Time Finance (LSE:TIME) — Full Year Results

0:01 Good afternoon, and welcome to the TIME FINANCE PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. Company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Ed Rimmer, CEO. Good afternoon to you, sir. Good afternoon, and, good afternoon, everyone, and thank you for for joining. Myself and James Roberts are gonna take you through, our first quarter's results as well as the year end to May 31, this year.

0:47 It's worth just saying before we go into the slides, we followed the same format as the previous presentations in that there's a a few slides at the back which give a bit more of a flavor of what we do and who we are, also our core products and how we play in the marketplace. We decided to put those as appendix because we run over the same information each presentation, and a lot of the people that are on the call today are quite familiar with what we do and who we are. So if people do want that information, it is available at the end of the presentation.

1:23 So let's let's get into the presentation just by way of updates in terms of who we are. I'm Ed Rimmer. I'm the chief executive of the business. I came into this role just over three years ago.

1:37 I've been in and around small business lending for nearly thirty years now. I spent a good time of my career with Bibby Financial Services, who are one of the leading players in the marketplace, certainly one of the larger independent players. Five years of that time was his UK chief executive. James, do you wanna just do your introduction? Thanks, Ed, and good afternoon, everybody. I'm James Roberts. I'm the CFO of TIME. I've been here now for just over seven years. I joined in, April 2017. I've got, over twenty years experience in financial services, with other AIM listed, companies back in the past as well.

2:23 Thanks, James. So I'll just take you through where we are in terms of our our current plan, the strategy that we put in place after COVID in June 21. It was a four year plan. The the year that we're reporting to is the third year of the plan, but, of course, now being through the first quarter, we're now well into now the final year of the plan. So it won't come as a surprise that we're doing quite a lot of work in terms of what that that plan looks like after the current phase, and we should be in a position to present a summary of that towards the end of this calendar year, as we move into the second half of our financial year. So just in terms of some key flavor of of what we've been working towards, this is a a slide that we've we've presented on many times before.

3:20 It was put in place, as I say, in June 21, and it was very much on the back of coming out of COVID and seeing a lifting of of of of all the issues that we were facing. So we put we put in place four key objectives, and I'll run you through those now. The first was to become a nationally recognized SME funder, and that was very much off the back of rebranding the business at the end of twenty twenty from our previous name, which was one PM, and it was very much targeted towards our key introducer base. So that's where we we look to gain the recognition within the broker and introduce a base for our asset finance and our invoice finance divisions. The second objective was to get our lending book up from the points of start, which was 115,000,000, and double that to 230,000,000 by the end of the plan.

4:13 The third was to get profitability back up to pre COVID run rates. 2019 was where we were in terms of peak profits prior to this phase of growth. And then the final objective was to strengthen the balance sheet very much through focusing on own book lending. The business was a mixture of brokerage

4:34 and own book, and this phase of growth has been very much centered on own book. The main asset that sits on the balance sheet is is is our receivables book. So the focus has been very much on developing our own lending book as opposed to broken business on. So where are we in terms of those key objectives? Well, I'll run through a couple of slides which are key elements of it, and then James will take you through some more detailed financial numbers both for the first quarter and for the year to to to May. So the progress that we've made in the first quarter has carried on the good momentum that we've seen over the last couple of years. The lending book, as I mentioned, has been one of the key metrics that we've measured in terms of that growth. And you can see there that to to the the the quarter at the end of August, we've got the book up to 205,000,000, which is a new high.

5:33 We've we've had, I think, 13 quarters now where we've seen the growth quarter on quarter in that in that lending book. And that's really strong growth from where we started. So 78% growth from the 115,000,000 starting point in June 21. That growth has really been driven by now what are are are referred to as our key key product offerings, and that's hard asset lending within the asset finance division and invoice finance. So you can see there, there's been pretty strong growth in both those subdivisions. The hard asset division is up to now 90,000,000 lending book, and the invoice finance division is up to 68,000,000. And between the two divisions, they now make up 77% of our of our lending.

6:22 And you can see from the starting points there, 32,000,000 was the starting point for hard assets, so that's nearly a trebling of that book. And 25,000,000 was the starting point for invoice finance, and and that's more than double. So we're really pleased with the focus that we've provided to those two key products and the growth that we've achieved so far. Just some other metrics to mention. So unearned income, so that's the amount of income that sits within that 205,000,000 gross receivables. Why is that important? Well, obviously, it gives us future visibility on the profitability that will flow down and and the income that comes from that that lending book and the growth in the new business that we see. That's up again by a million pounds from where we ended the end of the last financial year in 25,000,000, and it's up significantly from 14,000,000 where we started the plan. So, again, good growth there.

