Time Finance (LSE:TIME) — Interim Results

0:00 Good afternoon, and welcome to the TIME FINANCE PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you

0:31 over to CEO, Ed Remmer. Good afternoon to you. Good afternoon, everyone, and thank you for joining. Just by way of introduction, I'll quickly flick onto that slide. James will cover his introduction himself. So, I'm Ed Rimmer, chief executive of the business. I've spent nearly thirty years now, lending to SMEs through my career. I originally joined the industry, with Bibby Financial Services back in the mid nineties. Spent five years as UK chief executive with that business.

1:09 Started with TIME FINANCE in the days of 1PM originally in 2017. Came back to the business, two and a half years ago, as chief exec. So,

1:22 yeah, that's myself. James. Thanks, Ed. And, yeah, good afternoon, everybody. I'm James Roberts. I'm the CFO of TIME FINANCE, as Ed mentioned. I I joined in 2017, same as Ed, within about two weeks of each other. So I've been the CFO now for about six and a half years. Prior to that, I've been in financial services for just over twenty years initially in insurance and then in the lending side of things for about the past ten or eleven years. Great. Thanks, James. We're now just gonna turn the cameras off if that's okay. Just makes it easier to view the slides for us for us both, and then we'll come back on when we take the q and a at the end of the presentation. So just to, firstly say that, we've done this in the last few presentations.

2:11 The, introductory slides we now show as an appendix at the back, in terms of who we are, what we do, and how we compete on the basis that a lot of investors will have heard that information before. But if you do need to refer to it, it's at the back of the presentation. So gonna talk about where we are strategically in terms of our plan, and then James is gonna come on and give an update on the the numbers for the half year. And then I'll come back on at the end just to round up, and then we'll take any any questions. So just to recap on our medium term strategy that we put in place when I came back into the business, which is, as I say, two and a half years ago, June 21. It was a four year plan, so we're well into that now. We've got, I suppose, just over twelve months of it left through to our financial year end May next year.

3:04 And broadly, we're really pleased with the progress that we've made, and we're on track to achieve our key objectives. We put in place those four objectives really when we conceived this plan. The first was to become a nationally recognized SME funder. There's some caveats around that. That was very much on the back of us rebranding the business to TIME FINANCE at the end of twenty twenty and us needing to educate our introducer base just exactly who we were. One PM was very much a collection of different brands, and it was focused very much in the commercial finance space in terms of the introducer network, in terms of where that recognition is is focused. So that's what what that objective is all about. The second one was to more than double our gross lending book from where we started, in June 21,115,000,000.

3:55 The third was to get the business back to profitability, where we were pre prior to the the COVID lockdowns. And the fourth was to significantly strengthen our balance sheet through focusing very much on own book lending. The business previously was a mixture of own book and and brokerage generated revenue. So I'll be able to give an update on where we are with those four key objectives as we travel through the slides. As I say, significant progress to the half year 2023. I think we're we're we're all pretty pleased with how things are going. And so just to take you through some some highlights. Our gross lending book stood at a £189,000,000.

4:42 You can see that that's 11% up from where we finished the last financial year, but it's also 60% up from where we started out in terms of the plan. So broadly on target to where we want to get to. The two key divisions now, hard assets and invoice finance, between them nearly making up 75% of that overall lending book. They've both seen significant growth. Hard assets, 23% growth further from the end of the financial year. So that's just within the half year, a 23% increase, and a 138% increase from when we started the plan. And similarly, you know, strong growth in invoice finance.

5:27 We've more than doubled the book from when we started and a a further 9% growth from the start of the financial year. So those two divisions are very much now what we call as the the engine room of the of the business. They're secured lending products predominantly, and that was very much key to our strategy that we set out to achieve at the start of this this four year plan. Some of the significant highlights to note, the unearned income that we attached to leases and loans when they are originated that sit within that 189,000,000. You can see there, it stands at just under 24,000,000, and that is up 67,000,000 from sorry, 67% from 14,300,000 when we started out on our plan and 13% growth from the start of the financial year.

6:22 So why is that important? Well, clearly, it gives us visibility of future income in each of the years that the the loans and the leases sit on our our our balance sheet. So, yeah, a fairly significant increase from fourteen point three to twenty four million from when we we started, which, again, we're pleased with.

