Time Finance (LSE:TIME) — Annual Results

0:01 Good afternoon, and welcome to the TIME FINANCE PLC Annual 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 received during the meeting itself. However, the company will review all questions submitted today and publish responses where appropriate to do so. Before we begin, I would like to submit the following poll. And I would now

0:31 like to hand you over to CEO, Ed Rimmer. Good afternoon to you, sir. Good afternoon. And thank you, everybody, for joining our updates on not only the year end to May 31, but also our first quarter's trading results and a few accompany accompanying comments to go with the first quarter's performance. And just by way of introduction, James Roberts and and I are both down in Bath at the moment, so we're on the same screen for a change. Just to start off my introduction, I've been with TIME FINANCE for

1:12 four four years now. I've been in the CEO role for just over a couple of years. Most of my career, twenty five years, I've spent in and around lending to SMEs. A good chunk of that time, around seventeen years, I I spent with Bibi Financial Services and five years of which was as The UK chief exec.

1:34 James. Thanks, Ed. Good afternoon, everyone. Yeah. James Roberts, the CFO. I've been about six years now with with TIME. Prior to that, I've had about twenty years in financial services in the city. But, yeah, six years now with TIME. Great. So before we get into the the updates, worth just letting people know that at the back of the presentation, we've done the same as we've done over the last couple of presentations, included a couple of appendix in terms of what the business does, who we are, and who we compete with so that we're able to focus more on the the numbers and the strategic plan in the actual presentation. So if you do need to refer to those, they're shown as appendix at the back of the presentation. Okay. So, I'll take you through, our updates in terms of our plan, where we've got to, and then James is gonna go through, through the detailed numbers, and then I'll come on at the beginning to at the end, sorry, to wrap things up.

2:35 So in terms of the medium term strategy, we put this in place two years ago, June 21, very much on the back of coming out of COVID and and my return to the business. And it was a four year strategy that concentrated on on four key things. The the first was to become a nationally recognized SME funder. That was very much on the back of us rebranding the business from one PM as we were called to TIME FINANCE at the end of twenty twenty and very much targeted to the the introducer market, particularly the broker market in the commercial lending space. The second key objective was to double our gross lending from the level, we were at at that point in time, around about 115,000,000, up towards 250,000,000 by the end of the plan.

3:27 The third strand was to get profitability, post COVID back up to pre COVID levels of of 2019. And then the final one was to very much focus on our own book lending, which would strengthen the key assets on our balance sheet, which is the the receivables. So how are we doing? Well, these numbers look at the 08/31/2023, so the first quarter of our financial year, and also compared to when we started the plan at the start of June twenty one. So you can see there that the overall gross lending book has increased to a 176,000,000. That's a 53% update from when we started the four year cycle.

4:12 I'm pleased to say that there's been further growth in the first quarter of this year, up 4% from a 170,000,000. The two key drivers in terms of our product offering are hard asset finance and invoice finance. Between those two books, they make up 70% of our total receivables now. That's been a deliberate part of our plan. And you can see there that both of those divisions have have doubled or more than doubled from where we started off in June 21. So hard assets, a 109% from a 32% 30,000,000 starting point. And, again, further growth in the first quarter of this year, up 8%. And invoice finance, 128 growth from 25,000,000 starting points in June 21.

5:03 And and further growth, quite as as as good as the hard asset growth in the first quarter of this year, but but growth, nevertheless, from 56 to 57. And that's obviously during our first quarter, which is the the summer months. So not an ideal first quarter, but but we're pleased in terms of the growth that we achieved during the during the summer. Some other key metrics that we always look at, unearned income. Within our gross receivables, a 176,000,000, there's 22,000,000 of that is unearned income. So effectively, that's the income that's booked part of our leases and loans within those receivables. And you'll see there that that's an £8,000,000 increase from where we were just over two years ago in June 21, and it's it's further further increased in the in the first quarter by another another million.

5:56 And one of our key strategic points you'll you'll remember from the the first slide was to focus on own book lending. The business historically had a mixture of own book and broke Tom business. We still have the ability to broke on some of our asset finance business, but we've made a deliberate ploy to build our own book and the receivables on the balance sheet. And really pleased to show you these figures, which show 97 versus 3% split. And you'll see there that that's moved from eighty seven thirteen split two years ago. Prior to that, it was even even more pronounced. At one point, we were seventy five twenty five. So the difference is quite dramatic there in terms of what we're now putting on our our own book lending.

