Time Finance Positive trading momentum continues; Balance Sheet further strengthened

Time Finance plc (formerly ‘1pm plc’) (LON:TIME), the AIM listed independent specialist finance provider, has announced its unaudited interim results for the six-month period ended 30 November 2020.

The Results reflect increasing demand for finance, month-on-month, from UK SMEs and consumers as the Group continues to deal with the impact of the Covid-19 pandemic. The Group’s balance sheet and lending book have both remained robust, demonstrating their resilience and reflecting the Group’s prudent underwriting policies. These policies are kept under regular review given the uncertainty that currently exists in the wider macro-economic environment. The Group’s ability to continue to generate profits during the period highlights the strength of its multi-product offering of Asset Finance, Vehicle Finance, Loans and Invoice Finance. The flexibility afforded by the Group’s ‘hybrid’ business model enables the Group to act as both a funder and a broker in order to maintain both margins and manage credit risk throughout the economic cycle.

Operational Highlights:

·      Completion of group-wide rebrand to Time Finance plc to consolidate and strengthen the Group’s offering under a single nationally recognized, market-facing name

·      Accreditation from the British Business Bank to provide Coronavirus Business Interruption Loan Scheme (“CBILS”) loans to UK SMEs

·      Continued focus on diversification and spread of risk, with largest sector exposure accounting for less than 4% and top ten sectors less than 24% of the total lending book

·      Agility to switch provision of finance to buoyant sectors during the Covid-19 pandemic

·     “Employer of the Year 2020” Business Leader award winner and included in the London Stock Exchange plc’s 2020 “1000 Companies to Inspire Britain” report

Financial Highlights

·      Own Book origination up to £29.6m from £23.9m in H2 2019/20 (H1 2019/20: £30.6m)

·     Broked-on origination down to £27.0m from £35.2m in H2 2019/20 (H1 2019/20: £57.3m), due to the impact on trading activity of the pandemic

·      Group revenue of £11.9m (H2 2019/20: £13.7m; H1 2019/20: £15.6m)

·     Group operating profit before tax of £1.4m, up from a £1.0m loss in H2 2019/20 due to Covid-19, (H1 2019/20: £3.0m profit)

·      Fully diluted earnings per share of 1.20 pence (full year 2019/20: 1.74 pence per share)

·      Blended cost of borrowings maintained at approximately 4% (year to 31 May 2020: 4%)

·      Good visibility of future revenue with “unearned income” as at 30 November 2020 of £16.5m (31 May 2020: £15.2m)

·      Net ‘own-book’ lending portfolio increased to £105.6m as at 30 November 2020 (31 May 2020: £98.2m)

·    Funding facilities of £170m available as at 30 November 2020 with headroom of £97m to leverage own cash generation for future organic growth (31 May 2020: £174m with headroom of £108m)

·      Credit risk provisions maintained at £5.1m or approximately 5% of the net lending book

·      Deal value in forbearance significantly reduced to £2.6m (31 May 2020: £24.9m)

·      Deal arrears reduced by £6.1m as at 30 November 2020 from 31 May 2020 levels

·      Net Assets increased to £56.6m as at 30 November 2020 (31 May 2020: £55.2m)

·      Net Tangible Assets increased to £27.8m as at 30 November 2020 (31 May 2020: £26.5m)

Commenting on the Interim Results, John Newman, Time Finance Non-Executive Chairman, said:

“Given the impact of the Covid-19 pandemic on our business sector and the wider UK economy it is pleasing not only to have seen a steady and maintained improvement in trading during the six-month period to 30 November 2020, but also to report results that were ahead of our internal budget expectations for the period. The Group’s strategy of being a multi-product provider of finance to UK SMEs and consumers, spread across multiple business sectors, with the ability to act as both a funder and a broker, provides the Group with the resilience to withstand the challenges of difficult business environments. The Group has a strong balance sheet and liquidity and is well-positioned to deliver future growth and shareholder value as the economy recovers from the effects of the pandemic.

The Board has reassessed its dividend policy taking account of the potential impact of the latest national lockdown restrictions and also the uncertainty in business conditions and has taken the prudent decision to continue with the deferment of dividend payments until the outcome for the financial year ending 31 May 2021 is known.”




Time Finance plc is a multi-product speciality finance business providing funding for UK SMEs as a lender and arranging funding for both UK SMEs and consumers as a broker.

The Group comprises four operating divisions, namely Asset Finance (predominantly own-book lending with the ability to broke-on), Loan Finance (own-book lending, such as CBILS, and broking of property finance), Invoice Finance (own-book lending only) and Vehicle Finance (broking only).

Lending proposals are originated through a range of channels, sourced from national and regional finance brokers, other intermediaries such as professional firms, equipment vendors, suppliers and dealers, and direct from borrowers, both via field sales personnel and online.

