REG - Time Finance PLC - Interim Results
28/01/2025 07:00
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RNS Number : 8380U Time Finance PLC 28 January 2025
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28 January 2025
Time Finance plc
(the "Group" or the "Company")
INTERIM RESULTS AND CORPORATE STRATEGY UPDATE
Record lending book after fourteen consecutive quarters of growth, PBT margin
enhancement and 39% increase in EPS
Launch of corporate strategy through to May 2028 driving lending book to in
excess of £300m
Time Finance plc, the AIM listed independent specialist finance provider,
today announces its unaudited interim results for the six-months ended 30
November 2024 ("Results", "Interims" or "H1 2024/25"). 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."
Investor Presentation
The Company will deliver a live presentation relating to these H1 2024/25
Interims and to the corporate strategy update 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
Cavendish Capital Markets (NOMAD and Broker) 0207 220 0500
Ben Jeynes / Dan Hodkinson (Corporate Finance)
Michael Johnson / George Budd / Charlie Combe (Sales and ECM)
Walbrook PR 0207 933 8780
Nick Rome / Joe Walker 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) .
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
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER 2024
Unaudited Unaudited Audited
6 months to 6 months to 30 November 2023 12 months to
30 November £'000 31 May
2024 2024
£'000 £'000
Note
18,249 15,652 33,230
Revenue
Cost of sales (7,554) (6,617) (14,000)
GROSS PROFIT 10,695 9,035 19,230
Administrative expenses (6,512) (6,235) (13,185)
Share-based payments (12) (30) (61)
OPERATING PROFIT 4,171 2,770 5,984
Finance expense (223) (21) (145)
Finance income - - 96
PROFIT BEFORE INCOME TAX 3,948 2,749 5,935
(948) (593) (1,491)
Income Tax
PROFIT AND TOTAL COMPREHENSIVE INCOME
FOR THE YEAR 3,000 2,156 4,444
Attributable to:
Owners of the parent company 3,000 2,156 4,444
Pence per share Pence per share Pence per share
- basic 6 3.24 2.33 4.80
- diluted 6 3.24 2.33 4.80
All of the above amounts are in respect of continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS TO 30 NOVEMBER 2024
Unaudited Audited
6 months to 12 months to
30 November 31 May
2024 2024
£'000 £'000
NON-CURRENT ASSETS
Goodwill 27,263 27,263
Intangible assets 231 226
Property, plant and equipment 363 286
Right-of-use property, plant & equipment 454 552
Trade and other receivables 76,433 70,015
Deferred tax 1,418 1,418
106,162 99,760
CURRENT ASSETS
Trade and other receivables 110,919 108,389
Cash and cash equivalents 3,279 1,590
114,198 109,979
TOTAL ASSETS 220,360 209,739
Called up share capital 9,252 9,252
Share premium 25,543 25,543
Employee Shares 303 292
Treasury Shares (965) (815)
Retained earnings 34,863 31,863
TOTAL EQUITY 68,996 66,135
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 69,804 62,973
Financial liabilities - borrowings 104 294
Lease liability 263 363
70,171 63,630
CURRENT LIABILITIES
Trade and other payables 80,137 78,303
Financial liabilities - borrowings 702 1,025
Tax payable 21 288
Provisions 155 173
Lease liability 178 185
81,193 79,974
TOTAL LIABILITIES 151,364 143,604
TOTAL EQUITY AND LIABILITIES 220,360 209,739
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 NOVEMBER 2024
Unaudited Unaudited
6 months to 6 months to
30 November 30 November
£'000 £'000
Cash generated from operations
Profit before tax 3,948 2,749
Depreciation and amortisation charges 300 220
Finance costs 223 21
(Increase) in trade and other receivables (8,948) (11,399)
Increase in trade and other payables 8,665 7,297
Movement in other non-cash items 7 (1)
4,195 (1,113)
Cash flows from operating activities
Interest paid (223) (21)
Tax paid (1,145) (225)
Net cash generated from operating activities 2,827 (1,359)
Cash flows from investing activities
Purchase of software, property, plant & equipment (312) (101)
Net cash generated from investing activities (312) (101)
Cash flows from financing activities
Payment of lease liabilities (164) (109)
Loan repayments in period (512) (1,112)
Purchase of own shares in EBT (150) (16)
Net cash generated from financing activities (826) (1,237)
Increase/(decrease) in cash and cash equivalents 1,689 (2,697)
Cash and cash equivalents at the beginning of the period 1,590 3,772
Cash and cash equivalents at the end of the period 3,279 1,075
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2024
Share Capital Share Retained Treasury Employee Shares Total Equity
Premium Earnings Shares
