Time for a rerating
Results for H1 to end Nov ‘20 show Time’s recovery is well underway from an industry-wide, Covid-induced slump in good quality lending demand and spike in bad debt provisions. This coincides with a Group rebrand, which consolidates 5 years of buy-&-build success and offers a range of new competitive advantages.The loan book is growing again, reaching £106m on 30 Nov 20 (Nov 19: £125m; June 20: £95m); loans in arrears reduced by £6.1m during H1 after jumping £9.1m in the prior 6m; and the value of loans in forbearance has dropped from a peak of £25m in May 20 to £2.6m in November 20. Impressively, Time recorded a PBT of £1.4m in H1, compared to a loss of £1.0m in H2 20.
At a market level, light at the end of the Covid-19 tunnel brought about by the start of vaccine rollouts, coupled with a more clearly defined post-Brexit UK-EU relationship, should provide a platform for further recovery. While at a competitive level, Time’s established market position gives it a strong chance of gaining market share.
The share price of 25p is 30% below pre-pandemic levels, with valuation multiples suggesting that Time looks significantly undervalued in relation to peers.
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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.
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