REG - Time Finance PLC - Interim Results
26/01/2023 07:00
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RNS Number : 8988N Time Finance PLC 26 January 2023
26 January 2023
Time Finance plc
(the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2022
Profits and Earning Per Share both increased by more than 60%
Full year results now expected to be significantly ahead of market
expectations.
Time Finance plc, the AIM listed independent specialist finance provider,
today announces its unaudited interim results for the six-months ended 30
November 2022 ("Results" or "Interims"). The Interims reflect the success of
the Group's own-book lending strategy and its focus on core lending products
to UK SMEs, resulting in the Lending Book reaching an all-time high of over
£150m at the period end.
Financial Highlights:
· Own-Book lending origination up 27% to £36.6m during H1
2022/23 (H1 2021/22: £28.9m)
· Gross lending-book up 27% to £152.7m as at 30 November 2022
(30 November 2021: £120.5m)
· Revenue up 12% to £13.2m (H1 2021/22: £11.8m)
· Profit before Tax ("PBT") up 67% to £2.0m (H1 2021/22: £1.2m)
· Net deals in arrears reduced to 6% of the gross lending book as at
30 November 2022 (30 November 2021: 9%)
· Net Assets up 3% to £59.7m as at 30 November 2022 (30 November
2022: £58.2m)
· Net Tangible Assets up 8% to £32.1 as at 30 November 2022 (30
November 2021: £29.6m)
· Strong visibility of future earnings with unearned income up 32% to
£18.9m as at 30 November 2022 (30 November 2022: £14.3m)
· Earnings Per Share up 62% to 1.73 pence per share (H1 2021/22:
1.07pps)
· Continued positive trading momentum throughout December 2022 gives
the Board confidence that full year trading will be significantly ahead of
market expectations 1 (#_ftn1) , with PBT for the full year now expected to
be not less than £3.2m
Commenting on the Interim Results, Tanya Raynes, Non-Executive Chair, said:
"These Interims demonstrate the successful implementation of our stated
strategy of being an own-book lender focussed on our three core Business to
Business activities. Significant growth in the period has been achieved whilst
maintaining our margin, controlling credit and spreading risk as UK businesses
continue to value our focus on customer service and our multi-product funding
solutions. The Board is committed to further increasing shareholder value
through the stated strategy and, despite the current wider macro-economic
headwinds, looks forward to the second half of the financial year with
cautious optimism."
Investor Presentation
As announced on 16 December 2022, the Company will deliver a live presentation
relating to these H1 2022/23 Interims via the Investor Meet Company platform
at 12.30pm BST today. Existing and potential shareholders can sign up to
Investor Meet Company for free and add to meet Time Finance plc via:
https://www.investormeetcompany.com/time-finance-plc/registerinvestor
(https://www.investormeetcompany.com/time-finance-plc/registerinvestor) .
For further information, please contact:
Time Finance plc
Ed Rimmer, Chief Executive Officer
01225 474230
James Roberts, Chief Financial Officer
01225 474230
Cenkos (NOMAD)
Ben Jeynes / Mac Gould (Corporate Finance)
0207 3978900
Julian Morse (Sales)
Walbrook PR
0207 9338780
Paul Vann /Joe
Walker
07768 807631
paul.vann@walbrookpr.com
About Time Finance:
Time Finance's core strategy is to provide the finance UK SMEs require to fund
their businesses. It offers a multi-product range for SMEs concentrating on
asset, loan and invoice finance. While focussed on being an 'own-book' lender,
the Group does retain the ability to broke-on deals where appropriate,
enabling it to optimize business levels through market and economic cycles.
More information is available on the Company website www.timefinance.com
(http://www.timefinance.com) .
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as amended by regulation 11 of the Market Abuse (Amendment)
(EU Exit) Regulations 2019/310. Upon the publication of this announcement via
Regulatory Information Service, this inside information is now considered to
be in the public domain.
