Equipment leasing specialist St. Helen’s Finance is growing fast amid the credit crunch and is looking for potential acquisitions.

Turnover at the PLUS-quoted concern, which finances ‘core assets’ for smaller companies, is understood to have reached some �330,000 in the first quarter of this year, not far short of half the more-than-doubled �760,000 chalked up for the whole of last year. St. Helen’s, whose average deal size is between �10,000 and �12,000, is winning new business, as banks harden terms in this sector, says managing director Norman Kenvyn.

He says the company hopes to build its nascent ‘venture financing’ side, which takes an element of equity in lessee businesses along the lines of ‘mezzanine’ debt funding, and is looking at possible takeover targets. St. Helen’s, which has raised equity several times since its 2004 PLUS float, nearly doubled losses in 2007 to �312,000, after bad debt write-offs of �126,400 and bad and doubtful debt provisions of �168,000.

But income from its expanded lease book should take the City-based company into the black to the tune of more than �100,000 this year, according to friendly analysts. Kenvyn, a veteran of the Lombard leasing group, says St. Helen’s, which increased its own debt finance 151 per cent last year to �5.6 million – ‘all fixed and matched’ – to support growth and fund its (typically) 36-month leases, does not go to the big banks for this, but to companies such as Hitachi, Close Brothers Siemens, ING and Singer & Friedlander.

Including a �1 million convertible, St. Helen’s reported a 191 per cent increase in shareholders’ funds last year to �1.9 million. The company, most of whose business has so far come through brokers, does not specialise in particular sectors, but, says Kenvyn, it does shun those, such as retailing, where too many lessors are chasing the business.

Operations director Alan Irving, formerly of Anglo Leasing and then head of credit at Siemens Financial Services, oversees deal structures and credit control. Last year, St. Helen’s increased equipment financed from �2 million to �4.6 million and its year-end receivables rose from �3.1 million to �6.7 million.

Floated on PLUS five years ago at 11p, shares in St. Helen’s Finance have fluctuated in the past 12 months between 9.25p and 13.25p and are now quoted at 11.75p (with a 1.5p spread), valuing the company at �2.2 million. If the present strategy pays off and St. Helen’s can grab profitable market share because of the credit crunch, without unduly increasing its own risk, they should make progress.

Growth Company Investor is the UK’s leading authority on small-cap and AIM companies. You can gain immediate access to all the recent share recommendations with no obligation, with a free 30-day trial. Click here to join today