Time Finance Share Discussion Threads

[mpearson5] 29/1/2024 22:08

Smithie6 On Stockopedia metrics Time wins 26 out of 36 vs MFX …. It’s no contest!!
!

[gswredland] 29/1/2024 16:32

Been expecting a pullback with profit taking.
Hopefully its can get back to 35-36 to add.

[smithie6] 29/1/2024 11:22

mpearson5 wrote
"Time up 80% over past year , MFX down 5% over same period
Pays ya money ,takes ya chance !"

My response

Oct. '22 to now

MFX. 8p to 19.5p. +144%
TIME. 16p to 40p. + 150%

Almost identical growth in share price.
For growth from now on we have to wait to see.

(btw MFX owns 50.1% of Payment Assist Ltd, with an option to buy the rest for just 2 times profit. ;-)
Payment Assist Ltd multiplied it's PAT by X3 in H1 versus the previous year, to be £2.4m/year. If it keeps growing then it's profit might soon be the same as that of TIME. ;-)
TIME's growth can't compete with that).
;-)

Btw the loan book at MFX is double the size of the loan book at TIME.
Yet MFX has a lower cap. value.

Maybe ST might tip it in 2025 ! ;-)

[rivaldo] 29/1/2024 09:30

Cheers eeza - here's the rest of ST's tip:

"On course for double-digit earnings growth

Time Finance uses wholesale funding facilities to finance its lending and remains funded to continue cherry-picking business to hit its £230mn lending target by June 2025. That’s worth noting since an increasing proportion of incremental gross profit earned on new lending converts into operating profit given the company has a relatively fixed cost base.

This helps explain why house broker Cavendish expects 30 per cent growth in operating profit to £5.6mn on 12 per cent higher revenue of £30.8mn in the 12 months to 31 May 2024. On this basis, expect both pre-tax profit and earnings per share (EPS) to rise by more than a quarter to £5.4mn and 4.3p, respectively.

Factoring in further growth in loan receivables to £210mn by 31 May 2025, analysts expect annual revenue of £33.1mn to deliver operating profit of £6.6mn, pre-tax profit of £6.3mn and EPS of 5.1p in the 2024-25 financial year. This implies the shares are rated on modest forward price/earnings (PE) ratios of 8.5 (2024) and 7.3 (2025).

Moreover, by recycling profits back into the business, tangible net asset value (TNAV) is also delivering double-digit growth, rising 13 per cent to £36.4mn (39.3p) year on year and on course to hit £38.8mn (42p) in May 2024 and £44mn (47.5p) in May 2025. The value being created for shareholders has not been lost on investors, hence why the share price has risen 41 per cent since I spotted the opportunity (‘Alpha Research: Business is booming for this underrated lender to SME’s’, 18 August 2023) and is up 19 per cent since my last buy call (‘Six micro-caps worth buying’, 9 November 2023).

The modest single-digit earnings multiple and 21 per cent discount to May 2025 TNAV estimates suggest the re-rating has further to run and I upgrade my target from 40p to 50p. Buy."

[eeza] 29/1/2024 08:24

Sent you PM, riv

[rivaldo] 29/1/2024 08:12

Tipped by ST in the IC - but subscription-only so I can only see the article's intro:



"Tap into this bargain-priced SME lender

Business is booming for a lowly rated alternative provider of finance to SMEs

January 25, 2024
by Simon Thompson

Gross lending up 24 per cent to record £188mn
First-half pre-tax profit and EPS up a third to £2.7mn and 2.33p

Business continues to boom for Bath-based Time Finance (TIME:37.5p), an alternative provider of finance to more than 10,000 small and medium-sized enterprises (SMEs).

In the latest six-month trading period, own lending book origination increased 29 per cent to £47.3mn, which in turn boosted gross lending to a record high. Importantly, credit quality remains robust, a reflection of the fact that invoice and hard asset finance account for 70 per cent of total lending, up from 50 per cent in 2021. A doubling of the average deal size since then and dealing with a lower number of enquiries from more established and credit-worthy businesses is another reason why delinquency levels are holding steady at 6 per cent. All lending is made from the company’s own balance sheet or through brokering on business that does not meet its strict lending parameters."

[mpearson5] 28/1/2024 14:47

Time up 80% over past year , MFX down 5% over same period .
Pays ya money ,takes ya chance !

[smithie6] 28/1/2024 12:18

Who knows ...

Reward & risk.

The loan book is ~5.5 X the NTAV of the company, that infers risk. Who knows how the mkt will value that risk. And also depends on the price of other shares for lending companies. Currently bank shares are at a p/e of around 5 perhaps. Makes TIME shares look a bit expensive phps at a p/e of ~8 for future EPS of ~5p.
Previously the TIME share price repeatedly hit resistance at 36p. Will it hit resistance again ?
X months ago the mkt was worried about a possible recession & bad debt increasing as a result (reducing the profit). This week for TIME the mkt is not worried about that. In X months time we don't know.

