Bath-based specialist lender 1pm, which has grown rapidly this year, is forecasting further expansion in 2016 on the back of a positive trading update and a better-than-expected contribution from its first acquisition.
The firm, which provides finance for small and medium-sized enterprises, said in a trading statement that it wrote new lease and hire purchase contracts worth £9.7m in the six months to November 30 – a six-fold increase over the corresponding period last year.
It also said its acquisition of Lancashire-based MHH Holdings – which provides equipment finance and equipment and vehicles brokering to the SME market under the Academy Leasing name – had started to pay off through new revenue streams.
Between the deal in August and November 30, 1pm earned £200,000 in commission from lease and hire purchase contracts and £300,000 in commission from vehicle leases.
At November 30, the group’s combined asset finance and business loans portfolio stood at £57m, with 1pm accounting for £39.4m – up by 62% since November 2014 and an increase of 30% since 1pm’s year-end on May 31 – and £17.6m at Academy Leasing.
1pm, which provides assets finance from £1,000 to £50,000 for a period of between 12 and 60 months and £1,000 to £50,000 for business loans repaid over three to 36 months, said the trading results were ahead of management expectations.
“1pm and Academy continue to experience high levels of demand for finance from the SME sector across the range of products offered, being asset finance (finance lease and hire purchase), business loans and vehicles broking,” 1pm said.
“The group is also pleased to report that operational progress since the acquisition is in line with management’s expectations and consistent with its stated strategic and commercial objectives.”
1pm, which is paying up to £12m for the Academy acquisition subject to performance, paid an initial cash element on completion by raising £6.9m of equity finance by means of an oversubscribed share placing and open offer at 60p per share.
1pm chairman Ian Smith said: “1pm’s results for the first six months of the current financial year continue the trend of profitable growth delivered over recent years and, although only three months since its acquisition, the equally strong results of Academy clearly justify the decision to expand the group.
“Investment in resources at 1pm earlier in 2015 together with the Academy acquisition mark the first successful steps towards achieving our strategic aims. The board is committed to delivering sustainable growth and building value for its shareholders and we look forward to the second half of the financial year with optimism and confidence.”
In October 1pm landed the title of Independent Lessor of the Year at the Annual Leasing World Awards 2015 while chief executive Maria Lewis was presented with the Editor’s Choice accolade.
1pm’s nterim results for the six months to November 30 are scheduled to be released during the week commencing January 25, 2016.
