Time Finance plc: Interim Results
Positive trading momentum continues; Balance Sheet further strengthened
Time Finance plc (formerly ‘1pm plc’), the AIM listed independent specialist finance provider, is pleased to announce its unaudited interim results for the six-month period ended 30 November 2020 (“Results” or “Interims”).
The results reflect increasing demand for finance, month-on-month, from UK SMEs and consumers as the Group continues to deal with the impact of the Covid-19 pandemic. The Group’s balance sheet and lending book have both remained robust, demonstrating their resilience and reflecting the Group’s prudent underwriting policies. These policies are kept under regular review given the uncertainty that currently exists in the wider macro-economic environment. The Group’s ability to continue to generate profits during the period highlights the strength of its multi-product offering of asset finance, vehicle finance, loans and invoice finance. The flexibility afforded by the Group’s ‘hybrid’ business model enables the Group to act as both a funder and a broker in order to maintain both margins and manage credit risk throughout the economic cycle.
Operational Highlights:
- Completion of group-wide rebrand to Time Finance plc to consolidate and strengthen the Group’s offering under a single nationally recognized, market-facing name
- Accreditation from the British Business Bank to provide Coronavirus Business Interruption Loan Scheme (“CBILS”) loans to UK SMEs
- Continued focus on diversification and spread of risk, with largest sector exposure accounting for less than 4% and top ten sectors less than 24% of the total lending book
- Agility to switch provision of finance to buoyant sectors during the Covid-19 pandemic
- “Employer of the Year 2020” Business Leader award winner and included in the London Stock Exchange plc’s 2020 “1000 Companies to Inspire Britain” report
Financial Highlights
- Own Book origination up to £29.6m from £23.9m in H2 2019/20 (H1 2019/20: £30.6m)
- Broked-on origination down to £27.0m from £35.2m in H2 2019/20 (H1 2019/20: £57.3m), due to the impact on trading activity of the pandemic
- Group revenue of £11.9m (H2 2019/20: £13.7m; H1 2019/20: £15.6m)
- Group operating profit before tax of £1.4m, up from a £1.0m loss in H2 2019/20 due to Covid-19, (H1 2019/20: £3.0m profit)
- Fully diluted earnings per share of 1.20 pence (full year 2019/20: 1.74 pence per share)
- Blended cost of borrowings maintained at approximately 4% (year to 31 May 2020: 4%)
- Good visibility of future revenue with “unearned income” as at 30 November 2020 of £16.5m (31 May 2020: £15.2m)
- Net ‘own-book’ lending portfolio increased to £105.6m as at 30 November 2020 (31 May 2020: £98.2m)
- Funding facilities of £170m available as at 30 November 2020 with headroom of £97m to leverage own cash generation for future organic growth (31 May 2020: £174m with headroom of £108m)
- Credit risk provisions maintained at £5.1m or approximately 5% of the net lending book
- Deal value in forbearance significantly reduced to £2.6m (31 May 2020: £24.9m)
- Deal arrears reduced by £6.1m as at 30 November 2020 from 31 May 2020 levels
- Net Assets increased to £56.6m as at 30 November 2020 (31 May 2020: £55.2m)
- Net Tangible Assets increased to £27.8m as at 30 November 2020 (31 May 2020: £26.5m)
Commenting on the Interim Results, John Newman, non-executive chairman, said:
“Given the impact of the Covid-19 pandemic on our business sector and the wider UK economy it is pleasing not only to have seen a steady and maintained improvement in trading during the six-month period to 30 November 2020, but also to report results that were ahead of our internal budget expectations for the period. The Group’s strategy of being a multi-product provider of finance to UK SMEs and consumers, spread across multiple business sectors, with the ability to act as both a funder and a broker, provides the Group with the resilience to withstand the challenges of difficult business environments. The Group has a strong balance sheet and liquidity and is well-positioned to deliver future growth and shareholder value as the economy recovers from the effects of the pandemic.
The Board has reassessed its dividend policy taking account of the potential impact of the latest national lockdown restrictions and also the uncertainty in business conditions and has taken the prudent decision to continue with the deferment of dividend payments until the outcome for the financial year ending 31 May 2021 is known.”
This announcement contains inside information for the purposes of article 7 of Regulation (EU) No 596/2014.