6:42 A significant point to note as well in terms of that split between owned book lending and broke broke out business, very much a a key strategy that we've pushed much much more towards being an owned book lender. That was all around strengthening our own balance sheet. The main asset within our balance sheet is obviously our lending book. And you can see there it's gradually increased from when we started out 8713% split. It was actually more than that prior to starting this plan, but it's now ninety eight two. So, yeah, the vast majority of what we're doing in terms of activity is is through our own balance sheet. And net arrears has remained consistent at 6% from the start of the financial year.

7:29 It's down quite significantly from when we started the plan. Obviously, that was a little bit bit more relevant to the COVID situation and and where we were then as an economy. Things have got tougher for small businesses, so we're really pleased with the arrears having been maintained at 6% of the overall receivables book. They have obviously gone up in terms of quantum, but as a percentage of the receivables book, they've stayed the same. And you would expect that to happen in terms of the quantum increasing as we as we expand the business.

8:08 So just some of the highlights before I hand over to James to take you through the the numbers for the half year. Focus on our core business. I've I've mentioned this already. We have slimmed the business down from what we had in the 1PM days. We now have four centers, Bath, Manchester, Reading, and Warrington, providing asset finance and invoice finance predominantly. That's what we do. And we effectively exited the consumer brokerage businesses now nearly eighteen months ago. And we also exited the small unsecured loan market just over twelve months ago. So what we're what we're left with now is is predominantly secured lending business to business and all on our our our own balance sheet.

8:59 We've invested in in new people. We've developed existing people as well, and it's been a combination of of both those plans. The three roles that are mentioned there aren't all that we've seen happen in the last year or so, but they're they're three key roles that have really made a difference to the business. So we brought a new director of asset in just two years ago now, Steve Nichols. He's made a real difference to the business and helped to expand that division, particularly in the hard asset space with his experience. We brought a new head of credit in, Paul Seddon. Again, great experience with lending in the hard asset space. He joined eighteen months ago and has helped us transact more in that market, but also some bigger transactions.

9:49 And we recruited a new group head of operations, Sharon Bryden, TIME SERVED in the invoice finance and loan markets, and she's very much made a difference in terms of our operational efficiencies and process management. So just some examples of some of the talent that we've managed to acquire into the business. We've also developed our products very much around those key offerings now. Asset based lending was launched in April last year. We've seen some good deals been brought on. Tend to be smaller number of those deals, but but bigger in value and therefore higher average revenue attached to those transactions. And we're pleased with how that product is going, and we do see good opportunities for that offering in the in the smaller elements of the APL market as we travel through this year and and beyond.

10:42 And the one element that we do have left in the business, which is smaller business, is the soft assets historical product that we we did originally out of the bath business when it was 1PM. Most of that business is now transacted under a fast track offering, which tends to be for less than £15,000 deals, that was launched in April 23, so so last April. It's performing well. We've just done a review of that that that that product to the risk attached to it, the returns attached to it, and it's broadly where we thought it was would would be. We do a a review each quarter on that to make sure that the results are tracking as expected and and pleasingly they are.

11:27 So I think an an another highlight for us. And we've continued to build our brand, particularly within that introducer market in the commercial finance space. We've renewed our sponsorship of of NACFAB, which is the National Association of Commercial Finance Brokers for this year. We won a number of awards last year, and we were joint number one ranked in the business money intermediary index in the invoice finance market. So all all, I think, notable achievements which have been part of that that brand recognition and building up our profile in the in the marketplace since we rebranded to TIME FINANCE three years ago. So at that point, I am happy to hand over to James.

12:18 Thanks, Ed. Yes. I'm gonna do a quick whistle stop tour of the numbers. I've three got slides to run through, and then we will Ed will wrap up, and we'll we'll we'll go on to some questions.

12:31 Firstly, just a a high level slide showing the the sort of key financial metrics of the months to to November 23 compared to the six months to November 22. And as Ed alluded to, it's a it's a set of numbers we're quite pleased with and quite proud of. You can see on the on the right hand side, they're they're pretty much all nice ticks next to the number, and significant growth in in all the areas we we were looking at. If I start at the top and just just rattle through them, some of them are are repeats of some of the numbers Ed said, so I'll relatively brief. But own book origination, getting near 50,000,000 now, nearly 30% up on the same period twelve months before. And I said it before, and I I apologies for saying it again to those who've listened to this presentation many times before, but own book origination is key to us as a business because that's that's a bit the deals we identify, we write on our own book, and they underpin the the the book, which in turn drives revenue and profits over time. So own book origination is absolutely key. And as long as that keeps growing and and then the right quality deals, the business the rest of the business, he says somewhat flippantly, should take care of itself to a to a large degree.