6:47 And then the final point, net arrears. As we've grown the business, the net the net arrears have actually stayed flat in in the first quarter, which is obviously very positive. As the book grows, you would obviously expect the arrears to to grow. As a percentage of the book, they've stayed the same. So that's that's positive. And you can see there that they've actually reduced, again, quite markedly from where we started the plan from, June 21 when they were stood at 13%. So we're we're happy with the balance between growing the business and managing the the back end, which is where the arrears come from. And in terms of what we've been doing and and how we've been doing against our plan, just a few key points.

7:35 So the first is is that point to focus on core business. We exited two noncore consumer focused businesses, the vehicles brokerage in April 22, and the mortgage broking business in October 22. So that was the latter one of those was in our our previous financial year. Before that was obviously towards the end of the previous financial year before that. But all that has been leading up to us having a more rationalized, organized, easier to understand business. We also exited our small unsecured lending loans in December of last year, which was again within the the the the reported financial year end. And that's now left us with two key own book lending divisions in asset finance and and invoice finance from the four key locations that we have in Manchester, Warrington, Bath, and Reading.

8:32 So much more streamlined and easy to understand and, dare I say, slightly easier business to manage as as well. We've con continued to invest in proven industry leaders as well as Salesforce and operational people. We've built our team. We've taken on, in the last quarter, a net 10 people. We see that as as positive. We're obviously cognizant of doing this in a in an efficient way, and that's a key part of our plan as well. But we have continued to expand the the team. We took on Paul Seddon as a a key recruit who is our head of credit twelve months or so ago, and he's very much enabled us to increase the average ticket size in the hard asset division.

9:21 We've increased our overall exposure to any one customer from 500,000 to 750,000, and we've we've increased the average ticket in in hard asset up towards 40,000. It doesn't sound an awful lot, but twelve months prior, was 22,000. So that's been quite a marked increase. And we've done that because we've targeted different type of brokers, but we've also had Paul and the and the risk team helping to structure those deals and making sure they're done securely. So that's been a key part of the the driving hard asset finance. Continued to develop our products, so the product offering has has continued to evolve. We launched an asset based lending product in April of this year. We've started to transact business. We've done three deals now.

10:12 They're never gonna be volume deals. They're very much value deals and being able to fund other asset classes. So in one deal, we can do invoice. We can do asset. We can do property, and we can do stock funding. We do see this as a growth part of our our business. The secured loans offering has been has been re repositioned. So having moved away from the smaller unsecured loans, we've moved very much towards larger secured loans, so secured against property. But the the tweak that we've made and we're launching in in our second quarter being able to provide short term bullet loans.

10:59 So more bridging type loans for businesses that need money for three to twelve months rather than our normal product, which is typically amortizing loans over three to five years. So we see that as an opportunity to add to our product portfolio. And the smaller and soft asset business that is left in the business that we are still progressing, which is a a relatively small part of our business, but it's it's a better reward because it's higher yielding. And we're transacting pretty much all of that business now under our our fast track offering, which is progressing the deals from introduction to payout much more streamlined, much more auto scored. And that was restructured in April 23, and it's it's performing well. We're happy with where we are both from a return, new business, and an arrears position on on that offering.

11:52 And and we've continued to build our brands. So the objective of increasing the exposure in the commercial finance sector, I think we've we've done really well at. We're we're still evolving as a brand in in in our market, but we are more well known. We had a 26% increase in our own PR that we achieved in 2013 year end. We're we're a sponsor of NAC Fab now, the commercial finance brokerages body. And we won asset finance provider of the year, the the asset finance connect awards earlier in in the year. So really pleased with how that brand building and familiarization and understanding of our our businesses is going.

