TIDMTIME

RNS Number : 8988N

Time Finance PLC

26 January 2023

26 January 2023

Time Finance plc

(the "Group" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHSED 30 NOVEMBER 2022

Profits and Earning Per Share both increased by more than 60%

Full year results now expected to be significantly ahead of market expectations.

Time Finance plc, the AIM listed independent specialist finance provider, today announces its unaudited interim results for the six-months ended 30 November 2022 ("Results" or "Interims"). The Interims reflect the success of the Group's own-book lending strategy and its focus on core lending products to UK SMEs, resulting in the Lending Book reaching an all-time high of over GBP150m at the period end.

Financial Highlights :

   --       Own-Book lending origination up 27% to GBP36.6m during H1 2022/23 (H1 2021/22: GBP28.9m) 

-- Gross lending-book up 27% to GBP152.7m as at 30 November 2022 (30 November 2021: GBP120.5m)

   --       Revenue up 12% to GBP13.2m (H1 2021/22: GBP11.8m) 
   --       Profit before Tax ("PBT") up 67% to GBP2.0m (H1 2021/22: GBP1.2m) 

-- Net deals in arrears reduced to 6% of the gross lending book as at 30 November 2022 (30 November 2021: 9%)

   --       Net Assets up 3% to GBP59.7m as at 30 November 2022 (30 November 2022: GBP58.2m) 
   --       Net Tangible Assets up 8% to GBP32.1 as at 30 November 2022 (30 November 2021: GBP29.6m) 

-- Strong visibility of future earnings with unearned income up 32% to GBP18.9m as at 30 November 2022 (30 November 2022: GBP14.3m)

   --       Earnings Per Share up 62% to 1.73 pence per share (H1 2021/22: 1.07pps) 

-- Continued positive trading momentum throughout December 2022 gives the Board confidence that full year trading will be significantly ahead of market expectations [1] , with PBT for the full year now expected to be not less than GBP3.2m

Commenting on the Interim Results, Tanya Raynes, Non-Executive Chair, said:

"These Interims demonstrate the successful implementation of our stated strategy of being an own-book lender focussed on our three core Business to Business activities. Significant growth in the period has been achieved whilst maintaining our margin, controlling credit and spreading risk as UK businesses continue to value our focus on customer service and our multi-product funding solutions. The Board is committed to further increasing shareholder value through the stated strategy and, despite the current wider macro-economic headwinds, looks forward to the second half of the financial year with cautious optimism."

Investor Presentation

As announced on 16 December 2022, the Company will deliver a live presentation relating to these H1 2022/23 Interims via the Investor Meet Company platform at 12.30pm BST today. Existing and potential shareholders can sign up to Investor Meet Company for free and add to meet Time Finance plc via: https://www.investormeetcompany.com/time-finance-plc/registerinvestor .

For further information, please contact :

Time Finance plc

Ed Rimmer, Chief Executive Officer 01225 474230

James Roberts, Chief Financial Officer 01225 474230

Cenkos (NOMAD)

Ben Jeynes / Mac Gould (Corporate Finance) 0207 3978900

Julian Morse (Sales)

Walbrook PR 0207 9338780

Paul Vann /Joe Walker 07768 807631

paul.vann@walbrookpr.com

About Time Finance:

Time Finance's core strategy is to provide the finance UK SMEs require to fund their businesses. 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 optimize business levels through market and economic cycles.

More information is available on the Company website www.timefinance.com .

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

CHIEF EXECUTIVE OFFICER'S STATEMENT

FOR THE SIX-MONTH PERIODED 30 NOVEMBER 2022

Introduction

Time Finance plc is a multi-product alternative finance provider to UK SMEs. It is primarily a lender for the working capital requirements of UK businesses, but it can also act as a broker in arranging funding where more appropriate. It comprises three core, own-book divisions - Asset, Loan and Invoice Finance - with lending proposals originated through a variety of channels. These include finance brokers and other professional firms, equipment vendors, suppliers and dealers, and direct from borrowers.

Financial Results

I am extremely pleased to report this set of Interim financial results with good progress, both strategically and financially, having been made in the first half of the financial year.

Own-Book deal origination is a key performance indicator for the Group. Pleasingly, in the six-month period to 30 November, this origination amounted to GBP36.7m, an increase of 27% when compared to the six months to 30 November 2021. This increase has helped contribute to the Group's gross lending book growing to record highs. As at 30 November 2022 it stood at GBP152.7m compared to GBP120.5m twelve months earlier. An increasing own-book lending portfolio is key to the Group's strategy as it underpins future income generation and profitability and, in turn, the inherent value of the balance sheet.