13:41 And that own book origination has led to the book itself growing. We can see there it's just under a £189,000,000 now, which is up about 24% on the 153,000,000 or so from November 22. So the the origination is is driving the book growth, which is which is one of the key strategic tenants of our four year plan. And that has also led to increases in

14:03 unearned income, nearly £24,000,000 now, which is 26% up on the the the six months to November 22. And as Ed alluded to, unearned income is is is key as well because that effectively is the interest that we have on the leases and loans on our balance sheet that assuming they work well and work to plan, we will collect in that interest over the length of those those leases and loans, which could be anything between three months and five years. But you you all other things being equal, best part of £24,000,000 should drop into our p and l over over the coming months and years. At the same time, deals in arrears have stayed relatively flat as a percentage of the book at 6%. We view 6% arrears in in the space we operate in as as as really quite good.

14:50 We'd say that's a good clean book in our view, and we're very pleased that despite the wider economic headwinds that we we hear day in, day out that our book has has not worsened in terms of portfolio quality. It's it's it's stayed the same, which which is really, really pleasing, we think, in the in the wider scheme of things, which is great. And and one thing to stress, and I will distress it on a few other slides as well, is deals in arrears does not mean they are written off. There's a huge difference between arrears and write offs, and I'll come on to that in a bit. So arrears is simply deals that are haven't quite paid in line with what we thought. So it's very, very different than than hitting your your your bottom line in a negative way in the future.

15:33 The balance sheet has strengthened significantly over over the two and a half years of the four year plan as Ed alluded to, and and the next two, elements here, tangible assets and net tangible ounce tangible assets. Highlight that. Tangible assets, nearly 64,000,000 now up from, 60,000,000, just under 60,000,000 twelve months before, and net tangible assets, which arguably is is more pertinent. There is a small amount of intangible assets and a and a reasonably chunky amount of goodwill from a historic buy and build phase on on the balance sheet. So net tangible assets is a real key indicator for us, and that's up to 36,400,000, 13% up on the 32,100,000 twelve months before. So, an ever strengthening balance sheet, which is, again, pleasing. And in terms of the p and l, revenue, 15,700,000.

16:20 That's 19% up on the thirteen point two twelve months before, and a lot of that has dropped through to the bottom line where we can see PBT up to 2,700,000. That's a 35% increase on the six months to November 22. Again, in this current environment, macroeconomic environment, we view 35% growth in bottom line as as good, and and we're quite pleased with that and and long may it continue. And the same percentage growth in EPS, it's not a very complicated business, and and EPS is there's no adjusted shares out there or anything that need to be factored in to get adjusted EPS. It's just trade, EPS 2.33p per share, up 35% on the twelve months before. We've touched on the the the own book. For those who've been on these presentations before, the next two slides I've I've done many, many times and some people may be losing the will to live hearing me talk about them again. So I've tried to tweak them a little bit.

17:15 We used to show the book and then the one on arrears all the way back to pre COVID sort of early twenty twenty. We think we've sort of got through the COVID period now, and so rehash that is is is not really pertinent anymore. So this will be the last time I talk about it, but it's not it's not on the graphs. But to say arrears and our book arrears are much lower than they were pre COVID, and our book is much bigger than it was pre COVID. And the spikes in terms of arrears going up and and the book reverse spike, the dip into book going down due to COVID have all washed through. That's effectively done and dusted, he says somewhat flippantly, but that's gone now. So I'm starting these graphs now from June 21, which is both the end of the final lockdown of COVID and also the beginning of the four year strategy, that that was put in place as Ed mentioned. So that's sort of the new starting point. But bear in in the back of your mind, we're way ahead of in term book size of where we were pre COVID, and our arrears are much, much better than they were pre COVID. So that's the backdrop to this. But as you can see on that graph there, from June 21, the beginning of the plan, the book was about a 115,000,000.

18:22 As Ed said, our our four year target is to grow it to more than double it, so to above 230. And we can see, as we said, we're at we're we're at about a 190,000,000, which is an all time high. And it's been at an all time high from mid twenty twenty two, which is when it passed a 145,000,000, which was the previous highs. And it continues to grow almost always month on month, but certainly quarter on quarter. We've had 10 consecutive quarters of of of continued growth in the book, and the book is what underpins the the revenue, as we've said, and in turn, the profit and in turn, the the net tangible assets. So so it's an absolutely key metric for us. Some other metrics that that sort of smaller parts of our four year plan where we wanted to do larger and more secured lending. The average deal size in November 23, the the final month of these these interim numbers, was was about £44,000.

