OPM.L Regulatory News (OPM)

15 January 2020

1pm plc

(the "Group" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2019

Record new business origination during half-year; Balance Sheet further strengthened; Investment in senior personnel and operations in line with stated plans;

Increased interim dividend declared

1pm plc, the AIM listed independent specialist finance provider of funding facilities to UK SMEs and consumers, is pleased to announce interim results for the six-month period ended 30 November 2019 ("Results" or "Interims").

The Interims reflect continued demand for finance from UK SMEs and consumers across a comprehensive range of products offered by the group. The results are underpinned by the Group's prudent underwriting and provisioning policies which are continuously under review, given the extended period of uncertainty experienced in the wider macro-economic environment. The Group remains resilient and profitable thanks to its ability to offer a complete range of finance products (asset, vehicles, loan and invoice finance) to UK SMEs; its flexible business model which enables it to act as either a funder or a broker in order to maintain margins and manage credit risk, and its current focus on increasing Group synergies and operational efficiencies.

Highlights:

·; Deal origination increased 7% to £87.8m (H1 2018/19: £82.3m), 65% of which was brokered to other lenders for commissions (H1 2018/19 60%)

·; Group revenue of £15.6m (H1 2018/19: £16.0m), reflecting slight change in product mix

·; Group operating profit before exceptional items of £3.2m (H1 2018/19: £4.1m)

·; Fully Diluted EPS of 2.70 pence per share (H1 2018/19: 3.14 pence per share)

·; Net Assets increased 4% to £56.1m at 30 November 2019 (31 May 2019: £53.8m)

·; 'Own-book' lending portfolio increased 1% to £143.5m at 30 November 2019 (31 May 2019: £141.7m)

·; Funding facilities increased to £170.7m at 30 November 2019 (31 May 2019: £167.1m)

·; The blended cost of borrowings in the period was 3.9% (year to 31 May 2019: 4.0%)

·; Bad debt provisions prudently increased to 2.2% (£2.7m) of the total net portfolio (31 May 2019:1.9% or £2.4m)

·; Interim dividend declared up 29% to 0.36 pence per share (Interim 2019: 0.28 pence per share)

·; Significant investment in senior personnel and business functions in line with strategy; integration progressing as planned

Commenting on the Interim Results, John Newman, Non-Executive Chairman, said:

"Given the macro-economic and political uncertainty experienced in the UK throughout 2019, including the run-up to December's General Election, which clearly dampened business activity levels, we are satisfied with the trading momentum maintained across the Group during the first half. The Board believes that the Group's strategy of being a multi-product provider of finance to UK SMEs and consumers, allied to the flexibility of our "hybrid" operating model of either funding or broking-on new business origination remains sound and will facilitate future growth as well as mitigating the risks associated with any future economic downturn. This has enabled the Group to generate robust levels of demand whilst being able to maintain margin, control credit and spread risk. As a result, the Group remains strategically and operationally well positioned to deliver future growth.

I am also pleased to confirm that, in line with our progressive dividend policy, the Board is declaring an interim dividend of 0.36 pence per share for the half year period ended 30 November 2019. The dividend will be paid on 12 May 2020 to shareholders on the register at 17 April 2020."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

For further information, please contact:

1pm plc

Ian Smith, Chief Executive Officer 01225 474 230

James Roberts, Chief Financial Officer 01225 474 230

Cenkos (NOMAD)

Max Hartley / Ben Jeynes (NOMAD) 0207 397 8900

Julian Morse (Sales)

Walbrook PR 0207 933 8780

Paul Vann 07768 807631

About 1pm:

1pm's strategy is to focus on providing or arranging the finance UK SMEs require to fund their businesses and arranging vehicle and property-backed finance for consumers. The multi-product range for SMEs includes asset, vehicle, loan and invoice finance facilities. The Group operates a "hybrid" lending and broking model enabling it to optimize business levels through market and economic cycles. More information is available on the Company website www.1pm.co.uk

CHIEF EXECUTIVE OFFICER'S STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 NOVEMBER 2019

Introduction

The 1pm group is a multi-product speciality finance business providing funding for UK SMEs as a lender and arranging funding for both UK SMEs and consumers as a broker. The Group comprises four operating divisions, namely Asset Finance, Vehicle Finance, Loan Finance and Invoice Finance. Following the completion of a recent buy-and-build phase of expansion, the current strategic focus is on integration as a group and investment in order to lay the foundations for the next phase of organic and inorganic growth through to 2024.

