Time Finance - excellent Interims show shares too cheap to ignore at 53p, TP 112p

This morning Time Finance (LON:TIME) has reported strong interim results for the six months to end-November 2025, with own-book new business origination up 48% to £62.6m and a record gross lending book of £235.3m.

Revenue increased by 4% to £18.8m, and profit before tax rose 10% to £4.3m, with a PBT margin of 23%.

Earnings per share grew 7% to 3.47p, and net assets increased by 9% to £75.0m.

The company also saw a reduction in net deals in arrears to 4.5% and net bad debt write-offs to 1.0%, indicating improved portfolio quality.

The outlook remains positive, with the board confident that full-year trading will be at least in line with market expectations.

The Business

Time Finance's purpose is to help UK businesses thrive and survive through the provision of flexible funding facilities.

It offers a multi-product range for SMEs, primarily concentrating on Asset Finance, Invoice Finance and Secured Loans.

While focused on being an 'own-book' lender, the Group does retain the ability to broker-on deals where appropriate, enabling it to optimise business levels through market and economic cycles.

Outlook

Continued positive trading momentum throughout December 2025 underpins significant Board confidence that trading for the current financial year to end-May 2026 will be at least in line with market expectations.

Management Comment

Non-Executive Chair Tanya Raynes stated that:

"The first six months trading of FY2025/26 mark a solid financial performance and strong start in terms of delivery against our current strategic plan through to May 2028, with robust demand from UK SMEs helping to drive the Lending Book to record highs.

While Revenues continue to grow, the focus on efficiencies has resulted in growth in both margins, Profits and EPS.

Net Tangible Assets are at an all-time high; cash reserves and funding sources remain healthy; while arrears and write-offs have both fallen, reflecting the strong credit controls in place across the Group.

The Board, therefore, feel confident that the Group remains well positioned to deliver further long-term growth and increased value to the Company's shareholders."

Broker View

Analyst Andrew Renton, at Cavendish Capital Markets, rates the shares as a Buy, with a Target Price of 112p.

He goes for the current year to end-May revenue of £38.5m (£37.1m), with adjusted pre-tax profits of £8.6m (£8.0m), lifting earnings to 7.0p (6.5p) per share.

For the coming year, he looks for £40.6m revenue, £9.5m profits and 7.7p of earnings per share.

Renton states that:

"Trading on a FY27E basic P/E of just 6.9x and 0.8x tangible NAV, the shares continue to offer material re-rating potential as Time targets lending book growth to over £300m, higher PBT margins and mid-teen returns on equity by the end of the current three-year plan in May 2028."

My View

This group's shares at 53p still look to me to be too cheap.

It is a well-run business and operating good controls.

As I have said before – they are too cheap to ignore.

(Profile 23.12.20 @ 21.50p set a Target Price of 30p*)

(Profile 07.01.22 @ 23.50p set a Target Price of 30p*)

(Profile 20.11.23 @ 32.50p set a Target Price of 40p*)