7:21 The PBT margin, which is something that we've added into the presentation following some feedback from shareholders previously. James will talk you through the actual detailed income and and profit numbers. But just to summarize, the the PBT profit margin, 21% to August first quarter end. That's up from 18 at year end and 8% from where we started the plan. So, again, really strong growth. And pleasingly, the growth that we've seen has not been at the expense of deteriorating arrears or deteriorating quality in the book. The net arrears have stayed stable from when we finished the year end at 5%. And, again, significant progress over the course of the plan down from 13% from when we started in in June 21.

8:12 So overall, some pleasing trends and some positive numbers, which James will expand on in a moment when I've just covered off the last slide. So

8:25 or certainly the last slide of my section, my first section. So how has all this been achieved? Well, significant progress to to August 31 as the slide says. That's not all been achieved in the first quarter of this year. It's a culmination of what we've done really over the last two and a half years. And that is the focus on the core business, really. We we restructured the business when we rebranded. There was a number of businesses and brands that weren't core to what we we decided was gonna be our plan, and we're very much been on that path now of focusing on core business and our own book lending. We moved away from the consumer finance brokerages. We also moved away from unsecured small loans.

9:11 And more recently, in in the last trading period at the start of the calendar year, we also made the decision to move away from regulated business fully. So it's really given us a real focus on what we're trying to do, and that is grow our own book with those core product offerings of hard asset financing and invoice finance plus asset based lending, which I'll mention in a moment. We invested in some some people, and that's been a a mix of new people and also some promotions with existing people in the business, which has been good to see. We we brought in a new head of business improvement more laterally. That was right at the end of the current financial year. Fazia Riaz joined us. She's got some really good experience, just in business improvement and change management, but also really importantly in our in our industry, so both in assets and invoice finance.

10:07 And she's making some some some good headway already with the plans

10:12 that we're starting to put in place of making us more efficient and investing in some system improvements. That will be a key part of our future plan, which we'll talk through in more detail towards the end of the year. We've continued to develop our product offering. I mentioned asset based lending. That's a a key opportunity to increase the volume further over the next few years. We did that in the first year last year to to May, and we had some good success.

10:43 We will definitely be focusing more on that as we move through the next stage of the of the plan, and that's, in simple terms, lending more to the to the one client or customer. So that's that's combining assets, invoice, and loans where we can provide a more multiproduct solution. One of the things that differentiates ourselves is very much being able to offer more than just one product. And, of course, lots of businesses can do that, but lots of those businesses are much bigger businesses. We have the ability to have the flexibility and the speed of response to be able to do that as well. So that's a key area of differentiation for us as we move forward. We do still have our soft asset book.

11:28 It's a it's a fairly stable book. It's not really growing, but it provides good returns. It's becoming a a smaller percentage of the overall book, which was deliberate as we expand the hard asset and the invoice finance divisions. But the soft asset business is pretty much all under a fast track offering now, which reduces the amount of work that we have to undertake on those slightly smaller deals. And it means that we're moving more towards an efficient running of that smaller offering. It does also give us some natural hedge away from the slightly larger deals that we we see coming through for hard asset and and and invoice finance. And more lastly, we've become accredited to the government guarantee scheme, the the the new scheme that's been offered as a as a follow-up to the recovery loans guarantee scheme. So that was launched in July. We've recently had accreditation, and we're looking to to launch that into the business in the second quarter of our financial year.

12:30 And we have continued to build our brand within our key audience.

12:34 We sponsored the National Association of Commercial Finance Brokers. That's where a lot of our broker audience lies. And we've won a number of awards, which has been pleasing and testimony to the hard work of all our team. And we were ranked number one in the Business Money Intermediary Index, which again is a is a good recognition of of of the coverage we're getting within our our key broker audience.

12:58 So just some highlights there in terms of the progress that we've made and and and how we've managed to be reasonably successful over the last couple of years. At that point, I'll hand you over to to James. Thanks, Ed. I'll just do a quick four or five slides on the numbers in a little bit more detail to hopefully bring bring bring them to life. Initially, I'll I'll I'll go through the May numbers to May 24, the full year audited results, but I'm gonna focus probably a little bit more on the q one update, if that's okay with everybody.

13:34 So as you can see here, the numbers that were were published today to May 24, we did put a trading update out in June. So a lot of these were were largely known and have been for a while. Pleasingly, though, they're all marginally better than the update in June. So you can see on the right hand side there, the key thing is nice green ticks on every single metric. And in the movement, it's double digit growth in all the key metrics as well. So our own book origination,

14:03 up by 25% to nearly 92,000,000. The the lending book was up to, at the time, a record high of just over 200,000,000. And crucially, the point Ed has has raised and I will continue to raise and apologies for raising lost points, but it is absolutely key. It's arguably easy to lend money. The skill is in making sure you get it back. And the arrears, as you can see, fell during the last year, and the net bad debt write offs also fell to 51% respectively.

