Small cap lender 1pm (OPM:AIM) says demand from its small and medium-sized (SME) business customers remains strong despite a more uncertain economic outlook.
Lending at the hire purchase and leasing specialist increased 135% year-on-year to £48 million, according to a half-year results update.
'Notwithstanding some recent uncertainty over the global economic outlook, demand within the UK SME sector for our products and services remains strong,' says chief executive Ian Smith.
'Competition is increasing, but we continue to expand our broker network and equipment supplier-base which has contributed to the significant increase in new lease and hire purchase contracts written in the period.'
Smith, who replaced Maria-Louise Lewis as chief executive in November 2015, says results were helped by a £12 million deal to buy lender and broker Academy Leasing.
First half headline pre-tax profit more than doubled to £1.32 million and is also higher than the prior year's full-year result of £1.27 million.
Earnings per share for the six months to 30 November 2016 increased at a slower clip, at 52%, to 2.9p because of a £6.4 million share placing and new shares issued to fund the Academy deal.
Bad debt write-offs declined to 0.28% of the portfolio, down from 0.46% in the same period last year.
Tangible book value per share declined slightly from the year-end, from 33.6p to 31.1p, because of new shares issued and intangible assets acquired as part of the Academy deal.
Shares in 1pm trade 3.7% higher at 71p. Stockbroker WH Ireland increases its price target for the stock from 78p to 87p. It comments: 'Whilst the £1.75 million adjusted first half pre-tax profit outcome represents over half of our £3 million full year expectation, it should be remembered that (1pm's) second half is traditionally the quieter period plus additional costs relating to a
new IT system will be incurred.'
