TIDMTIME
RNS Number : 6536R
Time Finance PLC
07 July 2022
7 July 2022
Time Finance plc
("Time Finance", the "Group" or the "Company")
Trading Update and Notice of Final Results
Continued successful implementation of Strategic plan with
Own-Book Lending Portfolio up 19%, Own-Book Deal Origination up
36%, Net Arrears fallen by over 35%, and Net Tangible Assets of
over GBP30m
Time Finance plc, the AIM listed specialist finance provider is
pleased to announce the following trading update ahead of the
publication of its audited final results for the financial year
ended 31 May 2022, which are scheduled to be announced on 22
September 2022.
Unaudited trading results for the year demonstrate significant
progress towards delivering the Board's medium-term strategy to
significantly increase own-book deal origination and its commercial
lending and plans for the divestment of the Group's non-core,
consumer focussed brokerage businesses are well progressed.
Highlights [1]
-- Own-book gross lending portfolio at 31 May 2022 of GBP137.8m
(31 May 2021: GBP115.7m), an increase of 19%
-- Net Tangible Assets of GBP30.5m at 31 May 2022 (31 May 2021: GBP28.4m), an increase of 7%
-- Nil deals in forbearance at 31 May 2022 (31 May 2021: GBP0.8m)
-- Net deals in arrears [2] of GBP7.8m at 31 May 2022 (31 May 2021: GBP12.2m), a decrease of 36%
-- Good visibility on future earnings with unearned income of
GBP16.8m (2021: GBP14.9m), an increase of 13%
-- Core lending: Own-Book deal origination for the year of
GBP64.4m (2021: GBP47.3m), an increase of 36%
-- Revenue for the year of GBP23.6 million (2021: GBP24.2m), a decrease of 2%
-- Profit Before Tax, Exceptional Items, Share Based payments
and Goodwill write-off ("PBTE") of GBP3.0m (2021: GBP3.1m), a
decrease of 3%
-- Profit Before Tax of GBP1.1m (2021: GBP2.0m), a decrease of
45%, reflecting the goodwill write-off of a non-core brokerage and
restructuring costs in streamlining the business
-- Supportive, long-term funding partners with unused lending
headroom in excess of GBP60m at year-end
Strategy
Time Finance's strategy is to provide the finance which UK SMEs
require to grow their businesses, with a clear focus on lending on
the Group's own balance sheet. The Group has a highly distinctive
product offering, making it a truly multi-product funding provider
to UK SMEs. The Group is also able to operate a "hybrid" lending
and broking model for commercial deals which may occasionally fall
outside its usual credit criteria or where the margins are too
slim. At the same time, the Group has been looking to divest its
non-core, broked-on consumer businesses.
The financial year ended 31 May 2022 has seen the Group pull
back from its non-core brokerage businesses which have continued to
be significantly impacted by the effects of the COVID pandemic,
while it remains focussed on growing the commercial lending book in
a safe and secure manner. As a result, the lending book is 18%
larger than as at 31 May 2021, while the volume of deals originated
for own-book lending is 36% higher than the prior year.
Importantly, a large part of this growth was achieved during the
final quarter of the financial year, indicating that the Group's
re-focused strategy is becoming embedded and is setting the
business up on a solid footing for the current financial period and
beyond. This in turn provides management with a degree of optimism
as we begin the new financial year in terms of both repeat and
future revenue streams.
In line with the Group's re-focused strategy, the decision has
been made to close the non-core, second-hand vehicle brokerage
business. Despite concerted efforts, the business remained loss
making throughout the period since the start of the COVID pandemic
and was not showing any indications of returning to its pre-COVID
business levels, depressing consolidated profits in the financial
year by cGBP0.3m with the dampening effect likely to continue. The
decision to close the business has resulted in an exceptional,
one-off accounting adjustment to write-off cGBP1m of goodwill
associated with the original acquisition. However, it also
eliminates further ongoing losses being incurred, enables more
management time to be focused on the profitable parts of the
business and provides greater clarity of funding proposition coming
into the new financial year.
The Board also took the decision in early 2022 to streamline the
Group's management structure and reposition the team for own-book
growth, with the objective of removing infrastructure costs
required for the non-core consumer brokerages. This resulted in a
one-off exceptional cost of cGBP0.7m and a corresponding reduction
in staff costs moving forward.
Ed Rimmer, Chief Executive Officer, commented:
"The Results for the year ended 31 May 2022 mark a significant
first step on the Group's journey to enacting the new strategy
first announced in June of 2021. The results, while satisfactory,
reflect the organic growth we anticipated in relation to the
commercial own-book lending but are impacted by the continued
underperformance of the non-core consumer brokerages and wider
macro-economic headwinds that have buffeted the UK economy over the
past six months. The changes made, combined with our renewed focus
on own-book lending, mean that the Group is now better placed to
benefit from further organic growth and we look forward to building
value for our shareholders in the near- term."
The Company will deliver a live presentation relating to this
trading update via the Investor Meet Company platform at 11am 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/register-investor
For further information, please
contact:
Time Finance plc
Ed Rimmer, Chief Executive Officer 01225 474230
James Roberts, Chief Financial Officer 01225 474230
Cenkos Securities plc (NOMAD and
Broker) 0207 397 8900
Ben Jeynes / Max Gould (Corporate
Finance)
Julian Morse (Sales)
Walbrook PR 0207 933 8780
Paul Vann / Nick Rome 07768 807631
Timefinance@walbrookpr.com
About Time Finance:
Time Finance's core strategy is to focus on providing or
arranging the finance UK SMEs require to fund their businesses. It
offers a multi-product range for SMEs including asset, vehicle,
loan and invoice finance. While primarily an 'own-book' lender the
Group does 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
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.
[1] Unaudited
[2] Net deal in arrears include all deals in arrears aside from
"Technical" arrears, namely those less than 30 days in arrears
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END
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