14:31 Arrears, we've reported on quite a bit, and these are deals that aren't working, so they could be to quite a plan. They could be anything from one day down. They've just they've gone on holiday and forgotten to pay all the way through to maybe we're having to pursue legal action to get those back, but it doesn't mean you end up writing them off. So this year is the first year we've also begun reporting on the next line, the net bad debt write off. So these are the ones that actually do hit our p and l where we, for whatever reason, are not able to get our money back and have to take that hit.

14:58 So five percent are ones that we an element of concern on. A lot of them you'll cure and get back on track. Some of them you'll end up writing off, and that's the the 1% here. So 1% net bad debt write offs over the year, we think is a if you can have a good in any terms of write off, that's a good figure. And to see it come down from two the year before is particularly pleasing as it shows we're growing the book, but we're not weakening the quality of the book in doing so. The increased book and origination has led to the revenue growth. We can see there 20 odd percent to just over GBP 33,000,000. And crucially, the PBT increased by over 40% to 900,000. As Ed touched on, the margins are improving as we were able to scale the business now without adding a significant number of headcount.

15:45 And that's a key focus of ours to improve those margins. All that profit after tax flows through to the the balance sheet. We're reinvesting our profit to grow the business further using our cash to to lend, and that's resulted in, net tangible assets at the end of May, just under £39,000,000, and our EPS is at 4.8, again, up 30%. So numbers similar to the ones we put out in June as a high level trading update, but marginally better. So really pleased with those numbers in the current environment.

16:15 And probably the next slide is is is the one that's most important to us and and new for everyone today is the the the the quarter one to the end of August. Ed's already touched on some of it, but crucially, that growth and those controlled arrears continue. So very pleasing first quarter. It can often be quite a slow quarter for us due to holidays and and people being away, but actually our own book origination has increased. Our lending book has increased. Arrears and net bad debt write offs have stayed static.

16:43 And you can see there the revenue, 9,100,000, 20% up on the same quarter the year before. Profit before tax, 1,900,000, again, over 40% up on the same period the year before. And now our, net tangible assets are over 40,000,000. So the growth has continued through the summer months, and we enter now September, October, November, traditionally one of our strongest quarters. So we look forward with cautious optimism there, but very pleased with that first quarter's trading.

17:13 Just trying to bring some more of that to life. Here is the lending book since we set that new medium term strategy in place in June 21. You can see on the left hand side, it was about a 115,000,000 as we've said, and now it's at record highs of about 205,000,000 at the end of August. There is the odd dip as you go along due to holidays. Christmas tends to dip it around Christmas time, and and over the summer as well and also over Easter as people are away. They're not they're not looking for new pieces of kit, etcetera, etcetera, and it slows down. But generally, it's a continuous upwards upward trend. And

17:44 if you take a quarterly average, every quarter has grown. So it's thirteen consecutive quarters of loan book growth. And why is that important? Because if you get that type of oh, sorry. If you get that type of your book growth right and there aren't lots of arrears, then that will drop through into future interest over the life of the lease or the loan and in turn profit. So growing the book and growing it in the right way is absolutely key, due to its compound nature for our future growth. So that slide showed the the book has grown consistently and what this next slide here shows that the arrears have remained in control. That's the the graphic on the right hand side. The the purple line is the overall group arrears.

18:25 The green dotted line is the hard assets, and the blue dotted line, the invoice finance. I've pulled out hard and invoice finances, as Ed alluded to. They're the two great key growth areas. Now make up almost four fifths of our entire lending book, and they will get make up ever more as they they're where we're growing while the other products, are maybe stumped treading water. So you can see as we came out of, COVID, we set this plan in place. The overall arrears were were in the low teens, a bit higher for hard asset, bit lower for invoice finance. But for pretty much the last two years, we've got them down to that broad 6% range. And as we can see, it stayed around there for two years or so. So we are growing that book without those arrears increasing. As I said earlier, arguably, it could be relatively easy to grow the book by putting on weak quality deals, which one, two, three years down the line could come back to bite you. But keeping these arrears at those levels and the net bad debt write offs that we've already touched on at 21%, means nothing should be coming back. Touch wood to bite us later down the line. So that's a key slide for us as an own book own book lender.

19:30 Some other key things, I mean, we can only do what we we do thanks to support from our funding partners. Obviously, our key asset is cash that we're able to lend on, and we're able to leverage up our our lending with our partners. We used to put in between 1020% of equity in each deal as we've got better and and bigger. We're now putting in between 510% cash into each deal, which obviously improves our ability to lend. You can see here we've got over 200,000,000 of funding facilities in place between the block funding lines for the asset finance division and the back to back facility for invoice finance, all with significant headroom to grow. So we feel we're pretty well set for the foreseeable future to grow, and hit certainly this medium term plan and well into the next plan that we're gonna announce, hopefully before the end of this calendar year. And as you can see on the bottom left hand side there, there's a number of funding partners that we we work with. We feel it's good as well as diversifying our lending to spread the risk. It's also good to diversify our funding so we're not just in bed with one one or two partners. We've got a number of funding partners there, which puts us in a very strong position.

