Time Finance (LON:TIME) has reported a strong set of interim results for the first half of its 2026 financial year, reflecting robust growth in its lending book, rising profits and a continued focus on credit quality. The latest research note from Cavendish highlights the company’s positive momentum, noting that its strategy is “continuing to compound nicely”.
Own-book origination surged by 48% year-on-year to £62.6 million, helping grow the lending book to a record £235 million – the 18th consecutive quarter of growth. Profit before tax also climbed by 10% to £4.3 million, with operational gearing contributing to a 1 percentage point improvement in PBT margins to 23%.
Cavendish’s Director of Research, Andrew Renton, noted: “Time has already achieved 51% of its FY26E PBT forecast by the halfway point, and trading momentum through December supports confidence in the full year being at least in line with expectations.”
Credit quality also improved, with secured lending now making up 87% of the book – up from 77% a year ago – while net arrears declined to 4.5% and net bad debt write-offs fell to 1.0%. Risk remains well-managed, with no single sector accounting for more than 12.5% of the lending book and the top ten sectors representing less than a third overall.
From a strategic perspective, the interim results mark a strong start to Time Finance’s three-year plan through to May 2028. The company is targeting a lending book of over £300 million, higher PBT margins in the mid-20s, and mid-teen returns on equity – all of which appear achievable based on current progress.
Andrew Renton emphasised: “The shares continue to offer material re-rating potential as Time targets lending book growth to over £300m, higher PBT margins and mid-teen returns on equity by the end of the current three-year plan in May 2028.”
Despite recent share price softness, Time Finance is currently trading at just 6.9x FY27E P/E and 0.8x tangible NAV, with Cavendish reiterating its Buy rating and target price of 112p, representing 113% upside from current levels.
Highlights from H1 2026 Results:
- Lending book: £235 million, +12% YoY
- Own-book origination: £62.6 million, +48% YoY
- Revenue: £18.8 million, +4% YoY
- PBT: £4.3 million, +10% YoY
- EPS: 3.5p, +7% YoY
- Secured lending: 87% of total book
- Net arrears: 4.5%, down 0.8pp
- Headroom in lending facilities: Over £90 million
Final Thoughts
Time Finance plc continues to demonstrate disciplined execution and strategic clarity. With strong first-half performance, a growing and secure lending base, and ample headroom for expansion, the business appears well-positioned to meet its medium-term targets. As UK interest rates are expected to ease further, the environment could become even more favourable for alternative finance providers like Time Finance.
