Time Finance plc (LON:TIME) has once again demonstrated its robust growth potential with the release of its annual results for FY24, showcasing the continuation of a success story that defies challenging market conditions. The alternative finance provider for UK SMEs reported a significant 40% increase in profit before tax (PBT), bringing it to £5.9 million—an achievement 3% ahead of upgraded forecasts. As the company heads into FY25, the momentum continues to build, offering further promise of exceeding expectations.
Andrew Renton, Director of Research at Cavendish, highlights Time Finance’s strategic focus: “The remarkable performance shows that growth has been achieved whilst simultaneously improving the quality of the book. Net deals in arrears dropped by 1% year-on-year to 5%, and net bad debt write-offs halved to 1%.”
This performance is attributed to Time Finance’s pivot towards secured asset lending and invoice financing, which has been key to its four-year plan. The company’s focus on originating its own deals saw a 25% rise, pushing its gross book value to over £200 million by the year’s end. Revenues also grew by 20% to £33.2 million, highlighting the firm’s operational efficiency in navigating higher interest rate conditions.
Strong Start to FY25
The positive trajectory has continued into the first quarter of FY25, with revenues rising by 20% to £9.1 million and PBT increasing by a remarkable 46% to £1.9 million. Renton notes that this early success reassures confidence in the company’s ability to meet or exceed its forecasts for the year.
“Net Tangible Asset Value surpassed £40 million at the end of August, and the high-quality metrics of the book have been maintained, with arrears at 5% and net bad debt write-offs at 1%. This gives us a lot of confidence that FY25 forecasts will be met or exceeded,” Renton added.
Exciting Growth Outlook
Looking ahead, Time Finance is set to continue its upward trajectory. Forecasts for FY26 anticipate another year of double-digit earnings growth, with PBT expected to rise by 16% to £8.1 million. The easing of interest rates is likely to create a more favourable operating environment, enhancing profitability further. As Renton explains: “The valuation looks compelling, trading on a FY26E Basic P/E of just 8x and a P/TNAV of 1x. We have upgraded our price target from 71p to 112p.”
Moreover, Time Finance’s recent accreditation as a partner under the UK Government’s Growth Guarantee Scheme provides a new opportunity for profitable growth. This scheme, which offers government-backed guarantees for loans, is expected to increase the pool of eligible and profitable loans for the company.
On a Final Note
Time Finance’s performance is a testament to its resilient business model and strategic focus on secured lending. With a strong start to FY25 and exciting growth prospects for FY26, the company is well-positioned to capitalise on an improving market environment. Investors will be keen to see how the company continues to build on its successes, and with a potential for further share price rises, Time Finance remains a compelling opportunity.