20:37 Couple of other key points just to draw out very, very quickly. The the larger secured lending, our average deal size now is is significantly higher than it was back at the beginning of this this medium term plan. We feel we can get more security and and lower arrears and write offs on those type of deals and better returns. So it's great to see that metric moving up. We have continued, however, to focus on spread, and you can see that, the largest 10 secondtors we operate in are less than a third of our overall lending book, and no one sector is over 15%. So if there was a particular issue in one sector, although it would be a pain, obviously, it's never gonna be, particularly damaging. We're very, very well spread, and that diversification remains a a focus. And despite the good news about arrears and and write offs and spread, we feel we've still got a very sensible approach to provisioning. Our bad debt provision runs at about two and a half, 3% of the overall net exposure, which we feel is relatively prudent and has been borne out over the last few years.

21:38 But we maintain that provision, which we think is a sensible thing to do. So in summary, very solid set of numbers for the full financial year. We were very pleased with those in the current macroeconomic environment, and we're particularly pleased with how the first quarter of the new financial year has gone. And with regards to the numbers, we're certainly cautiously optimistic for the remaining nine months of the year. And with that, I'll hand back to Ed. Thanks, James. So just by way of a summary from myself and a bit of an outlook for the the rest of the financial year before we move on to any questions. Oh, it works. There we go. Yeah. So in terms of a summary, I think it's very much continuing the focus of the current strategy, which is, as you've heard, the the the focus on hard asset, invoice finance, and and ABL. They're our core products, and that's where we've had success. And we still think there's there's plenty of room for further growth.

22:37 The medium term plan, the aims remain the same, and we hopefully will be able to carry that positive momentum through the rest of this year. The key people that we've brought into the business are now embedded and and are adding value. That team is pretty much complete now, and very much the future is about driving growth through further efficiencies. And as James mentioned, not not increasing headcount at the same rate as as we increase income. Our profile and our brand continues to to increase within our our core introducer base and the commercial finance market, and we want to do further things there. And our new three year plan, as I mentioned, we are working on at the moment. We should have the that that finalized by our half year. So by the end of this calendar year, the latest, the start of the the new calendar year, we'll be able to communicate the key themes of what that looks like, and we look forward to to doing that.

23:38 And at some point, these slides will then take on a a slightly different look because as we move through this plan, some of the messages have been a little bit repetitive. So hopefully, we'll have a bit of a new look presentation as well to deliver to shareholders once we move into that plan. In terms of our our investment case, well, the share price has done really well over the last twelve months in particular. The lending book really has underpinned that. As as James mentioned, the lending books led to the increased income, the increased profitability, and and, obviously, that's a key part of that has been the arrears that have been really well managed. So as long as the lending book continues to grow quarter on quarter and we manage the arrears, we should continue to see growth in our revenue and and profitability.

24:27 And you you can see there where we started 1,100,000 in terms of the PBT when the when the plan started in June 21. We're now up to 5,900,000. So we've had some some profit upgrades over the last eighteen months, and we see further growth in PBT as we move into the next stage of our of our plan. Net tangible assets for the first time have moved through the 40,000,000 barrier, and the net tangible the the market cap is now roughly about 48,000,000. Obviously, moves around a little bit as the share price moves around. But for the followers of of of one PM and TIME FINANCE in its early years, you'll know that for a long time, the the share price was trading at a discount, quite a significant discount to net asset value. And and thankfully, with the progress that we've made, that's been reversed. So we're we're pleased about that.

25:26 Market conditions, they are challenging. I'm sure we'll come on to that with some of the questions, and I can elaborate on that. But the the the the conditions that small businesses face at the moment are challenging, but as we've always said, that that presents opportunities for lenders such as ourselves where we see some of the the the larger lenders and the banks in particular taking more of a risk averse view. The key for us is making sure that we balance the opportunities with the the quality of the lending book. And if we can get that right, then there'll be good opportunities for alternative financiers like ourselves, particularly those who have a multiproducts offering. So, yeah, all all in all, the case, I think, remains that we are optimistic for the future, and this is, you know, under underlying good business to invest in.

26:20 That concludes the presentation. So I think we'll move on to questions, which James will facilitate. Yes. James, if I could just jump in and thank you very much for your presentation. I'll just bring your cameras back up for the Q and A at this point if that's okay. Ladies and gentlemen please do continue to submit your questions. You can do that just by using the Q and A tab which is situated on the top right hand corner of your screen. Just while the company take a few moments to read the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And as Ed mentioned, James, if I could hand over to you to chair the Q and A, that would be great, and I'll pick up from you at the end. Great. Thank you. So we've had a number of questions submitted and some pre submitted. I think they're just in the order they were submitted. So I'll start with the first one. I think it's probably one for you, Ed, if that's okay. How do you balance your growth ambitions with your commitment to responsible lending?

