Fair value 50p/share as ‘Fantastic opportunities lie ahead’
Time has confirmed the permanent appointment of the highly experienced Ed Rimmer as CEO. He has described an updated strategy as ‘evolution not revolution’. The key elements are a primary focus on organic growth to double the net lending book to more than £200m over four years, with a priority placed on building the ‘own-book’ business over ‘broked on’ business.Time’s trading update highlighted the solidity of the foundations the re-shaped team have on which to build. While business volumes in FY21 were unsurprisingly depressed as a result of the pandemic (£103m originations vs £147m in FY20), the business has remained profitable with £3.0m adjusted PBT in FY21 (also £3.0m in FY20) and has a solid balance sheet. Net tangible assets stood at £28.3m on 31 May 21 (31 May 20: £26.5m) with cash and equivalents at £8.3m (£1.3m).
Market conditions are rapidly improving and we expect a return to growth. The Finance & Leasing association has reported a strong recovery in new lending business in March and April 21, and the May 21 HM Treasury Forecasts for the UK economy showed upgraded average UK GDP growth forecasts of 6.4% for 2021 and 5.4% for 2022.
Compared to peers Time looks undervalued as its price-to-book ratio of 0.5 is under half the 1.0 of a peer group median. Indeed, if it delivers on its growth ambitions we believe its current fundamental value to be 50p per share.
PCF Group is an investment holding company. Co.'s wholly-owned subsidiary, PCF Bank Limited, has two operating divisions: Business Finance, which provides hire purchase and finance lease agreements to sole traders, partnerships and limited companies to help them acquire vehicles, plant and equipment; and Consumer Finance, which provides hire purchase and conditional sale agreements to retail customers to help them acquire vehicles. As of Sep 30 2017, Co. had total assets of £172.5 million.
1PM is engaged in providing financial services to U.K. businesses.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.