Time Finance (LSE:TIME) — Trading and Strategic Update

0:02 Good afternoon, ladies and gentlemen, and welcome to the TIME FINANCE PLC Trading and Strategic Investor Presentation. Throughout this presentation, investors will be in listen only mode. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we will

0:33 send you an email to notify you when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. And if you could give that your kind attention, we'd be most grateful. And I'd now like to hand over to James Roberts, CFO and Ed Rimmer, CEO from TIME FINANCE. Good afternoon to you both. Afternoon, everyone, and thank you for for joining. An introduction first to to myself. I'm Ed Rimmer. I've just been appointed into the CEO role at TIME FINANCE, having come back into the business at the start of March as interim CEO.

1:13 I was previously in the business when it was called one PM. I I joined originally in June 2017, and I left in April last year. Prior to joining one PM, I spent twenty two years at Bibby Group, seventeen years in the financial services division, of which five were spent as The UK UK chief executive.

1:37 And within that time, we doubled the size of the business and became the leading independent small business provider of invoice discounts and factoring in The UK. So that's a bit of background on on myself. I'll hand over to James to to do the same. Thanks, Ed. Good afternoon, everybody. Yes. I'm James Roberts. I'm the CFO. I joined TIME FINANCE similar to Ed back when it was 1PM at a very similar time. I think we joined within a month of each other back in 2017. I'm a qualified accountant having qualified with PLC and been working in financial services with new start rapid growth businesses through to AIM listed buy and build businesses over the last twenty years. And as I say, I've been with TIME FINANCE now for just over four years.

2:29 Thanks, James. Okay. So taking you through the the presentation. Who are TIME FINANCE? Well, we are an aim listed provider of finance to UK SMEs to support their growth. Fundamentally, that's what we do. The business has been around for twenty years in The UK market, previously called one PM, and previously predominantly in the soft asset, small ticket finance market until a diversification plan started in 2015 with the acquisition of Academy Leasing and then other acquisitions followed. But that's, in in summary, who we are. What we do? Well, I could read out the the the text on the screen, or I could try and make it a a bit more simple.

3:17 What we do is effectively borrow money and lend it out for a margin. That's in simple terms what we do. We're not a deposit taker. We're not a bank. So we have to go to the banks, whether they're high street banks or challenger banks predominantly, negotiate the best terms, and then lend out the best terms. Within that, we provide a service to our clients. We provide flexibility, and we're very responsive. And and within that comes additional fees for our services. Those fees plus the net interest margin is our income, and then we have to manage the business in terms of the cost of our capital, the people, the systems, and and the properties from which we trade. At the end of the day, we hope to make a profit, and the key to that is managing the risk and managing the bad debts. If we do that well, then we've got a successful business, and that's effectively what we do. Our chosen markets to lend the money into are asset finance, invoice finance, loan finance, and vehicle finance, and we can manage facilities on our own book by lending that money ourselves or broke them onto other lenders for a commission if they're outside of our credit policy.

4:33 That's in summary what we do. In terms of some headline numbers, we lend money to around 20,000 UK SMEs within the products that I've just mentioned. We arranged on our own balance sheet or provided broke it out around a £100,000,000 worth of origination to our our end of financial year just gone, which was May 21. That was down on the previous year slightly, mainly down to COVID disruption. But pleasingly, throughout that time, we actually increased the worth of our balance sheet from around 26,500,000 to just over 28,000,000 as you can see from the screen, and that was very pleasing at a time of a lot of disruption and three periods of lockdown.

5:23 Our management team, in addition to myself and James, is the two executive directors on the board. This is the senior management team board. We have three director of products effectively, the various products that I've mentioned as well as the broking services. And then we have four director of functions, compliance and governance, HR, risk, and IT. We're due to be joined by a fourth head of product

5:50 at the beginning of September, which will see the assets and loans leadership split out. That lady will take responsibility for the loans business when she arrives in September and give that more ownership and and vibrance, I think, moving forward from what we have at the moment where it's managed by the head of asset finance.

6:14 We're award winning, and we've been nominated for a number of awards. I can't lay claim to a lot of that. It's over the last couple of years, so that's very much down to the the wider team of people that we've got, around a 160 people in TIME FINANCE business. And it's very nice for those people to get the recognition of the various awards that we've won. In terms of our product offering, just to get a bit more detail in terms of the four key products, Asset finances are, I would say, our main products, and that it equates to around 60% of our our lending book at the moment. That is effectively for small businesses who are looking to purchase new capital equipment or refinance existing equipment.

6:59 It's a mixture of soft asset where the assets in question hasn't got a great residual value at the end of the life, and hard assets, which is the opposite where you are funding assets that have got a residual value at the life. So examples for soft assets will be catering equipment, gym equipment, and hard asset construction equipment, diggers, yellow plants, CNC manufacturing equipments, and the likes. We get our business from mainly professional intermediaries, whether that be brokers. We do get some referrals from existing clients. And in the asset finance world, we have got programs set up with vendors, so equipment suppliers and manufacturers to help sell their products and where we fund those products to the purchasers.