12:36 So, hopefully, that gives you an update on where we are strategically and against our plan. Just over halfway through that now. And I'll hand over to James at this point to talk you through the numbers. Thanks, Ed. Yep. I'll do a a whistle stop tour of the numbers, both the twelve months to May 31 and also an update on the q one trading update that we put out simultaneously this morning. So hopefully, give you a good flavor of of the p and l and the balance sheet. So if we look at the audited financial results to May 31, the twelve months just finished. We we sort of announced pretty much all of these numbers back in late June in a in a trading update. Obviously, we've we've had the audits over the last couple of months, and now they've been completely firmed up in in line with what we said. So some of this may not be a surprise, but I think it's worth going over because Ed and I and the rest of the board are very pleased with with how it went, and and then we'll move on to to q one, which is fresh new news today.

13:39 We can see here sort of key metrics we look at on the right hand side, very pleasing to see nice ticks down the right hand side, which is always good and reflective of a good year. Own book origination, the first the first line there, up 14%. And what we mean by own book origination is these are deals we've we've identified and we've written them on our own book. Ed touched on the the desire and the strategy to grow our own own book. If you get the right type of deals on the book, that in turn will lead to revenue over three to five years with the length of the lease or the loan or or the length of time they remain an invoice finance client. And as long as you get it right and there aren't arrears and write offs, that in turn will lead to profit. So own book origination is effectively the future lifeblood of the business. So as long as that's going up and you get everything else right, you can be confident that revenue and in turn profit will inter in time increase.

14:32 So up that's up 14%, which is which

14:35 is great, and that has led to the own book growing as well. We can see there the second line up to 170,000,000 at the end of May. That's 24% up on where it was a year before. So that was really good. But, arguably, it's easy to lend money. The skill is getting the money back. And so for me, the third the third bullet point, arrears is is particularly pleasing, and you can see there that the the deals in arrears as a percentage of the book fell from about 7% at the end of May twenty two to about 6% at the end of May

15:09 twenty three. So that that indicates that we are as well as growing the book, we're not worsening the the the book quality. If anything, we're improving the book quality. So really pleasing third step there. All of that has led to an increase in consolidated net tangible assets over 34,000,000 at the end of May, and that's because we made profit. And as you can see, the sort of p and l indicators below revenue was up 17%, which in turn led to profit of 4,200,000, which was 282% up on the year before. It is worth highlighting. That that is a a great percentage. We're very proud of it, but there was a £1,000,000 write off in the year before. So that artificially depressed last year's numbers by about a million pounds.

15:55 But still, it it's it's it's 4.2 from from about 2,000,000, which is a great increase. And in turn, that has seen the EPS grow, again, nearly 300% up to 3.73p per share. So really strong set of numbers we feel to the end of May. And so the next key thing was would it continue and will it continue? And very pleasing to say that we're we're, again, delighted with our q one numbers, which shows the strategy embedding further and flowing through into the p and l and the balance sheet. Again, similar similar indicators. We can see that the own book origination, which as I touched on, is is vital, has continued to grow over 20,000,000 for q one this year compared to just under 16,000,000 for q one the year before. So nearly 30% growth in own book origination quarter versus quarter, which is great. And that's led the lending book as well to grow as well up to just under 176,000,000, and that's compared to just over 142,000,000 at the end of August in 2022, so 23% growth. And we've managed to continue making sure that we're lending to the right type of deals, and we're not increasing arrears on our book.

17:08 We can see the arrears has remained at 6% from period to period. So, again, we're not taking undue risk in growing the book. This has then resulted in net tangible assets continuing to rise. They're now over 35,000,000. That's up 13% from the end of August twenty twenty two. And, again, revenue and profit both significantly up from the quarter to August 2022. Revenue for the quarter just gone is 7,600,000. That's 21% up on the equivalent quarter in 2022. And profit before tax, 1,300,000. So 45% up on the naught 900,000 that we did to 08/31/2022. So, again,

17:49 similar to the twelve months to May 31, a really solid set of numbers to the 08/31/2023 and a and a good q '1 to start off the new financial year, which which means we're look forward with cautious optimism for the rest of this financial year in terms of the numbers.

18:06 If we just have a quick look at the balance sheet, as I I touched on somewhat facetiously saying, it's it's it's arguably easy to lend money, the skills in getting it back. The balance sheet is absolutely key for us as an overbook lender. And a couple of key stats here. Net tangible assets, as we touched on, up to 35,200,000, but you can see the growth year on year consistently growing that net tangible asset level from 26,600,000 back in May 2020. The lending book growing now to a 175,800,000 as I've touched on, up from a 170 at the end of May, our financial year, but back up up from a low of 115,000,000 or so in May 2021. And that's the low point when when we launched our full year plan. As Ed alluded to, we said we'd more than double our own book lending from that 115,000,000 low point.

