Shares in Bath-headquartered alternative lender Time Finance have risen strongly after it forecast that its annual profits are likely to be higher than expected.
The firm, which specialises in asset, loan and invoice finance products, has experienced a turnaround in its fortunes over the past year or so after embarking on a ‘back-to-basics’ strategy.
Prior to that the London Stock Exchange-listed firm had pursued a policy of growth through acquisition.
The new approach has resulted in faster-than-predicted growth – and in a trading update it said its 2023/24 full-year financial would be “ahead of current market expectations”, with pre-tax profits “now expected to be not less than £5.4m”.
That would be a 28.5% increase on last time’s annual pre-tax profit of £4.2m, which itself had been an increase of 281% on the previous 12 months.
The update trading statement triggered a near 9% rise in Time Finance’s share price, taking it to 31.9p yesterday, its highest since January 2020. The shares continued to climb today, rising to 32.4p by mid afternoon.
The group said it had “continued to enjoy positive trading momentum” in the first five months of the 2023/24 financial year.
The update continued: “Given this positive momentum year-to-date, which includes the lending book reaching a record high of approximately £180m as at 31 October 2023 and arrears remaining static despite the wider macro-economic environment, the board now has increased confidence that group performance for the 2023/24 full-year will be ahead of current market expectations.
The group, which grew rapidly through a series of acquisitions in the late 2010s under its previous name of 1pm, changed its strategy last year to concentrate on the key initiatives of investing in improved IT infrastructure to enable the business to scale more easily and maximising its multi-product offering as well as its own-book lending.
In March it said that the increase in revenue had been driven primarily by growth in its invoice finance division and the ‘hard asset’ subset of its asset division. Both growth areas operate in the larger-ticket, more secured lending arena.
The company said it planned to update shareholders further on its first half on 20 December.