27:20 Yeah. Well, we've touched on that a number of times, think, in the presentation, didn't we, in terms of the success of the business is really about getting that balance right. So it's it's it's obviously very much about originating the right business, making sure that our introducers have a clear understanding of the business we want and don't want. It's around around us having the right people in the business, them being targeted in the right way, and also things like our board and our executive committee making sure that we manage the business within our our our our cultural values which we feel very passionately about. So it's it's a range of things. And, yeah, ultimately, getting that balance right is is what we're paid to do, really. You know, that's that's really key.

28:09 And it's it's a it's a, yeah, it's a day to day challenge, but we're we we think we're in the right space, and we want to make sure that we continue getting that that balance right. Thanks, Ed. Next question was, has the current economic climate hampered your growth or trading? It's not. It's it's it's probably assisted it. And and, again, we've touched on that because when there's times of, you know, boom and bust, alternative lenders such as ourselves tend to do well. Businesses need to access cash, whether that's for cash flow purposes to grow the business and take advantage of others failing, which, you know, does happen quite a lot, or to to replace new kits, invest in new kits, or refinance existing kits.

29:03 So we we have an offering in terms of our products that plays to businesses in growth and businesses that are are looking to manage cash flow maybe a bit more tightly. That's where we we do well. So I would say that, you know, these times play to our strengths, but we shouldn't, you know, we shouldn't ignore the fact that insolvencies are increasing, and we need to make sure that we are managing that back end, if you like, as robustly as we can. So that means, you know, lots of client management, making sure that we're helping our clients and customers, but also we're we're keeping very close eye on on trading and and how they perform and making sure that there there's no misdemeanors in the in the book.

29:54 So, yeah, I think overall, it provides us with opportunities, but not without its challenges, and it's a question of, again, getting that balance right. Thanks, Ed. The next question was our aim is to become nationally recognized. How are we measuring this? Yeah. Well, I I think, again, I I mentioned in the presentation that that was not at all focused on, you know, households or consumers. You know, we we we we have to be realistic. We're a relatively small business, but we're becoming more and more recognized in our own space, which is the commercial finance lending market for small businesses. So it's very much focused within the introducer environment, brokers, accountants, insolvency practitioners, turnaround consultants, solicitors, and the likes, that professional community.

30:48 How do we measure it? Well, we're we're looking to undertake surveys and feedback mechanisms within that introducer database, and our marketing team help us to do that. We've done some of that on a an ad hoc basis over the last twelve months, which has helped us refine some of our our offerings in the way that we take things to market. We're looking to do something a little bit more on a on a wider basis across our our introducers and our customers and clients, probably along the Net Promoter Score concept. So that's something that we'll be able to talk about the results of as we as we move into the the end of the plan. We're probably looking to do it in the the later part of this financial year.

31:40 Great. Thanks, Ed. Can you comment on the outlook for UK SMEs and give some insight as to what this might mean for the company? Yeah. I I don't wanna completely repeat what I've said. I think I've I've sort of said that before with the balance right. You know, that there is there is insolvency trends that show that, unfortunately, that is increasing. That wasn't a surprise to us. It's probably not been a surprise to to many people because, you know, ultimately, the environment has been pretty hard for small businesses and not just in the last few months. It's a culmination of the last few years, really. Interest rate rises over the last eighteen months. You know, going back to Brexit challenges, supplier disruption, obviously, you know, post COVID challenges as well.

32:30 Businesses took out loans. They need to be repaid. So it's been a a culmination of things really, which has led to more challenges. There's also been a more much more notable change with the HMRC. There was a time, you know, not long ago, maybe three years ago, where HMRC would pretty much agree to any prepayment plans, pay us back what you can, when you can. That's completely changed now, and we're back to normalized negotiations with HMRC. And that is driving a number of businesses to restructure, and some of them, you know, on on table to restructure, and they they go out of business for good. So I think that's definitely a part of the environment that we're faced with at the moment.

33:15 But as I continually say, that provides us with opportunities. The the key is to get the balance right. Thanks, Ed. I'll give you a voice of rest, and I'll I'll take one now about risk. There's actually two, very similar ones or, well, the answer, I think, overlaps looking at them. One one is what are the key risks you monitor? And and secondly, Ben has said, as you grow further, how do you make sure that arrears and bad debt write offs do not increase? So I think, similar ish answer. In terms of the key risks, I assume the questioner is asking about, our lending risks. We obviously look at the arrears. We obviously look at the write offs. And within that, we drill down into the the sector that those go into, the the size of the deals, and the and the product type as well. So we look at the arrears and the write offs in each of those. And if we're starting to see some trends that arguably we're we're we're concerned about, we might take our foot off the gas in writing some of those businesses, etcetera, etcetera. We have a risk department, a a very well staffed and skilled risk department who do very detailed underwriting of every deal.

