Increased costs overshadow impressive revenue growth
Companies: Time Finance plc
AIM-listed finance facilities specialist 1pm plc (LON: OPM) has released mixed interim results for the period ending 30 November, with revenues up an impressive 50% but profit margins falling 5%.
Group revenues increased to £7.99m, with the just over half earned by the firm's original company Onepm Finance (£4.23m) and the remainder (£3.76m) coming from subsidiaries, Academy and Bradgate.
Despite a healthy increase in revenue, cost of sales and admin related costs both increased markedly, up 57% and 86% respectively, leading to a pre-tax profit increase of just 23% (£2.05m) and an EPS of under 5% (3.08p).
During the period the Group increased its Net Assets by 12% to £27m, up from £24m in FY15, but also increased its bad debt and bad debt write-offs. It is worth noting that the Group also says it has £15.1m of deferred income (future revenue), up 5% since mid-2016.
The market reacted negatively to the results sending shares down 6%, giving the AIM-listed firm a market cap of £32m and a forward P/E of c.10.
1pm's Chairman John Newman struck a positive tone in the update, saying said the results had demonstrated that the business could deliver profitable organic growth at Onepm finance, the Group's original company, and through its acquisitions Academy and Bradgate:
"The Board is committed to increasing shareholder value by delivering sustainable growth and is actively pursuing further organic and strategic opportunities in the current financial year."
Shares in 1pm Plc fell 6% as the market opened on Thursday.