Ultimate Finance has wow factor

While politicians grumble about the apparent reluctance of high street banks to lend to small businesses, Ultimate Finance Group seems to be doing very nicely addressing this market.

The company, which provides finance services to small and medium sized businesses, has found demand for its services growing as high street banks restrict lending.

Profit before tax in the year to June 30th was up to £1.19m from £0.72m the year before, while turnover was up 16% to £11.25m from £9.71m the previous year.

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Adjusted profit before tax, which excludes one-off items, increased by 58% to £1,91m from the previous year's £1.21m.

Basic earnings per share (EPS) amounted to 1.36p, up from 1.20p a year earlier. Adjusted EPS, which excludes amortisation costs, group restructuring costs and one off income, amounted to 2.38p (2011: 2.10p).

The group has a £34m banking facility, of which £8.7m is still to be tapped.

Bad debt levels on the group's lending book remain at what the group terms its "traditional lows" of 1%.

"Markets continue to be demanding but there are signs of improving confidence in the SME [small-to-medium-enterprises] sector within the UK. There is also an improving competitive landscape and less prevalence of our competitors buying market share by offering uncommercial terms," revealed Jeremy Coombes, the founder and Chief Executive Officer of Ultimate Finance.

"While the high street banks are restricting financing for small business loans and overdrafts, the services we provide will continue to fill this cash flow need and expand or replace the banks role with small businesses. Due to these factors, and our healthy pipeline, we believe that Ultimate Finance is well placed to continue to grow," Coombes added.

The stock is a long-time favourite of canny investor David Newton, whose Helium Special Situations Fund holds 23.55% of the equity.

The final dividend has been hiked 14% to 0.40p from 0.35p last year, making a full-year pay-out of 0.8p.

In early morning trade the stock was up 1.4p at 16.25p.

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