34:21 We're using systems more and more as much as we can to make things more efficient, but we have a a human eyes on on on the actual underwriting the deal. We may auto decline, but we don't auto accept because they're story deals, and they need that human experience on there. Above the risk department, we have the credit committee who will look at unusual deals or particularly large deals. And above that, we have the the risk committee, which is our non exec direct to sit on as well and look at all the risks across the group and the clients and where we're overweight in some areas and and some others. So we feel we've got a lot of checks and balances and review points on on the key risk of of our lending book and and whether there's any trends that are going in the wrong direction there. But the key point has been been made is as you grow, how do we make sure the arrears and the bad debts don't increase? Well, the key thing is not to relax our credit policy in a race to the bottom to just take deals on for the sake of taking deals on. We wanna take the right type of deals on. There's a lot of very good SMEs out there who need funding for absolutely the the right reason. We're still relatively small, and so we can really make inroads into that. So we keep our credit policy very tight and only write the deals we really want to. And then as I say, the key point is to monitor those the book in in great depth to see if any of those areas, certain products, certain size levels, certain sectors are are becoming a bit more stressed than others, and then maybe we'll make some decisions there on tightening things or not.

35:50 So multifaceted. Hopefully, that goes some way to answering the question. David's asked, the growth is excellent, but what are the barriers that will prevent it from continuing at these double digit levels? Ed, back to you. Yeah. Thanks, James. Well, I mean, ultimately, a big a big, barrier is is the market and how it performs, you know, what what that external market is like for small businesses, trade in, and also the demand for finance. So we are part of that wider market, but I think I've I've sort of touched on that in terms of where we are and and how these businesses benefit. The the other key barrier is is cash in terms of making sure that we have sufficient raw material. James has talked you through that, and that all looks really positive at the moment.

36:39 And we are just in the process of renewing our invoice finance back to back facility with with RBS for another three years. So that's really good news, and that will be enlarged. And and I think I think the other two barriers are people and systems. Yeah. And I've commented on both of those in the presentation, and we're, you know, very focused always on making sure that we we get the best people into the business. And we are now more focused on on the system side and making sure that we drive efficiencies so that we can scale the business up with a reducing cost to income ratio. So I'd say they're the key sort of four barriers, and and, yeah, we're we're very, very focused on making sure that we we can navigate our way around them. Thanks, Ed.

37:25 David also asked a follow-up question. What is the regulated business that we exited in January? Yeah. So that was the smaller end of our asset finance business. So businesses that were either a sole trader or a partnership still and we're we were lending less than £25,000 to still fell within the regulated environment within the asset finance business. We took the decision to move away from from that. The burden attached to what was a very small part of our lending business wasn't worth it. And we were confident that we'd we'd then seen enough trends to give us the the confidence that we were and we're gonna more than replace that that lost turnover, and we have done that with the the growth that we've seen in the unregulated business within most of the hard asset business. So, yeah, that was the that was the regulated business that I mentioned.

38:30 Thanks, Ed. The next question from Anthony. I'll give your voice a rest again, Ed, for a minute. That's probably one I can have a stab at. Anthony said, today, the shares are down 1%, 2% after what appears to be great results. Why? Very good question. I think I did a little bit of looking into this before this call as to who who's been selling, and it's purely retail driven from what I've been told. Our our our understanding would be that it's been a few people who've either come in when the shares were significantly lower or profit taking or even there was a little bit of a rally yesterday. I think it went up about 10% yesterday in the lead up to the results, and some of those people, it seems that are taking some some early profits. So we think it was a great set of results, so thank you for saying that.

39:19 Hopefully, it's just leveling out and maybe onwards and upwards in the future, one would hope. Ben has asked, could you give some examples of the hard asset finance you're currently providing customers? Yeah. So a lot a lot a lot of the finance that we provide under the hard asset division is is to what you would class as yellow plant. So it services the construction industry. So cranes, diggers, dumper trucks, crushers, anything that you would see on a on a building site or on the motorway. A lot of those assets are financed, and they're the sort of things that we we finance. We also finance a a number of wheeled assets. So, you know, lorries, trucks, trailers, vans, LGVs, and and the likes. We don't get involved in lots of cars.

40:15 It tends to be commercial assets. So, yeah, they're they're they're examples of what we we fund. Thanks, Ed. Colin has asked, how does the government guarantee scheme assist TIME? Previous schemes during COVID, etcetera, were not good for the business being nearly direct competition. What are the upsides of signing up for this scheme? Do do you wanna take that one, James? So you've been very instrumental in, in getting that over the line. So Okay. Yeah. It felt fine. Yes. So you you may have seen, we we announced about a month ago or so we'd, been accredited to provide the government guarantee scheme, the GGS, which was the successor to the RLS and before that, the CBILS, I won't say their full names, which were the government, lending schemes that provided support to UK businesses, coming out of COVID.