CHIEF EXECUTIVE OFFICER'S STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 30 NOVEMBER 2022
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 three core, own-book divisions - Asset, Loan 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.
Financial Results
I am extremely pleased to report this set of Interim financial results with
good progress, both strategically and financially, having been made in the
first half of the financial year.
Own-Book deal origination is a key performance indicator for the Group.
Pleasingly, in the six-month period to 30 November, this origination amounted
to £36.7m, an increase of 27% when compared to the six months to 30 November
2021. This increase has helped contribute to the Group's gross lending book
growing to record highs. As at 30 November 2022 it stood at £152.7m compared
to £120.5m twelve months earlier. 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.
It is also encouraging to see that all the key metrics on the Profit and Loss
account - Revenue, Gross Profit and Profit Before Tax - show growth from both
the preceding six-month period to 31 May 2022 and the six-month comparative
period to 30 November 2021. This demonstrates the medium-term strategy that
was introduced in June 2021 is gathering pace. Given the compound nature of
the Asset and Loan finance businesses, all other things being equal, this
gives the board confidence for the future.
With regard to the Group's Balance Sheet, the quality of the lending portfolio
is another key performance indicator and focus of the Board. It is extremely
pleasing, therefore, to report a continuing reduction in the value of arrears
despite the significant growth in the lending book over the period under
review. As at 30 November 2022, net arrears had reduced a further £0.6m from
the financial year-end, and stood £1.8m lower than as at 30 November 2021.
Total net arrears equated to 6% of the period-end gross lending book as at 30
November 2022 (31 May 2022: 6%; 30 November 2021: 9%).
The Group's increasing level of deal origination, lending portfolio management
and continued support from external funders have all combined to further
strengthen the Group's balance sheet. Net Tangible Assets stood at £32.1m as
at 30 November 2022 compared to £29.5m as at 31 May 2022, an increase of 9%
Strategy and Outlook
The Group remains committed to its medium-term strategy which it firmly
believes will lead to increased shareholder value over time. The focus on our
key initiatives - core product own-book lending, investing in improved IT
infrastructure to enable the business to scale more easily and maximising our
multi-product offering - continues apace.
Taking into account the wider macro-economic and geo-political concerns, 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.
The strategic plan remains on-track and the Group has continually shown its
operational resilience, balance sheet strength and liquidity throughout.
Furthermore, 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 now be ahead of current
market expectations, with Profit Before Tax of at least £3.2m
Ed Rimmer
Chief Executive Officer, Time Finance plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER 2022
Unaudited Unaudited Audited 12 months to
6 months to 6 months to 30 November 2021 31 May 2022
30 November £'000 £'000
2022
£'000
Note
13,183 11,774 23,611
Revenue
Other income - 8 29
TOTAL REVENUE 13,183 11,782 23,640
Cost of sales (5,292) (4,196) (8,648)
GROSS PROFIT 7,891 7,586 14,992
Administrative expenses (5,743) (6,210) (11,771)
Exceptional items (47) (47) (1,869)
Share-based payments (56) (33) (43)
OPERATING PROFIT 2,045 1,296 1,309
Finance income 1 - 1
Finance expense (76) (95) (255)
PROFIT BEFORE INCOME TAX 1,970 1,201 1,055
(374) (228) (134)
Income Tax
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR 1,596 973 921
Attributable to: 1,596 973 921
Owners of the parent company
Pence per share Pence per share Pence per share
- basic 6 1.73 1.07 1.00
- diluted 6 1.73 0.99 1.00
All of the above amounts are in respect of continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS TO 30 NOVEMBER 2022
Unaudited Audited 12 months to
6 months to 31 May
30 November 2022
2022
£'000 £'000
NON-CURRENT ASSETS
Goodwill 27,263 27,263
Intangible assets 240 298
Property, plant and equipment 181 320
