LONDON (Alliance News) - 1pm PLC, which provides finance facilities to small- and medium-sized enterprises, Monday said it is raising up to GBP4.0 million in order to enable it to lend at "enhanced" margins and increase profit in comparison to an equivalent level of debt funding.
The company also reported a big rise in profit in its most recently completed financial year.
In a statement, 1pm said it is raising GBP3.0 million before expenses through an oversubscribed placing of 4.9 million new shares at 61 pence each,. It also will issue of up to 1.7 million new shares at the same price under an open offer of 1 new share for every 18 existing shares to raise GBP1.0 million before expenses.
1pm said it has already conditionally raised the GBP3.0 million under the placing, with Henderson Global Investors, which currently owns a 14.96% stake in the company, subscribing for 1.6 million shares.
1pm said the placing and open offer will enable it to maintain a balance in the financing of the business between debt and equity, and to widen its institutional share register.
The company said it expects to used up to GBP800,000 of the net proceeds to expand, with the expenses to be a combination of profit and loss and capital expenditure. It also expects at least GBP3.0 million of the net proceeds to be available for loan book lending.
1pm said trading in its current financial year has begun satisfactorily and is ahead of the equivalent period last year. The news of the share placing came alongside final results for the year ended May 31, which showed a 74% increase in pretax profit to GBP1.3 million. Over the same period, customers increased to 2,995 from 2,380, and new business written increased to GBP10.8 million from GBP7.8 million.
"In overall terms the current financial year is now expected to be a year of modest growth as the platform for future significant growth is 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. 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," 1pm said in a statement.
1pm also said it intends to pay its maiden dividend as a final dividend for the year ending May 31 2015.
1pm shares were Monday quoted down 5.6% at 68.00p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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