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 May 2024 9,252 25,543 31,863 (815) 292 66,135
Total comprehensive income - - 3,000 - - 3,000
Transactions with owners
Sale of treasury shares - - - (150) - (150)
Value of employee services - - - - 11 11
Balance at 30 November 2024 9,252 25,543 34,863 (965) 303 68,996
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)
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 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)
Value of employee services - - - - 30 30
Balance at 30 November 2023 9,252 25,543 29,575 (780) 261 63,851
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 2024 prepared in accordance with UK adopted International Financial
Reporting Standards ("IFRS") 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 the UK
adopted IFRS in issue and are effective at 31 May 2024. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with the UK adopted International Accounting Standard
34 'Interim Financial Reporting'.
The financial information for the six months ended 30 November 2023 and the
six-month period to 30 November 2024 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
Due to the nature of the Group's trading the Directors do not have any
concerns over the key assumptions concerning the future and do not consider
there to be any key sources of estimation uncertainty. The Group has ample
headroom in its funding facilities. As such, the Directors are confident that
the Group will continue to operate as a going concern.
2 SEGMENTAL REPORTING
The Group provides a range of financial services and product offerings
throughout the UK and has two core trading divisions, namely: Asset Finance
and Invoice Finance. The Group's ancillary product offerings, Commercial Loans
and Vehicles fleet brokering are included within the Asset Finance segment as
they operate under the same management team, office locations and with the
same back-office teams. Asset Based Lending is included within the Invoice
Finance segment for the same reason. The operating segments, therefore,
reflect the Group's organisational and management structures. The Group
reports internally on these segments in order to assess performance and
allocate resources. The segments are differentiated by the type of products
provided.
The segmental results and comparatives are presented with intergroup charges
allocated to each division based on actual revenues generated. Intergroup
expenses are recharged at cost and largely comprise plc Board and listing
costs, Marketing, Compliance, IT and Human Resource costs.
6 months to 30 November 2024
Asset Finance Invoice Other TOTAL
£'000 Finance
Revenue 10,651 7,598 - 18,249
Profit before Tax 1,919 2,897 (868) 3,948
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
3 BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of
the parent company (Time Finance plc) and entities controlled by the company
(its subsidiaries) made up to 31 May each year. 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 2024 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
Earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in
issue during the year. For diluted earnings per share, the weighted average
number of shares is adjusted to assume conversion of all dilutive potential
ordinary shares.
There are no dilutive items impacting the Group and, as such, the Basic EPS
and Diluted EPS are identical. Any share options that are vested are fully
expected to be met from the Group's Employee Benefit Trust. Therefore,
issuance of new shares is not expected to be required and as a result, there
is no associated dilution.
6 months to 6 months to 12 months to
30 Nov 2024 30 Nov 2023 31 May 2024
£'000s 3,000 2,156 4,444
Earnings attributable to ordinary shareholders
Basic EPS
Weighted average number of shares 92,512,704 92,512,704 92,512,704
Per-share amount pence 3.24 2.33 4.80
Adjusted earnings 3,000 2,156 4,444
Diluted EPS
Weighted average number of shares 92,512,704 92,512,704 92,512,704
Per-share amount pence 3.24 2.33 4.80
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
The Group has one established unapproved Share Scheme, the "2022 Scheme", that
was previously announced on 22(nd) July 2022.
On 4th October 2024, the Group announced that, following the achievement of
profit-based performance criteria in relation to the Company's Unapproved
Share Option Scheme, a total of 611,667 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 2025 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.
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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