19:13 That compares to 14,000 at the start of the strategy. So over doubled in in the two and a half years as as we take on larger deals, which which we think are are more robust. And and all over 70% of the lending now is through our hard asset and and IF businesses, which is Ed, as mentioned, the key focus. And and the re one of the rationales behind those is they are arguably more secured. There's a a debtor book behind RF plus other security, and hard asset has a a tangible asset, which which should have a good solid residual value in the secondhand market plus other security as well. So our focus is on those two areas. They're now over 70% of the book, and indeed, they've been about 80% of the origination in the six month period. So we will see hard and as IF becoming ever more 70 will rise to 75 and etcetera, etcetera.

20:05 So we've we've sort of ticked to more of those sub sub metrics we're looking at. At the same time, we've we've very much focused on spread. We we we like to do safe and sensible lending. So of our top 10 sectors by six sick code, they're they're they're less than a third of the overall lending book, and and our largest sector by sick code is less than 10% of the overall lending book. So we're not putting all our eggs in one basket. We're spreading it far and wide across many sectors of of The UK economy. And we think we've we've we've got and maintained a a sensible approach to to provisioning. Our bad debt provision is remains around about 3% of our total, net net lending book, and our our IFRS nine calcs and our historic write offs and our specific provisioning and things indicate that is still the appropriate measure to have. So much like the arrears being static, the provisioning is being static as a percentage of the book, and and we think that's a sensible and prudent position to be in.

21:05 The final slide from me, again, focusing on more on the balance sheet, and we can see two two two pieces of information here. One's net tangible assets and one's the arrears. I'll be relatively brief on the net tangible assets. This is again from the start of our four year plan in in the middle of twenty twenty one. Net tangible assets were 28,400,000 as we've touched on. They're now they're they're now over 36,000,000, and and we can see every period we we are profitable, making more profit, the net tangible assets are are going up. Arrears is is obviously key. Arguably, it's easy to lend money. The skill is is getting it back, and the arrears are the first indicator of things not quite going to plan. So this graph here, the the purple line is the overall group arrears.

21:52 You can see at the beginning of our four year plan, they were were just over 12%, and they've they've fallen relatively quickly to settle on about 6% where they've they've been around 6% between about six point four and five point four depending on the month in question for about the past eighteen months. And we think that's that that's that's a good, you know, good solid rate of arrears in in the industry we're in, and we're we're we're pleased with that. I've added two other indicators on here because of the focus on hard asset and invoice finance. I thought it would be useful, hopefully, for for people listening in to see how hard asset and invoice finance are doing because they are the the focus of the business. They're the areas that are growing. They're the areas that will come ever more more and more a percentage of the overall book, and they're actually, in even ruder health than arguably the entire group, arrears rate. You can see the blue dotted line is invoice finance and and the and the sorry. The blue dotted line is hard asset, and the green dotted line is is is invoice finance.

22:51 Invoice finance started at around about 4% of its book, so this is based on its lending book, not the entire group lending book, And as sort of been relatively static, since the middle of twenty two at around about 2%. So it's it's just over 2% of its book. So it's it's arrears are lower than the overall group level. And hard assets, similar story. It it was it started at around 15% back in '21, and it's it's it's just under 4% now sort of, and it's been around the 4% for for over a year now. So, again, we'd class those as very clean books, and and we're very pleased with those those net arrears. So from a financial point of view, it it's very much more of the same from when we spoke back in in September looking at the year to May 23.

23:37 We continue to grow our our book, which in turn drives revenue and profit, and we are maintaining the quality of our book in terms of arrears and write offs. And so we continue to make more profit and and look forward optimistically. And with that, I will hand back to Ed. Thanks, James. So just to, wrap up, by way of summary, just, I think reconfirming some of the messages I've already delivered. We've simplified the structure, very much focused on b two b lending only now.

24:10 Hard asset and invoice finance are driving that growth and account for around 75% of that lending book. Our multi products offering has expanded with our ABL products, and we're pleased with how that's going. And, certainly, there'll be other opportunities as we travel through this year. We've made some key hires. Important senior people have been brought into the business. They've they've added value and are very much embedded now in the core parts of the business. We believe that the arrears are well controlled, difficult environments, but we are very much focused on making sure that we're first in the queue when there's problems. And we do have an excellent collections team. So I wouldn't say anyone is ever pleased with arrears, but we're comfortable with where we we are.

