News blog

1PM

  • BY: Andrew Hore |
  • POSTED: 14/07/2013 |

Fund manager Henderson is already reaping the benefits of its investment in asset finance provider 1PM.

In June, Henderson invested £1.5m at 0.15p a share in 1PM because it is keen on the market for the provision of finance to small businesses. The investment has already increased in value by 80%. 1PM reported record figures for the year to May 2013 and it is set to do much better this year, although earnings per share will be held back because it will take time to invest the additional cash.

Revenues increased by 35% to £3.11m, while pre-tax profit jumped from £436,000 to £775,000 as admin expenses rose more slowly than revenues. The bad debt provision was 1.39% of the portfolio. The pro forma NAV is just over £6m.

New funding lines of £4.14m were agreed during the year and the £1.5m from Henderson was received after the year end. 1PM is finding that it is becoming possible to obtain finance at cheaper rates as the company becomes more successful.

New business has reached record levels and the growth is set to continue as small businesses seek alternatives to bank finance. The loan book is expected to be worth more than £16.5m by the end of May 2014. 1PM intends to offer new products, such as small business loans, but nothing is included in the forecasts for these new products.

House broker WH Ireland forecasts a 2013-14 profit of £1m on revenues of £3.49m. The shares are trading on 15 times prospective 2013-14 earnings. The company tends to beat the broker’s initial forecasts so there is a good chance that 1PM will do better than this.

At 0.27p a share, 1PM is valued at £11.9m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJuly2013_46.pdf

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