Helping the UK economy grow by providing finance to SMEs Corporate - - PowerPoint PPT Presentation

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Helping the UK economy grow by providing finance to SMEs Corporate - - PowerPoint PPT Presentation

Helping the UK economy grow by providing finance to SMEs Corporate Presentation Introduction An independent financier to the UK SME market Trading since 2000, floated on AIM in 2006 Raw material is cash. Sourced through


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‘Helping the UK economy grow by providing finance to SMEs’

Corporate Presentation

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SLIDE 2

Introduction

  • An independent financier to the UK SME market
  • Trading since 2000, floated on AIM in 2006
  • Raw material is cash. Sourced through equity, bank & HNW borrowings and

excess receivables

  • Six years of strong organic growth based on sound procedures and controls
  • Opportunity to further increase value through new products and M&A

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£0 £1,000,000 £2,000,000 £3,000,000 £4,000,000 £5,000,000 £6,000,000 May 10 May 11 May 12 May 13 May 14 May 15

Revenue (CAGR 27% )

Revenue

  • £500,000

£0 £500,000 £1,000,000 £1,500,000 £2,000,000 £0 £1,000,000 £2,000,000 £3,000,000 £4,000,000 £5,000,000 £6,000,000

Revenue and PBT

Revenue Profit/Loss Before Tax

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SLIDE 3

Group Structure

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Bath 30 employees Warrington 42 employees

1pm plc (AIM listed) 1pm (UK) Ltd (100%) MH Holdings (100%) Speakertone (100%) Unique leasing (100% & Dormant) Academy Leasing (100%) Harrogate (100% & Dormant)

First acquisition completed in August 2015 – Academy Leasing Limited

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SLIDE 4

Shareholder information

  • Market:

AIM

  • Ticker:

OPM

  • Share price 18/2/16:

62p

  • Mkt Cap:

£32m

  • Shares in issue

52,534,463

  • NOMAD:

WH Ireland

  • Financial PR:

Walbrook PR

  • Auditors:

Moore Stephens

  • Legal advisors:

Simmons & Simmons

Principal shareholders:

  • Ron Russell (HNW)

19.4%

  • Henderson

18.6%

  • Charles Stanley

14.7%

  • Mike Nolan (Academy)

5.1%

  • Hargreaves Lansdown

3.1% 60.9%

Shareholder information

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SLIDE 5

Board & Management

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Julian Telling Ron Russell John Newman

Chairman

Mike Nolan Strategy & Risk Hazel Jacques Sales & Marketing Helen Walker Finance

Ian Smith CEO Academy Supplier Sales 1pm Broker Sales Under- writing Academy Ops. 1pm Ops. Comp- liance HR Fin. Control

Main Board: Junior Board:

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What 1pm and Academy do…

  • Provide ‘soft asset’ and loan finance to UK SMEs
  • Broad range of equipment sectors (e.g. catering, health, garages)
  • Lend between £1,000 and £50,000, on Terms from 3 to 60 months
  • Products comprise commercial lease finance, hire purchase, business

loans and broking of vehicles (approx. 28% is regulated business)

  • Strict underwriting procedures and strong credit management policy

Overview

And what we do not do…

  • Consumer finance or short-term ‘pay-day’ lending
  • ‘Big ticket’ capital assets
  • Sub-prime lending
  • Peer to peer lending

(…although partnering is a strategic option under review)

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  • Non-bank loan financing to UK SMEs approx. 64bn, of which asset finance

market is £28bn, and of that £10bn is plant, machinery & equipment

  • Served by banks and smaller funders in the sales finance distribution channel

and the broker-introduced channel

  • The non-bank asset finance tends to be for smaller, riskier lends

The market

Car finance 34% Commercial Vehicle finance 25% IT equipment finance 9% Plant & Machinery finance 22% Business equipment finance 8% Aircraft, ships, rolling stock 2% Direct finance 50% Sales finance 32% Broker introduced finance 18%

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SLIDE 8

Business Model

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1pm

  • Broker introduced proposals
  • Circa 190 brokers
  • 80:20 rule applies to brokers
  • Funder only
  • Fund those proposals that meet

criteria

  • Leases and loans
  • Typically higher risk; higher price

Academy

  • Equipment supplier introduced

proposals

  • Aim to satisfy all supplier

introductions

  • Fund those that meet criteria;

broke-on others for commission, thus managing cash flow and risk

  • Cross-sell vehicles
  • Manage fleets
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SLIDE 9

Product Guide

9 LEASE

  • All legal entities, ALL of UK
  • £1,000 - £25,000 new start
  • £1,000 - £50,000 established (2+ years trading)
  • Tenants considered (2+ years trading)
  • Rates from 13% to 18%
  • Doc fee £150 ex vat
  • 12-60 months

SHORT TERM LOAN (UNDER 2 YEARS)

  • Non-regulated business only, All of UK
  • £1,000 - £50,000 ltd, plc, and partnerships of 4 or more
  • £25,001 - £50,000 as above plus sole traders and

partnerships of 3 or less

  • Homeowners only
  • 2 years + trading
  • Rates from 20% to 26%
  • Doc fee variable
  • 3-23 months

HIRE PURCHASE

  • Non-regulated business only, All of UK
  • £1,000 - £25,000 new start
  • £1,000 - £50,000 established (2+ years trading)
  • Tenants considered (2+ years trading)
  • Rates from 13%
  • Doc fee £150 ex vat
  • 12-60 months

LONG TERM LOAN (OVER 2 YEARS)