18:59 Arguably, the most important graph of of of my brief presentation is this one on the right showing the net arrears. These are deals that aren't quite going to plan anything from they've missed one direct debit, and they're they're one day down, and, variably, we'll be able to get them back on track through our our credit team and things like that all the way through to ones which are in the depths of the legal process in trying to recover our money. You can see here there was a huge spike around the COVID. And if I can just explain briefly the the green and purple color differences, the the green colors that you see around the middle of twenty twenty in the in the height of the pandemic are forbearance. That's where we granted forbearance on repayments or interest or whatever to certain clients who said they they needed our help. And we can see there are no longer any green bars, and there haven't been for for quite a while. We no longer have any any deals in arrears, but you could in forbearance. Sorry.

19:56 But you can see back in in the height of the pandemic, we had a best part of 20,000,000 in forbearance. So it's great to have got those those deals back on track and out of forbearance. The purple bars, however, are, I feel like, standard arrears that we haven't granted forbearance to and the deals that aren't quite going to plan, as I say. And, crucially, here, you can see sort of the right hand third is pretty static. So since sort of mid to late twenty twenty one, we've had a relatively static level of arrears, and that is, as you can see, compared to the left hand side, significantly lower than pre pandemic levels. So in pounds and pence, we can see arrears now are significantly lower than they were pre pandemic despite the fact the book has grown from about a 115, a 120,000,000 up to a 175,000,000.

20:43 The arrears have stayed static. And as a percentage of the book, we've already touched on, they've they've fallen. So very pleasing for us to see arrears remain very much under control despite some of the macroeconomic headwinds or the doom and gloom that we're hearing out there. We think we've got it about right, and we're growing pretty rapidly without taking on undue risk at the back end, which sets us up well for the future. Final slide from me before I hand back to Ed just to talk about a couple of of key metrics and and on why the book size is so important. I've shown this graph before of of of the book over time, and I make no apologies for doing so. Again, it is it is really key for us. As I said, if you you get the book growing with the right type of deals, the unearned income and the compound nature of it means you will get higher revenues and higher profits for months and years to come.

21:36 So growing the book in the right way is is is consist is is important. You And can see since the end of lockdown three, sort of in the middle of it there, we've grown pretty consistently month on month on month for for the best part of two years now to these all time record high levels. And you can see on the left how how the various lockdowns impacted us. But you can see on the right hand side, over a 170,000,000, significantly up on the previous highs pre pandemic of of over just over a 140,000,000. So so one of our key things to get back to an above pre pandemic levels is we've got there on the book, and the rest should hopefully follow through in due course over the coming months and years. Ed touched on the average deal size. And just on the right hand side, you can see there the average deal size for hard asset, one of our key growth areas, hit 40,000, as Ed mentioned, in q four of previous financial year and also has maintained at that level for q one in this year.

22:31 So we have made big strides increasing our average average deal size. At the same time, however, we've continued to focus on our spreads to diversify our risk. And our top 10 sectors by value, they're still less than 30% of the overall lending book, and the largest sector is is still less than 10% of the of the lending book. So we're very well, in our view, spread and diversified, which which derisks arguably some of the lending, which is which is key for us. Despite the improvement in arrears, we still think we've got a sensible approach to provisioning. The bad debt provision continues to be about 3% of our total net book exposure. It increased during the last financial year from 3,600,000 to 4,200,000, and it's about 4.3, 4,400,000 today. So it's going up as the as the book increases despite the arrears staying roughly where they were.

23:24 So we think we're well provided and adopted essential sensible approach to our provisioning. And we've managed to pass on a number of the rate the recent rate increases to our to our clients within invoice finance. All all the rate increases are automatically passed across due to the variable nature of the funding

23:44 both in and out. In asset and loans, it's slightly different. All the deals that we've done and are out the door before any interest rate rise are fixed, so they are not impacted by future impact rate rate rises up or down, same with our funding and and those deals done. Where the rate rises do impact us is if new deals, we have to make a commercial decision whether to up the rates for the new funding. We'll get in to fund those deals or to keep the rates where they are or only pass a certain amount of mount on for commercial reasons to enable us to get more secure and bigger bigger deals. But overall, we've passed on approximately 2%, and we're happy with where our margins are. They're in line with our plan. So in summary, very strong set of numbers we feel to 05/31/2023, and really pleased with the first three months of this new financial year as well, which sets us up well, we think, for the remaining nine months of the year. And with that, I will hand back to Ed.