25:03 Our profile and our brand recognition continues to build, and we are pleased with how that's going. And all that has led to a a positive set of numbers for the first half of the current year. In terms of our outlook, we're very much more of the same at the moment. We'll we'll continue to focus on our current strategy of which we've now got fifteen or sixteen months left. The medium term aims, therefore, still are the same, and we're gaining positive momentum towards those goals. We expect to see further growth in our PBT this year, next year, and hopefully on onwards with the compounding nature of the book and how it works as James has explained.

25:50 And the market additions conditions are challenging, but that's where there are opportunities for alternative lenders. So I've stressed this point to many people I've spoken to in the past, whether that be internally through our own teams of people or externally with presentations like this or to our our funders, our introducers, all our stakeholders really in in the in the difficult times generally bring good opportunities for alternative lenders who are focused very much on maintaining an acceptable and sensible risk reward profile in their book, and we very much fit into that mold as a flexible, agile funder with a commercial approach to doing business. So I do think that the opportunities will continue.

26:38 The key is to get the balance right, and that's very much what we're focused on achieving. So that concludes our presentation. I'm happy to take any questions. That's great, Ed James. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via investor dashboard. Ed James, as you can see, we have received a number of questions throughout today's presentation. And if I may now hand back to you to read out the questions, give responses where appropriate to do so, and I'll pick up from you both at the end. Thanks. So the way we'll probably do it is I'll I'll read out the questions, and then Ed and I will decide who who answer them. So the first one, just looking at the very first line, looks like it's one for me.

27:33 But so the first one says arrears remain at 6%, but the lending book has increased to by 18,000,000. So arrears have increased by 1,000,000, but overall profit is up only by 700,000. To me, an increase in arrears of over 1,000,000 bringing only an increase in profit of 1,000,000 is not a good trade off as the vulnerability to bad debts has increased too much. Can you also shed some light over how much of the increase in arrears relates to advances in h 01/24 or if arrears have risen on older amounts let lent? Or in other words, is arrears slowly creeping up or being masked by the issue of new loans which are not yet in arrears? That's quite a quite a question. I will attempt to break it down and go through it as as best I can. Firstly, as I think I mentioned, I I'd like to be very, very clear here. Areas, although, as Ed said, they're never never pleasing and and and not ideal, are very much expected in the lending thing, and they're very much not write offs. It's the first stage of a deal not working quite as we planned out. So 6% arrears, which I think is is in our our market very, very respectable, if not if not very good, is is is not to say there will be 6% of write offs at all in any step stage. A number of those arrears will be dealt with by our colleagues colleagues in credit, and they will cure them and bring them back online. They may have just missed the direct debit due to a mistake or something like that or they whatever. Something's come up one month, they couldn't pay. We bring them back online.

29:03 There's a number of stages we'll then go through to to recover that money before it is it goes to the legal route and invariably then through legal charges, etcetera, or whatever, we will we will be able to get our money back. We also have other security in many places, personal guarantees, debentures on companies, charges on commercial property, etcetera, etcetera. And then we will so then we will get a number of recoveries. So 6% very much isn't isn't write offs. So that that's the first thing to say. The second thing is I think that they're saying profit's only up by 700,000 for 1,100,000 of arrears. It's not quite apples with apples, if I'm honest. Firstly, the profit, that's only six months of profit. So you could say it's gonna be 1,400,000 for for full twelve months. Also, remember, our leases and loans can be anything from three months to five years, even six years in length. On average, they're three and a half to four years.

29:57 So so you would get that that that profit. Let's just say it's 700,000, and it could be 1,400,000, as I said, if you do it over twelve months. But that'll be coming through for three to four years on average. So four years of that, you know, you'd be looking at 5 millions worth of profit. So it's not quite as simple as just saying, well, you've only done 700,000 in this six months, but arrears have gone up by a million pounds. It it doesn't quite work like that. Hopefully, that that explains it a little bit. And in terms of the the the age of these things, as as we saw on the the graphics I showed earlier, the vast majority of the business we're writing is hard asset and invoice finance. And as you saw on those graphs, their arrears have come down in a a 2% and a 4% and continue to come down.

30:42 So most of these arrears are coming through our our soft assets or our our loan business, which loans we don't really do many of at all anymore. And soft assets, it's a relatively small small section, so they're very much not new business coming in as loans. It's it's it's some some legacy CBILS loans, RLS loans, etcetera, through through that type of the business. So we take a different view on the 6%. If I'm honest, we think that's that's, you know, that's the game we're in, the lending game we're in. We think it's it's a pretty solid rate at the moment, and it's no concern. And as Ed said, we we we we're relatively comfortable with that that figure. The second question, probably one for you, Ed, but but the question is, when will you be paying a dividend to your shareholders considering you have cash in the bank?