7:47 Deal size, our minimum ticket on soft asset is now 5 k, and the maximum ticket on hard assets is 250 k on our own book. But we do go higher than that to lend lend out through other providers where we broke out business as well. Our sweet spot is around 10 k on soft assets and 50 k on hard asset. That's the markets we play in. And the yields typically nine is the minimum we'll do on hard asset. Typically, average is around 12, and the maximum on soft asset is 18. Typically, the average is around 16. And the funding comes from wholesale block facilities mainly from the challenger banks. Invoice finance is effectively funding a company's sales ledger to release cash for working capital purposes.

8:34 It's disclosed and confidential. The the common names in the in the markets are factoring and invoice discounting. Again, the referrals come from finance brokers and professional firms, the likes of insolvency practitioners, accountants. Deal size, 10 2,500,000. Sweet spot, generally 200 k to 400 k. And typical yield, 8% for the better quality invoice discounts in deals, up to around 18% for the smaller factoring deals. And the and the funding comes from a high street bank facility, which is on a a back to back basis. Our loans business is split between b to b, business to business, and business to consumer. The b to c business is a brokerage for residential mortgages, and the own book loans is predominantly for corporate loans, commercial loans in the same way that we're lending to SMEs and invoicing asset finance.

9:34 The the detail on the screen is predominantly for own book loans. And, again, typical introductory sources are the professional firms, brokers, typical deal size, as small as 5 k up to 250 k. Sweet spot, 25 k unsecured and a 100 k secured, and typical yields range from 12 to 18%. The funding comes from a mixture of wholesale block funders and also a high net worth loan note program.

10:05 The b to c brokerage is all broken out. So that's residential buy to let mortgages that are are arranged as as as a packager and funded through tier two funders in the main. Our vehicle finance proposition is for small commercial fleets to SMEs. Direct direct business is more the flavor here rather than intermediary based. We get business through social media channels and client relationships, repeat business. Deal ticket size typically from 15 to a 150 k. Sweet spot around 35 k. Typical yields are much lower. The funding comes from generally tier one and tier two funders, that's all broke out.

10:52 We do have another part of the vehicle business, which is business to consumer, which is used car finance through a separate subsidiary called Car Finance to You. But again, that is all broke out, and as you'll see later, isn't what we would class as our core product moving forward. Where we stand out from the crowd? So in terms of our market, there's lots of competitors and lots of providers of of finance to small businesses. However, we do believe that we are in a a fairly unique bunch of those. We're not completely unique, but we are in a in a in a in a unique fairly small pool of providers who do all these things on the screen. So from one end, you have the banks, typical high street banks, the challenges, they obviously came into the market from 2008 onwards, the fintech platforms, other quoted companies such as ourselves, and private businesses which tend to be more regionally based and smaller.

11:52 The banks clearly have a wide range of products, but they're not really known anymore for being flexible or being quick and the personal approach. And at the other end of the spectrum, private companies, they tend to be very much based around flexibility and speed of response, personal approach, but they generally are are not wider range product providers. They tend to stick to one product. And and all those different players in the market will have elements of of of what we've mentioned there. But as I say, we believe that we cover all the grounds in terms of flexibility, speed of of service, and a personal approach as well as having the range of products. And that and that range of products is very much key to our future strategy, which I'll come on to. Before I do that, I'll hand over to James just to take you through a few numbers.

12:43 Thanks, Ed. Great. I'm just very quickly going to talk about the last year and the position we find ourselves in current from a finance point of view, then at a high level where we think potentially we we can move the business forward to over the next few years, and then I'll hand back to Ed on the strategy that can be achieved. So, I mean, at a very hard high level, we've been through as as everyone knows, a relatively tough twelve months. We've had COVID impacting us for the full full twelve months of the year. We feel we've navigated it pretty well. Our profitable tax exceptional items and share based payments is is is about 3,000,000, which is flat from the year before, which is respectable we believe.

13:32 More pleasingly on our balance sheet, we find ourselves with over 8,000,000 of cash. We're in a much more liquid position. And as Ed touched on, our net tangible assets have continued to grow as the business strengthened. So we feel it's quite a solid achievement in what has been a challenging year. If we look at those two areas in a little bit more detail, the balance sheet is key. As primarily an owned lender, the balance sheet is absolutely the key area for us. And in the last twelve months, seen it improve and strengthen, show its resilience and its robustness, and that's particularly pleasing. Net tangible assets have gone up and we can see the year to May 20, they increased from May 2019 even with the quarter of impacting and again this year from GBP 26,500,000 up to 28,300,000.