  • Non-regulated business only, All of UK
  • £1,000 - £50,000 ltd, plc, and partnerships of 4 or more
  • £25,001 - £50,000 as above plus sole traders and

partnerships of 3 or less

  • Homeowners only
  • 2 years + trading
  • Rates from 18%
  • Doc fee variable
  • 24-60 months
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SLIDE 10

SME sectors

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26% 10% 10% 8% 4% 5% 11%

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Company wishes to purchase equipment Focus on small ticket leasing market Leasing Broker contacts 1PM with financing proposal Broker relationships periodically reviewed for quality control purposes 1PM undertakes assessment

  • f
  • pportunity

Credit criteria is consistently applied and periodically reviewed Lease Agreement activated and financing completed Funding sourced from “block discount” facilities Monitoring

  • f lease

and repayment Constant arrears and legal follow up

Leasing spreads the cost of equipment and is repayable in fixed monthly instalments. By leasing the customer keeps its other credit lines available

Process

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SLIDE 12

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Interim Results: P&L

H1 2015/16 H1 2014/15 Change

Revenue £5.25m £2.56m x 2.0 Gross Margin 64.8% 54.6% + 19% Profit Before Tax £1.66m £0.76m x 2.2 Earnings per Share 2.91p 1.91p + 52% Bad debt write-offs y-t-d £0.16m (0.28% of portfolio) £0.11m (0.46% of portfolio) + 45% (-39% re portfolio) … comprise 1pm’s results for six months and Academy for three months from 25th August (date of acquisition) to 30 November 2015.

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% May 10 May 11 May 12 May 13 May 14 May 15

Bad Debt as a % of total Portfolio

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Interim Results: New Business Origination

H1 2015/16 H1 2014/15 Change

New lease & HP contracts £9.7m £5.8m x 1.6 New loan contracts £6.1m £1.0m x 6 Commission income £0.45m

  • n/a

Own book v broked-on 80 : 20 100 : 0 Total Portfolio £57.0m £24.3m x 2.3 … comprise 1pm’s results for six months and Academy for three months from 25th August (date of acquisition) to 30 November 2015.

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£0 £5,000,000 £10,000,000 £15,000,000 £20,000,000 £25,000,000 £30,000,000 £35,000,000 May 10 May 11 May 12 May 13 May 14 May 15

Portfolio & Debt

Total Portfolio Funding

Interim Results: Block funding & Net Assets

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1pm Academy

Facilities £25.4m £19.3m Borrowing £17.5m £11.9m Headroom £7.9m £5.8m Gearing (re total portfolio) 44% 68% …plus, significant unencumbered paper.

H1 2015/16 H1 2014/15 Change

Net assets £25.2m £11.7m x 2.1

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SLIDE 15

Investment in resources Acquisition: Academy Leasing “Adjacent” products ‘Fintech’ platform ? Second Acquisition Banking license ???

Market Cap May 2015 £25m Market Cap first target £50m Market Cap target £100m

The Group’s continuing financial strength provides the platform for three- year strategy of organic and M&A growth

Growth plan

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  • Asset Finance is £28.5b (45%) of £64b non-bank loan SME financing market
  • Competition increasing – e.g. PE interest in specialty finance
  • ‘Fintech’ trend (72 platforms) and ‘specialty’ banks (Aldermore, Shawbrook,

Metro) all providing new sources of finance to our customer base

  • nevertheless the Directors are confident for the future because:
  • New business origination shows no signs of slow-down
  • Track-record of both businesses is attracting increased interest from banks;

raw material (cash) is available to borrow

  • Fragmented sector with opportunities to acquire scale and broaden offering;

hence strategic growth plan

  • Supportive and growing institutional shareholder base

Outlook

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This presentation ("Presentation") has been prepared by 1pm plc (the "Company") and is confidential and is only directed at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 and certain other investment professionals, high net worth companies, unincorporated associations or partnerships and the trustees of high value trusts) and persons who are otherwise permitted by law to receive it. This Presentation is directed only at persons having professional experience in matters relating to investments and any investment or investment activity to which this Presentation relates is only available to such persons. Persons of any other description, including those who do not have professional experience in matters relating to investments, should not rely on this Presentation or act upon its contents. This Presentation does not constitute or form part of any offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision in connection with any proposed purchase of shares in the Company must be made solely on the basis

  • f the information contained in the admission document to be published by the Company. While all reasonable care has been taken to ensure

that the facts stated in this Presentation are accurate and that any forecasts, opinions and expectations contained herein are fair and reasonable, this Presentation has not been verified and no reliance whatsoever should be placed on them. Accordingly, no representation or warranty express or implied is made to the fairness, accuracy, completeness or correctness of this Presentation or the opinions contained herein and each recipient of this Presentation must make its own investigation and assessment of the matters contained herein. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given, and no responsibility or liability is accepted, as to the achievement or reasonableness of any future projections or the assumptions underlying them, or any forecasts, estimates, or statements as to prospects contained or referred to in this Presentation. Save in the case of fraud, no responsibility or liability whatsoever is accepted by any person for any loss howsoever arising from any use of, or in connection with, this Presentation or its contents or otherwise arising in connection therewith. In issuing this Presentation, the Company does not undertake any obligation to update or to correct any inaccuracies which may become apparent in this Presentation. This Presentation is being supplied to you for your own information and may not be distributed, published, reproduced or otherwise made available to any other person, in whole or in part, for any purposes whatsoever. In particular, this Presentation should not be distributed to or otherwise made available to persons with addresses in Canada, Australia, Japan, the Republic of Ireland, South Africa or the United States, its territories or possessions or in any other country outside the United Kingdom where such distribution or availability may lead to a breach of any law or regulatory requirements.

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