Right-of-use property, plant & equipment 339 30
Trade and other receivables 54,273 50,344
Deferred tax 1,036 1,036
83,332 79,291
CURRENT ASSETS
Trade and other receivables 83,848 70,852
Cash and cash equivalents 3,959 3,170
Tax receivable 100 -
87,907 74,022
TOTAL ASSETS 171,239 153,313
EQUITY
Called up share capital 9,252 9,252
Share premium 25,543 25,543
Employee Shares 163 106
Treasury Shares (820) (820)
Retained earnings 25,568 23,972
TOTAL EQUITY 59,706 58,053
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 45,975 39,033
Financial liabilities - borrowings 1,915 2,344
Lease liability 3 -
47,893 41,377
CURRENT LIABILITIES
Trade and other payables 61,363 51,956
Financial liabilities - borrowings 1,954 1,879
Tax payable - 18
Lease liability 323 30
63,640 53,883
TOTAL LIABILITIES 111,533 95,260
TOTAL EQUITY AND LIABILITIES 171,239 153,313
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 NOVEMBER 2022
Unaudited Unaudited
6 months to 6 months to
30 November 30 November
2022 2021
£'000 £'000
Cash generated from operations
Profit before tax 1,970 1,201
Depreciation and amortisation charges 195 203
Finance costs 76 95
Finance income (1) -
(Increase) in trade and other receivables (16,970) (6,095)
Increase in trade and other payables 16,396 3,495
Movement in other non-cash items (89) (374)
1,577 (1,475)
Cash flows from operating activities
Interest paid (76) (95)
Tax paid (411) (258)
1,090 (1,828)
Net cash generated from operating activities
Cash flows from investing activities
Purchase of software, property, plant & equipment (31) (45)
Interest received 1 -
(30) (45)
Net cash generated from investing activities
Cash flows from financing activities
Payment of lease liabilities (77) (103)
Loan repayments in period (513) (323)
Change in overdrafts 160 118
(430) (308)
Net cash generated from financing activities
630 (2,181)
Increase/(Decrease) in cash and cash equivalents
2,916 7,665
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period 3,546 5,484
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2022
Share Capital Share Retained Treasury Employee Shares Total Equity
Premium Earnings Shares
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 May 2022 9,252 25,543 23,972 (820) 106 58,053
Total comprehensive income - - 1,596 - - 1,596
Transactions with owners
Sale of treasury shares - - - - - -
Dividends - - - - - -
Issue of share capital - - - - - -
Value of employee services - - - - 57 57
Balance at 30 November 2022 9,252 25,543 25,568 (820) 163 59,706
Share Capital Share Retained Treasury Employee Shares Total Equity
Premium Earnings Shares
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 May 2021 9,252 25,543 23,051 (790) 63 57,119
Total comprehensive income - - 973 - - 973
Transactions with owners
Sale of treasury shares - - - 41 - 41
Dividends - - - - - -
Issue of share capital - - - - - -
Value of employee services - - - - 33 33
Balance at 30 November 2021 9,252 25,543 24,024 (749) 96 58,166
Share Capital Share Retained Treasury Employee Shares Total Equity
Premium Earnings Shares
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 May 2021 9,252 25,543 23,051 (790) 63 57,119
Total comprehensive income - - 973 - - 973
Transactions with owners
Sale of treasury shares - - - 41 - 41
Dividends - - - - - -
Issue of share capital - - - - - -
Value of employee services - - - - 33 33
Balance at 30 November 2021 9,252 25,543 24,024 (749) 96 58,166
1 BASIS OF
PREPARATION
The financial information set out in the interim report does not constitute
statutory accounts as defined in section 434(3) and 435(3) of the Companies
Act 2006. The Group's statutory financial statements for the year ended 31
May 2021 prepared in accordance with IFRS as adopted by the European Union and
with the Companies Act 2006 have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498(2) of the Companies Act 2006. These
interim financial statements have been prepared under the historical cost
convention.
These interim financial statements have been prepared in accordance with the
accounting policies set out in the most recently available public information,
which are based on the recognition and measurement principles of IFRS in issue
as adopted by the European Union (EU) and are effective at 31 May 2022. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting', as adopted by the European Union.