14:24 Cash and cash equivalents are key for us. Cash effectively is the fuel that helps the business grow. We use that cash to lend to SMEs and so having cash at disposal is absolutely vital. And through a mixture of cash conservation, tightening our belts on the credit side of things to a degree and derisking the books slightly by pushing some some clients over to other other sources of funding such as bounce back loans elsewhere. We find ourselves primed at the May 31 with over 8,000,000 in cash. So the cash and liquidity positions improved a lot, which is which is really pleasing. Most impressive or pleasing thing from from my side of view is the position of the book, the the own book lending.

15:13 If we jump back to late March last year, twenty and and when COVID really impacted and the lockdown happened,

15:23 we saw arrears move up quite dramatically as understandably clients would cancel their direct debits, etcetera. They look to conserve cash themselves. We've seen a number of clients come to us and ask for forbearance, so either not paying for a number of months or reduced payments or something like that. So the book was stressed to a degree sort of April, May, June, July time And you can see there the arrears movement from May 19 to May 20, our arrears went up by 8,000,000. But over the last twelve months or so, the sterling work in

15:59 credit and risk has seen that the arrears increase more than recover. We've reduced it by 9,300,000. So now it's a million or so below the levels of pre COVID and that's a testament to the great work they've done. Also, you can see there the forbearance graph, May, June time last year, we had roughly 25 million% 25,000,000 of our book in forbearance of one form or another. And again, the sterling efforts that we the guys have put in and the team now see at the end of May, it's less than £1,000,000. It's about £800,000. So the book is in a much better position. We're much more liquid and our net tangible assets have strengthened. So we're primed, we think, in a strong position with a solid base to move forward.

16:48 In terms of the P and L, our revenues have fallen. So it's from 29,000,000 to roughly 24,000,000. That's to be expected. It's purely COVID driven. And there's two elements to that. One, our brokerage businesses really fell off a cliff, if we're honest, back in March, April last year. And unfortunately, every time there's been a lockdown, they've stalled again in recovering. We're beginning to see the shoots of that recovery now, but lockdown three since our interim results made us take a step back there. So roughly 50% of that revenue reduction is from our brokerages businesses. And given cut 15% or so of the the group's revenue, they're making up 50% of the fall shows just how how much of an impact COVID had on those businesses.

17:37 The other driver is the own book. As you can see of that slide there, the average book sites in the last twelve months is just over 100,000,000 compared to an average book size the year before of about 120,000,000. And if you do a high level rec, say our average rate is about 14%, that just reduction in the book size would lead to about £2,500,000 reduction in revenue. So that's why the book is so key and as Ed will come on to you later, growing that book gives you a fantastic base for the revenue coming in each year as we move forward.

18:10 But despite the revenue reduction, we have seen our profit before tax exceptional and share based payments remain relatively flat at 3,000,000 from the year before. That's driven by two two areas really, lower cost of sales. You expect that revenues are down, so you pay less introduction of commissions, you pay less funding costs, etcetera. There's less bad debt charges, but also very much a focus on cost controls, primarily staff costs to ensure that we did keep that profit at a similar level to the year before. So again, as I say, I think all things considered, it's solid performance. Couple of other highlights to bring to your attention, our bad debt provision again focusing on the own book lending side of things is very similar to last year. It's marginally increased from 5,100,000 to 5,300,000.

18:57 We feel that's a prudent approach to take at the moment. There is a slight unknown about when government support schemes ends in September and so keeping this provision at over 5,000,000, we think it's the right thing to do at this stage and hopefully puts us on, as I said, firm ground moving forward. We see write off levels and recovery levels remain in line with historic trends or write off over the last twelve months despite everything going on is about one and a half percent, which is marginally up on before, but nothing nothing huge. And our recovery levels, if you've heard me speak before, I I I sort of often bang the drum about the the merits of of personal guarantees and recovering money on small ticket deals and we've seen those small ticket soft asset deals recoveries

19:42 remain in the 70 to 80% of deals. We've had the write off, we get 70 to 80% back because of the strength of the PGs and that in this twelve month period has continued and that's that's particularly pleasing given everything that's going on that that they're they're still as durable as they were. Despite all of that, we have good visibility of future income. So we've got just under 15,000,000, about 14,500,000 of unearned income on the balance sheet at May 31, which means that day one in this financial year from the June 1 year and assuming those businesses perform as we want, we've got a reasonably sizable chunk of income in the bag for one to the better

20:19 expression. And just finally on diversification and spread, it's something we've always prided ourselves on and I think it stood us in good stead over the last fifteen months having this widespread of industry sectors and geographical locations of our clients so we're not exposed and overweight in one certain area. And that's that's still very much in the forefront of our mind and our credit credit colleagues' minds. So our our highest sector is is less than 5% of our overall book. Once we

20:46 get down to the tenth largest sector, it's only about 1%. And so the whole top 10 industry sectors we have in our book is is less than 25% overall. So it's a very well spread and and diversified book, which I think has been the strength of that is shown through the the arrears and how we've we've come out to the thirty first of of May. So that's where we find ourselves. I suppose almost that's a de minimis backstop position, you know, we've been you could argue we've been through about as tough as it could get, and yet we've remained profitable and we've strengthened up

21:17 start. But where where can we go from from here? And before I hand back to Ed, just just a couple of bullet points from me on on where we think we can go. So one of the things is following the rebrand, we we want to become a nationally recognized SME.

