1pm raises £1.15 million to support lease portfolio growth
Specialist provider of lease asset finance to the SME sector 1pm PLC (AIM: OPM) has raised £1.15 million via a placing to help the company grow its lease portfolio further and enhance receivables and cash generation.
The company said that the funds will also allow it to increase margins on lending by reducing the gearing on its lease portfolio through the proportion of company funding of new leases.
A previous trading statement from 1pm said that levels of new business were disappointing and there was a requirement for an unexpectedly high level of bad debt write-offs. However, in today’s update, the company stated that trading and new business levels have been ahead of management’s revised expectations since the previous statement and it now expected a “significantly stronger” performance in the second half of the current financial year, while the lease portfolio was growing after losing part of its value earlier this year.
The expected improvement in performance is due to an anticipated increase in demand for alternative funding providers such as 1pm as traditional bank lending to SMEs remains restricted in the aftermath of the economic downturn.
“During what has been a difficult period for the financial services sector we have demonstrated that 1pm has shown great resilience. We are delighted with the interest shown in the placing and believe that the significant level of funds raised will strengthen the company considerably. There are signs that business levels are now increasing and the proceeds of the placing will allow us to write more business, improve lending margins and accelerate our return to profitability,” said chairman of 1pm Michael Johnson.
