RNS Number : 0646C
Time Finance PLC
16 June 2021
16 June 2021
Time Finance plc
("Time Finance", the "Group" or the "Company")
Year-end Trading Update
Strategic Update and Dividend Policy
Time Finance plc, the AIM listed independent specialist finance
provider, is pleased to issue the following unaudited trading
update ahead of the publication of its final results for the
financial year ended 31 May 2021.
The Company also announces a strategic update. This sets out the
Group's renewed focus on its core products, its ambition for
significant organic growth, and to become a leading alternative
multi-product independent SME funder helping UK businesses recover
and grow post-Covid. This follows the appointment of Ed Rimmer as
the Company's permanent CEO, announced on 10 June 2021.
The financial year to 31 May 2021 was profitable for the Group
with it continuing to demonstrate the resilience and
diversification of its lending book, further strengthening its
balance sheet and improving liquidity. This was achieved despite
trading being severely impacted by the ongoing effect of the
COVID-19 pandemic which included a further period of interruption
to normal trading conditions as a result of Lockdown 3.
-- Board restructured and strengthened with the appointments of
Ed Rimmer and Tanya Raynes as CEO and Non-Executive Director
-- Rebranding to Time Finance, consolidating the Group's
activities under a single national brand.
-- System enhancements, including online introductions,
automated links to credit referencing agencies and to a new fraud
detection service, embedded within the Group's IT
-- Accreditations from The British Business Bank to provide
Coronavirus Business Interruption Loan Scheme ("CBILS") and,
latterly, Recovery Loan Scheme ("RLS") providing Government-backed
financing to UK SMEs.
-- Continued focus on diversification and spread of risk in
lending, with largest sector exposure now accounting for less than
5% and top ten sectors less than 25% of the total lending book.
-- New business origination for the financial year of
approximately GBP103m (FY20: GBP147m). Approximately GBP47m (46%)
was written on 'own-book' and GBP56m (54%.) was brokered on for
commission income (FY20; GBP54m (37%) and GBP93m (63%)
-- Revenue for the year expected to be approximately GBP24.1m
(FY20: GBP29.2m) of which approximately 85% is from lending
activities and 15% from broking activities (FY20: 80% and 20%
-- Profit Before Tax, Exceptional Items and Share-Based Payments
("PBTE") for the year expected to be approximately GBP3.0m (FY20:
-- Blended cost of borrowing maintained at approximately 4% (FY20: 4%).
-- Net portfolio write-offs representing circa 1.5% of the gross
lending portfolio (FY20: 1.0%).
-- Net Tangible Assets at 31 May 21 of approximately GBP28.3m (31 May 20: GBP26.5m).
-- Net lending book at 31 May 21 of approximately GBP98.8m (31 May 20: GBP107.7m).
-- Cash and cash equivalents of approximately GBP8.3m at 31 May 21 (31 May 20: GBP1.3m).
-- Forbearance granted reduced by over 95 per cent during course of year to under GBP1m.
-- Deal arrears at 31 May 21 now standing at below pre-pandemic
levels seen at February 2020 having reduced by approximately 40 per
cent from 31 May 2020.
-- Credit Risk Provisions marginally increased to approximately
GBP5.3m or 5.3% of the net lending book (31 May 20: GBP5.1m or
-- Good visibility of future revenue with "unearned income" at
31 May 21 of approximately GBP14.5m (31 May 20: GBP15.2m).
The Group is also pleased to issue the following Strategic
Update. This involves the adding of significant scale with the
clear goal for Time Finance of becoming a leading alternative
multi-product independent SME funder, helping UK businesses to
recover and grow post-Covid.
In doing so, the Group's principal strategic objectives are
-- More than double the Group's gross lending book organically
from its current level to approximately GBP250 million by 31 May
-- Over the same timeframe achieve organic-led growth to be in
excess of the Group's 2019 pre-Covid levels of over GBP30m Revenue
and GBP8m of PBTE.
-- Apply a clear focus on the core business-to-business
offerings of asset, loan and invoice finance.
-- Refocus the Group's proposition to primarily offer more secured own-book lending.
-- To focus on funding on the Group's own balance sheet wherever
possible, while maintaining the flexibility to act as a broker to
other lenders when prudent to do so.
The Group will therefore very much remain a non-bank alternative
finance provider to UK SMEs. There will, however, be a far greater
focus on lending its three core products to UK businesses on its
own book wherever possible, increasing overall margins and
providing greater visibility of earnings. This will be underpinned
by taking greater security and increasing the average deal size,
enabling the business to position itself as a lender to a wider
range of established clients.
Ed Rimmer, Chief Executive Officer, commented:
"I firmly believe a number of fantastic opportunities lie ahead
for Time Finance. The foundations of the Group are extremely strong
and my first three months back in the business have convinced me
that evolution not revolution is the right next step on the Group's
journey. We now have a clear vision focussing on the three key
products that are very much in our DNA - asset finance, invoice
finance and loan finance - with an exciting growth plan to return
to and in time exceed pre-Covid performance. I strongly believe
this is the direction that will add real value to all our
stakeholders and I am looking forward to the challenges ahead."
John Newman, Chairman, added:
" The impact of the global pandemic made the financial year to
31 May 2021 a challenging one for the Group, especially with the
impact of a further lockdown after our half year results were
published. The period has, however, also demonstrated the
resilience and robust nature of the Group, highlighting its ability
to withstand the significant headwinds it has faced and bringing to
the fore the benefits of being a multi-product provider of finance
to UK SMEs, spread across multiple business sectors, with the
ability to act as both a funder and a broker. The Group starts the
new financial year on more solid foundations having navigated the
impact of COVID-19 well, emerging with a stronger balance sheet and
better liquidity. Whilst the economic environment remains
uncertain, we are cautiously optimistic by the positive signs we
are seeing across the markets in which we operate and the Group is
well-positioned to deliver future shareholder value."
Updated Dividend Policy
As highlighted above, the Group's strategy is to generate
organic growth that will more than double the Group's lending book
over the next few years through a renewed focus on its core
offering of business-to-business financing. A key factor in the
successful delivery of this strategy and the growth of shareholder
value will be maximising the deployment of its cash resources to
the growth of, and investment in, the business rather than to
dividends at the current time. The Board therefore confirms that,
due to the impact of the COVID-19 pandemic, the deferred interim
dividend of 0.36 pence per share previously declared for the half
year period ended 30 November 2019, and originally due be paid on
12 May 2020 to shareholders on the register at 17 April 2020, will
not be paid. The dividend policy will be regularly reviewed during
the course of the new financial year as the Group continues its
recovery from the effects of the pandemic.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (as amended), which forms
part of domestic UK law pursuant to the European Union (Withdrawal)
Act 2018. Upon publication of this announcement via a Regulatory
Information Service, this inside information is now considered to
be in the public domain.
For further information,
Time Finance plc
Ed Rimmer, Chief Executive
Officer 01225 474230
James Roberts, Chief Financial
Officer 01225 474230
Cenkos Securities plc (NOMAD)
Max Hartley / Ben Jeynes
Julian Morse (Sales) 0207 397 8900
Walbrook PR 0207 933 8780
Paul Vann / Nicholas Johnson 07768 807631
About Time Finance:
Time Finance's strategy is to focus on providing or arranging
the finance UK SMEs require to fund their businesses and arranging
vehicle and property-backed finance for consumers. The
multi-product range for SMEs includes asset, vehicle, loan and
invoice finance facilities. The Group operates a "hybrid" lending
and broking model enabling it to optimize business levels through
market and economic cycles.
More information is available on the Company website
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