24:43 Thanks, James. So just to finish off, really, before we we take any questions, I guess in summary, we've simplified our structure now, very much focused on business to business lending, moved away from the noncore parts of the group. You'll remember from the previous slides, 97% of our of our business now is is own book lending across those really two key products of of asset finance and invoice finance. So a more simplified business to manage. We've brought key hires into the group. We we will continue to to be open minded to doing doing that in the future. We've expanded the sales team in asset finance and invoice finance over the last twelve months.

25:32 But if the right people come along, we'll we'll continue to try and attract those people into the business. A lot of the people that we've we've brought in are now embedded and up up to speed in the core parts of the business. So that that strand is is really now complete. The multiproduct offering has expanded with our ABR offering. We see that as a key product moving forwards. And and as I've said, hard asset and invoice finance are our key growth areas, and and that should continue certainly for the rest of this this current plan over the next two years. The arrears are are well controlled. James has gone over that, and and I mentioned it in the earlier slides. And and our profile and brand recognition is is on the rise. So I think in in summary, our plan that we set out two and a bit years ago is is very, very broadly on track.

26:24 And in terms of the outlook, it's it's more of the same, really. We'll we'll continue to focus on our current strategy. We believe we've still got plenty to go at. We're not we're not a a huge bank who has to maintain a certain size of growth just to stay still. We think there's many opportunities in the market for us to continue our our momentum and to continue growing. We expect to see that further growth achieved this this year and next. And even though the market conditions are challenging with interest rate rises, There will be some sort of a lag, I believe, in terms of businesses starting to run out of cash that was maybe, drawn from COVID loans, and the insolvencies are increasing.

27:13 They will continue to, I think, increase. But that market does present opportunities for alternative financiers like ourselves. As I've said before, is a market that I've experienced previously. There's all obviously subtle differences in the different cycles we've seen. I joined the market in 1995. We had thirteen years of pretty good conditions and growth through to o seven and o eight. And when everybody thought that the world was gonna end in the banking crisis, alternative financiers did did really well if they had the right people in the business, and they took on the right business at the right rates. And and that's where I see the opportunities for us. Clearly, we have to make sure that we manage arrears and the back end of our business really well.

28:06 And I think we've got some good people in the business to steer us through that. And there will be challenges, but they'll they'll also be really good opportunities. So I'm, you know, as James said, cautiously optimistic about the rest of this year and and into next. And that concludes our presentation. So I'm happy to take any any questions. 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 by our investor dashboard. James, as you can see, we have received a number of questions throughout today's presentation.

28:55 And James, if I may hand back to you to chair the q and a, and I'll pick up from you at the end. Yep. Thanks very much. So I'll I'll steer us through the questions and invariably hand them to Ed because he'll be able to answer most of them. But So we we have a presubmitted question here, Ed. One for you. What are the directors going to do in order to improve the market view of the company? Well, that that's that's a really good question, and we've one one one we've asked ourselves many times as a board. Probably, there's two parts to that that question in terms of answers. The first is we're doing what we think is in our control to do, and and that's run the business properly, get the right balance between risk and reward.

29:40 And, ultimately, the results will hopefully look after the the the market cap itself and the share price itself. Clearly, it's not quite as straightforward as that because we're subject to the wider vagrices of the market and the ups and downs that we as a financial services provider have to have to contend with, but we are focused very much on doing what we think we can do to achieve the results and and and get the the share price going in the right direction. And, you know, to be fair, we have done that over the last two years. The share price was down at around 15 p. It's now up at 29 p. Clearly, we'd like it to be higher. We still think it is significantly undervalued versus the net asset value and therefore still represents good good value for for investors.

