TIDMTIME
RNS Number : 0247Z
Time Finance PLC
20 January 2022 20 January 2022
Time Finance plc
(the "Group" or the "Company")
HALF YEAR RESULTS FOR SIX MONTHSED 30 NOVEMBER 2021
Time Finance plc, the AIM listed independent specialist finance
provider, today announces its unaudited interim results for the
six-months ended 30 November 2021 ("Results" or "Interims").
Financial Highlights :
-- Origination up 3% to GBP58.1m (H1 2020/21: GBP56.6m).
-- Revenue* up 1% to GBP11.8m (H1 2020/21: GBP11.7m)
-- Gross profit* up 3% to GBP7.6m (H1 2020/21: GBP7.4m)
-- Profit before tax* up 1% to GBP1.2m (H1 2020/21: GBP1.2m)
-- Blended cost of borrowings maintained at approximately 4% (year to 31 May 2021: 4%)
-- Gross lending portfolio increased to GBP120.5m as at 30
November 2021 (31 May 2021: GBP115.7m)
-- Net Assets increased to GBP58.2m as at 30 November 2021 (31 May 2021: GBP57.1m)
-- Net Tangible Assets increased to GBP29.6m as at 30 November 2021 (31 May 2021: GBP28.4m)
-- Net deals in arrears as at 30 November 2021 reduced by 26%
representing 9% of the gross lending book (31 May 2021: 12%)
-- Nil net deals in forbearance as at 30 November 2021 (31 May 2021: GBP0.8m)
* Excluding furlough Other Income of GBP0.165m in H1
2020/21.
Operational Highlights:
-- Accreditation from the British Business Bank to provide the
Recovery Loan Scheme ("RLS") to SMEs
-- GBP50m Invoice Finance three-year funding facility agreed
with the Group's corporate bankers
-- Investment made in sales resource across Asset, Invoice Finance and Commercial Loans
-- Lending portfolio performance better than pre-pandemic levels and continues to improve
-- UK SMEs have remained resilient during pandemic with borrowers missing payments reducing
-- Strong cash position with GBP9.6m of cash, cash equivalents
and convertible 'paper' at period end, leaving the business well
placed to capitalise on future opportunities
Commenting on the Interim Results, Tanya Raynes, Non-Executive
Chairman, said:
"Given the continued impact of the Covid-19 pandemic on our
business sector and the wider UK economy, it is pleasing that
momentum is again building in our core product offerings and that
our loan book is also growing. This gives us confidence in our
strategy for the medium-term. The balance sheet continues to
demonstrate its resilience and it is particularly encouraging to
see deals in arrears at their lowest level since late 2018. Lending
to smaller SMEs will always mean there are deals in arrears. This
is to be expected, and risk is priced into our model, however we
are delighted to see the levels both lower than anticipated and
continuing to fall. The Board continue to assess the impact of the
current wave of the pandemic but remain confident the fundamentals
of the business are secure, that the Group remains well placed to
capture the opportunities ahead of us, and that the medium-term
strategy will deliver significant growth."
This announcement contains inside information for the purposes
of article 7 of Regulation (EU) No 596/2014.
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 (NOMAD) 0207 3978900
Julian Morse (Sales)
Walbrook PR
0207 9338780
Paul Vann / Nicholas Johnson 07768 807631
paul.vann@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
CHIEF EXECUTIVE OFFICER'S STATEMENT
FOR THE SIX-MONTH PERIODED 30 NOVEMBER 2021
Introduction
Time Finance plc is a multi-product speciality finance provider
to UK SMEs. It is primarily a lender for the working capital
requirements of UK businesses but can also act as a broker in
arranging funding where appropriate.
The Group comprises three core own-book divisions - Asset
Finance, Loan Finance and Invoice Finance - as well as a Broking
division which primarily arranges vehicle and property finance for
consumers. Lending proposals are originated through a variety of
channels, sourced from national and regional finance brokers, other
intermediaries such as professional firms, equipment vendors,
suppliers and dealers, and direct from borrowers. This is both via
field sales personnel and also direct online. Funds are advanced to
borrowers using a mix of the Group's own reserves and operational
debt facilities provided by a range of wholesale funding
partners.
Financial Results
The various waves of the Covid-19 pandemic mean its effects on
trading activity is still being felt and normal business has yet to
be fully resumed. The impact of the pandemic continues to fall
primarily on the Group's non-core brokerage arms and particularly
in the vehicles arena exacerbated by the well-publicised delays in
sourcing vehicles. Despite the dampening effect of the brokerages,
the Group has delivered a solid interim set of financial
results.
Deal origination is a key performance indicator for the Group.