31:32 Yeah. No. That was a question when we we spoke last time to investors in September in terms of dividend. We we did have our board meeting in December to discuss this point again, and we concluded that we wouldn't be paying a dividend for the foreseeable future. That's no change to what we'd already discussed, so it's not particularly big news. And the reason for that is because this is a growth stock. We need to utilize our cash to grow the business. Whilst there is some cash that's held in in the balance sheet, it's a sensible amount. It's not excessive that it's not actually working for the business. It's designed to be a a sensible amount so that we maximize the value of that cash, and that will help us grow the business.

32:18 So having talked to a number of people in the investment community, including some of our larger shareholders and the board as well, we we came to that decision unanimously back in in December. So that's the simple answer to that question. Thanks, Ed. Marcus has asked, given the 29% increase in own book deal origination, how sustainable is the growth rate for TIME in the current economic economic climate? Ed, that's probably one for you if you're alright to say that. Yep. Well, I think it is sustainable. The the the the there's a a caveat to that. In the asset finance market, number of people have expected the the market to move more towards refinance than people buying new pieces of kits, and and that that's sort of, you know, sensible on the basis of the economic climate. That has that actually hasn't happened.

33:15 We've continued to see, you know, businesses across the board acquiring new kits. There's been some refinance, but it's it's not developed to the extent that we thought it might do when time start to, to get a bit harder. So that's that's encouraging, and that's been across the industry sectors that we we support in the commercial space. So manufacturing, construction, it's very much based around sort of yellow plants, crushers, diggers, cranes, tractor units, vehicles, the industrial side of what we do. So I think at the moment, it does feel like there's a reasonable amount of momentum still with the business that we're seeing. If it does turn more towards refinance, that is something that we do, and we're geared up to do as well.

34:07 So, yeah, reasonably confident that the own book side of our business in terms of the asset finance can can continue. Thanks, Ed. Question from Colin. You've stated that TIME are well recognized in invoice finance re awards. However, the growth in invoice finance over one year has only grown 9%, which is not much more than inflation. Can you square these two views? Yeah. I I think the 9% was for the the the first half of the year, James, wasn't it? So I think that 9% increase was just on h one. So that's the end of our last financial year in May through to the end of the first half in November.

34:54 Clearly, we're hoping that that increases further in the second half of the year. So comparing the 9% with an annualized cost of inflation probably isn't right. It would be right if we've only increased it by 9% at the end of the the year, albeit, obviously, you can take a view on what inflation's been. But I get the essence of the of the question. There's a there's a big difference between invoice finance and asset finance in terms of measuring growth. Asset finance effectively is is is financing capital equipment, the amount that's outstanding stays on your balance sheet and reduces on a monthly basis on the basis that people pay you back that monthly agreed payment, which includes interest.

35:41 Invoice finance can move around a lot more month to month. So some clients we actually have don't borrow an awful lot. They use the facilities as almost insurance policies to dip into when they need it. Some businesses absolutely max out their funding every single day. So the the comparison between the two is is quite different, and therefore, you do get some slightly odd movements at the end of each month in terms of the lending in invoice finance versus the overall debt that sat on the balance sheet. I'll try I'm trying to keep it simple. The simple answer to that is that we are seeing growth in invoice finance. It's just not quite as as as pronounced as the asset finance.

36:28 And one of the reasons for that is because the movements that go on in the book each month. But we will we will, I'm sure, continue to see growth in invoice finance, particularly as cash flow becomes, you know, tighter for businesses. And I can only see that continuing for the foreseeable future. Thanks, Ed. Another question from Marcus. Also, what strategies are in place to acquire and retain customers? Ed, that's probably got your name on it again. Yeah. Well, in simple terms, our acquisition of customers is an indirect strategy at the moment. So that is very much through introducers. In the asset finance space, it's predominantly brokers. In the invoice finance space, it's specialist finance brokers, but also other professional firms like accountants, insolvency practitioners, and the likes.

37:24 We don't see that changing too much, although we are discussing a move towards a little bit more acquisition of business through a direct strategy. So that will probably be very much part of our our new plan when it's conceived over the course of the next twelve months. In terms of retaining customers, it's very much around hands on client relationships. So in invoice finance, we have dedicated account managers, and that is their job to manage relationships on a day to day basis. In the asset finance world, it's a bit different because as soon as you set a client up, as long as they continue to pay you through the monthly direct debit, you don't really have a need to stay in touch with them. The staying in touch with them is done by the broker who brings us repeat business. So it's very much a partnership with the broker in asset finance, and we really rely on those brokers and the and the close working relationships we've got with them to manage the customer relationships in in in conjunction with ourselves.

