It is now just over two years since I first bought into TIME Finance, which subsequently resulted in my first catch up call with the management.
Suffice to say, that thus far the picture and the strategy that was laid out to me back then has played out every bit and even better than was painted, which has proved to be highly rewarding.
Indeed, the shares have risen considerably from the then, 22p to a current 60p, but have actually been higher than that, having hit 66p at one point.
Last week, TIME delivered its Interim Results for the financial year 2025, which made for very positive reading and in my view, leaves the door open for a continuation on the upgrade front.
Pleased to say that I once more had the opportunity to catch up with both CEO Ed Rimmer along with CFO James Roberts, to hear more on what continues to be a rewarding and evolving story.
Firstly, a run through the numbers, which saw the momentum that has been building continuing, with revenues increasing by 16% for the period to £18.2m which translated into a pre-tax-profit of £3.9m, that being well up on the prior year’s £2.7m.
Impressively, the gross lending book hit a record £209m as the previously laid out strategy continues to deliver and where operational gearing drives the increasing scale and profitability.
Rimmer, who is always engaging and clearly values the private investor interest, was happy to speak again and build out a little more as to what has been happening and is continuing to play out on the strategic path.
Commenting, he said, “I think that the growth really has come through the progress we have made over the last couple of years.
The nature of the business has seen us build the lending book and the income flows through to the bottom line as well, as long as we also get the bad debts right too.
It really isn’t just about the last few months of course, but the last two or three years and the progress we have made there.”
Going further Rimmer said that there had been an accumulative effect on leases and loans and the invoice financing that stays with them and generates a lot of the future income.
Having said that, he also added, “we have continued to build the book and obviously that bodes well for the future of the business.
There was a little bit of a slowdown around the October budget which obviously affected a lot of people then as they sat on their hands.
But, it picked up again in the latter part of November and we have seen a good pick up towards the end of January, so we have actually got a decent pipeline of business at the moment.
We like to think that we have positioned TIME well for the opportunities that come up and the market has obviously been a bit more conducive to alternative lenders, as the Banks have continued to retrench and become more internally focused.”
That would appear to continue to bode well for TIME and its organic growth strategy where the withdrawal from the space by a major name is already providing the company with opportunities as Rimmer explained.
“ABN Amro who is a major player in the invoice financing space decided to exit the market towards the end of November and that has presented a few opportunities as well, as their customers seek out new arrangements.”
Whilst there are things like that going on, Rimmer also added that despite the underlying economy continuing to prove challenging, the climate actually plays to their strengths and positioning.
Having already demonstrated an ability to deliver, there appears to be scope for an extension of its footprint, where in a previous conversation with management, we touched upon TIME’s expanding into other areas across the UK, where they previously had no presence.
Filling me in further on this, Rimmer said that going back a bit they had embarked upon expanding the invoice financing team, which whilst it had seen some comings and goings of sales people involved, it had increased and expanded.
Most recently a new appointment has been made in London and that person is, Rimmer said, very much focused on slightly bigger deals.
There are however still those geographical gaps in the UK that TIME can fill and the CEO adds that they certainly aren’t up to capacity yet and there is more scope for growth, particularly across that invoice financing space.
This, I was told, is very much a part of the plan for the future, in particular to further build out that aspect of the company’s offerings and which has been performing well.
One concern investor’s will always have though in the case of businesses such as TIME, is the exposure to arrears or bad debts, so it was natural that I revisited this point.
CFO Roberts, was happy to enlighten me further on this, where he said that having come out of Covid, the last few years has seen them getting the number on arrears down to the 5% level which appears to me to have been a commendable performance, given the prevailing economic climate.
Whether that will carry on forever is obviously a hard call and an understandably difficult one to address, but Roberts said that whilst you can’t predict that it will drop to say 3 or 2% as clearly some things will go wrong, he nevertheless sounds a confident enough note on this aspect where they believe that they can keep it in that 5% range.
Commenting further on this, the CFO said, “we are not in a race to the bottom and growing the book just for the sake of growing it and we are very conscious of keeping the quality.”
Sure and steady are words that are also mentioned, with a reference to a close eye being applied to deals and the customers as a key integral part of the ongoing plan.
“We try and tread that middle ground and stick to our credit policy and we get a lot of security on the deals too, so we are pretty confident on maintaining that 4 to 5 or 6% range on arrears and if we do that, our numbers will flow through to ever more profit.”
Having delivered according to its strategic plan over the last few years, TIME is now moving into the next phase of its growth journey where a key aspect is to continue to strengthen the balance sheet through its own-book lending.
With Net Tangible Assets at a record high of circa £41.5m the company is continuing to build and importantly has the firepower in place to meet and deliver on its aims.
Looking at the forecast numbers from Cavendish, it is surely conceivable that there could be another upgrade on the cards, particularly in light of the first half numbers delivered which proved impressive.
TIME has stated that it is on track to at least deliver on the full year expectations, which sees the broker looking for revenue of £35.1m delivering an adj £7.5m PBT with adj EPS of 6.1p.
Looking ahead to next year, the same broker cites revenue at £37m with adj PBT of £8.3m as the EPS is expected to increase to 6.8p.
On that basis, which could prove conservative, the shares trade on a forward PE (2026 numbers) of under 9, which for a growing business continues to look attractive to this investor.
Net cash, which is forecast to come in at £5m for the current full year is then expected to increase sharply to £8m, that could open the door to dividends, which is an area that the board continues to monitor in line with balancing for reinvestment into the business.
Comments