Time Finance (LON:TIME) has delivered another year of profitable growth, according to the latest research note from Cavendish, with the broker retaining its Buy recommendation and 112p target price. The note, written by Research Analyst Andrew Renton CFA, highlights a strong FY26E trading update, supported by record lending book balances, higher revenues, increased profit before tax and continued discipline around credit quality.
Time Finance is an alternative finance provider to UK SMEs, offering services including asset finance and invoice finance. The company’s role is centred on helping smaller businesses access the funding they need, and Cavendish’s latest update suggests that the group continues to make steady progress against its medium-term strategy.
Research Analyst Andrew Renton wrote: “Time Finance has delivered another strong year of profitable growth in FY26E, in line with expectations, with record revenues, earnings and lending book balances demonstrating continued execution against its medium-term strategy.”
That sentence captures the tone of the note clearly. Cavendish points to a 15% year-on-year increase in the gross lending book to a record £250.9m, compared with £217.4m in FY25A. The broker also notes that this represents the company’s 20th consecutive quarter of growth, a useful marker of consistency in a specialist finance business.
Own-book origination also moved higher, rising 26% year-on-year to £122.0m from £96.5m. Revenue increased 4% to £38.5m, while reported profit before tax rose 6% to £8.4m. Cavendish also highlights improving operational leverage, with the PBT margin expanding by 100 basis points to 22%.
FY26E trading update highlights
One of the more important parts of the Cavendish note is that growth has not appeared to come at the expense of credit quality. Net arrears stood at 4.8% of the lending book, only slightly higher than 4.6% in FY25A, while net write-offs improved to 0.9% from 1.0%. For a lending business, this balance between growth and credit discipline is central to the investment case.
The group’s strategic focus on secured lending also remains clear. Cavendish notes that Invoice Finance and Hard Asset Finance accounted for more than 95% of new lending volumes and 89% of the total book. That puts the company close to its three-year plan target of more than 90% of the book being weighted towards these secured areas.
Cavendish also points to enhanced funding facilities, with more than £80m of available headroom to support further expansion. The broker says this gives Time Finance capacity to continue moving towards its £300m lending book goal and beyond.
Valuation is another key theme. At the time of the note, Time Finance shares were trading at 50p, compared with Cavendish’s 112p target price. The broker states that the shares were trading on a FY27E basic price-to-earnings multiple of 6.6x and 0.8x tangible net asset value, which it sees as offering material re-rating potential.
Final Thoughts
The latest research note from Cavendish presents Time Finance as a business continuing to grow profitably while maintaining a measured approach to credit quality. With record lending balances, stronger origination, improving margins and funding headroom to support further growth, Cavendish’s positive stance is based on clear operational progress rather than promotional language.
