1pm Plc (LON:OPM) (OPM, 0.04p, £1.26m), the provider of asset finance facilities to SMEs, reports an encouraging start to Q1 ended 31 August 2010. Q1 has returned to a profit. The value of new leases agreed was 402% ahead of the previous year and ahead of management expectations. The group has completed £1.7m of new leases in Q1 (FY09: £2.5m). The level of new leases has also had a positive effect on the lease portfolio which has grown to £7.71m as at 31 August 2010 (31 May 2010: £6.55m). The Board believe it will return to profitability. The business is debt free with net cash of £0.31m at the end of May 2010 (2009: £0.002m) following the £1.5m placing. The key challenge remains in accessing funds to support portfolio growth. In August the group were in constructive discussions with a number of funders, which clearly have not resulted in any new funding. Despite the strong performance, we believe trading will continue to be tough in the current environment. We are still not comfortable with the group’s net cash position given its level of cash burn. The group need to add debt to the balance sheet or need to return to the market for more money. The share price has fallen 20% since our sell recommendation. The scope for dilution encourages us to retain our SELL recommendation.  

21st Century (C21, 6.88p, £6.34m), the vehicle installation service provider supplying public transport CCTV and other monitoring systems, reports interims to 30 June 2010 are in line with FY consensus. The group reports a 48% uplift in pre-tax profits to £0.3m (H109: £0.2m) on 6% revenue growth to £5.6m (H109: £5.3m) driven by the first sale if the EcoManager to mainland Europe. Net cash improved to £0.2m (2009: net debt: £0.8m).  The group will require further working capital investment in H2 to support further expansion in mainland Europe. The Board expect to be cash positive by the end of the year. The management team are considering paying a dividend in the future once it has sufficient distributable reserves and cash and the Board considers that the distribution is in the best interests of shareholders. The group are well positioned to drive profitability and continue to expand their operations internationally.  We believe H2 will be tougher, reflecting potential constraints on customer’s budgets. The market forecasts…

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here