Pleasingly, in the six-month period to 30 November, deal
origination amounted to GBP58.1m, the highest level since the start
of the pandemic and an increase of more than 24% when compared to
GBP46.7m in the preceding six-month period to 31 May 2021. This
increase has resulted in the Group's gross lending book growing to
GBP120.5m as at 30 November 2021 compared to GBP115.7m at 31 May
2021. An increasing own-book lending portfolio underpins the
Group's future income generation and, in turn, profitability.
Crucially, the Group's own-book lending portfolio has continued to
grow since the half-year period end.
When reviewing the Profit and Loss account, it is important to
note that the prior half-year comparatives and the full year to 31
May 2021 include significant 'other income' from government grants
in the form of the Coronavirus Job Retention Scheme which the Group
no longer has access to. These historical grants equated to GBP0.2m
in the six-month period to 31 May 2021 and a further GBP0.2m in the
six-month period to 30 November 2020. As such, the true comparison
in performance is to compare the results without this pandemic
'other income' stream as detailed in the table below:
GBP'm 6m to 30/11/21 6m to 31/05/21 6m to 30/11/20
Revenue 11.8 12.1 11.7
Gross Profit 7.6 7.0 7.4
Profit before Tax 1.2 0.4 1.2
It is therefore encouraging to see that both Gross Profit and
Profit Before Tax have grown significantly from the preceding
six-month period despite the ongoing dampening effect of the slow
recovery of the Group's non-core brokerage arms. This demonstrates
the strength of the core own-book lending businesses.
With regards to the Group's Balance Sheet, the lending portfolio
itself is another key performance indicator. It is extremely
pleasing to report a continuing reduction in the value of portfolio
arrears. As at 30 November 2021, net arrears were down a further
GBP3.8m from year end, equating to 9% of the period end gross
lending book (31 May 2021: 12%; 30 November 2020: 14%). It is also
encouraging to report that at the period end there were no longer
any deals in forbearance resulting from the impact of the pandemic.
This compares to GBP0.8m as at 31 May 21, GBP2.2m as at 30 November
2020 and a pandemic-high of GBP20.5m as at 31 May 2020.
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
and to generate an increase in Net Assets to GBP58.2m and in Net
Tangible Assets to GBP29.6m as at 30 November 2021. This compares
with GBP57.1m and GBP28.4m as at 31 May 2021 and 30 November 2020
respectively.
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 key sales resources to grow the business and
maximising our multi-product offering - continues apace.
Given the continued, somewhat unpredictable waves of the
pandemic and their impact on trading conditions the Board is
satisfied with the financial results and pleased with the
operational progress made during the first half of the current
financial year with the overall strategic plan set out at the start
of the current financial year being broadly on track. The Group has
continually shown its operational resilience, balance sheet
strength and liquidity throughout the pandemic and the Board
remains optimistic of a return to significant organic growth in due
course whilst remaining vigilant and cautious as to the potential
impact that further economic uncertainty or additional government
restrictions could have on the Group.
Ed Rimmer
Chief Executive Officer, Time Finance plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS TO 30 NOVEMBER
2021
Unaudited Unaudited Audited
6 months to 6 months 12 months
30 November to 30 November to
2021 2020 31 May
GBP'000 GBP'000 2021
GBP'000
Note
Revenue 11,774 11,698 23,799
Other income 8 165 425
-------------- ----------------- ------------
TOTAL REVENUE 11,782 11,863 24,224
Cost of sales (4,196) (4,315) (9,362)
-------------- ----------------- ------------
GROSS PROFIT 7,586 7,548 14,862
Administrative expenses (6,210) (5,794) (11,475)
Exceptional items (47) (224) (843)
Share-based payments (33) - (277)
-------------- ----------------- ------------
OPERATING PROFIT 1,296 1,530 2,267
Finance income - - 3
Finance expense (95) (179) (250)
-------------- ----------------- ------------
PROFIT BEFORE INCOME TAX 1,201 1,351 2,020
Income Tax (228) (257) (243)
-------------- ----------------- ------------
PROFIT AND TOTAL COMPREHENSIVE
INCOME FOR THE YEAR 973 1,094 1,777
============== ================= ============
Attributable to:
Owners of the parent company 973 1,094 1,777
============== ================= ============
Pence per Pence per Pence per
share share share
- basic 6 1.07 1.21 1.98
============== ================= ============
- diluted 6 0.99 1.20 1.85
============== ================= ============
All of the above amounts are in respect of continuing
operations.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
FOR THE SIX MONTHS TO 30 NOVEMBER 2021
Unaudited Audited
6 months to 12 months
30 November to
2021 31 May
2021
GBP'000 GBP'000
NON-CURRENT ASSETS
Goodwill 28,241 28,241
Intangible assets 358 476
Property, plant and equipment 839 551
Right-of-use property, plant & equipment 137 224
Trade and other receivables 43,012 44,335
Deferred tax 884 806