38:32 Thanks, Ed. Collins asked, asset based lending was launched in 2023. So it's a it's a year old now. You stated it's pretty much meeting your plans, but what is or was the expectation for this new vertical? Is it is it 20% increase a year, for example? It's certainly not 20% increase per year. I think that 20% increase per year is thinking about top line revenue possibly. No. It it's it's it's not designed. Now there may be a point in time where that that is is more realistic. But at the moment, it was always designed to provide additional business on a more sensible strategy. So we're not piling into this. They tend to be bigger deals.

39:18 You tend to obviously have more work involved in structuring deals, and therefore, you have more work in terms of managing them because, obviously, you've got a more widespread asset to go and manage. They tend to be a combination of invoice and loans or invoice and hard asset and loans or, yeah, any any one of those combinations. So by their sheer nature, they're a bit more complicated. They need a little bit more work. And for that, we we get, higher remuneration. A key point of this and a key part of the strategy is that by offering these facilities, it means that you can offer more than one product to one client, which obviously makes the whole sales process a bit more efficient. But all science becomes stickier to you. So if we take on an ABL deal where there's a five year hard asset finance deal, it means that all the facilities are coterminous, which means that if they decided to go and seek a cheaper invoice finance facility just to test the market, that would be fine. You know, people do that all the time. But if they decided to go and leave, they would have to repay all the facilities.

40:25 And, normally, clients don't leave us for service levels. They normally look around because they may decide that they want to compare prices when, obviously, you've got coterminous agreements across your product sets, and it makes the client, you know, more stickier to you. So that was one of the key reasons for launching ABL as well as obviously generating returns and as well as generating a more efficient sales process as well. I hope one day we can get to 20% increase. It's quite modest at the moment. We have half a dozen deals that we've taken on in the first six months. That's in line with what we forecast for the first year, which was one a month. But as I say, they do tend to be bigger and more remunerative deals. Thanks, Ed. Ian's asked, with the increase in lending and origination volumes, how is TIME managing its operational costs, what efficiencies are being targeted?

41:21 Well, that's a very topical question and one that I can answer, albeit it's very much work in progress. So as one of our our key operational priorities is very much to grow the business in a more cost efficient way. So seeing a a a southern direct a southern, direction trend in our cost income ratio, and the numbers are all all mapped out for that. A key part of that is developing our asset finance efficiencies and the migration away from historically the business being set up to do small soft asset businesses and lots of those deals to more secured lending through hard asset finance, a lower number of deals, but a higher average ticket size.

42:12 And that has been challenging as you'd as you'd expect when business businesses migrate from one strategy to to another. But we're making good progress. We've implemented things like DocuSign into the business now. We've got auto recognition tools for onboarding clients in terms of ID checks so that we've moved away from old fashioned exchange of paper. And there's a big program in place at the moment to look at our system in asset finance with a a view to challenging ourselves whether we've got the right systems in place. And if we do look to change, it's for exactly this reason to help us scale the business more efficiently. We're not looking to go and cut back on our people, but what what we are looking to do, been very open about this, is to grow the business commensurately with less people, in in line with that growth.

43:07 And that will obviously bring that southern direction, of, of a reduction in the cost income over over time. Thanks, Ed. The next question, just to give any people who aren't aware the context, it asks about Arena, which I'll come on to, who are our largest shareholder and have about 20%. So let's just give a bit of backdrop to people that wouldn't be aware of that. So the question, Ed, it's from Paul is, is there any update on Arena? Is there a strategic collaboration angle there? Well, we talked to Arena about a strategic collaboration angle. The main area focus is deploying, cash into the business to see whether or not we can use that effectively to scale the business up.

43:52 At the moment, we haven't needed to progress those discussions to a point where we've needed cash. Cash, as anyone knows, unless it's coming from a retail deposit taker, is quite expensive, particularly at the moment with interest rate increases. So we've managed to, continue to increase the the business and grow the business with our senior facilities, which we've got in the business, which are a lot cheaper, a lot more cost effective than wholesale debt. So that that's the simple, answer to that at the moment. Like all our shareholders, we retain an open dialogue if they want to speak to us. But the relationship with Arena is is very cordial positive as as it is with all our our major shareholders. That's really all I can say at the moment.