The financial information for the six months ended 30 November 2021 and the
six-month period to 30 November 2022 are unaudited and do not constitute the
Group's statutory financial statements for these periods. The accounting
policies have been applied consistently throughout the Group for the purposes
of preparation of these interim financial statements.
Going Concern
The Directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than 12
months from the date of this report. Accordingly, they continue to adopt the
going concern basis in preparing the condensed financial statements.
2 SEGMENTAL REPORTING
The Group has three key trading divisions which reflect its organisational and
management structures, and these are differentiated by the type of finance
products provided. Asset, Loans and Invoice Finance represent the core
products. Other represents central overheads related to being listed and
running a group of Companies and any legacy non-core brokerages. The Group
reports internally on these segments in order to assess performance and
allocate resources.
6 months to 30 November 2022
£'000 Asset Loans Invoice Finance Other TOTAL
Revenue 6,321 1,020 4,761 1,081 13,183
Profit before Tax 965 99 1,626 (720) 1,970
6 months to 30 November 2021
£'000 Asset Loans Invoice Finance Other TOTAL
Revenue 5,520 964 3,772 1,526 11,782
Profit before Tax 934 244 1,767 (1,744) 1,201
6 months to 30 November 2021
£'000 Asset Loans Invoice Finance Other TOTAL
Revenue 5,520 964 3,772 1,526 11,782
Profit before Tax 934 244 1,767 (1,744) 1,201
3 BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power to govern the financial and
operating policies of an entity so as to obtain benefit from its activities.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
4
TAXATION
Taxation charged for the period ended 30 November 2022 is calculated by
applying the Directors' best estimate of the annual tax rate to the result for
the period.
5 SHARE
CAPITAL
The Articles of Association of the company state that there is an unlimited
authorised share capital. Each share carries the entitlement to one
vote.
6 EARNINGS PER ORDINARY SHARE
The earnings per ordinary share have been calculated using the profit for the
period and the weighted number of ordinary shares in issue during the period.
For diluted earnings per share, the weighted average number of shares is
adjusted to assume conversion of all dilutive potential ordinary shares.
6 months to 6 months to 12 months to
30 Nov 2022 30 Nov 2021 31 May 2022
£'000 £'000 £'000
Earnings attributable to ordinary shareholders 1,596 973 921
Basic EPS
Weighted average number of shares 92,512,704 90,806,852 92,512,704
Per-share amount pence 1.73 1.07 1.00
1,596 912 921
Adjusted earnings
Diluted EPS
Weighted average number of shares 92,512,704 91,621,519 92,512,704
Per-share amount pence 1.73 0.99 1.00
7 DIVIDENDS
At the current time, under the strategy published in June 2020, cash reserves
are being deployed for business growth. This approach to future dividends is
kept under regular review and any change to the policy would be notified at
that point in time.
8 SHARE-BASED PAYMENT TRANSACTIONS
On 3 October 2022, the Group announced that following the achievement of
time-based criteria in relation to the Company's Unapproved Share Option
Scheme, a total of 202,500 previously awarded nil-cost options over ordinary
shares of 10 pence each in the capital of the Company vested. These vested
options may be exercised at any time prior to an expiry date of 30 September
2023 being 12 months from the vesting date. As previously stated, it is the
Board's intention that, wherever possible, any vested options that are
exercised are met through the Group's Employee Benefit Trust and so would not
dilute any existing shareholders.
The terms of the scheme were previously announced by the Group on 29 October
2020.
9 COPIES OF THE INTERIM
REPORT
Copies of the Interim Report are available from www.timefinance.com and the
Company Secretary at the registered office: Time Finance plc, St James House,
The Square, Lower Bristol Road, Bath, BA2 3BH.
1 (#_ftnref1) FY2023 market expectations at the time of publication of
£25.0m of revenue and £2.8m of PBT
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