It is also encouraging to see that all the key metrics on the Profit and Loss account - Revenue, Gross Profit and Profit Before Tax - show growth from both the preceding six-month period to 31 May 2022 and the six-month comparative period to 30 November 2021. This demonstrates the medium-term strategy that was introduced in June 2021 is gathering pace. Given the compound nature of the Asset and Loan finance businesses, all other things being equal, this gives the board confidence for the future.

With regard to the Group's Balance Sheet, the quality of the lending portfolio is another key performance indicator and focus of the Board. It is extremely pleasing, therefore, to report a continuing reduction in the value of arrears despite the significant growth in the lending book over the period under review. As at 30 November 2022, net arrears had reduced a further GBP0.6m from the financial year-end, and stood GBP1.8m lower than as at 30 November 2021. Total net arrears equated to 6% of the period-end gross lending book as at 30 November 2022 (31 May 2022: 6%; 30 November 2021: 9%).

The Group's increasing level of deal origination, lending portfolio management and continued support from external funders have all combined to further strengthen the Group's balance sheet. Net Tangible Assets stood at GBP32.1m as at 30 November 2022 compared to GBP29.5m as at 31 May 2022, an increase of 9%

Strategy and Outlook

The Group remains committed to its medium-term strategy which it firmly believes will lead to increased shareholder value over time. The focus on our key initiatives - core product own-book lending, investing in improved IT infrastructure to enable the business to scale more easily and maximising our multi-product offering - continues apace.

Taking into account the wider macro-economic and geo-political concerns, the Board is pleased with these interim financial results and also with the operational progress made during the first half of the current financial year. The strategic plan remains on-track and the Group has continually shown its operational resilience, balance sheet strength and liquidity throughout.

Furthermore, and whilst remaining vigilant and cautious as to the potential impact that further economic uncertainty could have on the Group, the Board is confident that the results for the full-year will now be ahead of current market expectations, with Profit Before Tax of at least GBP3.2m

Ed Rimmer

Chief Executive Officer, Time Finance plc

 
 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 FOR THE SIX MONTHS TO 30 NOVEMBER 
  2022 
 
                                                                  Unaudited          Unaudited       Audited 
                                                                   6 months           6 months     12 months 
                                                                         to     to 30 November            to 
                                                                30 November               2021        31 May 
                                                                       2022            GBP'000          2022 
                                                                    GBP'000                          GBP'000 
                                                     Note 
 
   Revenue                                                           13,183             11,774        23,611 
 Other income                                                             -                  8            29 
                                                             --------------  -----------------  ------------ 
 TOTAL REVENUE                                                       13,183             11,782        23,640 
 
 Cost of sales                                                      (5,292)            (4,196)       (8,648) 
                                                             --------------  -----------------  ------------ 
 
 GROSS PROFIT                                                         7,891              7,586        14,992 
 
 Administrative expenses                                            (5,743)            (6,210)      (11,771) 
 Exceptional items                                                     (47)               (47)       (1,869) 
 Share-based payments                                                  (56)               (33)          (43) 
                                                             --------------  -----------------  ------------ 
 
 OPERATING PROFIT                                                     2,045              1,296         1,309 
 
 Finance income                                                           1                  -             1 
 Finance expense                                                       (76)               (95)         (255) 
                                                             --------------  -----------------  ------------ 
 
 PROFIT BEFORE INCOME TAX                                             1,970              1,201         1,055 
 
   Income Tax                                                         (374)              (228)         (134) 
                                                             --------------  -----------------  ------------ 
 
 PROFIT AND TOTAL COMPREHENSIVE 
  INCOME FOR THE YEAR                                                 1,596                973           921 
                                                             ==============  =================  ============ 
 
 Attributable to: 
  Owners of the parent company                                        1,596                973           921 
                                                             ==============  =================  ============ 
 
                                                                  Pence per          Pence per     Pence per 
                                                                      share              share         share 
 - basic                                               6               1.73               1.07          1.00 
                                                             ==============  =================  ============ 
 - diluted                                             6               1.73               0.99          1.00 
                                                             ==============  =================  ============ 
 
 
 
 
 
   All of the above amounts are in respect of continuing 
   operations. 
 
