News blog
1PM
- BY: Andrew Hore |
- POSTED: 20/01/2015 |
Small company finance provider 1PM grew strongly in the first half but increased admin costs will hold back profit in the second half.
In the year to November 2014, revenues were 31% higher at £2.56m, while pre-tax profit was one-quarter higher at £760,000. The loan book has increased by 37% over 12 months to £24.3m. There was a small initial contribution from hire purchase, while business loans account for £1.3m of the total.
The move into a larger office in bath at the end of 2014 will lead to an increase in second half admin costs and it will take time to invest the cash raised last year. That means that there could be a decline in second half profit.
Earnings per share improved in the first half but a full six months of the increased number of shares following last summer’s placing and open offer means that flat full year profit of £1.3m would lead to earnings per share falling from 3.5p to 3p. However, the benefits of the investment are expected to show through in 2015-16 with profit of £2m and earnings per share of 4.4p. A dividend of 10% of earnings is promised from this year.
At 63p a share, down 2.5p, 1PM is valued at £23m. The shares are trading on less than 15 times 2015-16 earnings. In reality, 1PM tends to do better than the early forecasts so the outturn this year and next year could be better than expected.
AIM Journal January 2015 available.
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