REG - Time Finance PLC - Interim Results
25/01/2024 07:00
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RNS Number : 8373A Time Finance PLC 25 January 2024
25 January 2024
Time Finance plc
(the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023
Continued strong growth in Profits and Earnings Per Share
Lending book at record levels after ten consecutive quarters of growth
Time Finance plc, the AIM listed independent specialist finance provider,
today announces its unaudited interim results for the six-months ended 30
November 2023 ("Results" or "Interims"). The Interims reflect continued strong
demand from businesses across the UK for the range of alternative finance
products offered by the Group.
Financial Highlights:
· Own-Book lending origination up 29% to £47.3m during H1
2023/24 (H1 2022/23: £36.6m)
· Gross lending-book up 24% to a record £188.6m as at 30
November 2023 (30 November 2022: £152.7m)
· Revenue up 19% to £15.7m (H1 2022/23: £13.2m)
· Profit before Tax ("PBT") up 35% to £2.7m (H1 2022/23: £2.0m)
· Earnings Per Share up 35% to 2.33 pence per share (H1 2022/23:
1.73 pence per share)
· Net deals in arrears remain stable at 6% of the lending book as
at 30 November 2023 (30 November 2022: 6%)
· Net Assets up 7% to £63.9m as at 30 November 2023 (30 November
2022: £59.7m)
· Net Tangible Assets up 13% to £36.4m as at 30 November 2023
(30 November 2022: £32.1m)
· Strong visibility of future earnings with unearned income up 26% to
£23.9m as at 30 November 2023 (30 November 2022: £18.9m)
· Continued positive trading momentum throughout December 2023 gives
significant confidence that full year trading will be at least in line with
Board expectations
Commenting on the Interim Results, Tanya Raynes, Non-Executive Chair, said:
"These results show that our focus on own-book lending continues to deliver a
strong trading performance. This is particularly encouraging given the wider
economic headwinds and demonstrates UK SMEs' robust demand for funding from a
truly customer-focussed, multi-product provider of finance like ourselves. The
strategic positioning of the Group within the market has enabled it to
generate increasing levels of demand whilst also maintaining control of credit
and spread risk. As a result, the Group is well positioned to deliver further
growth and increased value to our shareholders. We look forward to being able
to report on further progress at the year-end."
Investor Presentation
As announced on 19 December 2023, the Company will deliver a live presentation
relating to these H1 2023/24 Interims via the Investor Meet Company platform
at 1:00pm GMT 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
Cavendish Capital Markets (NOMAD)
Ben Jeynes / Dan Hodkinson (Corporate Finance)
0207 220 0500
Michael Johnson / George Budd / Charlie Combe (Sales)
Walbrook PR
0207 933 8780
Paul Vann /Joe Walker
07768 807631
timefinance@walbrookpr.com
About Time Finance:
Time Finance's purpose is to Help UK Businesses Thrive and Survive through the
provision of flexible funding facilities. 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 2023
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 business who have a funding requirement
between £5k and £3.5m.
Financial Results
I am 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; building on the solid foundations laid in the
previous 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 £47.3m, an increase of 29% when compared to the six months to 30 November
2022. This increase has helped contribute to the Group's gross lending book
growing to record highs. As at 30 November 2023 it stood at £188.6m compared
to £152.7m 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 2023 and the six-month comparative
period to 30 November 2022. Given the compound nature of the Asset and Loan
finance businesses, all other things being equal, this gives the board
confidence for the future performance.
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 stability in make-up of the book despite the
wider economic difficulties. As at 30 November 2023, net arrears as a
percentage of the lending book had remained static at approximately 6% as was
the position twelve months earlier.
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 £36.4m as
at 30 November 2023 compared to £32.1m as at 30 November 2023, an increase of
13%.
Strategy and Outlook
The Group remains committed to its four-year medium-term strategy which was
introduced in June of 2021 as it firmly believes this 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 and balance sheet strength throughout. 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 Board
expectations.
