Although it was only last month that I caught up with again with Time Finance (TIME), given that the company released a Q3 Trading Update earlier this week, I thought it worth speaking with management again.
Despite continuing to perform strongly across all aspects of its business, the share price has frustratingly retraced from the twelve-month high of 66p.
Given that they currently sit at 52p which in turn continues to see the stock trading on a single digit PER, I thought it worthwhile opening with the question as to whether management were aware of any large sellers in the background.
CEO Ed Rimmer was happy to comment, expressing as much confusion and disappointment on this as echoed by those holding the shares.
CFO James Roberts echoed the sentiment adding “we are perhaps equally frustrated and slightly baffled as I’m sure a number of our shareholders are, because obviously we have put out positive updates, upping our expectations along with Director share purchases too.”
Roberts continued to say that obviously they had looked into the share more recent price activity, but it has not revealed any major share seller in the market.
“It appears to be almost all retail seller driven, as we have had no notifications of selling from our three major holders where we have spoken to them all and they remain very supportive.
Arena, our largest shareholder has been equally perplexed, so we are not aware of any of those three major’s selling off and nobody else has a particularly large stake, so it does seem to be large scale retail sellers, who perhaps thought there was bad news coming.”
CEO Rimmer also commented that whilst they don’t frequent bulletin board’s they are aware from time to time of specific posts, on which he commented that one in particular had posted the wrong figures relating to a specific aspect.
Of course, bulletin boards can be worthy and interesting forums to visit, although as many will know and can testify, selection and large amounts of salt pinching are prerequisites when embarking on engagement.
Of course, whilst short term share price movements can occupy the mind and often too much, it is perhaps more important to focus on the business itself, which remains in rude health.
The numbers speak for themselves, with revenue for the nine-month period for full year 2025 increasing by 14% year-on-year to £27.3m. This in turn, has resulted in pre-tax profit jumping by a significant 40% to £5.9m, which is impressive to say the least.
Speaking of the performance, Rimmer said that “we were pleased with January and February particularly, as they tend to be a bit quieter after the Christmas period, so they have been pretty good. The same looks like it is going to apply to March as well and we then go into what is normally a better period as things tend to get going.
With January and February performing better than what we have seen in the past, we are pleased with that.
We are now obviously coming into our fourth quarter, with March almost done moving into April and May which will see us at our year end again. So, we are pretty positive with what is in front of us in terms of the pipeline and the demand of the products we offer.”
One key aspect across the business and one that can prove to be a challenge is that of arrears, which fortunately to date for TIME, has seen very positive management within this segment.
“We are reasonably pleased with that as well” Rimmer said, “because we have maintained that at a level, as we have been growing the business in an environment that has been getting harder.”
He also added that whilst there are always challenges with businesses that struggle or go out of business, it comes as part of their own territory, so they are very much all hands-on deck in maintaining an acceptable level.
“We have got really good people and processes in place and third parties that help us do that as well and those relationships are well trodden.”
Although the climate understandably remains difficult, TIME has already proved that it can outperform and deliver and Rimmer emphasises that there remain opportunities, particularly with new business openings.
Having now delivered on its previous four-year plan, TIME is now moving into its next phase of growth, to further drive the business forwards.
On this front, the CEO stressed that in terms of the growth message it is still seeing a focus on the two key divisions, invoice finance/ asset based lending which present further opportunities, particularly in new geographic arears which is seeing the sales team beefed up.
In terms of asset finance, Rimmer added, “our broker business has really been the mainstay of our distribution channel over the four-year period and we have really only started to develop a direct business in the last six months, so that is a third opportunity to grow that business.
This effectively is saying that we aren’t abandoning the broker market whatsoever as it is still going to be the mainstay of what we do, but there are development managers out there that are highly experienced who don’t need to rely on the brokers.”
This, he said, provides the ability to shape or refine the deals in a more positive way for the company, which then plays into the multi-product offering, thus providing more financial solutions as opposed to just those of a transaction nature.
Another key aspect of the next phase is that of business improvement, which translates into growing in a more efficient way and Rimmer said that this is already pleasingly taking shape.
There is also a new system going in at the moment, which he said is on track and is related to the front office, being focused specifically on asset finance and that has already been launched.
This should allow the company to further grow without the need to increase headcount, whilst there is also another project on the go in relation to data improvement and that should provide assistance on both risk and cross selling.
Last, but certainly not least, Rimmer added that there are around another dozen initiatives simmering in the background which they will get going in the next twelve to twenty-four months and they see those as further fueling the business and the growth path.
More recently, TIME has concluded on larger deals and that is clearly an ongoing aspect of the strategy, although the CEO once again emphasised that it will not take them into any uncomfortable area such as an overreach, which sounds prudent.
Having previously upgraded on numbers and now delivered excellent figures for the nine-month period, it would appear feasible that in what is historically a positive three-month end period that TIME could perhaps upgrade once again.
Rimmer was happy to comment, saying that they like to be a little bit cautious and build credibility rather than the other way round as they certainly do not want to over promise and under perform.
With that in mind, he was happy to say that he doesn’t believe there will be another upgrade before the year end, given there are only two months left.
Roberts also commented, further stressing the importance of under promising and over delivering, adding at the same time that they remain cautiously optimistic on the year end.
Whilst echoing Rimmer’s thoughts on any potential additional year end upgrade, whilst concurring he also added that it isn’t completely out of the question, if those last months come in strongly.
Either way, there is surely little doubt that TIME is well placed to continue to deliver going forwards with a number of internal initiatives set to flow through and support further ongoing organic growth.
Other aspects of the business also worth touching on are both dividends and acquisitions, which are areas I have visited with management before.
To this end, Rimmer said that the policy remains the same as in our previous discussions, in that whilst they still have that drive for increasing the sales team and utilising money into ongoing growth, dividends remain on the back burner.
On a personal level and from a shareholder perspective, any dividend would likely be small or arguably regarded as a token gesture, so I embrace the ongoing continuation of ploughing the money into the business.
As for potential acquisitions, the CEO said that they are interested in doing that, but there aren’t a whole host of deals that are waiting to be done. “They normally come along because businesses get into trouble or there is a retirement sale, but we are keen and interested to get into that as and when they come up, but they would have to be right for us.”
As things stand, broker Cavendish is forecasting a full year 2025 outcome of £36m in revenue, with a PBT of £7.5m giving EPS of 6.3p. This moves to £37m in revenue next year with PBT increasing to £8.1m and 6.8p in EPS.
This sees the stock trading on a forward PE of under 8, which whilst already looking very good value, could prove to be markedly cheap, if TIME can continue to move the dial with another upgrade, or an earnings enhancing acquisition.
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