Time Finance advances funds to borrowers using a mix of its own cash and operational debt facilities provided by a range of wholesale funding providers.

Financial Results

The impact on trading activity of the Covid-19 pandemic was felt most sharply in the fourth quarter of the previous financial year, which ended on 31 May 2020. Since then, the Group has seen a steady month-on-month increase in trading activity, yielding financial results ahead of management’s internal budget expectations for the period. It is therefore pleasing to report satisfactory interim financial results for the six-month period to 30 November 2020, which show a marked profit improvement compared with the prior six-month period.

In the six-month period to 30 November, deal origination amounted to £56.6m compared with £59.1m in the previous six months to 31 May 2020. Within this total, however, there was a notable change in mix, with own-book origination of £29.6m (52%) compared with £23.9m (40%) in the previous six months. This reflects two key factors; firstly, the agility of the Group to be able to pivot its lending into sectors trading buoyantly during the pandemic, such as national and local delivery businesses, equipment for local convenience stores and local retailers, and personal protective equipment manufacturers; and, secondly, the ongoing support of the Group’s wholesale funding providers, all of whom have either maintained or increased their funding facilities as the Group has stood by its commitment to continue to lend to credit-worthy SMEs during this period. Whilst it is a crucial risk-mitigating factor in the Group’s operating model to be able to broker business on to other lenders, a growing own-book portfolio underpins the Group’s future income generation and profits. It is therefore important to note that the gross own-book lending portfolio as at 30 November 2020 was £122.1m compared with £113.4m at 31 May 2020 and it is continuing to grow. Included in this figure is unearned interest income, i.e. future revenue, of £16.5m which compares with £15.2m as at 30 May 2020.

The Results show revenue for the period of £11.9m compared with £13.7m in the prior six months, the reduction being due to the impact of Covid-19, primarily in relation to broking activities. In the Results, approximately 85% of revenues is interest income and related income from lending activities and 15% from broking activities.

The Group’s profit before tax for the six-month period was £1.4m compared with a loss of £1.0m in the prior six-month period. The prior period included a one-off provision for potential future impairments, which took the credit risk provision to £5.1m as at 31 May 2020. This provision has been maintained at £5.1m, demonstrating that the Group has seen neither a significant increase in credit risk write-offs in the six-months to 30 November 2020, nor the need to make additional significant provisions in the period. Furthermore, in relation to performance of the lending portfolio, it is pleasing to report a significant reduction in both the value of the portfolio in arrears and the value of deals where some form of repayment forbearance had been granted. This is not only testament to the Group’s collection processes and the outstanding efforts of collections personnel in working with borrowers through this challenging period, but also to the quality of the lending decision-making policies adopted by the Group’s credit and risk function.

The Group’s risk-mitigated operating model, continued level of deal origination, sound credit decision-making, lending portfolio management and support from external funders have all combined to further strengthen the Group’s balance sheet and to generate an increase in Net Assets to £56.6m and Net Tangible Assets to £27.8m as at 30 November 2020, compared with £55.2m and £26.5m as at 31 May 2020, respectively.

Earnings per share for the six-month period to 30 November 2020 were 1.20 pence, compared with 1.74 pence for the full year ended 31 May 2020.

Market guidance and dividend

The Board has reassessed the reinstatement of market guidance in the light of trading momentum in the first half of the current financial year, the potential impact of the current further national lockdown restrictions, and the prospects for a return to more normal economic activity later in the calendar year. The Board has concluded that due to these prevailing uncertainties and their potential duration, it is not possible to quantify their impact on the Company’s financial performance in the second half of the financial year. Consequently, guidance on expectations for the Company’s financial performance for the year ending 31 May 2021 and the year ending 31 May 2022 continues to be withdrawn.

In addition, the Board has reassessed its dividend policy in the light of the same uncertainties and has decided to continue to postpone further dividend payments until the outcome for the financial year ending 31 May 2021 and prospects for the year ending 31 May 2022 can be assessed with greater certainty.

Strategy and Outlook

The Group remains committed to providing a comprehensive range of finance solutions to support the UK SME sector and UK consumers whilst aiming to deliver profitable growth to increase shareholder value. Given the unpredictable trading conditions that have prevailed since the initial impact of the Covid-19 pandemic, the Board is pleased with the financial results and progress made during the first half of the current financial year. The management of the Group through the impact on its business activities of the Covid-19 pandemic has proven to be highly effective, attesting to the Group’s operational resilience, balance sheet strength, liquidity and relevant market positioning. The Board is optimistic of further organic growth and a return to strategic growth when economic conditions allow.

Ian Smith

Chief Executive Officer, Time Finance plc

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