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OPINION

Funded for growth

Funded for growth
September 23, 2014
Funded for growth
IC TIP: Buy at 68p

In the 12 months to end May 2014, the company’s lease portfolio increased by a third to £20m driven by new business of around £10.8m. There has been no shortage of customers to service the financial needs of given the reluctance of banks to lend in this area, but the key is to make sure that they are of the highest quality possible so that the risk adjusted returns are maximised. To achieve this 1pm sources clients through a network of 100 finance brokers, and adheres to a rigorous underwriting procedure. In fact, defaults are at an all-time low of less than 0.7 per cent of the lending book. So with bad debts low and revenues rising by over a third to £4.2m, pre-tax profits soared by almost three quarters to £1.35m to produce EPS of 3.54p. Those figures were more than 10 per cent ahead of what analyst Eric Burns at W.H. Ireland had anticipated when I last updated the investment case (‘Award winning growth’, 5 June 2014).

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