Time Finance plc (LON:TIME), the AIM listed independent specialist finance provider, has announced its unaudited interim results for the six-months ended 30 November 2024. The Results reflect continued strong demand from businesses across the UK for the range of alternative finance products offered by the Group.
Financial Highlights:
· Revenue up 16% to £18.2m (H1 2023/24: £15.7m)
· Profit before Tax (“PBT”) up 44% to £3.9m (H1 2023/24: £2.7m)
· PBT margin improved to 21% (H1 2023/24: 17%)
· Earnings Per Share (“EPS”) up 39% to 3.24 pence per share (H1 2023/24: 2.33 pence per share)
· Net Assets up 8% to £69.0m at 30 November 2024 (30 November 2023: £63.9m)
· Net Tangible Assets up 14% to £41.5m at 30 November 2024 (30 November 2023: £36.4m)
· Gross lending book up 11% to a record £209.4m at 30 November 2024 (30 November 2023: £188.6m)
· Net deals in arrears fell to 5% of the lending book as at 30 November 2024 (30 November 2023: 6%)
· Net Bad Debt Write-Offs stable at 1% of the average lending book at 30 November 2024 (30 November 2023: 1%)
· Deferred income up 9% to £26.1m at 30 November 2024 (30 November 2023: £23.9m) providing strong visibility of future earnings
· Continued positive trading momentum throughout December 2024 gives significant confidence that full year trading will be at least in line with market expectations
Operational Highlights
· Strengthened senior management team to drive operational efficiencies
· Continued focus on risk management underpinning quality of lending book
· Extended and improved funding facilities, including a £65m back-to-back Invoice Finance facility with NatWest and a £64m Asset finance facility with the British Business Bank
Corporate Strategy Update
In June 2021 the Company set out a four-year medium-term strategy to May 2025 that aimed to double the Gross Lending Book, achieve run-rate profits ahead of the 2019 pre-pandemic levels, strengthen the balance sheet through own book lending, and to become a nationally recognised SME funder. With the Company well on track to meet these metrics, a new strategy, designed to maintain the significant momentum generated and to provide a platform for the next phase of the Company’s growth to May 2028, has been set. The key pillars include:
· Lending Book Growth to over £300m – expected to be achieved from existing funding lines
· Resilient Lending – arrears and write-offs well controlled at broadly current levels
· Operational Leverage – PBT margins rising to the mid-twenty percents
· Increased Return on Equity (“RoE”) – RoE increasing to the mid-teen percentages
Commenting on the Interim Results, Tanya Raynes, Non-Executive Chair, said:
“H12024/25 marks another period of strong financial performance and delivery against our strategic plan. Demand from UK SMEs remained robust helping drive the Lending Book to record highs and, while Revenues continue to grow, our focus on efficiencies has resulted in even more significant growth in both Profits and EPS. Net Tangible Assets are at record highs, and cash reserves and funding sources remain solid, while arrears and write-offs are well controlled.
“The Group remains in an excellent position to deliver further growth and increased value to our shareholders and we are pleased to launch the pillars of the Group’s updated corporate strategy targets in this regard.”
CHIEF EXECUTIVE OFFICER’S STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 30 NOVEMBER 2024
Introduction
Time Finance plc is a multi-product alternative finance provider to UK SMEs. It is primarily a lender for the working capital requirements of UK businesses, but it can also act as a broker in arranging funding where more appropriate. It comprises two core, own-book divisions – Asset Finance and Invoice Finance – with lending proposals originated through a variety of channels. These include finance brokers and other professional firms, equipment vendors, suppliers and dealers, and direct from borrowers. Its target market is generally those businesses with a funding requirement between £5k and £3.5m.
Financial Results
I am pleased to report this set of interim financial results which continues the good progress made since the start of our current four-year strategic plan, launched in June 2021.
Expanding our lending book is a key performance indicator for the Group. Pleasingly, at the end of the six-month period to 30 November 2024, it stood at £209.4m compared to £188.6m twelve months earlier, an increase of 11%. An increasing own-book lending portfolio is key to the Group’s strategy as it underpins future income generation and profitability and, in turn, the inherent value of the balance sheet. Clearly, it is also important that the quality of the receivables funded are within our credit policy and the amount of arrears is kept to acceptable levels. It is, therefore, extremely pleasing that net arrears as at 30 November 2024 actually fell to 5% from 6% twelve months ago, despite the increasingly challenging environment for SMEs.
It is also very encouraging to see that the key metrics in the Profit and Loss account – Revenue, Margins and Profit Before Tax – show growth from the comparative period to 30 November 2023. Revenue is up 16% to £18.2m and PBT an impressive 44% up; with PBT margins having increased from 17% to 21%.
A significant achievement in the period was the renewal and increase of or Back-to-Back funding facility with NatWest for another 3 years, which firmly underpins our future strategy and demonstrates the confidence our funding partners have in the business.
The continued good progress against the strategic plan, resulting financial performance and on-going support from our funding partners have combined to further strengthen the Group’s balance sheet. Net Tangible Assets stood at £41.5m as at 30 November 2024 compared to £36.4m as at 30 November 2023, an increase of 14%.
Strategy and Outlook
The Group remains on track to deliver the key objectives set out in its four-year medium-term strategy introduced in June of 2021 and I am pleased with the overall progress made and the financial results achieved so far. The focus on growing the business through own-book lending, investing in improved IT infrastructure to enable the business to scale more efficiently and maximising our multi-product offering, will continue into the next stage of our strategic plan as we look to deliver a lending book in excess of £300m and significantly increasing Profit Before Tax by May 2028.
Taking into account the increasing challenges faced by UK SMEs, including a very unpredictable macro-economic and geo-political climate, the Board is pleased with these interim financial results and also with the operational progress made during the first half of the current financial year. As a result, and whilst remaining vigilant and cautious as to the potential impact that further economic uncertainty could have on the Group, the Board is confident that the results for the full-year will be at least in-line with current market expectations.
Ed Rimmer
Chief Executive Officer, Time Finance plc