Ed Rimmer
Chief Executive Officer, Time Finance plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER 2023
Unaudited Unaudited Audited 12 months to
6 months to 6 months to 30 November 2022 31 May 2023
30 November £'000 £'000
2023
£'000
Note
15,652 13,183 27,570
Revenue
Cost of sales (6,617) (5,292) (11,399)
GROSS PROFIT 9,035 7,891 16,171
Administrative expenses (6,235) (5,743) (11,648)
Exceptional items - (47) (80)
Share-based payments (30) (56) (125)
OPERATING PROFIT 2,770 2,045 4,318
Finance income - 1 1
Finance expense (21) (76) (152)
PROFIT BEFORE INCOME TAX 2,749 1,970 4,167
(593) (374) (720)
Income Tax
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,156 1,596 3,447
Attributable to: 2,156 1,596 3,447
Owners of the parent company
Pence per share Pence per share Pence per share
- basic 6 2.33 1.73 3.73
- diluted 6 2.33 1.73 3.73
All of the above amounts are in respect of continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS TO 30 NOVEMBER 2023
Unaudited Audited 12 months to
6 months to 31 May
30 November 2023
2023
£'000 £'000
NON-CURRENT ASSETS
Goodwill 27,263 27,263
Intangible assets 236 231
Property, plant and equipment 130 238
Right-of-use property, plant & equipment 473 573
Trade and other receivables 67,231 58,530
Deferred tax 1,235 1,236
96,568 88,071
CURRENT ASSETS
Trade and other receivables 94,544 91,847
Cash and cash equivalents 1,075 3,772
95,619 95,619
TOTAL ASSETS 192,187 183,690
EQUITY
Called up share capital 9,252 9,252
Share premium 25,543 25,543
Employee Shares 261 231
Treasury Shares (780) (770)
Retained earnings 29,575 27,419
TOTAL EQUITY 61,675
63,851
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 60,188 52,822
Financial liabilities - borrowings 806 1,319
Lease liability 3 428
60,997 54,569
CURRENT LIABILITIES
Trade and other payables 65,137 65,207
Financial liabilities - borrowings 1,025 1,625
Tax payable 715 423
Lease liability 462 191
67,339 67,446
TOTAL LIABILITIES 128,336 122,015
TOTAL EQUITY AND LIABILITIES 192,187 183,690
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 NOVEMBER 2023
Unaudited Unaudited
6 months to 6 months to
30 November 30 November
2023 2022
£'000 £'000
Cash generated from operations
Profit before tax 2,749 1,970
Depreciation and amortisation charges 220 195
Finance costs 21 76
Finance income - (1)
(Increase) in trade and other receivables (11,399) (16,970)
Increase in trade and other payables 7,297 16,396
Movement in other non-cash items (1) (89)
(1,113) 1,577
Cash flows from operating activities
Interest paid (21) (76)
Tax paid (225) (411)
(1,359) 1,090
Net cash generated from operating activities
Cash flows from investing activities
Purchase of software, property, plant & equipment (101) (31)
Interest received - 1
(101) (30)
Net cash generated from investing activities
Cash flows from financing activities
Payment of lease liabilities (109) (77)
Loan repayments in period (1,112) (513)
Change in overdrafts - 160
Purchase of own shares in EBT (16) -
(1,237) (430)
Net cash generated from financing activities
(2,697) 630
(Decrease)/increase in cash and cash equivalents
3,772 2,916
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period 1,075 3,546
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2023
Share Capital Share Retained Treasury Employee Shares Total Equity
Premium Earnings Shares
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 May 2023 9,252 25,543 27,419 (770) 231 61,675
Total comprehensive income - - 2,156 - - 2,156
Transactions with owners
Sale of treasury shares - - - (10) - (10)
Dividends - - - - - -
Issue of share capital - - - - - -
Value of employee services - - - - 30 30
Balance at 30 November 2023 9,252 25,543 29,575 (780) 261 63,851
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 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
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 2023 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 2023. 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 2022 and the
six-month period to 30 November 2023 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 now has two core trading divisions which reflect its organisational
and management structures, and these are differentiated by the type of finance
products provided. Asset and Invoice Finance represent the core products.
Other represents central overheads related to being listed and running a group
of Companies (2022 included the legacy non-core brokerages). The Group
reports internally on these segments in order to assess performance and
allocate resources.
6 months to 30 November 2023
Asset Finance Invoice Other TOTAL
£'000 Finance
Revenue 8,987 6,665 - 15,652
Profit before Tax 1,448 2,213 (912) 2,749
6 months to 30 November 2022
Asset Finance Invoice Other TOTAL
£'000 Finance
Revenue 7,341 4,761 1,081 13,183
Profit before Tax 1,064 1,626 (720) 1,970
6 months to 30 November 2022
Asset Finance Invoice Other TOTAL
£'000 Finance
Revenue 7,341 4,761 1,081 13,183
Profit before Tax 1,064 1,626 (720) 1,970
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 2023 is calculated by
applying the Directors' best estimate of the expected 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 2023 30 Nov 2022 31 May 2023
£'000 £'000 £'000
Earnings attributable to ordinary shareholders 2,156 1,596 3,447
Basic EPS
Weighted average number of shares 92,512,704 92,512,704 92,512,704
Per-share amount pence 2.33 1.73 3.73
2,156 1,596 3,447
Adjusted earnings
Diluted EPS
Weighted average number of shares 92,512,704 92,512,704 92,512,704
Per-share amount pence 2.33 1.73 3.73
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 2023, the Group announced that, following the achievement of a
mixture of time-based performance criteria and profit-bases performance
criteria in relation to the Company's Unapproved Share Option Schemes, a total
of 790,166 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 2024 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 various schemes were previously announced by the Group on 29
October 2020 and 22 July 2022.
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.
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