Time Finance – Trading Update shows sixteen quarters of growth, deserving a much higher rating, shares 61.50p, TP 112p

Mark Watson-Mitchell
4 hours ago
2 min read

26.06.2025

This morning’s Trading Update from Time Finance (LON:TIME) shows record revenues and a growing lending-book.

The trading update for the year to end-May 2025 reflects the continued success of the group focussing on own-book lending to UK businesses, with demand remaining strong for the group's multi-product funding offering.

That demand has driven further growth across all key financial metrics with both revenue and profitability ahead of market expectations and the lending book having now enjoyed 16 consecutive quarters of growth.

This is all while the group's continued lending discipline has delivered unchanged levels of arrears and write-offs.

Revenues for the last year are guided 11% better to £37.0m (£33.2m), with pre-tax profits up 34% at £7.9m (£5.9m).

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 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.

Management Comment

CEO Ed Rimmer stated that:

"31st May 2025 saw the end of the four-year strategy that we commenced in June of 2021.

We can look back with great satisfaction on a period of strong delivery.

The business ends the year having enjoyed record revenues, improved margins and with an ever-growing lending book as UK SMEs take advantage of our multi-product offering.

This has been achieved without the lowering of our credit quality as demonstrated by the consistent and stable nature of both our arrears and our net write-offs.

As we now enter our new three-year growth plan through to May 2028, the Board is confident that the Group remains strongly positioned to continue its success and build long-term value for all our shareholders."

Broker’s View

Analyst Andrew Renton, at Cavendish Capital Markets, has maintained his Buy rating on the group’s shares, with a 112p Target Price.

For the yerar to the end of May 2025 his estimates are for £37.0m(£33.2m) of revenues, with adjusted pre-tax profits of £8.0m (£6.0m), and earnings of 6.5p (4.9p) per share.

For the current year that is now underway he goes for £38.5m revenues, £8.6m profits, and 7.0p per share in earnings.

He states that these results conclude the end of the group’s four-year strategy and highlights the success of the group’s strategic pivot towards its own-book, secured lending, with a particular focus on Invoice Finance and the Hard Asset component of Asset Finance.

He reckons that Time Finance has bolstered its funding capacity to over £90m in facility headroom, positioning it well for further growth as it begins executing on its new three-year plan to FY28E.

This will see the lending book grow by around a further 50%, with arrears remaining stable, PBT margins increasing to the mid-twenties and RoTE increasing to c.15%.

My View

I remain a fan of Time Finance and consider that its shares at just 61.50p look too cheap to ignore.