contractual undiscounted cash flows (which differ from the discounted cash flow totals shown in Current and Non current liabilities above).

 

 

 

2011

2010

 

 

£

£

Trade payables:

 

 

 

On demand or within one year

 

3,029,901

1,996,111

More than one year but less than two years

 

2,012,699

1,264,900

More than two years but less than five years

 

1,067,111

  284,554

Total

 

6,109,711

3,545,565

 



10. SHARE CAPITAL AND PREMIUM

 

Authorised:

 

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

 

Issued:

 

 

No of Shares

Ordinary Shares

Share Premium

Total

 

 

£

£

£

At 1 June 2010

3,158,979,085

2,153,791

1,565,035

3,718,826

Movement

   121,639,686

     82,934

       2,214

     85,148

 

 

 

 

 

At 31 May 2011

3,280,618,771

2,236,725

1,567,249

3,803,974

 

 

 

 

 

 

Allotted and fully paid:

 

 

 

No of Shares

Nominal Value

Total

 

 

 

£

£

Ordinary Shares

 

3,280,618,771

0.0006818

 2,236,725

 

 

 

 

 

 

Issue of shares

 

During the year the company issued 121,639,686 ordinary shares with a nominal value of £0.0006818 at £0.0007 per share.

The funds raised were used in 1pm (UK) Limited to finance continuing operations.

 

11.       RETAINED EARNINGS

 

 

 

Group

Company

 

 

£

£

 

 

 

 

At 1 June 2010

 

(426,383)

-

Profit for the year

 

154,247

-

Equity dividends

 

                -

              -

 

 

 

 

At 31 May 2011

 

  (272,136)

               -

            

12. CASH AND CASH EQUIVALENTS

 

 

 

2011

2010

 

 

£

£

 

 

 

 

Cash at bank and in hand

 

353

305,211

Bank overdrafts

 

      (94,248)

      (80,324)

Cash and cash equivalents

 

      (93,895)

      224,887

 

 

 

 

 

13.    TRANSACTIONS WITH DIRECTORS

 

A director Mr M R Johnson has given personal guarantees to: Svenska Handelsbanken plc of £350,000, Hitachi Capital Limited of £1,000,000, Venture Finance of £500,000, & 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:

 

R Russell invoiced the company for £42,844

M R Johnson invoiced the company for £66,511

R Channon invoiced the company for £16,283

H Walker invoiced the company for £46,143

 

At the year end, included within Current liabilities are; £4,038 due to H Walker, £3,703 due to M R Johnson, £31 due to R Channon and £17,638 due to R Russell.

 

R Russell is a director and 25% shareholder of UK Private Healthcare Ltd, a company which has an outstanding loan balance of £130,000 (2010 £250,000), included within financial liabilities.

 

R Russell (Director loaned the company £600,000, interest is charged at 11%. The gross amount of £744,350 is repayable in forty eight monthly payments.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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