 
 
 CONSOLIDATED STATEMENT OF FINANCIAL 
  POSITION 
  FOR THE SIX MONTHS TO 30 NOVEMBER 2022 
                                                 Unaudited      Audited 
                                               6 months to    12 months 
                                               30 November           to 
                                                      2022       31 May 
                                                                   2022 
                                                   GBP'000      GBP'000 
   NON-CURRENT ASSETS 
 Goodwill                                           27,263       27,263 
 Intangible assets                                     240          298 
 Property, plant and equipment                         181          320 
 Right-of-use property, plant & equipment              339           30 
 Trade and other receivables                        54,273       50,344 
 Deferred tax                                        1,036        1,036 
                                             -------------  ----------- 
                                                    83,332       79,291 
                                             -------------  ----------- 
 CURRENT ASSETS 
 Trade and other receivables                        83,848       70,852 
 Cash and cash equivalents                           3,959        3,170 
 Tax receivable                                        100            - 
                                                    87,907       74,022 
                                             -------------  ----------- 
 
 TOTAL ASSETS                                      171,239      153,313 
                                             =============  =========== 
 
 
   EQUITY 
 Called up share capital                             9,252        9,252 
 Share premium                                      25,543       25,543 
 Employee Shares                                       163          106 
 Treasury Shares                                     (820)        (820) 
 Retained earnings                                  25,568       23,972 
                                             -------------  ----------- 
 TOTAL EQUITY                                       59,706       58,053 
 
 LIABILITIES 
 NON-CURRENT LIABILITIES 
 Trade and other payables                           45,975       39,033 
 Financial liabilities - borrowings                  1,915        2,344 
 Lease liability                                         3            - 
                                             -------------  ----------- 
                                                    47,893       41,377 
                                             -------------  ----------- 
 CURRENT LIABILITIES 
 Trade and other payables                           61,363       51,956 
 Financial liabilities - borrowings                  1,954        1,879 
 Tax payable                                             -           18 
 Lease liability                                       323           30 
                                             -------------  ----------- 
                                                    63,640       53,883 
                                             -------------  ----------- 
 TOTAL LIABILITIES                                 111,533       95,260 
                                             -------------  ----------- 
 TOTAL EQUITY AND LIABILITIES                      171,239      153,313 
                                             =============  =========== 
 
 
 
   CONSOLIDATED STATEMENT OF CASH FLOWS 
   FOR THE SIX MONTHS TO 30 NOVEMBER 2022 
 
                                                   Unaudited      Unaudited 
                                                    6 months       6 months 
                                                          to             to 
                                                 30 November    30 November 
                                                        2022           2021 
                                                     GBP'000        GBP'000 
 Cash generated from operations 
 Profit before tax                                     1,970          1,201 
 Depreciation and amortisation charges                   195            203 
 Finance costs                                            76             95 
 Finance income                                          (1)              - 
 (Increase) in trade and other receivables          (16,970)        (6,095) 
 Increase in trade and other payables                 16,396          3,495 
 Movement in other non-cash items                       (89)          (374) 
                                               -------------  ------------- 
                                                       1,577        (1,475) 
 Cash flows from operating activities 
 Interest paid                                          (76)           (95) 
 Tax paid                                              (411)          (258) 
                                               -------------  ------------- 
 
   Net cash generated from operating 
   activities                                          1,090        (1,828) 
                                               -------------  ------------- 
 
 
 
   Cash flows from investing activities 
 Purchase of software, property, plant 
  & equipment                                           (31)           (45) 
 Interest received                                         1              - 
                                               -------------  ------------- 
 
   Net cash generated from investing 
   activities                                           (30)           (45) 
                                               -------------  ------------- 
 
 
 
   Cash flows from financing activities 
 Payment of lease liabilities                           (77)          (103) 
 Loan repayments in period                             (513)          (323) 
 Change in overdrafts                                    160            118 
 
   Net cash generated from financing 
   activities                                          (430)          (308) 
                                               -------------  ------------- 
 
 
 
   Increase/(Decrease) in cash and 
   cash equivalents                                      630        (2,181) 
 
 
   Cash and cash equivalents at the 
   beginning of the period                             2,916          7,665 
                                               -------------  ------------- 
 
 Cash and cash equivalents at the 
  end of the period                                    3,546          5,484 
                                               =============  ============= 
 
 
 
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
  FOR THE SIX MONTHS TO 30 NOVEMBER 2022 
 
                      Share     Share   Retained   Treasury   Employee     Total 
                    Capital   Premium   Earnings     Shares     Shares    Equity 
                    GBP'000   GBP'000    GBP'000    GBP'000    GBP'000   GBP'000 
 
   Balance at 31 
    May 
    2022              9,252    25,543     23,972      (820)        106    58,053 
 
   Total 
    comprehensive 
    income                -         -      1,596          -          -     1,596 
 
 
   Transactions 
   with 
   owners 
 
   Sale of 
    treasury 
    shares 
 
    Dividends 
                          -         -          -          -          -         - 
    Issue of 
    share capital         -         -          -          -          -         - 
 
    Value of              -         -          -          -          -         - 
    employee 
    services              -         -          -          -         57        57 
 
   Balance at 30 
    November 
    2022              9,252    25,543     25,568      (820)        163    59,706 
                   ========  ========  =========  =========  =========  ======== 
 
 
 