21:33 And the opportunity for us to do that is there so that people know they can come to us. Ed will talk a bit more about that. Lending, I touched on the value of of the book. It it it's a bit like turning an oil tanker, but once you've got the the lending book up to a certain size, the revenue just keeps coming and the profit continues. So we're looking to more than double our gross lending book by May 2025. In doing that, we'll achieve profits well in excess of those pre COVID levels we had in 2019, we believe. And we will continue to further strengthen our balance sheet as a result of this focus on own book lending, which we think is a way to drive shareholder value and is certainly the correct thing to do in the medium term. So that's where we want to go. We've got a very solid base to start that journey as of the May 31, and I'll hand back now to Ed to talk about how that's going to happen.

22:29 Thanks, James. Well, this is the hard bit, how to how to achieve all this.

22:35 It's always easy to set out targets and aspirations. How you're gonna do that is is a lot more difficult. I think before I start, I'll I'll just recap, I think, a little bit of history. I mentioned that the business started to diversify in 2015, and that was a key part of its plan to spread away from being a small provider of soft asset in Bath, which is where the origins origins of the the group came from. To a degree, that has been really successful in the sense that we've now got the multiproduct offerings that we've talked about. We've got diversification of risk, of income, and of people. However, most of those most of that diversification came through acquisitions.

23:20 And if you complete six to seven acquisitions in the space of three years, which is what the business did, That's not straightforward. It's never straightforward. Some of the acquisitions have been really good. Some of them haven't been as good, and some of them have turned out to be good. But, actually, there's been an awful lot of work put in cost and endeavor through time and change to actually get to that stage. And I think through that period, the business got a little bit muddled in terms of what it was trying to be. It got a mixture of business to business, business to consumer, broke on, own book, And that wasn't really, in hindsight, a joined up strategy of what exactly we were trying to be other than diversify income streams. And I think that was that was positive, but I think now is the time to just stand back and say, what are we trying to be? And and my view is that we have some parts of the business that are a little bit confused.

24:14 They conflict with the key parts of the business, which is really, in my mind, being a business to business funder of predominantly three products, asset finance, invoice finance, and loan finance. So if we start at the top of that diagram and work clockwise, that's the first part of how we look to achieve our plan moving forward. It's refocusing on our core products and looking to move away from what I would class as noncore activities. We will still remain a broker in the sense of being able to broke out asset finance business that comes from our vendor programs where we originate business from manufacturers and distributors, and it's really up to us whether we put it on our own book or broke it out.

25:02 But in terms of the other brokerage activities, I'm not looking for I'm not looking to take those forward in the sense of the same pace as as we are of own book. The own book, we can build our balance sheet. We can build the worth of the business much quicker. Broking activities are are good when they work because you get an upfront commission. But as anyone knows, brokering activities are very easy to replicate because it's pretty much people that can go off and set up their own businesses with their own contacts, and they don't need an awful lot of cash to do it. So I think a lot more worth will come through building our own balance sheet through our core products in the future. I think with that, we we're we've repositioned the soft assets offering as well. We had a lot of inquiries at the very, very small end of the market in soft asset, which weren't the best quality.

25:51 It also clogged up the system in terms of managing that high volume of inquiries. These are inquiries for, you know, 1 or £2,000. So we've increased the ticket size now on soft asset up to a minimum of five k, and we're looking to take out around half the volume of the inquiries that come through, but maximize the opportunities through a better conversion rates, providing the underwriters with a a better way of shaping deals and structuring deals rather than just being overwhelmed by a pure volume of inquiries coming through to all low levels. So it's being smarter, really, and working smarter in our core offerings. That's the first the first part of this plan. The second part, just working clockwise, is really taking forward our multiproduct solution and asset based lending offering.

26:44 We've had some success in in the past at developing cross selling internally, but in truth, that's not been the focus during the last fifteen months of of COVID. There's an opportunity to relaunch that, which we're doing at the moment through an internal project, which is christened Excel. And that is something that I'm moving forward myself with a a project team so that we can get some more leverage off off our internal cross selling opportunities. But in terms of the external market, we'd like to develop a a small ABL proposition where we can take our products, join them up, and offer those to one customer. At the moment, we can do that, but it's quite fragmented in terms of how we offer them and and and how we manage it internally. Lots of businesses have tried to do this with different levels of success. I've experienced it in the past, both good and bad.

27:35 But I do believe that this business can get it right because we're a bit smaller, a bit more agile, and there is a a a real termination and positivity to make it work because it's where we can stand out from the crowd. So So that is something that we're we're gonna look to take forward. And the lady that I mentioned earlier, who is coming in September to head up the loans division, has really good experience across all our products, and she will start take ownership of developing that ABL offering as well. Moving down, so repositioning of brand and investment in marketing. So as you know, the business is rebranded to TIME FINANCE at the end of last year. As I've also mentioned, the origins of the of the one PM story were very much in the small ticket soft asset finance market.