41:12 The key point of the GGS scheme is after all our recovery efforts and things like that, the government will underwrite 70% of anything left outstanding. So effectively, the government underwrites 70% of the of the risk. I'd probably disagree with Colin if if that's allowed to do to say the previous schemes were not good for business. They kept our doors open to a degree, during some pretty difficult times out there. We were able to support UK businesses. And while some of those loans didn't work out because the businesses were distressed, overall, we helped a lot of businesses and and and overall, we've done all the analysis. They were they were quite well profitable to the to the group. So in in doing those businesses, we did make money, and we supported dozens of UK businesses who may not have otherwise been able to stay in business. So I I don't think they weren't good for business.

42:04 I would say they they they were a necessary thing to do. The upsides of of the new scheme are, obviously, there's this, government guarantee, and it means we're we're maybe able to help businesses that perhaps we we wouldn't be able to, without that guarantee. So it enables us to look at a slightly different type of business. Again, if we keep our credit policy tight and we do some good underwriting and there's good assets underpinning it, then we're confident we can write some business, help some some UK businesses, and and make some profit at the end of it. So it's something we're we're looking to do over the coming months. It's not gonna change the dial. It's not gonna double our loan book or anything like that, but hopefully, it'll be a nice little additional product to augment the lending that we already do.

42:52 Mark it's another one for me, probably Ed. Martin has asked, would you consider quoting arrears in bad debt percentage to at least one decimal place? That would give a a more accurate picture of problematic debt numbers. Yes. I I I suppose we could. Just in case you're interested, the arrears, the 5% we quote was actually 5.3, and the bad debt percentage net bad debt write off of, 1% was bang on one point naught percent at the end of August. So those are the are the figures to one decimal place. We could go to to more detail. We'll we'll we'll take it on board, and we'll we'll have a think about it to see whether it's it's something we wanna do. But we will certainly consist report consistently period to period to enable comparisons.

43:40 Paul g has asked, given The UK economy is pretty flat, are you growing faster than your underlying underlying markets? If so, whose market share are you taking? Probably one for you, Ed. Yeah. Thanks, James. Yeah. The simple answer to that is yes. We are in terms of the underlying markets. They're they're quite different as you as you would imagine, so they're segmented out in terms of size. So the invoice finance market now services businesses that are traditionally what you would class as SMEs all the way up to businesses that really aren't SMEs at all because their their lending requirements are sort of hundreds of millions, and that's where you get into the asset based lending space at the real top ticket side. So you have to slice and dice the different segments of the markets to be able to get some comparisons with our business, and the the same applies to the asset finance market. There's some very big deals that are done at the top end of the market, but that's really not the the the the small business end that we're in.

44:45 But in in simple terms, we we are out outpacing the the markets that we're in. And we tend to take share from the the slightly bigger businesses where we're more agile, we're more on the front foot, and we're we're more flexible, very much around the offerings that we have. It's focused on service and speed and flexibility. So I'm I'm not gonna say that we're the only client we're the only provider to clients funding out there that is is doing well. There are other businesses, but we're certainly amongst a smaller group that are are are growing quite nicely at the moment and believe have the right the right offerings to small businesses.

45:32 Thanks, Ed. Few more questions. John has asked, could you comment on technology developments within the business? Yeah. I mean, I can to a degree. Obviously, we've got some existing partners in place where there's there's, you know, maybe change of foot. So what what I can say is that we're I mentioned in the presentation, we we've brought in a a a new lady to spearhead this for us, which we we categorize as business improvement. It's not all about IT. It's about how you use the developments in the market and how we develop our own processes and procedures. Technology is just you know, it it it's just one area.

46:20 You could have, you know, the best solution that somebody has utilized brilliantly, but then unless you change the way that you do things and and put the right information into that technology, it doesn't give you the right results. So it's a combination of making sure that we've got the right technologies for our business and and for the future plans of the business and the right way of doing things and using that technology. And that's as much a part to play in the future as the actual technology itself, and and that's where Fosia with her experience a smaller team of people will be able to help us in making sure that everyone gets behind improving the business and improving the way that we do things. You know? It's making sure that we don't rework things. We don't redo things, and we're not focused on moving pieces of paper around multiple times.

47:16 It's on occasions as simple as that. So it's as I say, it's a combination of utilizing what's available in the market. We're not looking to develop things ourselves and write new software. That's not who we are. Yeah. We'll utilize what's available. We'll work with those players very closely to make sure that future iterations come out that that are better. That's something that we do really well. Again, because we're able to do that, we're we're we're we're more hands on. And it's it's making sure that we we have the right people in the business to get the most out of those systems. Thanks, Ed. Excuse me. Just conscious of time. We probably got two or three more questions to go through before we need to wrap up. So Jeff has said borrowings are reported under trade payables. Where can we find the interest paid on those borrowings?

