Fast-growing Bath-based specialist finance provider 1pm plans to raise just over £4m in new funding to meet ambitious expansion plans, including recruiting more staff and moving to larger offices in the city.
The firm, which lends to small and medium-sized businesses, launched the share issue this week to coincide with results showing it achieved a 35% increase in pre-tax profits to £1.35m in the year to May 31 on revenue up 73.8 per cent at £4.2m.
Four years ago it made an annual £400,000 loss. Over the same period its loan book has grown from £6.5m to £20.4m and its stock market value from £1.5m to £21m. 
Now it plans to further accelerate its expansion through a combination of organic growth, new products and selective acquisitions. This week’s announcement from the firm, which is listed on the London Stock Exchange’s AIM market, said it plans to raise the £4.016m by placing 4,918,032 new shares at 61p per share with institutions to bring in £3m and issuing a further 1,664,963 new shares at the same price to existing shareholders, which will net £1.016m.
The issue price was at a 15.3% discount to last Friday’s mid-market price of 72p. However, the firm warned that its earnings per share growth would slow as a result of the new issue and subsequent investments, which pushed down its share price by 5p – or 6.94% – today to close at 67p.
Around £3m of the new funding will be used to expand its loan book with the balance of up to £800,000 used for business expansion, including increasing its network of brokers and relocating to larger office premises in Bath able to accommodate its anticipated increase in staffing over the next three years.
It said it had already found a suitable leasehold property and was expecting to move by November. It also plans to take on around 12 more employees over the next year and invest in a new computer billing system to improve efficiency.
Its annual results today showed its loan and lease portfolios grew by £476,000 and just over £5.1m respectively.
It said trading in the current year had commenced satisfactorily and was ahead of the equivalent period last year.
However, it said in overall terms the current financial year was now expected one of “modest growth” as the platform for future significant growth was established.
“The investment in people, premises and systems will impact profits growth in the current financial year and the increased number of shares in issue following the fundraising will restrict earnings per share growth in the year,” it said.
“The benefits of the increased investment are expected to impact in the later part of the current financial year and into the following financial year.”
The firm expects to pay its maiden dividend as a final dividend for the year ending May 31, 2015.
1pm provides assets finance from £1,000 to £50,000 for a period of between 12 and 60 months and £1,000 to £25,000 for business loans to be repaid over three to 36 months.
