Early strategic progress not reflected in valuation
H1 ‘22 results (to 30 Nov ‘21) show steady progress on key metrics, with signs that Time’s refined strategy under the leadership of CEO Ed Rimmer (appointed 1 Jun ‘21) is resulting in a return to growth, following the Covid-induced pullbacks in lending markets in 2020 and 2021.£58.1m of new loans were originated in H1 ‘22, up 25% over H2 ‘21, and 3% y-o-y. The gross loan book increased 4% from £115.7m on 31 May ‘21 to £120.5m. Revenue was flat y-o-y (£11.8m v £11.9m in H1 ‘21), with PBT slightly down at £1.20m vs £1.35m. However, the H1 ‘21 figures benefitted from non-recurring furlough income, so PBT would be 1% up y-o-y if this is excluded.
• Time’s balance sheet remained strong, with Net Tangible Assets increasing to £29.6m, and it maintained a healthy cash position of £9.6m.
• Time’s price-to-book ratio is 0.41 compared to a peer median of 1.41;
• its market cap of £23.3m represents a 20% discount to Net Tangible Assets; and its PER of 12.7 (and forward PER of 11.0) is undemanding.
Our fundamental value stands at 45p per share, not far from double the current share price.
1PM is engaged in providing financial services to U.K. businesses.
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