Project “Zoo” presentation April 2017 1
Disclaimer 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 of 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. 2
Presentation team Ian Smith, CEO 15 months in full-time CEO role • Previous 2 years in Non-exec Chairman role • Instigated the current strategic plan, leading on the previous Placing and recent acquisitions • 23 years in listed and privately-owned, PE/VC - backed entities, leading strategic transformations • Ed Rimmer, MD designate, Commercial Finance Division Currently engaged by 1pm in a consulting capacity with view to full-time role and plc directorship (terms agreed) • 17 years with leading independent player, Bibby Financial Services, including 5 years as UK CEO • Extensive experience at growing businesses, both organically and through acquisitions • Whilst UK CEO of Bibby, increased new business and market share by 50% and doubled profitability • Will lead 1pm’s drive to consolidate niche, high -quality, under-exploited businesses in Invoice Finance • and in attendance, James Roberts, CFO ; joining 2 May 2017 3
£12m - £15m fundraising Strategic objective to introduce “adjacent” products to provide a full suite of business finance choices for SMEs Sound track record in ASSET FINANCE Successful extension to BUSINESS LOANS Now adding INVOICE FINANCE Take advantage of a market opportunity to consolidate niche, small-ticket invoice finance providers. First target – sign upon Placing announcement Second target in diligence. Will increase group returns on net assets 4
Financial performance – 31 May y/e 14000 4000 3500 12000 3000 10000 Revenue £k 2500 PBT £k 8000 2000 6000 1500 4000 1000 2000 500 0 0 2011 2012 2013 2014 2015 2016 2016 Group Top line CAGR 33% over 5 years to 2016 • 10 x growth in PBT from 2011 to 2016 • 5
The SME finance market 5.5m SMEs in the UK – employing 15.6m • people ( BEIS Business Population Estimates 2016) Circa 70% are current or potential borrowers • (British Business Bank Business Finance Survey: SMEs 2016) Over 50% of these still go to their main bank • when first identifying a financing need (British Business Bank Business Finance Survey: SMEs 2016) Their challenge is immediate day-to-day • cash flow High-street banks no longer structured to • meet this immediate need In 2016 only 6% actually applied to their • bank for a new loan or overdraft (BDRC Continental (2016) SME Finance Monitor) So, where do SME borrowers go? • 6
Alternative Finance As a specialist provider, we have: • greater flexibility • faster service • more personal approach • 13 days from proposal to pay-out • (HSBs up to 60 days) Provide or arrange commercial leases, • loans and vehicle finance Business-critical equipment for SMEs • Finance from £1,000 to £250,000; 3 to 60 • months Across a broad range of sectors • 22% of SMEs still use credit cards for • finance (British Business Bank Business Finance Survey: SMEs 2016) at a blended interest rate of circa 17% • we are a cost-competitive alternative 7
Deals “ Within two weeks 1pm had secured, agreed and paid out over £50,000 to allow us fund the equipment we needed for our newest venture .” John Ennis/Matt Farrell – Graffiti Group “1pm had agreed and paid out a £42,000 loan which allowed us to begin repair work faster than planned and reopen our gym “As I’m not a homeowner it was before substantial losses to our hard to find funding for my new memberships.” start business, 1pm managed to Mark – Space Premier Fitness source £20,000. Our gym has been open 6 weeks and already has over 250 members .” Chris Kirkby – Kirkby Gyms 8
Why we succeed Underwriting decision within 4 hours • Every customer circumstance is a ‘story’ • requiring a ‘pair of eyes’ on the deal and potentially a site visit – we are operationally set up to do this Strict underwriting and credit control – • aim to be “brilliant at the basics” PGs on all advances • Write-off rate less than 1% of portfolio • Typically dealing with owner-managers for • whom their business is their life – often a lower credit risk than may be apparent from their trading results Receivables now total c. £75m. • £15m of unearned income • Carrying an impairment provision of c. • £1m (1.67% of capital outstanding) Cautious, prudent approach to growth • 9
Breadth of portfolio Restaurants / Cafes Beauty and Hairdressing 23% 28% Garage Retail Health and Fitness Freight transport by road 11% Pubs and Bars 4% 2.03% 2.06% Takeaway 5% 8.62% 2.09% Remediation activities and Scaffolds 5% 11% other waste management 5% services 9% Other 2.33% Renting and leasing of construction and civil Telephone systems 13% engineering machinery and 2.38% equipment 27% Survey equipment Other transportation support activities Garage 2.48% 12% 7.06% Data collection units Demolition Catering 2.9% 5% 11% Energy management Specialised construction Laundry 7% activities (other than scaffold 3.29% 4.96% erection) n.e.c. 9% Office 3.70% 8% 9% 10 Other
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