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1PM PLC (OPM)

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Friday 20 August, 2010

1PM PLC

Final Results

RNS Number : 3645R
1PM PLC
20 August 2010
 



1PM PLC

(AIM: OPM)

 

Preliminary Results For The Year To 31 May 2010

 

1pm plc ("1pm" and "the Company") the AIM quoted independent provider of asset finance facilities to the SME sector announces its results for the year ended 31 May 2010.

 

CHAIRMAN'S STATEMENT

 

I am pleased to report the results for the year ended 31 May 2010.  Despite the continuing difficult economic environment the Company has put in a resilient performance assisted by our business model and diverse portfolio.  Revenue has been maintained although the overall performance for the year has been affected by a significantly higher level of bad debt write-offs.  Pleasingly the second half has seen an increase in the level of new leases being written and this improvement has continued into the current year.

 

Results

 

Group turnover in the year to 31 May 2010 was 2% lower at £1.331 million (2009: £1.365 million).

 

Bad debt write-offs during the year were £349,843 (2009: £82,200). 

 

Operating profit before bad debt write-off and provisioning was £16,500 (2009: £99,828).

 

The loss before taxation for the year was £402,416 (2009: £3,085 profit).

 

Levels of new business in the second half of the year were an improvement on the first half.  The value of new business written in the second half of the year was £1,519,250 compared with £975,601 in the first half.  As at 30 May 2010 the total lease book amounted to £6.55 million (2009: £7.13 million, 30 November 2009: £6.42 million).

 

Operating review

 

During the financial year we made significant operational changes.  These include a tightening of our underwriting criteria, a prudent change in our provisioning policy and a drive to enhance our relationships with the broker network.  A number of these changes have been implemented following a review of the trading environment and a desire to reduce operational risk.

 

The level of bad debt write-offs during the year has been disappointing.  These have largely resulted from customers bankruptcies for which it is the Company's policy to write-off immediately any amounts due as bad debt.  The majority of the bad debts relate to leases that were relatively mature and large and, more significantly, pre dated the company's decision during the year to reduce its average deal size.  In light of continuing difficult economic environment we have implemented a new provisioning system that should more accurately link provisions with the lease portfolio.

 

The positive impact of our meetings with brokers has already been seen in the second half through the increase in new business and a much more efficient conversion rate of proposals submitted.  Our willingness and ability to support our brokers and customers through difficult times is significantly appreciated in our designated marketplace and bodes well for the future relationships.

 

I remain proud of our performance in light of prevailing conditions in the wider economy, which led to the exit from our market of a number of our competitors.  We believe we are well positioned to take advantage of the prevailing market opportunities resulting from reduced competition without compromising our standards.

  

Staff

 

During the year a number of operational changes were made to the structure of the Board.  Maria Hampton became Managing Director and Helen Walker became Finance Director effective from 1 February 2010.  In addition, Rod Channon, the previous Finance Director, became a non-executive director.

 

I want to thank the dedicated staff of 1pm who have demonstrated extraordinary commitment.  The hard work of our highly trained and experienced staff has been a major factor in our resilient performance.

 

Financing

 

In March this year we announced a successful placing raising £1.15 million, before expenses, which significantly strengthened our balance sheet.  The proceeds of the placing have allowed us to accelerate the levels of new business written.  In addition, the extra capital has reduced the gearing on the lease portfolio by increasing the proportion of Company funding of new leases and thereby increase the margin on lending.

 

Outlook

 

I am pleased to report that the new financial year has started positively helped by the March fundraising.  In the first two months of trading we have written levels of new business in excess of budget.  This is reflected in the loan book which as at 31 July 2010 has increased to £7.4m.  The challenge remains accessing funds to support portfolio growth and to that extent we are in constructive discussions with a number of funders.

 

Turning to the economic outlook there are signs that the asset finance market is showing a return to growth.  We are cautiously optimistic having emerged in robust shape from the last two years and believe we are well positioned to take advantage of the emerging opportunities in our designated market sector.

 

Contacts:




1pm plc

www.1pm.co.uk

Mike Johnson, Chairman

+44 (0) 844 967 0944



WH Ireland Limited

www.wh-ireland.co.uk

Mike Coe / Marc Davies

+44 (0) 117 945 3470

 



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MAY 2010

 


Note

2010

2009



£

£









REVENUE


1,331,922

1,365,172

Cost of sales


 (1,184,547)

 (791,399)





GROSS PROFIT


147,375

573,773





Administrative expenses


(516,978)

(556,145)





OPERATING (LOSS) / PROFIT

2

(369,603)

17,628





Finance income


303

63

Finance costs


   (33,116)

   (14,606)





(LOSS) / PROFIT BEFORE TAX


(402,416)