48:08 That's probably one for me. Jeff, I don't know if you've seen the actual full report and accounts. It's it's on our website now if you wanna have a look at it. But note note six, I think it is shows that there were 7,500,000 of borrowing costs reported in the in the p and l during the year to May 21. So it's note six in the report and accounts, which are on our website, has that figure in there. The trade the the borrowings are about a 142,000,000, so 7,500,000 cost on about a 140 odd. It's just over 140 odd million of borrowing. So, hopefully, you can you can work out the percentages and and and see those numbers there if you if you look into the accounts in a little bit more detail, but, hopefully, that answers that question.

48:57 Martin t has asked, have you had any discussions about paying dividends in the future? Given the current prospects for growing the business, I see no good reason for dividends being paid, but your thoughts would be welcome. Ed, are you okay to answer that one? Yeah. I'm I'm always very happy to take that one. And and and and Martin's with his second sentence there, I think, has answered perfectly for what I would what I would say. However, just to reassure all shareholders, we do regularly discuss dividend. When I say regularly, we've tended to approach this at least once a year. We had our board meeting in December last year where this was tables and agenda item. We decided to stick with our policy of not paying a dividend, probably for the reason that that Martin has summarized, and that is because we're looking to grow the business, and we need to utilize within reason all the the the cash that we've got to grow the business.

49:54 I I believe this is a growth stock. I think if people want to get a dividend from a finance business, go and invest in Lloyd's Bank would be my advice. This is very much a growth stock book. We will reassess that, and I would imagine that we will probably look at that again in in the December's meeting so that we we fulfill our commitment and and reassess it at least once a year. Thanks, Ed. Probably got time for two more questions. So we'll do do one each, if that's okay. And and apologies to those we have won't have time to get around to answering. But but Joe has asked one probably for me because I've just done some competitor analysis on this. He's he's asked, how does your net arrears stroke write offs compare to competitors?

50:40 As I mentioned, we we do we we do a lot of work seeing what's out there and what to expect in the market. And funnily enough, only only last week, we were looking we're looking at this very question. The the tier one lenders who we compete against or in in the in the asset lending world and and the lending worlds we're in, Typically, the the challenger banks, if you like, we've been told their net bad debt write offs are about 50 basis points. So as we as you saw there, ours are about a 100 basis points. So our arrears are are lower than the the tier one lenders, but you would expect that. And our net bad debt write off of about 1% is competitive is comparable to the tier two lenders and better than the tier three lenders. So we sit roughly where we want to sit. In terms of arrears, I can only say anecdotally, there aren't many listed competitors like us, but one of our funding partners who do fund a lot of people in that space said that they thought our hard asset arrears were the best of, of the people they provide funding to. So that's just some anecdotal evidence back from, one of our our relatively large funding partners.

51:48 So I think we're in a a pretty good place with regards to our arrears and write offs from what we're hearing anecdotally around the market and the wider market. Hopefully, that answers the question. And then finally, Ed, one for you. David has asked, do you get offered lending books from other lenders where they've gone into administration? Yeah. We do. That was, something that didn't, really come up at all that much in the ten years or so, after 2008 because, obviously, interest rates were a lot lower. There was lots of less administrations, and and no one was really going out of business. That's changed a little bit. As you can imagine, we we did look at a couple of businesses in the last quarter. They hadn't they hadn't gone into administration, but, arguably, they were, you know, not at the peak of their powers.

52:47 So it is something that will fall into our future planning with a probably a little bit more focus given where we are. It's not straightforward because, obviously, we've got a specific market within which we play. So you don't really wanna take on whole books where there's businesses that don't fall within your your lending scope, it then it becomes difficult to sort of start to break bit books up. But we are it's something I've looked at and I've done in the past, certainly in my days in Bibi, and something that I'm, yeah, really interested in, but only within our core offerings. So our asset and invoice finance, so it's consistent with our our strategic plan. Great. Thanks, Ed. And I think, Alessandra, that's probably time to hand back to you. Perfect, Ed. James, thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted today, we'll publish search responses out on the Investor Me company platform.

53:48 Just before redirecting investors, Friday, their feedback, which I know is particularly important to you both, Ed, I was just wondering if I could ask you for a few closing comments. Sure. Well, thank you for everyone's time in in listening and obviously the ongoing support of of the business. We we believe, yeah, we've come through what has been a successful first three years of our strategic plan. We're looking forward to hopefully finishing off this year and and moving into the next stage of our of our growth. The new plan will be will be centered around growing the business. You probably won't be surprised to hear that. And we believe there's some still good opportunities in the markets within which we've developed without needing to go into anything more revolutionary.

54:35 So, yeah, I'm looking forward myself to working and finalizing that plan and hopefully continuing to deliver successful results for for shareholders. James, thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? This will then take a few moments to complete, but I'm sure we'll greatly valued by the company. On behalf of the management team of TIME FINANCE PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.