Financial Results

Against a backdrop of uncertain macro-political and economic conditions, which have undoubtedly impacted UK business activity levels during the entire financial period under review, it is pleasing to report ongoing progress in the first half of the current financial year, with revenues delivered in line with budget. New business origination increased 7% to £87.8m in the half-year ended 30 November 2019, compared with £82.3 million for the same period in the prior year. Furthermore, new business origination in the 12-month period ended 30 November 2019 totalled £166.6m, compared with £153.1m in the preceding 12 months, an annualised increase of 9%.

Group revenue in the half-year ended 30 November 2019 amounted to £15.6m compared with £16.0m for the same period in the prior year, a marginal decrease of 2.5%. This reflects a slight change in the mix of revenue in the half-year, with less interest and related income from lending activities, and more income generated from broking activities, which has a lower margin, compared to the same period in the prior year. This, in turn, reflects the higher proportion of origination brokered-on, which was 65% of total new business in the half-year compared with 60% in the prior year. The Group's ability to choose between lending and broking-on, i.e. utilisation of the "hybrid" operating model, continues to be both a differentiator and a key business advantage, enabling the Group to robustly manage credit risk whilst maintaining net interest margin, which was a blended 12% in the first half, in line with 12% for the same period in the prior year.

Profit before tax and exceptional items in the half-year amounted to £3.2m compared with £4.1m in the prior period. This reflects the planned investment in both personnel and operations in the current financial year, highlighted in the Annual Report for the year ended 31 May 2019, together with the policy decision to further increase impairment provisions. At 30 November 2019, these provisions stood at £2.7m, or 2.2% of the receivables' portfolio, compared with £2.4m, or 1.9%, of the portfolio at 31 May 2019. The lending portfolio continued to grow and, at 30 November 2019, amounted to £143.5m compared with £141.7m at the prior year end. The Balance Sheet has also been strengthened with Net Assets at the period-end amounting to £56.1m compared with £53.8m at the prior year end and £50.8m at 30 November 2018.

Earnings per share and interim dividend

Earnings per share for the first half of the financial year were 2.76 pence compared with 3.62 pence per share in the comparable period for the previous year. Notwithstanding this reduction, the Board has determined to maintain its progressive dividend policy and is pleased to declare an interim dividend of 0.36 pence per share for the half-year ended 30 November 2019, an increase of 29% from 0.28 pence per share declared in the prior period. This will be paid on 12 May 2020 to shareholders on the register at 17 April 2020. The shares will be marked ex-dividend on the 16 April 2020. The Group paid a total dividend in respect of the financial year ended 31 May 2019 of 0.84 pence per share.

Funding

The Group's capital management objective is to maintain a strong capital base to support its current operations and planned growth whilst continuing to reduce the cost of capital in order to provide returns for shareholders and benefits for other stakeholders. The Group increased its funding facilities during the period to £170.7m at 30 November 2019 compared with £167.1m at the prior year end, 31 May 2019. The increase in facilities includes the renewal and extension of the Group's key block discounting facilities for leasing and the addition of a further loan note facility for funding secured business loans.

The Group's blended cost of borrowing in the first half marginally improved to 3.9% from 4.0% for the year ended 31 May 2019.

Strategy and Outlook

The Group remains committed to providing a comprehensive range of finance solutions to support the UK SME sector and UK consumers whilst aiming to deliver profitable growth in order to increase shareholder value. The Board is satisfied with the progress made during the first half, laying the operational foundations for delivering the next phase of its strategic development through to 2024.

Demand for business-critical asset, loan and invoice finance from UK SMEs and cost-effective vehicle and property finance for consumers continues to increase. The levels of demand the Group is able to generate is encouraging given an increasingly competitive market for bank and alternative finance and against the background of political and economic uncertainty which has prevailed for the past 12 months. The Board continues to see opportunities for further organic and strategic growth as certainty returns to UK markets.

Ian Smith

Chief Executive Officer, 1pm plc

Dividends provided for or paid during the half year:

Copies of the Interim Report are available from www.onepmfinance.co.uk and the Company Secretary at the registered office: 2nd Floor, St James House, The Square, Lower Bristol Road, Bath, BA2 3BH