Time Finance – next Tuesday’s Q3 Update should get the shares, now 50.50p, ticking higher, my 80p TP stays firmly in place, brokers TP still 112p

21.03.2025

I last featured this company six days before last Christmas, when its shares were 58p, with me calling them up to 80p in due course, while looking at a broker’s Target Price of 112p.

Since then, they have been up to 66.89p but also as low as 47p.

So not quite the performance that I was anticipating – however, I have no worries about its shares, and I still look for them to stride forward.

Less than a month ago Time Finance (LON:TIME), the alternative finance provider, put out a Trading Update following its shares having fallen to that 47p level on the back of some 4,187,209 shares having been traded in the £50m-capitalised group.

The slump in price was quick and has still not been explained in the market.

The Business

The £46.7m-capitalised Bath-based group helps UK businesses to 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 Trading Update - 27th February

The independent specialist finance provider declared that it had continued to enjoy positive trading momentum throughout the first nine months of its 2024/25 financial year.

That positive momentum reported for the year-to-date included record revenues, a series of fifteen consecutive quarters of lending book growth, and that its loan book ‘arrears’ remained well-controlled.

The group’s Board stated that it was confident that performance for FY25 will be ahead of the then current market expectations, which were previously raised under market guidance in November 2024.

After that guidance it was expected to report some £35.1m of group revenues and around £7.2m of pre-tax profits.

With the late February announcement, the group uplifted its previous guidance by noting that following its continued strong performance, expectations should now be for around £36.0m revenues and £7.5m pre-tax profits.

Analyst View

Director of Research, Andrew Renton, at Cavendish Capital Markets, rates the shares as a Buy, looking for 112p as his Target Price.

After the late February Trading Update, he upgraded his current year estimates to show total revenues for the year to end-May 2025 will be some £36.0m (2024 -£33.2m), with adjusted pre-tax profits of £7.8m (£6.0m), lifting earnings to 6.3p (4.9p) per share.

For the year to end-May 2026 he now looks for £37.0m revenues, £8.3m profits and 6.8p per share in earnings.

In My View

Investors should note that, taking advantage of the share price dip, four of the group’s directors were buyers of the shares at up to 55p following the Update.

The shares of Time Finance, now 50.50p, are ready to move back up to trade the 60p/70p range, and that move could well be helped by next Tuesday’s Q3 Trading Update news.

Time Finance supported a sausage maker

My 80p price objective remains steadfast.