28:26 And I think there's now a real opportunity to reposition TIME FINANCE in the markets that we want, assets, invoice, and loans, and obviously the ABL offering. We need to invest in some marketing. We've started to do that. We've brought in back into the business a lady who used to work with me and Bibby Group called Diane Blinkhorn to head up the the the division. She oversaw the the rebrand, we've also taken on another person to increase our digital marketing capabilities in the last six weeks. So we are going to focus more on online and digital marketing than we have in the past. And I think that rebrand and repositioning of TIME FINANCE in the markets that we we choose to play in is really important. The ultimate aim is for us to be able to communicate with our introducers and also our customers and clients directly, and they've already heard of TIME FINANCE. They already know what we're about, and they already know what we stand for.

29:24 That will significantly aid the sales process rather than having to explain, you know, for half an hour every time you speak to someone who you are and what you do. So that's what we're aiming to to achieve. It will take time. It won't happen overnight, but the journey's already started. Moving down at the far bottom of the slide, so invest in further talents. We recognize that there's a need to bring in additional talents into the business as well as the talent we've already got. I would say that at the moment, that is very focused towards new business and sales. The markets have experienced a lot of change in the last twelve months, not just because of COVID. There's been a lot of change within the banks. The banks really now are choosing to lend through people like ourselves rather than directly, certainly at the smaller end of the SME market.

30:17 So that has created change within the people that work for the banks, and there's been quite a bit of change with some other players in the market as well. Different people arriving, different strategies pursued, different markets pursued, and that's created quite a bit of movement. So at the moment, we're quite focused on bringing in some sales talent that ordinarily wouldn't be available. And I think that's key to this plan is to boost our sales team. We've got a fairly lean sales team at the moment, and we need to recognize that we do need to invest in that sales operation to get future return. So it will see some further cost come into the business in the short term, but if we get that recruitment right, that will pay back and it will underpin the growth plan for future. As well as bringing additional talent into the business, we also need to bring additional cash into the business, which is the fifth point bottom left on the diagram.

31:12 That's something that James has worked on continually, but it's not been the the the the priority whilst we've been going through COVID and whilst we've been appointing myself fully into the role and and preparing for the future strategy. It will come back onto the agenda very soon. Our plan is based on organic growth predominantly, but we could go quicker if we're able to bring some additional equity stroke debt into the business. And the simple rationale for that is that in the loans and the asset finance business, every time we lend money out, we only get roughly 85% of it from our funders, our debt funders. So we have to provide 15% or the likes ourselves.

31:58 Now that's fine when you've got a fairly slow pace of growth because use the money that you're collecting in for your existing clients to lend out. But when you're trying to push forward quickly, it's it obviously can't the model can't keep up with itself. So it would be easier for us to deliver this plan with additional equity stroke debt in the business, and that's what we're looking to do. And that is, again, a key part of this plan. If we can do that, we can go quicker and we can bring forward the returns on profitability and obviously to shareholders. And the final point at the top left is that the plan is based on organic growth, predominantly. And whilst I've said what I've said about the acquisitions, we are still open minded to to doing targeted acquisitions.

32:44 That isn't just doing deals for the sake of it. I think we've learned an awful lot about acquisitions and what they should look like, how much you should pay, and where you should originate them from, which is key. I'd like to think that I'm reasonably streetwise around acquisitions and what we should be looking at and what we shouldn't be looking at. We will remain open minded, and I would like to do some further acquisitions, but it will be targeted ones that fit with our core products and our core strategy moving forward. So just in summary, in terms of the investment case for this business, I think as James said, we have shown really good resilience through the pandemic, and our liquidity has improved, which is really pleasing. We have got a committed and experienced management team and wider group of people in the business.

33:34 We've now got a clear strategy and aspirational vision for the the future over the medium term at least. We are a business that stands out in terms of our multiproduct offering, and if we can get the delivery of that right, that is a key to our to our strategy. And we have got opportunities ahead of us. I went through the the nineties in terms of lending. I went through the financial crisis in 2008, and, obviously, I've been through the the the last fifteen months. And I think all those all those ups and downs have been very different. There will be opportunities that come out of this this COVID situation. There'll be threats as well. There's other companies out there that are looking to take those opportunities. So we're not alone. We have to stand out from the crowd.

34:22 But I think if we if we can focus on providing a consistent level of appetite to our introducers, that is key. Lots of businesses come in and out of the market. They choose that they're in one minute and out the next, and then they come back, and then they're in a market for a minimum of this and a maximum of this. I think what we need to do is show consistency to our introducers. And if we can do that over the next three to four years, it builds credibility and confidence, and people then get you at the top of the list for the referrals of business, and that's really important. That's one of the key opportunities I think we can take through this return to, hopefully, normality. Clearly, there's a bit of uncertainty still in the market. To an extent, we can't control that at all. We just need to make sure that we're well positioned to take the opportunities as and when they come up, and that's really my job moving forward.