30:28 The second part of the of the answer really is around us marketing the business to investors in a more effective way. We did start to do that last year. We put a specific plan in place to focus the retail end of the market. We believe that's where there was a better value to be had in terms of share price movements. James and I did three presentations to various investor forums last year, and that's still part of our plan for this year is to get in front of those retail forums and and and audiences to push the message. We could do an awful lot more around the city in terms of institutional investors. I'm meeting with our brokers tomorrow to discuss what that might look like, but I am very reticent to go and start trolling around the city when we've got a business to run and when we believe that we need to focus on doing that for for the good of our shareholders. So that's the answer to to that question.

31:29 Thanks, Ed. The next one is for you as well. Do do you think the shares are good value considering the low PE and growth potential? And if so, will you own any more get I'm trying to reword this. If so, why do you not own more shares? Okay. Well, that's another good question because it's very topical. So what we have to obviously do at this stage of the year is is get through our close period, get the results audited, get the result announcements done, and get this presentation out of the way. And then as a board, discuss any direct to share dealings. And that is something that we have on the agenda for our next board board meeting next week.

32:17 So, yeah, watch watch this space. It's really work and sell now. But I I get the question. I understand the sentiment, I believe in the business. So, yeah, that will will look to be done in an organized fashion as we move out of this closed period. Thanks, Ed. The next question is, are there any changes in the regulatory environment that may affect the company? Shall shall I take that one? Yeah. There's not there's not many on the horizon. No. We we've just been through one pretty sizable regulatory change, which was consumer duty, and that that kicked in in various stages over the last six months or so. We've got a, we think, pretty robust and skillful compliance department who helps steer us through through these these changes in the regulatory environment.

33:06 And we've we've taken that in our stride for want of a better phrase. So there's nothing else now on the horizon that we are aware of major regulatory changes. However, that's not to say something won't come out of left field. They often do, but we're usually ahead of the game and and prepared for those as they as they come. So no no major issues on our side on the regulatory front that we're aware of. Second question from from Ian as well was what KPI should we use use to judge the performance of the group? Ed, would you like to say that one or should I? Yeah. Sure. I'll I'll take that one. So I think it's it's a mix really of what we've talked about today. It's it's not all about sales and and and it's not all about profits, making sure we understand how the profit's made through managing arrears, bad debts, cost income ratio, and it's a mix of really those those key metrics. So yeah. I mean, it's it's the the key points that we present on.

34:06 We try and ensure that they're the they're the KPIs that we we look at. Probably the one that's that's maybe missing is the cost income ratio. That's something that we're very focused on to try and grow the business in a more efficient way and using technology and improving our processes and that whole area of business improvement. So I would say that's probably one area where we we probably need to report on ourselves, and that's one area that should be should be assessed. But other than that, we cover the key the key the key metrics in the in the presentation. So they're they're the ones that I would suggest that that you as a shareholder monitor. Thanks, Ed. Paul has asked, our our market cap is less than our our tangible book value. How are we working to get market rec greater market recognition of of our impressive progress? Thanks for the impressive progress comment, Paul.

34:59 But I'll take this one. That's what I said. Ed Ed's already touched on some of the steps we're gonna take in the next twelve months to to sort of get our get better recognition that we think we deserve as a company, which hopefully in turn will will lead to some new ratings or or what have you. But I think it is also worth adding, if I if I may, that it seems to be a an issue across the whole lending sector of of of people with their market cap less than their net tangible assets. Almost all the banks are the same. Ours is arguably in a better position than than some of theirs in terms of that that metric, but it it is something we are working hard we'll be working hard to to change, but we're not alone in having as a lender, having a a valuation of less than our our net tangible assets.

35:51 Mike d asked a question if there's lots of cyberattacks reported in the press recently. What measures do you have in place to protect the company and customers' data? I'll I'll happily take that one because it's actually quite relevant to some work we've done recently. So we recognize that as an area of potential threat to the business at board level. We included it in our our strategy review where we did back in January, and we put an initiative in place to go and and do some work around that, which we actually completed quite recently a couple of weeks ago. Think the final work was done. So we engaged our outsourced service provider to effectively commission a whole report and work around that.