 
                      Share     Share   Retained   Treasury   Employee     Total 
                    Capital   Premium   Earnings     Shares     Shares    Equity 
                    GBP'000   GBP'000    GBP'000    GBP'000    GBP'000   GBP'000 
 
   Balance at 31 
    May 
    2021              9,252    25,543     23,051      (790)         63    57,119 
 
   Total 
    comprehensive 
    income                -         -        973          -          -       973 
 
 
   Transactions 
   with 
   owners 
 
   Sale of 
    treasury 
    shares 
 
    Dividends 
                          -         -          -         41          -        41 
    Issue of 
    share capital         -         -          -          -          -         - 
 
    Value of              -         -          -          -          -         - 
    employee 
    services              -         -          -          -         33        33 
 
   Balance at 30 
    November 
    2021              9,252    25,543     24,024      (749)         96    58,166 
                   ========  ========  =========  =========  =========  ======== 
 
   1    BASIS OF PREPARATION 

The financial information set out in the interim report does not constitute statutory accounts as defined in section 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 May 2021 prepared in accordance with IFRS as adopted by the European Union and with the Companies Act 2006 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006. These interim financial statements have been prepared under the historical cost convention.

These interim financial statements have been prepared in accordance with the accounting policies set out in the most recently available public information, which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 31 May 2022. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The financial information for the six months ended 30 November 2021 and the six-month period to 30 November 2022 are unaudited and do not constitute the Group's statutory financial statements for these periods. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.

Going Concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

   2    SEGMENTAL REPORTING 

The Group has three key trading divisions which reflect its organisational and management structures, and these are differentiated by the type of finance products provided. Asset, Loans and Invoice Finance represent the core products. Other represents central overheads related to being listed and running a group of Companies and any legacy non-core brokerages. The Group reports internally on these segments in order to assess performance and allocate resources.

 
       6 months to 30 November 2022 GBP'000          Asset   Loans   Invoice Finance   Other    TOTAL 
         Revenue          6,321   1,020             4,761   1,081   13,183 
 
         Profit before 
          Tax               965      99             1,626   (720)    1,970 
 
 
 
        6 months to 30 November 2021 GBP'000          Asset   Loans   Invoice Finance     Other    TOTAL 
         Revenue          5,520     964             3,772     1,526   11,782 
 
         Profit before 
          Tax               934     244             1,767   (1,744)    1,201 
 
   3    BASIS OF CONSOLIDATION 

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

   4    TAXATION 

Taxation charged for the period ended 30 November 2022 is calculated by applying the Directors' best estimate of the annual tax rate to the result for the period.

   5    SHARE CAPITAL 

The Articles of Association of the company state that there is an unlimited authorised share capital. Each share carries the entitlement to one vote.

   6    EARNINGS PER ORDINARY SHARE 

The earnings per ordinary share have been calculated using the profit for the period and the weighted number of ordinary shares in issue during the period. For diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of all dilutive potential ordinary shares.

 
                                           6 months     6 months    12 months 
                                                 to           to           to 
                                                          30 Nov       31 May 
                                        30 Nov 2022         2021         2022 
                                            GBP'000      GBP'000      GBP'000 
 
 Earnings attributable to ordinary 
  shareholders                                1,596          973          921 
 
 Basic 
  EPS 
 Weighted average number of shares       92,512,704   90,806,852   92,512,704 
 Per-share amount pence                        1.73         1.07         1.00 
 
 
   Adjusted earnings                          1,596          912          921 
 
 Diluted EPS 
 Weighted average number of shares       92,512,704   91,621,519   92,512,704 
 Per-share amount pence                        1.73         0.99         1.00 
 
   7    DIVIDENDS 

At the current time, under the strategy published in June 2020, cash reserves are being deployed for business growth. This approach to future dividends is kept under regular review and any change to the policy would be notified at that point in time.

   8    SHARE-BASED PAYMENT TRANSACTIONS 

On 3 October 2022, the Group announced that following the achievement of time-based criteria in relation to the Company's Unapproved Share Option Scheme, a total of 202,500 previously awarded nil-cost options over ordinary shares of 10 pence each in the capital of the Company vested. These vested options may be exercised at any time prior to an expiry date of 30 September 2023 being 12 months from the vesting date. As previously stated, it is the Board's intention that, wherever possible, any vested options that are exercised are met through the Group's Employee Benefit Trust and so would not dilute any existing shareholders.

The terms of the scheme were previously announced by the Group on 29 October 2020.

   9    COPIES OF THE INTERIM REPORT 

Copies of the Interim Report are available from www.timefinance.com and the Company Secretary at the registered office: Time Finance plc, St James House, The Square, Lower Bristol Road, Bath, BA2 3BH.

[1] FY2023 market expectations at the time of publication of GBP25.0m of revenue and GBP2.8m of PBT

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