44:44 Thanks. Ed, Kevin has asked, what are the main constraints on company growth? Okay. Well, cash is the first the first issue there because, you know, ultimately, if we were a manufacturing business, our raw material is cash. So we have to go and find our cash and enough of it and at the right price. And following on from what I've just mentioned, we're we're well set up, with our current partners. We're continually looking at new funders who can join, in terms of our asset finance, block block funding arrangements. Our invoice finance is solely funded by one retail bank relationship, which is is is very healthy.

45:36 So that that's the first thing that can constrain a company's growth, not having enough raw material cash in our in our in our arena. The second thing I I would say, key to that is is is credit quality and and bad debts. It's not just the bad debts that you have that obviously put a dent in the in the financial performance. It's it's the knock on impact of what bad debts can do to a business. And we see this very much in the banking world where a bad debt occurs in a certain industry and everyone then runs for the hills because that industry is labeled as being terrible. All things are, you know, falling to pieces, and you shouldn't touch anything in that industry moving forward.

46:23 We tend not to take that approach. Clearly, we listen to industry commentary. We look at figures. We look at stats. We compare ourselves to competitors and industry peers, but it's very much a common sense, approach to business. So, yeah, if there is a problem with a certain industry and and and everyone will be aware that construction is very difficult at the moment, it's not a question of us running for the hills for exit in an industry. It's it's it's the the deals, how you price them, how you structure them, what security you take, and where you originate them from so that they're, you know, as best as possible coming from trusted trusted sources. That leads on then to the opportunity because the businesses that can hold their nerve and manage that risk appropriately will benefit.

47:13 So, hopefully, I've answered the question. Yeah. Yeah. Three three really, really three key constraints, cash, people, and bad debts. The key is to managing those things effectively. And if you do, you'll you'll do well. Thanks, Ed. So at the moment, our final question we're coming on to now, this is from Hugo, and he says a very good set of results. Well done. Thanks, Hugo. That's that's good to know. We should end it there. But, no, then he carries on with, if the board has decided not to pay a dividend and the the only incentive for shareholders to continue to be loyal supporters is share price growth. While this has shown some movement recently, the long term share price performance has been disappointing. Do you have any internal share price targets, and do you see yourselves as a takeover target to maximize shareholder return?

48:01 Yeah. Okay. Well, that's that's a good question. Because if we take the long term, performance of the business and you track it over five years plus, you know, clearly, it's a lower price than it was $5.06 years ago. But an awful lot has happened since then. The industry is in a completely different place as is this business. And I think, you know, really, we're we're looking at the position from share price post COVID and, obviously, in line with this strategic plan. And if we look at that position, obviously, the share prices performed really well. And, yeah, we're pleased with with ultimately the results eventually coming through to deliver that that share price because sometimes they, as anyone knows, they they say they they cannot be aligned, and that can be frustrating.

49:01 So, yeah, I think it's all in context, really. And the the point about a dividend look. Yeah. I invest myself. If I want a dividend in this environment, I'm looking at strong dividend paying stocks. I'm probably not looking at stocks that may or may not pay a dividend. And if they do pay a dividend, it's really quite small, and therefore, what's the point? This is a growth stock. It's a small cap stock, which will benefit from growing the value of the balance sheet and the value of the market cap over time because of what we're doing. And therefore, the attractiveness for buying this stock is very much about capital growth.

49:51 And and that's that's the simple reality to it. If you want a dividend stock, well, you know, go and buy it by Lloyd's Bank. You you probably won't get the growth in in capital that you will get through a share, you know, like like this. So, yeah, that's my that's my answer to that. I think, we haven't had any more questions, so I think I think that's it. That's great, Ed James. And thank you for addressing all those questions for investors today. And, of course, the company can review your questions submitted today, and we'll publish those responses on the Investor Day company platform. But before we direct investors to provide you with their feedback, which I know is particularly important to the company, Ed, could I please ask you for a few closing comments?

50:38 Yeah. Well, thank you for the questions. Yeah. They were they were all topical and, you know, really relevant to where we are as as a business and, obviously, the wider economy and for lending to small businesses. So, yeah, in in closing, I do think there's still good opportunities. As I've said many times before, businesses like ourselves can capitalize on those opportunities. We are seeing those develop in the market through the bigger banks taking a little bit more of a conservative view in terms of their lending policies. So, you know, whilst we've got lots of things to achieve and all good things to achieve over the next few years, I do think that is all driven through the opportunities that we can we can take.

51:30 So, yeah, exciting times ahead. Ed James, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board could better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be 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. Thank you.