Time Finance momentum building again in core product offerings and loan book

Time Finance plc, (LON:TIME) the AIM listed independent specialist finance provider, today announced its unaudited interim results for the six-months ended 30 November 2021.

Financial Highlights:

·      Origination up 3% to £58.1m (H1 2020/21: £56.6m).

·      Revenue* up 1% to £11.8m (H1 2020/21: £11.7m)

·      Gross profit* up 3% to £7.6m (H1 2020/21: £7.4m)

·      Profit before tax* up 1% to £1.2m (H1 2020/21: £1.2m)

·      Blended cost of borrowings maintained at approximately 4% (year to 31 May 2021: 4%)

·      Gross lending portfolio increased to £120.5m as at 30 November 2021 (31 May 2021: £115.7m)

·      Net Assets increased to £58.2m as at 30 November 2021 (31 May 2021: £57.1m)

·      Net Tangible Assets increased to £29.6m as at 30 November 2021 (31 May 2021: £28.4m)

·     Net deals in arrears as at 30 November 2021 reduced by 26% representing 9% of the gross lending book (31 May 2021: 12%)

·      Nil net deals in forbearance as at 30 November 2021 (31 May 2021: £0.8m)

* Excluding furlough Other Income of £0.165m in H1 2020/21.

Operational Highlights:

·      Accreditation from the British Business Bank to provide the Recovery Loan Scheme (“RLS”) to SMEs

·      £50m Invoice Finance three-year funding facility agreed with the Group’s corporate bankers

·      Investment made in sales resource across Asset, Invoice Finance and Commercial Loans

·      Lending portfolio performance better than pre-pandemic levels and continues to improve

·      UK SMEs have remained resilient during pandemic with borrowers missing payments reducing

·    Strong cash position with £9.6m of cash, cash equivalents and convertible ‘paper’ at period end, leaving the business well placed to capitalise on future opportunities

Commenting on the Interim Results, Tanya Raynes, Time Finance Non-Executive Chairman, said:

“Given the continued impact of the Covid-19 pandemic on our business sector and the wider UK economy, it is pleasing that momentum is again building in our core product offerings and that our loan book is also growing. This gives us confidence in our strategy for the medium-term. The balance sheet continues to demonstrate its resilience and it is particularly encouraging to see deals in arrears at their lowest level since late 2018. Lending to smaller SMEs will always mean there are deals in arrears. This is to be expected, and risk is priced into our model, however we are delighted to see the levels both lower than anticipated and continuing to fall. The Board continue to assess the impact of the current wave of the pandemic but remain confident the fundamentals of the business are secure, that the Group remains well placed to capture the opportunities ahead of us, and that the medium-term strategy will deliver significant growth.”




Time Finance plc is a multi-product speciality finance provider to UK SMEs. It is primarily a lender for the working capital requirements of UK businesses but can also act as a broker in arranging funding where appropriate.

The Group comprises three core own-book divisions – Asset Finance, Loan Finance and Invoice Finance – as well as a Broking division which primarily arranges vehicle and property finance for consumers. Lending proposals are originated through a variety of channels, sourced from national and regional finance brokers, other intermediaries such as professional firms, equipment vendors, suppliers and dealers, and direct from borrowers. This is both via field sales personnel and also direct online. Funds are advanced to borrowers using a mix of the Group’s own reserves and operational debt facilities provided by a range of wholesale funding partners.

Financial Results

The various waves of the Covid-19 pandemic mean its effects on trading activity is still being felt and normal business has yet to be fully resumed. The impact of the pandemic continues to fall primarily on the Group’s non-core brokerage arms and particularly in the vehicles arena exacerbated by the well-publicised delays in sourcing vehicles. Despite the dampening effect of the brokerages, the Group has delivered a solid interim set of financial results.

Deal origination is a key performance indicator for the Group. Pleasingly, in the six-month period to 30 November, deal origination amounted to £58.1m, the highest level since the start of the pandemic and an increase of more than 24% when compared to £46.7m in the preceding six-month period to 31 May 2021. This increase has resulted in the Group’s gross lending book growing to £120.5m as at 30 November 2021 compared to £115.7m at 31 May 2021. An increasing own-book lending portfolio underpins the Group’s future income generation and, in turn, profitability. Crucially, the Group’s own-book lending portfolio has continued to grow since the half-year period end.

When reviewing the Profit and Loss account, it is important to note that the prior half-year comparatives and the full year to 31 May 2021 include significant ‘other income’ from government grants in the form of the Coronavirus Job Retention Scheme which the Group no longer has access to. These historical grants equated to £0.2m in the six-month period to 31 May 2021 and a further £0.2m in the six-month period to 30 November 2020. As such, the true comparison in performance is to compare the results without this pandemic ‘other income’ stream as detailed in the table below:

£’m6m to 30/11/216m to 31/05/216m to 30/11/20
Gross Profit7.67.07.4
Profit before Tax1.20.41.2

It is therefore encouraging to see that both Gross Profit and Profit Before Tax have grown significantly from the preceding six-month period despite the ongoing dampening effect of the slow recovery of the Group’s non-core brokerage arms. This demonstrates the strength of the core own-book lending businesses.

With regards to the Group’s Balance Sheet, the lending portfolio itself is another key performance indicator. It is extremely pleasing to report a continuing reduction in the value of portfolio arrears. As at 30 November 2021, net arrears were down a further £3.8m from year end, equating to 9% of the period end gross lending book (31 May 2021: 12%; 30 November 2020: 14%). It is also encouraging to report that at the period end there were no longer any deals in forbearance resulting from the impact of the pandemic. This compares to £0.8m as at 31 May 21, £2.2m as at 30 November 2020 and a pandemic-high of £20.5m as at 31 May 2020.

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 and to generate an increase in Net Assets to £58.2m and in Net Tangible Assets to £29.6m as at 30 November 2021. This compares with £57.1m and £28.4m as at 31 May 2021 and 30 November 2020 respectively.

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 key sales resources to grow the business and maximising our multi-product offering – continues apace.

Given the continued, somewhat unpredictable waves of the pandemic and their impact on trading conditions the Board is satisfied with the financial results and pleased with the operational progress made during the first half of the current financial year with the overall strategic plan set out at the start of the current financial year being broadly on track. The Group has continually shown its operational resilience, balance sheet strength and liquidity throughout the pandemic and the Board remains optimistic of a return to significant organic growth in due course whilst remaining vigilant and cautious as to the potential impact that further economic uncertainty or additional government restrictions could have on the Group.

Ed Rimmer

Chief Executive Officer, Time Finance plc

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