TIME IS TICKING WELL - 26/09/25

 Time Finance (TIME) has been a regular feature here on the blog over the last few years, where my initial investment has delivered a very positive gain.

During that period, the company has announced positive and improving trading along with impressive results, which has seen the shares move from circa 20p to a current 57p.

As has appeared to become customary with the share price though, having once again delivered on the numbers and outlined continued positivity, the shares succumbed to some profit taking, although that arguably leaves something for the next person, given ongoing positive sentiment.

For anyone unfamiliar with the business, TIME is an independent provider of financial solutions to small and medium sized businesses across the UK.

This sees it offering services such as invoice and asset financing along with secured lending across a broad and varied spectrum of end customers and sectors.

Having just delivered its full year 2025 numbers along with an update on Q1 trading for the current financial year, the company has once again demonstrated the success of its model, with what has been a record year on the numbers front.

The company saw its lending book expanding significantly to £217m, which in turn drove revenues to £37m returning a PBT of £7.9m, the latter of which saw a 34% increase on the corresponding year.

In order to hear more on what has been happening and the prospects moving forwards, I have once again caught up with CEO Ed Rimmer and CFO James Roberts.

Speaking of the full year performance Rimmer commented, “the good progress that we previously reported on has continued, with no negative movements, so it’s all been positive”.

Going further, he touched on Q1, which no doubt investors will be keen to home in on.

“That is traditionally more challenging for us with summer in that, but we have been relatively pleased, so the progress in the first quarter has been good and trading to budget.

The focus is still very much on our core plan, where we have launched our new one, which is very much an evolution of the previous plan that was in place.”

That sounds very much like business as usual, but with a determination to deliver further on the back of the previously successful path that had been taken.

Rimmer went on to say that a number of new deals had been secured during the results period after having set themselves a target to achieve and they are very much where they want to be after the first quarter of the new financial year.

This focus has been across asset financing and loans which he says sees them joining up the products and the deals for their clients.

Margin growth is and has been focused on delivering on the back of the efficiency programme which Rimmer says has pleasingly progressed.

There is, I was told, also a new system launch towards the end of this calendar year, which should further help and assist in operational improvements into the second half of the year.    

Clearly, given a difficult economic backdrop, TIME has performed extremely well, so it was worth touching on the present climate that it has had to endure. “In terms of the market, there is nothing huge to report” Rimmer said, “it still has its challenges and there is increased insolvency, but that in turn creates opportunities for alternative lenders.

The plan continues and generally all is on track and although we could be described as being a bit boring by some as we aren’t a tech company, we are happy with that.”

Of course, investors here should also be happy and having delivered on the numbers over recent years where the backdrop has been difficult, then TIME looks set for further progress and provide for positive returns.  

With no single sector exceeding 15% of business and no client representing more than 2%, the spread for returns and mitigating downside looks comfortable and provides for growth opportunities.

With that in mind, I was keen to hear as to whether any specific areas had performed well, whilst equally, which were perhaps finding the headwinds more prevalent.

Commenting on this aspect Rimmer said, “transport and logistics is the biggest sector that we have got, accounting for around 15% and there is continuing demand for that and there is nothing out of the ordinary there as it tends to be one of the stronger sectors.

Construction has struggled a bit over the last year or two, although we don’t have much at all in the invoice financing space with that, it tends to be more the asset financing spot.

That relates to plant and equipment, so it has been more challenging, but then it goes in fits and starts.

Overall, there isn’t anything that really stands out in terms of doing very well and equally nothing that is doing very badly.”

Rimmer reiterated that the spread and diversification is a positive for the business and that the discipline installed will continue moving forwards.

Given the nature of its business and the ambitions laid out, it is always good to hear of new or larger deals that have been completed, which can provide investors with a flavour of continued momentum.

To this end, Rimmer was happy to expand, “we did a deal a couple of months ago in the first quarter, and that was with a third- generation furniture supplier which was an £800k invoice finance deal, but also an £800k secured loan aspect.”

This, I was informed, was a new customer and to support a restructuring of the business which amounted to quite a significant deal in its entirety.

Another highlighted by the CEO was a transaction to the hefty sum of £4.5m that was completed in June, but which actually involved twelve companies active in the care home sector.

They were actually all part of a particular care home group and it saw TIME stepping in as the group was in the process of moving away from a traditional bank in order to provide for more flexibility in their operations.

Rimmer said that whilst the client in question is not borrowing much at the current time, the structure is in place in what is a longer-term plan of its operations, which looks as though it could prove interesting.

The CEO also added that both deals are indicative of what TIME is about, as they aren’t standard deals and are effectively differentiators of the business to those offered by traditional banks or other competitors in the space.

This doesn’t imply an elevated level of risk, rather, it is understanding the customer intrinsically and the requirements they need with the flexibility to tailor an offering.

Rimmer confirmed that they certainly aren’t taking on different levels of risk and whilst some bad debts are unavoidable, TIME’s own screening mitigates the downside.

This is borne out by a consistent low level across arrears and write-offs, which remain stable at 5% and 1% and are what Rimmer describes as being at the smaller end and well spread.

On the back of the positive financial performance, it is not surprising to see net cash building, where it now stands at £4.7m and is forecast to hit £7m by the end of the current financial year.

With that in mind, I asked the question about the potential for the payment of a dividend to shareholders, which is an area that I was aware management does review periodically.

Rimmer, said that nothing had really changed on that and they were due to review the situation once again at the end of the calendar year and they will give it due consideration.

He concurred with my own view as a shareholder though that a dividend declaration could be perceived as being a token gesture as opposed to anything meaningful.

“A lot of our shareholders and the board are aligned in the sense that if you have got money available you should use that to grow the business and that is what we are trying to do" he added.

One final area worth touching on was the investor list in terms of Institutional representation along the continued presence of major holder Arena.

CFO Roberts, who incidentally has just purchased a further 11,400 shares in the company was happy to update me on this.

“There hasn’t been any change in our major shareholders, these are still Arena, GPIM and Ron Russell, but our main focus over the last couple of years has been on retail investors.

We felt this is where we should focus through our presentations and that continues at the moment.”

With regards to Arena, Roberts recapped that when they came on board it was largely opportunistically and that they didn’t really know them very well. However, they now have regular dialogue with them talking quite often and whilst Arena has been regarded as an activist investor elsewhere, the CFO added that they have been pretty passive in relation to TIME.

Looking ahead to the current full year 2026 forecasts, Cavendish is anticipating revenue of £38.5m providing for PBT of £8.6m which in turn would see adjusted EPS of 7p.

The company has already stated that it is on track to at least hit those numbers, which arguably leaves the door open for a continuation of an upgrade, as has been the case on a number of occasions over the last few years.

The shares at this morning’s price of 57p trade on a PE of just 8, which taken in conjunction with the anticipated £7m net cash, looks great value to me, hence I remain a holder of the stock.