TIME IS MARCHING ON - 03/02/26

Last week, Time Finance released its interim results for the first half of financial year 2026, once again highlighting the steady progress being made across the business. Following the update, I caught up with management to gain further insight into the recent performance and outlook ahead.

Regular readers will know that there is already extensive coverage of the company on this blog, but for those new to the story, Time Finance operates in the UK SME market, providing asset finance, invoice finance, and asset-based lending.

In recent years, the company has made meaningful strides, and the latest results suggest that trend remains firmly intact.

With consistent book growth, improving profitability, and a strengthening balance sheet, TIME is increasingly taking on the characteristics of an emerging compounder that still appears to be underappreciated by the wider market.

The results revealed record revenue, with own-book origination increasing 48% year-on-year to £62.6m.

This, in turn, supported a 12% YoY rise in the lending book to a record £235m. Profit before tax moved to £4.3m, leaving the company well on track to meet its full-year forecast of £8.4m, particularly as it has already achieved 51% of the anticipated figure.

Importantly, this growth continues to be delivered in a measured and controlled manner, rather than at the expense of balance sheet quality. This disciplined approach remains a central pillar of the investment case and differentiates TIME from many smaller lenders that have historically struggled to scale profitably.

Having previously embarked on and successfully completed a four-year programme of development, the company is now well advanced in the next phase of its strategy, designed to further drive growth.

Despite what remains a challenging economic backdrop, TIME has continued to make excellent progress, which made me keen to hear more about how management views the competitive landscape.

Commenting on this, CEO Ed Rimmer noted that competition has always been a significant feature of the industry, particularly from fintech lenders and online platforms.

“They have disrupted some of the smaller deals,” he explained, “where businesses just want £20k–£30k quite quickly and they can get that online. So, it has had a bit of an impact at the smaller end, but we tend to focus on £50k and above in the invoice funding space.”

There is, of course, also competition at the upper end of the market, particularly from challenger banks and independent lenders, with traditional banks now playing a more limited role.

“I don’t think the mainstream banks are coming back into our space,” said Ed. “When they talk about SMEs, they tend to be referring to larger businesses, so they are quite happy to fund us and let us do the work with smaller companies.”

Expanding on this point, Ed referred to recent news regarding Lloyds, which is now exiting invoice factoring and invoice finance services for small and medium-sized businesses. This follows similar moves by HSBC and Barclays, which have already withdrawn from much of this segment.

The result is a market that remains substantial and, arguably, increasingly attractive for specialist operators such as Time.

As larger institutions continue to retrench, the company appears well positioned to consolidate its presence and capture a growing share of this underserved segment.

One key aspect of the business that both existing and prospective investors understandably focus on is the level of bad debts and arrears.

Here, TIME continues to demonstrate strong operational discipline. Arrears fell 0.8pp to 4.5%, while net bad debt write-offs reduced 0.2pp to 1.0% of the lending book, which further underlines the strength of the operation.

To gain further insight into how management maintains this level of control, I asked Ed to provide some additional colour.

“It is a mix of people and different systems really,” he explained, “but we are never going to move to systems that are completely automated… Generally, it is people and having a real hands-on approach and making sure we are very much up to date on trends.”

He also highlighted the development of the company’s own data warehouse, which should further improve portfolio visibility and risk management.

Taken together, this combination of experienced staff, improving data infrastructure, and active monitoring helps explain why TIME has been able to grow while keeping credit losses firmly in check.

Over the cycle, this capability is likely to remain a key competitive advantage and having now demonstrated sustained growth and rising profitability, TIME’s cash position has also been steadily building.

Net cash is forecast to close the financial year at £7m, rising to £10m next year. Inevitably, this raises the recurring question of whether a dividend may be on the horizon.

Although this has been discussed in previous meetings, Ed confirmed that the board continues to prioritise reinvestment in growth.

“The priorities are to continue growing those two core businesses of asset and invoice finance… and it is mainly organic growth which is under our control.”

From this investor’s perspective, it remains a sensible approach at this stage of the journey.

Given the returns currently being generated on incremental capital, retaining cash to fund expansion arguably offers superior long-term value creation.

CFO James Roberts also emphasised that TIME puts in between 10%–20% of equity into every lend they do, so if they were to pay a reasonably big dividend, this would then translate into a slowing of growth.

In that context, he added that any dividend would effectively be pretty small, which from the board’s perspective tilts the argument in favour of the existing growth policy.

Alongside the organic growth, management is also focused on building out the multi-product offering.

Ed noted that in the first half alone, they generated as much business from multi-product clients as in the whole of last year.

“We see that as a differentiator… where we can join up offering one client the invoice, asset and loan finance.”

This increasingly integrated offering should help deepen client relationships, improve retention, and enhance lifetime value, further reinforcing the group’s competitive position.

While acquisitions remain a potential avenue for growth, management appears in no rush.

“We will look at acquisitions, but… we are only seven months into the new three-year plan.

And while we know lots of corporate financiers that do bring those deals to people when they come up, we haven’t seen any clear opportunities in the first half of the year yet. That may be something we turn our attention to more proactively in the second year of the plan.”

This measured stance is consistent with the company’s broader philosophy of prioritising sustainable returns over rapid expansion.

Overall, these interim results reinforce the view that Time Finance continues to execute well on its long-term strategy. The combination of double-digit book growth, improving credit metrics, rising cash generation, and a favourable competitive backdrop provides a solid foundation for continued compounding.

While the SME lending market is not without risks—particularly in a weaker economic environment—TIME’s track record of disciplined underwriting and operational control offers a degree of reassurance.

At this stage, the company appears to be quietly building a high-quality, scalable lending platform, and one that still seems to be flying somewhat under the radar.

Sure, there are risks, as with all businesses and sectors, and here it really boils down to, at one end, overexpansion risk, and recessionary and default spikes at the other.

That said, management has been extremely open in our various catch-ups, acknowledging a difficult backdrop which has been the case for some years now.

Looking at the current broker forecasts, Cavendish is expecting full year 2026 to deliver revenue of £38.5m, giving PBT of £8.4m with basic EPS of 6.8p.

At the current price of 51p, the shares trade on a PE of just 7.5, which falls to 6.7 on next year’s numbers, which looks too cheap given peers are trading on 10–12x.

And given the company has already stated that it will at least deliver in-line results and is continuing to trade well on all metrics, then it is feasible that another upgrade could be coming down the line.

Management rightly remains cautious here, but equally there appears to be a concerted effort to drive the business further forwards and to scale.