Time Finance plc, the AIM listed independent specialist finance provider, today announces its unaudited interim results for the six-months ended 30 November 2022 (“Results” or “Interims”). The Interims reflect the success of the Group’s own-book lending strategy and its focus on core lending products to UK SMEs, resulting in the Lending Book reaching an all-time high of over £150m at the period end.
Financial Highlights:
· Own-Book lending origination up 27% to £36.6m during H1 2022/23 (H1 2021/22: £28.9m)
· Gross lending-book up 27% to £152.7m as at 30 November 2022 (30 November 2021: £120.5m)
· Revenue up 12% to £13.2m (H1 2021/22: £11.8m)
· Profit before Tax (“PBT”) up 67% to £2.0m (H1 2021/22: £1.2m)
· Net deals in arrears reduced to 6% of the gross lending book as at 30 November 2022 (30 November 2021: 9%)
· Net Assets up 3% to £59.7m as at 30 November 2022 (30 November 2022: £58.2m)
· Net Tangible Assets up 8% to £32.1 as at 30 November 2022 (30 November 2021: £29.6m)
· Strong visibility of future earnings with unearned income up 32% to £18.9m as at 30 November 2022 (30 November 2022: £14.3m)
· Earnings Per Share up 62% to 1.73 pence per share (H1 2021/22: 1.07pps)
· Continued positive trading momentum throughout December 2022 gives the Board confidence that full year trading will be significantly ahead of market expectations[1], with PBT for the full year now expected to be not less than £3.2m
Commenting on the Interim Results, Tanya Raynes, Non-Executive Chair, said:
“These Interims demonstrate the successful implementation of our stated strategy of being an own-book lender focussed on our three core Business to Business activities. Significant growth in the period has been achieved whilst maintaining our margin, controlling credit and spreading risk as UK businesses continue to value our focus on customer service and our multi-product funding solutions. The Board is committed to further increasing shareholder value through the stated strategy and, despite the current wider macro-economic headwinds, looks forward to the second half of the financial year with cautious optimism.”
CHIEF EXECUTIVE OFFICER’S STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 30 NOVEMBER 2022
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 three core, own-book divisions – Asset, Loan 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.
Financial Results
I am extremely pleased to report this set of Interim financial results with good progress, both strategically and financially, having been made in the first half of the financial year.
Own-Book deal origination is a key performance indicator for the Group. Pleasingly, in the six-month period to 30 November, this origination amounted to £36.7m, an increase of 27% when compared to the six months to 30 November 2021. This increase has helped contribute to the Group’s gross lending book growing to record highs. As at 30 November 2022 it stood at £152.7m compared to £120.5m twelve months earlier. 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.
It is also encouraging to see that all the key metrics on the Profit and Loss account – Revenue, Gross Profit and Profit Before Tax – show growth from both the preceding six-month period to 31 May 2022 and the six-month comparative period to 30 November 2021. This demonstrates the medium-term strategy that was introduced in June 2021 is gathering pace. Given the compound nature of the Asset and Loan finance businesses, all other things being equal, this gives the board confidence for the future.
With regard to the Group’s Balance Sheet, the quality of the lending portfolio is another key performance indicator and focus of the Board. It is extremely pleasing, therefore, to report a continuing reduction in the value of arrears despite the significant growth in the lending book over the period under review. As at 30 November 2022, net arrears had reduced a further £0.6m from the financial year-end, and stood £1.8m lower than as at 30 November 2021. Total net arrears equated to 6% of the period-end gross lending book as at 30 November 2022 (31 May 2022: 6%; 30 November 2021: 9%).
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. Net Tangible Assets stood at £32.1m as at 30 November 2022 compared to £29.5m as at 31 May 2022, an increase of 9%
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 improved IT infrastructure to enable the business to scale more easily and maximising our multi-product offering – continues apace.
Taking into account the wider macro-economic and geo-political concerns, 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. The strategic plan remains on-track and the Group has continually shown its operational resilience, balance sheet strength and liquidity throughout.
Furthermore, 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 now be ahead of current market expectations, with Profit Before Tax of at least £3.2m
Ed Rimmer
Chief Executive Officer, Time Finance plc
[1] FY2023 market expectations at the time of publication of £25.0m of revenue and £2.8m of PBT