3,085





Income tax expense

5

       64,656

              -





(LOSS) / PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR


    (337,760)

    3,085





Attributable to equity holders of the company


   (337,760)

    3,085





Profit per share attributable to the equity




holders of the company during the year




- basic and diluted

6

 (0.017678)p

  0.000436p









 

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

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 MAY 2010

 


Notes

2010

2009



£

£









ASSETS




NON CURRENT ASSETS




Deferred income taxes


159,964

78,861

Property, plant and equipment


     36,478

     54,651



196,442

133,512

CURRENT ASSETS




Trade and other receivables

7

6,548,773

7,127,592

Cash and cash equivalents


   305,211

     1,783





TOTAL CURRENT ASSETS


6,853,984

7,129,375





TOTAL ASSETS


7,050,426

7,262,887









EQUITY




Share capital

10

2,153,791

1,035,639

Share premium account

10

1,565,035

1,640,867

Retained earnings

11

 (426,383)

 ( 88,623)





TOTAL EQUITY


3,292,443

2,587,883





LIABILITIES




CURRENT LIABILITIES




Trade and other payables

8

1,997,834

2,428,547





NON CURRENT LIABILITIES




Trade and other payables

9

1,760,149

2,246,457

Deferred tax liabilities


              -

              -





TOTAL LIABILITIES


3,757,983

4,675,004





TOTAL EQUITY AND LIABILITIES


7,050,426

7,262,887

 



CONSOLIDATED CASH FLOW STATEMENT

YEAR ENDED 31 MAY 2010

 


Notes

2010

2009



£

£





CASH FLOWS FROM OPERATING ACTIVITIES




Operating (Loss)/Profit before income tax for the year


(369,603)

17,628

Adjustment for:




Depreciation


24,232

27,695

Trade and other receivables


578,819

(2,196,034)

Trade and other payables


     (495,847)

    1,463,502

Consumed by operations


(262,399)

(687,209)

Taxation


       (16,447)

                -





Net cash generated from operating activities


(278,846)

(687,209)









CASH FLOWS FROM INVESTING ACTIVITIES




Interest received


303

63

Purchase of property, plant and equipment


   (6,058)

   (16,255)





Net cash generated from investing activities


(5,755)

(16,192)









CASH FLOWS FROM FINANCING ACTIVITIES




Interest paid


(33,116)

(14,606)

Issue of shares net of cost


 1,042,320

  565,688





Net cash generated from financing activities


     1,009,204

     551,082









NET INCREASE/(DECREASE) IN CASH AND CASH




EQUIVALENTS


724,603

(152,319)





CASH AND CASH EQUIVALENTS AT THE




BEGINNING OF THE YEAR


 (499,716)

 (347,397)





CASH AND CASH EQUIVALENTS AT THE




END OF THE YEAR

12

 224,887

 (499,716)

 

 

STATEMENTS OF CHANGES IN EQUITY

YEAR ENDED 31 MAY 2010

 

CONSOLIDATED GROUP

 


Share

Share

Retained

Total


Capital

Premium

Earnings

Equity







£

£

£

£






Balance at 1 June 2009

1,035,639

1,640,867

(88,623)

2,587,883






Loss for the year



(337,760)

(337,760)

Movement in share capital (note 14)

1,118,152

(75,832)


1,042,320

Other movements

            -      

                -

              -

               -






Balance at 31 May 2010

2,153,791

1,565,035

  (426,383)

 3,292,443






 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 31 MAY 2010

 

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 2010 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 2010 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:

 



2010

2009



£

£





Depreciation of property, plant and equipment


24,232

27,695

Auditors remuneration (see below)


11,900

11,850

Staff costs (see note 3)


334,174

336,913

Operating lease costs:




Rent


     29,911  

     28,703  

 

 

Auditors' remuneration:

 



2010

2009



£

£

Audit services




Statutory audit


8,500

8,500

Non audit  services




Other services pursuant to legislation


   3,400

   3,350





Total


 11,900

 11,850

 

 

3.     STAFF COSTS

 



2010

2009



£

£





Wages and salaries


317,786

319,479

Social security costs


15,338

16,384

Other pension costs


     1,050

     1,050







 334,174

 336,913

 

 

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

 



2010

2009



No

No





Administrative


6

6

Management


            1

            1







            7

            7

 

 

 

4.     DIRECTORS' REMUNERATION

 

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

 



2010

2009

Aggregate Emoluments


£

£

M Johnson


85,547

93,454

M Hampton


70,000

72,181

H Walker


37,240

22,294

R Channon


17,816

15,000

R Russell


10,776

-

P O'Connell - resigned 29.05.09


3,000

12,000



224,379

214,929

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:

 



2010

2009



No

No





Money purchase schemes


    1

     1

 

5.     INCOME TAX EXPENSE

 

 

(a)


2010

2009

Current tax


£

£





UK corporation tax charge


-

-

Movement in deferred taxation


(81,103)

-

Under provision in prior years


 16,447

          -





Current tax


 (64,656)

          -

 

Corporation tax is calculated at 21% (2009: 21%) of the estimated assessable profit for the year.

