Today I follow-up on an old favourite of mine, Time Finance (LON:TIME), after yesterday’s Final Results for the year to end May.
Revenue for the year was £33.2m, a 20% increase of £5.6m year-on-year, while the pre-tax profit was £5.9m, a significant uplift on the previous year (£4.2m).
Chair Tanya Raynes stated that:
"The Group's financial performance, over the third year of our four-year strategy, was particularly strong.
Despite wider macro-economic headwinds, revenue, profit and earnings per share all saw double-digit growth, with revenue and profit ahead of market expectations.
At the same time, the Group's Balance Sheet has continued to strengthen with the lending book and Net Tangible Assets hitting record highs at 31st May 2024 and growing further still through the current financial year.
The Business
Time Finance considers that its purpose is to help UK businesses thrive and survive through the provision of flexible funding facilities.
It offers a multi-product range for SMEs concentrating on Asset, Loan and Invoice Finance.
While focussed on being an 'own-book' lender, the group does retain the ability to ‘broke-on’ deals where appropriate, enabling it to optimise business levels through market and economic cycles.
The company is recognised as an alternative finance provider offering highly relevant and flexible business finance products for a diverse and expanding base of UK SMEs.
Outlook
Amidst the turmoil of the external economic and political environment, the group’s financial results for the year were above initial expectations, leaving it confident that of delivering another strong outcome.
The strength of the balance sheet, together with its liquidity in the form of available operational debt facilities for lending and cash held, ensures that it is well-placed to take advantage of future opportunities over the short-to-medium term.
CEO Ed Rimmer stated that:
“Both from a financial and operational perspective I am very pleased with the performance of the Group.
Great strides forwards have been taken in both of our core divisions - Asset Finance and Invoice Finance - which have seen significant increases in their lending books while, crucially, adhering to strong portfolio management and control.
Our brand has continued to grow and be enhanced within our key introducer base and the focus on recruiting high-calibre staff has continued.
The Group, therefore, remains very well positioned and there is real optimism in our ability to continue to increase shareholder value.
With the changes made over the last three years to the business, including the people tasked with delivering our strategy, and the work we are doing to deliver growth in a more efficient way, I am confident we will continue to see the business deliver shareholder value.”
Analyst View
At Cavendish Capital Markets, its analyst Andrew Renton is estimating that the current year to end-May 2025 will show total revenues of £34.5m (£33.2m), while adjusted pre-tax profits could increase to £7.2m (£6.0m), lifting earnings to 5.8p (4.9p) per share.
For the following year he sees £37.0m revenues, £8.3m profits and earnings of 6.8p per share.
He is very confident that his estimates will be achieved and, accordingly, he has increased his Price Objective to 112p (71p) per share.
In My View
This £50m capitalised group’s shares are trading at only 54p, which I consider to be a ‘giveaway price’ and one not to be missed.
(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)
(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)
(Profile 20.11.23 @ 32.5p set a Target Price of 40p*)
Comments