------------- -----------
73,471 74,633
------------- -----------
CURRENT ASSETS
Trade and other receivables 62,492 55,073
Cash and cash equivalents 5,905 7,969
Tax receivable 160 113
68,557 63,155
------------- -----------
TOTAL ASSETS 142,028 137,788
============= ===========
EQUITY
Called up share capital 9,252 9,252
Share premium 25,543 25,543
Employee Shares 96 63
Treasury Shares (749) (790)
Retained earnings 24,024 23,051
------------- -----------
TOTAL EQUITY 58,166 57,119
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 33,320 33,749
Financial liabilities - borrowings 2,877 3,369
Lease liability 3 44
------------- -----------
36,200 37,162
------------- -----------
CURRENT LIABILITIES
Trade and other payables 45,615 41,692
Financial liabilities - borrowings 1,500 1,331
Overdrafts 421 303
Lease liability 126 181
------------- -----------
47,662 43,507
------------- -----------
TOTAL LIABILITIES 83,862 80,669
------------- -----------
TOTAL EQUITY AND LIABILITIES 142,028 137,788
============= ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 NOVEMBER 2021
Unaudited Unaudited
6 months 6 months
to to
30 November 30 November
2021 2020
GBP'000 GBP'000
Cash generated from operations
Profit before tax 1,201 1,351
Depreciation and amortisation charges 203 380
Finance costs 95 179
Finance income - -
(Increase)/Decrease in trade and
other receivables (6,095) (384)
Increase/(Decrease) in trade and
other payables 3,495 (833)
Movement in other non-cash items (374) 933
------------- -------------
(1,475) 1,626
Cash flows from operating activities
Interest paid (95) (179)
Tax paid (258) (368)
------------- -------------
Net cash generated from operating
activities (1,828) 1,079
------------- -------------
Cash flows from investing activities
Contingent consideration paid - (197)
Purchase of software, property, plant
& equipment (45) (119)
------------- -------------
Net cash generated from investing
activities (45) (316)
------------- -------------
Cash flows from financing activities
Payment of lease liabilities (103) (109)
Loan repayments in period (323) (435)
Loans issued in period - 3,100
Change in overdrafts 118 779
Purchase of own shares in EBT - (80)
Net cash generated from financing
activities (308) 1,747
------------- -------------
(Decrease)/Increase in cash and cash
equivalents (2,181) 2,510
Cash and cash equivalents at the
beginning of the period 7,665 132
------------- -------------
Cash and cash equivalents at the
end of the period 5,484 2,642
============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 NOVEMBER 2021
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
- - - 41 - 41
Dividends
- - - - - -
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
========== ========== =========== =========== ============= ==========
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
2020 8,899 25,360 21,274 (310) - 55,223
Total
comprehensive
income - - 1,094 - - 1,094
Transactions
with
owners
Purchase of
treasury
shares - - - (80) - (80)
Dividends
- - - - - -
Issue of share
capital 138 183 - - - 321
Balance at 30
November
2020 9,037 25,543 22,368 (390) - 56,558
================ ========== =========== =========== ========= ==========
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 2021. 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
2020 and the six-month period to 30 November 2021 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
While the Covid-19 pandemic continues to have an impact on the
business, 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 four 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. The Group reports internally on these segments
in order to assess performance and allocate resources.
6 months to 30 November 2021 GBP'000 Asset Loans Invoice Finance Brokerage Other TOTAL
Revenue 5,520 964 3,772 1,526 - 11,782
Profit before
Tax 934 244 1,767 (122) (1,622) 1,201
6 months to 30 November 2020 GBP'000 Asset Loans Invoice Finance Brokerage Other TOTAL
Revenue 6,254 640 3,308 1,651 10 11,863
Profit before
Tax 1,463 60 1,374 (75) (1,471) 1,351
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 2021 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 2021 2020 2021
GBP'000 GBP'000 GBP'000
Earnings attributable to ordinary
shareholders 973 1,094 1,777
Basic EPS
Weighted average number of shares 90,806,852 90,374,204 89,481,386
Per-share amount pence 1.07 1.21 1.98
Adjusted earnings 912 1,094 1,696
Diluted EPS
Weighted average number of shares 91,621,519 90,739,365 91,685,404
Per-share amount pence 0.99 1.20 1.85
7 DIVIDS
Dividends were not paid during the pandemic due to cash
preservation in an uncertain time. At the current time, under the
strategy published in June 2020, cash reserves are being deployed
for business growth. Future dividends will be kept under
review.
8 SHARE-BASED PAYMENT TRANSACTIONS
On 1 October 2021, the Group announced that following the
achievement of time-based criteria in relation to the Company's
Unapproved Share Option Scheme, a total of 305,500 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 2022
being 12 months from the vesting date.
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.
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