Time Finance provides support to UK businesses through the provision of a broad portfolio of finance solutions, designed to meet the unique needs of businesses today at times when the traditional banks may not be able to help.
21 Jan 2021
Time for a rerating?
Results for H1 to end Nov ‘20 show Time’s recovery is well underway from an industry-wide, Covid-induced slump in good quality lending demand and spike in bad debt provisions. This coincides with a Group rebrand, which consolidates 5 years of buy-&-build success and offers a range of new competitive advantages.
The loan book is growing again, reaching £106m on 30 Nov 20 (Nov 19: £125m; June 20: £95m); loans in arrears reduced by £6.1m during H1 after jumping £9.1m in the prior 6m; and the value of loans in forbearance has dropped from a peak of £25m in May 20 to £2.6m in November 20. Impressively, Time recorded a PBT of £1.4m in H1, compared to a loss of £1.0m in H2 20.
At a market level, light at the end of the Covid-19 tunnel brought about by the start of vaccine rollouts, coupled with a more clearly defined post-Brexit UK-EU relationship, should provide a platform for further recovery. While at a competitive level, Time’s established market position; advantages gained from the rebrand (simpler messaging, cross selling opportunities, cost synergies); and financial headroom – it has £97m of ‘available’ funding facilities and a strong balance sheet with net tangible assets of £27.8m (£26.5m on 31 May 20) – gives it a strong chance of gaining market share.
The share price of 25p is 30% below pre-pandemic levels, with valuation multiples suggesting that Time looks significantly undervalued in relation to peers.