 

The charge for the year can be reconciled to the Income Statement as follows:

 

(b)


2010

2009



£

£

(Loss) / profit on ordinary activities before tax


 (402,416)

 3,085





Profit on ordinary activities by rate of tax


(84,507)

648

Capital allowances for the period in excess of depreciation


2,363

585

Unused tax losses


82,144

(1,220)

Movement in deferred taxation


(81,103)

-

Under provision of current tax


16,447

(13)





Total current tax (note 5(a))


     (64,656)

               -

 

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.

 



2010

2009



£

£

(Loss) / Profit attributable to equity shareholders


      (337,760)

         3,085





Weighted average number of shares


1,910,595,524

707,144,061





Basic & Diluted Earnings per Share


  (0.017678)p

   0.000436p 





 

7.     TRADE AND OTHER RECEIVABLES

 



2010

2009



£

£





Trade receivables


6,174,025

6,208,032

Unpaid share capital


-

508,933

VAT recoverable


33,233

-

Other receivables


301,255

375,939

Prepayments and accrued income


40,260

18,241

Corporation tax


               -

      16,447







6,548,773

7,127,592





 

Trade receivables wholly represent finance lease debtors.

 

 



2010

2009

Gross receivables from finance leases


£

£

No later than 1 year


3,319,001

2,997,621

Later than 1 year and no later then 5 years


4,382,015

5,079,270

Later then 5 years


-

-





Unearned future finance income on finance lease


 (1,526,991)

 (1,868,859)

Net investment in finance leases


   6,174,025

   6,208,032

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




No later than 1 year


2,392,623

2,342,881

Later than 1 year and no later then 5 years


3,781,402

3,865,151

Later then 5 years


                 -              

                 -              



6,174,025

6,208,032

 

The cost of assets acquired for the purpose of letting under finance leases were as follows; 2010: £2,484,952 (2009: £4,157,196).

 

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 £67,917 (2009: £54,127), more than three months old £51,801 (2009: £90,740), all amounts are secured on the asset to which they relate. No other assets are past due or impaired.

 

8.     CURRENT LIABILITIES

 



2010

2009



£

£





Bank overdrafts


80,324

501,499

Trade payables


1,787,867

1,804,196

VAT payable


-

13,279

Other taxation and social securities


5,613

4,676

Other payables


103,090

70,610

Accruals and deferred income


      20,940

      34,287



 1,997,834

 2,428,547

 

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 10%.

 

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

 



2010

2009



£

£

Other loans


250,000

-

Accruals and deferred income


36,300

-

Trade payables


 1,473,849

 2,246,457



1,760,149

2,246,457

 

Other loans are £250,000 from UK Private Healthcare Ltd, which is repayable in June 2011, 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).

 



2010

2009



£

£

Trade payables:




On demand or within one year


1,996,111

2,088,513

More than one year but less than two years


1,264,900

1,554,697

More than two years but less than five years


  284,554

   881,775

Total


3,545,565

4,524,985

 

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 2009

1,518,979,086

1,035,639

1,640,867

2,676,506

Movement

1,639,999,999

1,118,152

(75,832)

   1,042,320






At 31 May 2010

3,158,979,085

2,153,791

1,565,035

3,718,826






 

Allotted and fully paid:

 



No of Shares

Nominal Value

Total




£

£

Ordinary Shares


3,158,979,085

0.0006818

 2,153,791






 

Issue of shares

 

On 17 March 2010 the company issued 572,000,001 ordinary shares of nominal value £0.0006818 at £0.0007 per share and on 1 April 2010 the company issued 1,067,999,998 ordinary shares of nominal value £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 2009


(88,623)

-

Loss for the year


(337,760)

-

Equity dividends


                -

              -





At 31 May 2010


      (426,383)

               -

         

12. CASH AND CASH EQUIVALENTS

 



2010

2009



£

£





Cash at bank and in hand


305,211

1,655

Bank overdrafts


      (80,324)

    (501,371)

Cash and cash equivalents


      224,887

    (499,716)





 

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 £10,776

M R Johnson invoiced the company for £85,547

R Channon invoiced the company for £17,816

H Walker invoiced the company for £37,240

 

At the year end, included within Current liabilities are; £3,508 due to H Walker and £7,000 due to M R Johnson.

 

R Russell is a director and 25% shareholder of UK Private Healthcare Ltd who loaned the company £250,000 during the year. At the year end the full amount is outstanding and included in non-current liabilities.

 


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