1pm Plc (LON:OPM), the group the provides asset-finance debt facilities to small and medium sized enterprises has swung to a £0.4m loss after a big jump in write-offs for bad debts. The group reported a turnover in the year to end-May 2% lower at £1.331m. The company wrote off bad debts of £0.35m, against £82k in 2009. Operating profit before the bad debt write-off and provisioning was £16.5k, down from the previous £0.1m. Loss before tax was £0.4m, after breaking even in 2009.

Chairman Mike Johnson said: "The level of bad debt write-offs during the year has been disappointing. These have largely resulted from customers' bankruptcies, for which it is the company's policy to write-off immediately any amounts due as bad debt. The majority of the bad debts relate to leases that were relatively mature and large and, more significantly, pre-dated the company's decision during the year to reduce its average deal size. In light of the continuing difficult economic environment we have implemented a new provisioning system that should more accurately link provisions with the lease portfolio."

New business in the second half rose to £1.52m, compared with £0.98m in the first half. At May 30, the total lease book amounted to £6.55m, down from the 2009 figure of £7.13m but up from £6.42m at the half-year. Johnson said the company had made significant operational changes during the year, including a tightening of its underwriting criteria and a drive to enhance its relationships with the broker network.

He said: "The new financial year has started positively, helped by the March fund-raising. In the first two months of trading we have written levels of new business in excess of budget. This is reflected in the loan book which as at 31 July 2010 has increased to £7.4m. The challenge remains accessing funds to support portfolio growth and to that extent we are in constructive discussions with a number of funders."



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