Time Finance stronger balance sheet and improved cash position

Time Finance plc

Time Finance plc (LON:TIME), the AIM listed independent specialist finance provider, has announced its final results for the year ended 31 May 2021. The Company is pleased to report a satisfactory performance despite the continued impact of the Covid-19 pandemic on trading throughout the financial year.

Despite the wider macroeconomic effects of the pandemic, the Group has remained profitable throughout, demonstrating its resilient and diversified lending book, a strengthened balance sheet and greatly improved liquidity. Furthermore, trading activity in the first quarter of the current financial year is also steadily increasing.

Commenting on the results, John Newman, Non-executive Chairman of Time Finance, said:

“The Group’s unbroken record of year-on-year growth in revenue and profits since 2015 was severely impaired by the Covid-19 pandemic. Over a four-year period the Group’s “buy and build” strategy achieved almost a six-fold increase in revenue, five-fold increase in PBT and 100% growth in earnings per share. The Board and senior management team are determined that the Group returns to this level of performance and believe that the strength of our business model and the support of our colleagues throughout the Group provide the resources for this to be achieved over the next few years. Together with a stronger balance sheet and greater cash resources, the Board has confidence in the future development of the Group as a non-bank alternative provider of finance to UK SMEs”

Financial Highlights:

• Revenue for the year of £24.2m (2020: £29.2m), a decrease of 17%

• Profit Before Tax, Exceptional Items and Share-Based Payments for the year of £3.1m (2020:   £3.0m), an increase of 3%

• Earnings per share of 1.98 pence per share (2020: 1.76 pence) an increase of 13%

• Consolidated Net Assets at 31 May 2021 of £57.1m (2020: £55.2m), an increase of 3%

• Consolidated Net Tangible Assets at 31 May 2021 of £28.4m (2020: £26.5m), an increase of 7%

• Cash, Cash Equivalents and Convertible “paper” of £11.3m (2020: £1.4m)

• Good visibility on future earnings with unearned income of £14.9m (2020: £15.2m)

• Blended cost of borrowings maintained at approximately 4% (2020: 4%)

• Consistent write-off levels despite the continued impact of the pandemic with net write-offs in the year of 1.6% of the year-end gross portfolio (2020: approximately 1.3%)

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• Deals in forbearance at 31 May 2021 of £0.8m (31 May 2020: £24.3m), a decrease of 97%

• Deals in arrears at 31 May 2021 fell by 33% from 31 May 2020 levels, to below pre-pandemic level

• Credit risk provision at 31 May 2021 prudently held at £5.2m (2020: £5.1m)

Operational Highlights:

• Board restructured and strengthened with the appointment of Ed Rimmer as CEO and Tanya Raynes as Non-Executive Director

• Group-wide rebrand to Time Finance completed, bringing the Group under a single, national brand

• Government-backed accreditations from The British Business Bank to provide both Coronavirus Business Interruption Loan Scheme (“CBILS”) and Recovery Loan Scheme (“RLS”) to UK SMEs

• Continual focus on diversification and spread of risk, with largest sector exposure accounting for approximately 5% and the top ten sectors less than 25% of the total lending book at 31 May 2021

• Since 31 May 2020 the Group has been recognised in London Stock Exchange Group’s ‘1000 Companies to Inspire Britain’ report, been awarded ‘Employer of The Year’ in the Business Leader Awards and nominated in the SME Funding Awards

• New business origination for the financial year was £103m (2019: £147m), a decrease of 30% attributable to the impact of the pandemic with the most significant driver of the reduction being brokered-on vehicle finance

Ed Rimmer, Time Finance Chief Executive Officer, added:

“Time Finance is well positioned to take advantage of the post-Covid recovery and is pursuing a clearly defined growth strategy. Fresh ideas are being brought into the organisation and the Group is being repositioned under the Time Finance brand as a multi-product provider of lending facilities to SMEs, focusing on core own-book lending. Market conditions remain challenging as the overhang of government funding initiatives is still apparent; however, it is likely that demand for finance will increase again through the course of our financial year. We therefore look forward with a sense of cautious optimism.”

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