35:11 And in summary, we're well positioned and primed for that growth to be achieved. So thank you for for listening. That concludes the the presentation. We have had some questions, so I'll I'll hand over to Mark and James just to see us through the the end of the the the session. Thank you very much. And also thank you to you, James, as well. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. I just want the company to take a few moments to review those investor questions submitted already. I'd like to remind you that a copy recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations.

36:02 At James, obviously, investors have the ability to pre submit questions. We received a number of those, and I'd like to start the Q and A off with those before handing over to James to perhaps manage those that are coming in during this part of the presentation. The first question reads as follows. Due to there being a new CEO, are you expecting any change in strategy or corporate governance? I've noticed the growth stage of the current strategy has been slow to get going even before the pandemic. I wanted to know if there was any plan on how to change this. Yeah. I'm I'm gonna take that one there. It's Ed Rimmer. Well, to an extent, I would hope that the the the the change of plan and strategy has been covered by the the last half an hour. So I'm hoping that that's answered that question.

36:54 In terms of governance, no. Absolutely. There won't be any change or relaxation of of governance. We're an aim listed business. We're regulated, and that's always been high up on the the agenda for the relevant businesses and for the group. We've got a board of directors with a a strong non exec presence, and we have appropriate committees for audit, remuneration, and and risk by way of example. So, no, I I don't I don't envisage that we will move away from having the appropriate governance. What I do envisage is that that governance and that risk will work commercially for a business that at the end of the day is relatively small.

37:39 We need to be agile. We need to be quick, and it's important that we don't get bogged down by unnecessary bureaucracy and governance. So it's recognizing where that sits in our business and setting us up appropriately to deliver that. Thanks ever so much indeed, Ed. Next question reads as follows. What happened to the promise of a progressive dividend? Most other AIM dividend companies have, as a minimum, restored their dividends to at least pre-twenty twenty levels. Thanks, Mark. I'll take that one. Dividends is a very emotive subject. It's being given an awful lot of thought by the Board. But if I can take that question in two parts effectively. One was if we jump back to late March twenty twenty, and I touched on it earlier when talking about liquidity and arrears, our cash position was relatively stretched then.

38:35 People weren't paying as we'd hoped and yet we still had to fund our pay our funders. So we were in a squeezed in the middle, if you like. And so I think it was absolutely the right decision we made to not pay those dividends given the the huge level of uncertainty that that was in front of us. We decided to defer the dividend and regularly assess it, hoping we'd cut get some certainty and stability as we move forward. But, unfortunately, every time we thought we were getting there, there was another lockdown and so we'd have to defer again and we didn't get into that steady state. Hence, we've had to keep repeating that message that things have deferred. We have now reached what we think is a relatively steady state. We have there are forecasts back in the market today and we've spoken about where we think we can take the business.

39:26 And the decision you may have seen is to not reinstate the dividends at this this stage. And and there's two reasons for that. One is if we remember when we put the progressive dividend in policy in place, we were probably profit wise at double, if not a bit more than we are currently. So we haven't come back to the point where the dividend didn't play. And then the second point, listeners have have gleaned from Ed's presentation that we're we're very much focusing now on organic growth and growing that loan book. And to do that, cash is the fuel that enables us to do that. So to to to get the strategic vision of doubling the loan book over the next few years, we've decided to keep the cash in the business, reinvest it in the business and grow the loan book. At that point, we may well but we should be ahead of pre COVID profit levels. We should have a double sized loan book, and I'm sure we'll reassess that that decision and look at things again then. But for the moment, we feel the right thing to do is to reinvest our cash in growing this business and getting back to where we were.

40:37 That's great. Thanks very much indeed, James. The next question, in 2017, the time share price was 71p plus. In 2021, the TIME share price is less than 30p. The strategy of buying other companies, its upgrades, recruiting new heads of each stream within the businesses have clearly been detrimental with the halving of the share price. The trend is clear. Why has there not been a management shakeup or clear out at this dismal performance continues? Yes. So I'll I'll take that one. Well, again, I think through the course of the presentation, hopefully, part of that has been answered in the sense that there has been some change. For a start off, there's a new chief exec. And like any business, there will be further change because that's just what happens in business.

41:28 If there's not change, then, you know, arguably, you're not moving forward. So I'm very open minded to further change, whatever they may may look like. I think in terms of the the points that the the question asked in terms of upgrades, recruiting new heads, rebranding, and buying other companies, I would repeat what I said in in the presentation. The the key mistake, I think, that we we we've learned from is the the acquisitions. As I say, some of them some of them were were better than others. Some of them caused a lot of challenges in terms of integration. When you buy entrepreneurial businesses, it's not not uncommon for those entrepreneurs to want to go off and do their own thing again, and and and and that's been no different with this business. But I do think that we're over that now.

