Time Finance plc · LSE:TIME
Time Finance — 1pm — Investor Presentation (May 2020)
22 slides from Time Finance's investor presentation, May 2020
Slide 1: Investor Presentation
Investor Presentation May 2020 1
Slide 2: Disclaimer
Disclaimer This presentation ("Presentation") has been prepared by 1pm plc (the "Company") and is confidential and is only directed at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as perso
Slide 3: Presenters
Presenters Ian Smith, CEO • Over 3 years in the full-time CEO role; previously 2 years as 1pm Non-executive Chairman • Instigated and implemented the recent buy-and-build phase of expansion • 26 years in listed and privately-owned, PE/VC - backed entities, leading strategic transformations • Initial
Slide 4: Presentation contents
Presentation contents Overview of the 1pm plc Group Business impact of COVID-19 CBILS accreditation Q&A 4
Slide 5: Overview of the Group
Overview of the Group • A non-bank, specialist finance provider to SMEs • Trading subsidiaries are FCA authorised • Operating a hybrid model; flexibility to either fund on own balance sheet, or broke-on to other lenders Business-critical Invoice Finance ‘hard’ & ‘soft’ – discounting • All own balanc
Slide 6: Operating principles
Operating principles 1pm is a cautious finance provider focused on Spread, Security and Margin Spread is key to SME lending and is a risk-mitigating hedge: • Largest sector by value and number of deals is < 5% of portfolio • Multiple SIC codes – top 10 sectors account for only 1/3rd of the portfolio
Slide 7: Recent deal examples
Recent deal examples Asset Finance Invoice Finance • Food Manufacturer • Fashion and Textile Manufacturer • £77,000 Asset Finance Facility (£50k own book funded & • £400,000 Invoice Finance Facility £27k brokered) • In response to COVID-19, the firm had secured a large • The business had recently se
Slide 8: Pre COVID-19 financial performance
Pre COVID-19 financial performance REVENUE AND PROFIT £000 BALANCE SHEET £m 30/11/19 31/5/19 Track Record Assets 35,000 9,000 8,000 Non-Current Assets 74 82 30,000 Current Asset 90 76 7,000 25,000 Total Assets 164 158 6,000 20,000 5,000 15,000 4,000 Equity 3,000 Retained Earnings 22 20 10,000 2,000
Slide 9: Operating division data (Pre COVID-19)
Operating division data (Pre COVID-19) Over 21,000 SMEs and consumers Asset Finance Loans Invoice Finance Vehicle Finance Annual Annual Annual Annual origination £54.3m origination £35.3m origination £17.3m origination £54.1m Book £86.9m Book £12.1m Book £42.7m All new and used Interest rate 10-18%
Slide 10: Funding partners
Funding partners Ample headroom for organic growth Key Funding Lines - £m Facility Usage at 30 Nov. 19 Headroom Bank Overdraft (Nat West) 1.0 0.0 1.0 Block Funding lines (no non-utilisation fees) 116.8 51.5 65.3 Secured Loan Note & other HNW loans 26.9 8.2 18.7 Back-to-back facility (RBS IF) 37.0 31
Slide 11: Robust business factors
Robust business factors • Risk-mitigating spread and diversity – of introducer channel, asset category, lending product, sector, geography, deal size and deal quality • Operating model flexibility – lending and broking • Borrower resilience – lending to independent businesses for ‘staple-diet’ consu
Slide 12: COVID-19 response
COVID-19 response Incident Management Team IMT formed of plc and Operating Board members to take a ‘crisis-management’ approach – weekly meetings Four guiding principles established 1. a dedicated focus on the health and safety of the Group’s employees and their families 2. an uninterrupted seamless
Slide 13: COVID-19 business impact – category A
COVID-19 business impact – category A Effect on trading - Vehicles division activity reduced significantly in late March and April; signs of increasing activity in May - Property broking activity reduced significantly in late March and currently inactive - ‘Soft’ asset origination activity reduced i
Slide 14: COVID-19 business impact – category B
COVID-19 business impact – category B Effect on portfolio - Currently circa 14,200 borrowers. - Forbearance requests from circa 25% of borrowers, equating to circa 15% of the Group’s lending portfolio by value - Forbearance granted to date represents circa £0.8m of cash inflow - Rate of new requests
Slide 15: COVID-19 business impact – category C
COVID-19 business impact – category C Effect on capacity to lend - Some sectors are trading strongly; staying ‘open for business’ is therefore key to meeting their needs - Requesting matching forbearance from funders risks closing-off the ability to lend for new deals - British Business Bank, throug
Slide 16: CBILS accreditation
CBILS accreditation • CBILS provides financial support to SMEs across the UK that are losing revenue, and seeing their cash flow disrupted, as a result of the COVID-19 outbreak. • A lender can provide finance in the form of term loans, invoice finance or asset finance • 1pm’s accreditation is, at pr
Slide 17: Outlook
Outlook • 1pm has: – a strong balance sheet – policies and characteristics that lead to a robust trading model – a strategically sound market position – a track record of delivering expected financial results • The Group is responding effectively to the business impact of COVID-19 and taking appropr
Slide 18: Appendices
Appendices iPM 18
Slide 19: 1pm group management structure
1pm group management structure Non-Executive Directors Chief Financial Officer Chief Executive Officer Head of Risk (& Warrington site) Head of Governance, IR & Co Sec. Lorraine Neyland Jennifer Bodey EXEC TEAM Head of IT Head of Marketing Head of Loans (& Cardiff site) Head of Vehicles Head of Asse
Slide 20: 1pm plc current ownership
1pm plc current ownership 10 Largest holdings % 30 Nov 2019 Holding 88,985,316 Fund Manager s £30,477,471 Lombard Odier Asset 23.01% 20,478,352 GPIM Limited 17.59% 15,650,187 Russell R Esq 12.34% 10,977,967 Hargreaves Lansdown 8.46% 7,529,682 Interactive Investor Trading 5.62% 5,000,586 Individuals
Slide 21: Diversified lending
Diversified lending Credit risk management – no major concentrations £ M's Top 10 by Principal o/s (leases, loans, HP) & credit facility (invoice financing) 10 Top 10 by deal number Unlicensed restaurants 9 4.9% Maintenance & repair of 8 vehicles 4.0% Licensed restaurants 7 4.8% 10.7% Hairdressing &
Slide 22: Competition
Competition Fragmented sector - few companies at scale in small-ticket lending Banks Challenger Banks Alternative finance Private companies Quoted companies HSBs lend to SMEs, Also lessors, but do Quantum Finance platforms Tend to be single but no longer not operate in the and regional Growing secto