36:37 We completed a number of penetration testing exercises for them to see if they could do certain things that weren't obviously permitted. And the results are broadly positive. There's one or two remedial things we need to work on, but nothing that you would include as a a as a real worry. And we're agreeing now a more regular review to work on that on a an annualized basis at least. So that is part of our strategic plan. There's initiative behind that. It's got it's got an owner. And as I say, we we work with our outsourced service providers to make sure that we're as best as prepared for these things as as we can be. Thanks, Ed. Collins asked the question of why shouldn't the company just concentrate on invoice finance given the margins are much higher than they are for asset finance?

37:35 Well, we like the mix between the two. One is clearly for working capital as companies need cash flow to survive and and and obviously grow their businesses. Another is for fixed asset finance. So as businesses need to either replace or invest in new equipment. And the cycles are slightly different in terms of when those two businesses peak and trough and when the opportunities and threats come about. There's also some similarities in terms of the businesses, obviously, in terms of raising money. They're two key well known products that many SMEs tap into. So we the short answer is we like the flexibility, the slightly different returns and rewards, and the slightly different economic cycles that those those two offerings maximize and and play out in, that's that's the the reason we don't just focus all our efforts on invoice finance. But, clearly, I I understand the question. The IF market does have better margins, but only better margins if you can manage the risk in the book and make sure you get your money back, and it's not all straightforward.

38:43 So, yeah, it's having the mix of products is is the key. It's a risk mitigator, and it it provides us with a a better stream of income and a more varied stream of income. Thanks, Ed. Andy's asked, as you target larger deal sizes, are you finding a different set of loan providers competing for that business? Yeah. Like, again, a good question because it does take you into markets. And for that, you need different people to originate business and different people to structure and underwrite business. And we've not moved into that uncomfortable territory yet where we need to be worried about having entered a market that we're not familiar with. We've pushed up the average size of the hard asset and the IF deals through playing in our our core markets.

39:35 So at the moment, I don't see us moving into completely unfamiliar territory. It's really just doing more of the same, but doing doing it better and targeting slightly higher deals. It's it's not it's not taking us into complete mark completely different markets. So if you do do that, you need to really relook at the resources you've got and how you go about underwriting and and originating those deals. We're not we're not there. We're not there with the the the growth we've we've seen. Thanks, Ed. Scott's asked, are there any legacy issues from the CBILS lending? So so I take that one? Yeah. Alright. Yeah. So for those of you who've been long term listeners to our presentations, you'll remember we we were a government accredited CBILLS and RLS lender. So I'll combine CBILLS and RLS because they're they're very similar during the pandemic, and we were very pleased and proud to support a number of UK businesses. We lent in total in the grand scheme of things, not a huge amount. It it was roughly 10,000,000 through the CBIL scheme and roughly 5,000,000 through the RLS scheme. Almost all of those now have washed through because there was sort of three year loans or so. So we're almost done on that. We've we've got a a couple of million left.

40:52 The vast majority are fine, and there's a handful that are being worked through. So the exposure now is is very, very potential exposure, sorry, now to the group is very, very small from the legacy CBILLS and RLS lending. In general, they've all paid back or or or been dealt with. So very few overhang from that that product that we that we had. That's probably worth saying as well that other than other than for fraud, the claims that we've we've made through the scheme, through the the the British Business Bank who administer the scheme for the government, Our policies and procedures have have been enabled us to recover all the claims that we've put put in. So we see that as a as a positive way in which the the the scheme thrillers was administered. The deals were underwritten and how they've been managed since then.

41:47 Abs asks, are there any plans to pay a dividend in the next one or two years? Well, again, a common question and one that, yeah, is is is worth reasking. We've asked ourselves that same question. We've got it tabled for our board meeting at half year. James has produced a a a recent paper on this. So rather than categorically making a judgment and and answering that question, all I can say is that it is tabled for our half year board meeting, and the reason for that was to see, obviously, how we performed off the back of a a pretty strong year in the first half of this year and how our how our cash requirements are playing out. You may recall when this has been debated previously.

42:40 Our previous strategy has been to make sure that we maximize our cash in the business to lend lend more and grow the book. That is still the same, but we will we will revisit the dividend question at half year. Thanks, Ed. Colin asks, since I've known TIME, it's been updating IT systems. According to the notes in the results, upgrading systems is another key activity. Could you explain what the changes are, which the company requires, and how the changes will assist? Yes. It'd probably take a lot longer to give a a proper answer than than what we've got today. But very, very broadly, we have systems in the assets and invoice finance businesses that are different both at the front end and the back end. So in terms of the front end CRM system, in terms of originating business and managing the flow through from inquiry to payout, they're different, and they talk to the back office systems differently as well. So the the two two systems that we've got are different in both divisions.