42:23 Sufficient amount of time has gone on, and we have spent the last twelve months embedding procedures and policies and and and and getting the business fit for purpose again. So I think, yeah, that's a fair question. Clearly, the share price is is a lot lower than it was. And I would I would say that of all the points that were mentioned, the mistakes of acquisitions is the is is is the key point there and not want to be made again. Thank you very much indeed, Ed. The next question reads as follows. What clear reasonable performance measurable targets is the new CEO setting to raise the share price back to more than the twenty seventeen levels? And a progressive dividend policy as promised by management team.

43:10 Yeah. Okay. Well, again, I don't wanna just ramble on because I think the elements of that question have probably been answered already. James has covered the progressive dividend policy, and and the targets have been covered through the presentation and, obviously, through the the the releases that have gone out today in terms of what we're looking to achieve, doubling the size of the book, return the the the business to pre COVID PBT as soon as we can, and then push on from there. And then, obviously, doubling the size of the balance sheet or thereabouts. So those targets are there. In terms of management targets, I'm very used to running a business where there's monthly targets for all the key metrics of a of a business and particularly a sales team. And needless to say, they're being worked on at the moment for the new financial year.

43:58 The budgets have already been done, the targets are broadly already there. It's just filtering them down into individual teams and people and making sure that they're held to account and managed accordingly the normal way that you would expect to manage a a business through targets and performance. We've got two final questions. One's a little bit shorter than the other. So the first one reads, why is there no financial calendar key dates under shareholder information or even company information on the website? I'll take that one, Mark, if that's okay. And that's a that's a very good point. We do have relatively inform formalized financial updates so that there's only really four things. The interim results in January, the trading update in June we're we're having today, the final results in September and the trading update on the interims in December.

44:47 And we do flag them through our RNS' many months in advance. Having said that, it's a very fair point. So we'll take that away and we will get a put on on the website sooner rather than later. So thanks for the for the comment. Thank you, James. And the final question, the government funding scheme, TIME put TIME took part in, should have provided a wealth of contact data on companies who require funding at the end of the government scheme. These are marketing leads with no broker commissions. Are these being prioritized for follow ups before they're approached by other more agile lenders? I'll take that one as well if that's okay if that's okay, Mark. Just just to maybe put it in context, there there isn't a central depository, if you like, of all c bills or or RSL leads or anything like that that funders can dip in and out of and and and and and look to fund or move forward. It it doesn't quite work like that. You become an accredited partner from the British Business Bank, and then it's up to you to effectively source your own deals. So through your normal routes, however that is, maybe direct, maybe through the broker network, etcetera. So so we don't have any sight of other CBILLS applicants who have gone to other funders and haven't got it. Having said that, we do have all ones who've come to us and have accepted or not, and they're part of our wider marketing strategy. So, yeah, we can't go after everyone who's applied to CBILLS left,

46:19 right, and center. We just don't have access to that data and no funder does. We don't have that either. But we have very much got a database of those who we fund or have come to us for funding and they are part of the wider marketing strategy that we're focusing on. Thanks so much, James. Well, that takes care of all the pre submitted questions. So thank you to those that took the time to send those in ahead of today's presentation. James, obviously, investors have had the ability to submit questions throughout the presentation. If I could hand back to you once again to open up the Q and A tab. If you could start at the top perhaps, read out the question, who it's from and a response where it's appropriate to do so. I am mindful of time, so I'll hand back to you now. Thanks, Mark. Yep. We'll just we'll just rattle through those and bear with us as Ed and I will probably say, do you wanna take this one or do you wanna take that one? So bear with us on that, but we'll we'll go through them. So just starting with the first one that's come through, Douglas p. Thank you, Douglas. He said, the company is not listed as a provider of claims on the BBB website. Are you aware of this and why? So we did announce three or four weeks ago that we we've become an accredited lender with the BBB RLS, which is the sort of successor to CBILS, and we have been. What happens once you are accredited? Do you then for a period of three or four weeks of training, taking checking your systems up to up to speed, your team know what they're doing in terms of and your marketing is all sort of BBB approved.

47:48 So we've been going through that process. And I suppose hot off the press, the intention is on Monday next week that it goes live and we start letting it. So, hopefully, touch wood, we should see our name appear on that list on Monday. The the next question, Henry w, what proportion of inbound requests which you decide to take on your own book results in written loans changed over the last few years? I'm happy to one. Yeah. I'm happy to take that. Thanks, James. So that's a a really good question because in the last twelve months or so, it's changed dramatically because of c bills. So we were an accredited provider of of c bills, that really overtook any normal loans that we would have been doing before that. If I go back pre COVID and we take the own book loans business, very, very broadly, we were accepting about 40% of the loans that came into the business.

