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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