43:51 What we need in each of those divisions is slightly different, so it's not a question of one system for the whole business. That was explored in the past. I don't believe it's the right answer, and I don't believe it's what we need. We effectively need an efficient front end system in both divisions to make it easier to progress deals through the system, easier to produce data, and easier to actually take onboard business. That's the simple answer. And there's some improvements that we are making. So for instance, in, invoice finance, we've recently moved over all agreements to DocuSign, which is clearly a more effective and efficient way of signing legal documents rather than waiting for a week, potentially, for documentation to come back and doing all your onboarding checks. Like, it can happen, you know, literally with it within minutes. And we're more we're more with doing that ourselves for our own finance facilities. So it's something that the whole industry is moving more towards.

44:52 But in in simple terms, it's making sure that we we are efficient at the front end in originating and progressing deals through the system, and we're efficient at the back end in terms of managing those clients both in life and out of life. We have made some good improvements, but as anyone knows in systems, it's an evolving process rather than revolutionary. Anyone that's tried to revolutionize system improvements, in my experience, has spent an awful lot of money and made some mistakes, and I'd rather do it as an evolving part of our improvements. Thanks, Ed. Just conscious of time, so we'll probably just do another couple of couple of questions. Apologies if we if we haven't had time to get get through to everyone. So next one is from Sam.

45:39 Sam says that most finance companies are priced at significant discount to net tangible assets. No matter how much effort you put in, you need a shift in market sentiment for the sector. I suggest you spend your time on running the business and not trying to impress shareholders. Excellent point from Sam. Should we hang up? No. I'm joking. Sorry for whenever no. It's a fair point. We touched on it earlier. I I mentioned the the discount to to net tangible assets experienced by lending companies. It is the bane of our life. We will do all we can to improve our set the sentiment we have, but but some of the time, we do have one arm tied behind our back. But thank you, Sam. We are trying to run the business the best we can, and we will continue to do so. So it wasn't really a question from Sam.

46:24 It's more of a sentiment. But a final question then from Johnny. Will you consider m and a in the future as a way to drive growth? Ed? Yeah. We we absolutely will, but it will be focused on what we now consider our core businesses. So there are elements of our core divisions where there's natural attachments, if you like. So, for example, invoice finance, is often linked with trade finance or purchase order finance. That's not something that we currently are involved in. It's something that I've experienced in the past, and and it's something that we could look at in the in the future. There's elements of funding receivables that are specific that we're not involved in. So recruitment funding, construction finance, and and and their elements that we could look at.

47:19 And there's there's other bolt on smaller books where from time to time, you get opportunities to look at. There are exactly what we do, and we could look at trying to do some deals just to achieve growth through acquiring some agreements and and client contracts. So we are open to to m and a. It's an area clearly that the old one PM business had a lot of in. Some work better than others as as we've mentioned in the past. We've spent some time tidying the business up, for want of better words. So we're not about to go and embark on a massive m and a plan to take us into unrelated parts of what we already do. But as I say, there's definitely areas that we can consider to help the organic growth, and and that is part of our our plan, but for the right the right deals.

48:13 That's great, Ed James. And thank you for being so generous with your time and addressing those questions for investors today. And, of course, the company can review all questions submitted today, and we'll polish publish those responses on the investment company platform. But before we direct investors to provide you with their feedback, which one is particularly important to the company? Ed, could I please ask you for a few closing comments? Yeah. Sure. Well, thank you to everyone for listening. I hope you found it informative. I think that one of the last questions or or statements was was probably what I'll close on, and and that that was the, you know, the difference in terms of our our market cap and our net asset value. And it it can be frustrating because we're achieving what we believe is is a is a a good set of results on the back of a sensible plan.

49:01 And and the share price, whilst it has increased, it's still at a discount to net asset value. And, yeah, we can really do what we can do, and that's very much our focus. So I firmly believe if we continue to produce the results and balance the risk and reward and take our opportunities, then we'll achieve success for this business. And and that's what we're focused on. 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 you feedback in order that the board can 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.