48:55 And I think that was a challenge that I saw where we needed to in in in improve efficiencies. My experience is that we should be really aiming for 50% approval, and then 50% of those should be completed onto the books. So that's the broad metrics that we should be aiming for. That that has been very, very different in the last twelve months because the normal loans business has has really gone off a cliff. It's been replaced by CBILLS. That's to our advantage because we were an accredited provider, so we used all of our 12,000,000 allocation. And now we're back into a a a recovery loan scheme replacement facility, which is very, early days. It's not got the same level of advantages as CBILLS, so it's gonna be, I think, a lot less used, and it's too early to say just what the volumes that that will be coming through.

49:50 We have seen some activity coming through, but the the broad brush is that you should be aiming to accept half of the leads you get through and then complete half of those as well. So ideally completing one in four, one in five leads that you get through onto the books. Thanks, Ed. There's another question here from Henry w, which I'll probably take if that's alright, Ed. And Henry asks, what is the opportunity to increase the level of automation in the process of writing loans? So on the automation front, we've begun moving down that road. We have made a couple of announcements this year of various credits and fraud checks that are are automated and and and embedded.

50:36 The next stage of that automation is effectively auto decline, which is being put out now when we hope in this calendar year, we'll have certainly have something in place that effectively will weedle out the the deals that are a clear no. So our underwriters then can focus their time on looking at ones that stand a chance rather than maybe being inefficient as you could argue. I think it's fair in saying though with the increasing of the the the lower ticket size to five k as Ed Ed mentioned as part of the strategy, we we are or we we're moving up into the story deals type of business. We're not gonna be that sausage machine factory where you can just have an auto acceptance. So the the the assumption at the moment is we're gonna try and embed auto decline to speed things up and be more efficient, but we probably won't at the moment move to auto acceptance because of the spoken unique nature of the deals that we typically do.

51:34 Okay. I've got a question here from Martin t. Ed, this is probably one for you. Can you comment on what are the key metrics you optimize with the new to the new strategy? Yeah. Thanks, James. One of them is around the point that we just touched on in terms of conversion. So that's the whole process of sales is vital. So how many deals and the value of those deals are originated each month? How many you accept in terms of your credit and underwriting, and and how many you convert in terms of the board. It's it's really quite simple. Yeah. If you if you get enough in and you get your underwriting and and your product mix right internally, and then you get your onboarding right, then you'll achieve the right level of of conversion.

52:25 If you don't get those things right, you'll be left with an inefficient process, and that's where opportunities are missed. So that's a that's a major point that I'm focusing on in terms of that whole sales process. I'm sure many people will know the whole principle of the deal funnel and making sure that we're very on the business that we want. We're not just taking in business from brokers that, you know, just is oh, I need some cash. I'll refer it to TIME FINANCE. It's I need some cash, but it fits these parameters so that we're working efficiently. So that whole sales area of efficiency combined with risk and operational efficiency is vital. That will give you a flavor of the metrics we're using to achieve the strategy. Thanks, Ed.

53:11 Another question's come in which, if it's okay, I'll probably take. It's Cam B has asked, will further funding be required to hit the loan book targets? So on that, Cam, we we we've got a sort of in our mind a three, four, five year plan. The first three years of that plan, we have the funding in place to hit hit at the moment towards the very back end of that of that plan. We would need to extend facilities with a few of our providers, maybe such as the British Business Bank, etcetera, etcetera. So we we think we're well positioned funding wise and supported by our partners to for the next two, three years. As I say, we may need to tweak it towards the end as we we go. Having said that though, Ed touched on the point earlier in his strategic update that arguably we could go quicker if we additional even further additional liquidity. So that's something, as Ed said, that I'm tasked with, I'm looking at as well.

54:09 So, you know, watch this space, I suppose. But but at the moment, we're we're well set for the next few years. James, I hope it's okay just to cut across at this point. I am mindful of we're coming up to the hour and giving investors the opportunity to provide you with some feedback. And thank you to investors that have submitted those questions. And of course, any questions that we haven't managed to answer during this presentation, we will make available for the comment for the company to comment on post this meeting. James, I don't know if there's any final ones there that stand out or if not, perhaps you could hand back to Ed just for a few closing comments before, as I said, we'll redirect investors to give you feedback. There there there are quite a few others. So rather than just pick one at random, it's probably if it we'll try and address those separately, and and and I'll hand it away if that's okay, Mark.

54:58 Thanks, James. Well, look, thank you for everybody's time, and I hope you found it interesting. Yeah. We will endeavor to answer the questions that have come through that we've not managed to cover at the end. And and I hope you've got a good flavor of where the TIME FINANCE business is is is at, where it's been, and what we're looking to achieve moving forward. I'm confident that we can deliver the plan that's been set out, and I'm excited about the future. And, hopefully, you you are too. So thank you for listening. And, hopefully, when we return to some form of normality of conferences and meeting up, I'll be able to meet some people in in person. Thank you. Ed, James, thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations?

55:53 This will only take a few moments to complete, and I'm sure will be greatly appreciated by the company. On behalf of management team of TIME FINANCE PLC, we'd like to thank you very much for attending today's presentation. That now concludes today's session. So good afternoon to you all.