I bought NatWest last week in preference to TIME, since the p/e for NatWest is notably cheaper.

I hope that all shares of companies doing lending do well. I made some money in Time shares from ~28p to 35p)
(...I have a chunky holding in MFX, also does lending to UK SMEs, & much cheaper than TIME. ~8 weeks till MFX annual results, fingers & toes are crossed !.

MFX is up ~30% in last 2-3 weeks. :-). While Time is up a smaller ~13%. ;-) )

Pays ya money, takes ya chance.

[doobz] 27/1/2024 09:56

Smithie, do you still think there’s not a chance we will see 50p this year :)

[sharesoc] 26/1/2024 18:47

ShareSoc is hosting a webinar with Time Finance (TIME) on 26/3/24, which may be of interest to current shareholders or potential investors. Ed Rimmer (CEO) and James Roberts (CFO) will be presenting. You can register here:

[owenski] 26/1/2024 15:50

Indeed, good to see.

[eeza] 26/1/2024 15:14

A few chunky buys this afternoon.

[smithie6] 26/1/2024 13:37

Eeza..
....will see what happens...
.. previously TIME seemed to be hitting resistance at 34-37p area....which it has phps gone above now....but there is a chance it might hit resistance again...who knows, depends if the sellers of the last few months have any/many shares left to sell.
(Each to their own but the TIME p/e looks expensive imo compared to the big bank shares ( I have just bought some NatWest today, @ 223p & initially in at ~183p ;-) ), ; Time shares are more expensive than Natwest due to Time's higher growth I assume. Other questions like risk/reward come in to it. Time's loan book is ~5 times it's NTAV so there is an element of risk involved, but that exists for all lenders. I guess that like any share the best thing to do it hold for 3-5 yrs, to get the real benefits.

Still confident that MFX will outperform Time by the end of June, although Time is winning at the moment.

[nakedmolerat] 26/1/2024 09:26

i registered with cavendish to read that report yesterday, although it didnt like as clicked individual, so pressed the back button and changed to business user :D

[gswredland] 26/1/2024 08:29

Yes welcome aboard Rivaldo!

[hastings] 26/1/2024 07:26

Good to see you here rivaldo

[rivaldo] 26/1/2024 07:22

Bought in here yesterday for the first time on the morning dip as it just looks too cheap and management have performed well consistently and for some time now.

Given the H1 figures, together with the order book expansion, it's likely imo that TIME will certainly meet and most likely beat expectations of 4.6p EPS for this year ending in May (which rise to 5.4p EPS for the year commencing June).

Finncap's upgrade to a 71p target (from 47p) is summarised by them as follows:

"Time to celebrate another strong set of interims

Time Finance has released a strong set of interim results to the period ending 30 November 2023. The origination capabilities were firing away with 29% YoY growth to £47m, taking the gross lending book to a new record of £189m. The quality of the book remains uncompromisingly high with invoice and hard-asset financing now making up over 70% of the book and arrears flat at 6%. Revenues increased 19% to £15.7m and PBT increased 35% to £2.7m, reflecting the operational gearing from the organic top-line growth.

Time looks extremely cheap, trading on an FY25E P/E of 7.1x and FY25E P/TNAV of 0.8x. With the sustained period of strong performance through a rising rate environment, we believe that growth will continue or even accelerate in what should be a more benign future environment and as a result we have increased our 1-year price target from 47p to 71p."

[eeza] 25/1/2024 22:18

Careful, Smithie, else you'll be buying in.

[smithie6] 25/1/2024 22:05

.. impressive annual EPS growth.
+35% WRT H1 in 2022

Impressive

(While NTAV is up 13%)
...not too surprising to see that gearing of the loan book wrt NTAV has increased in order to help obtain that high EPS growth)

[owenski] 25/1/2024 20:28

Results presentation -

[eeza] 25/1/2024 19:56

Tipped once again by ST, this evening.

Has a good following, so may goose the share price tomorrow morning.


His TP raised from 40p to 50p.

[eeza] 25/1/2024 17:32

From the Cavendish note.

" we have increased our 1-year price target from 47p to 71p."

[smithie6] 25/1/2024 17:05

Congrats to Time shareholders. Growth & EPS are up & company expects to keep growing the loan book & profits.

The % for bad loans is unchanged, which hopefully is a precursor for the same happening at MFX, hopefully, which also lends to SMEs in the UK.

(In my , just for fun, competition between MFX & TIME share prices, TIME is out in the lead, so far. But the end date is the end of June, so some time to go yet)

[eeza] 25/1/2024 14:56

Movin' on up.

About Time.

[davidosh] 25/1/2024 13:56

Time Finance will be presenting on the next Mello Monday show on the 19th February