| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 550.76 | 949 |
| Intrinsic value (DCF) | 22.04 | -58 |
| Graham-Dodd Method | 0.80 | -98 |
| Graham Formula | 1.23 | -98 |
Time Finance plc (LSE: TIME) is a UK-based financial services provider specializing in tailored credit solutions for businesses and consumers. Operating through four core segments—Asset Finance, Vehicle Finance, Loan Finance, and Invoice Finance—the company offers a diversified portfolio including hire purchase, leasing, asset-based lending, and business loans. Formerly known as 1pm plc, the company rebranded in 2020 to reflect its broader financial services focus. Headquartered in Bath, Time Finance serves SMEs and corporates with niche products like VAT loans, bridging finance, and government-backed recovery schemes. With a market cap of £54.1 million, the firm plays a critical role in the UK’s alternative lending landscape, addressing gaps left by traditional banks. Its hybrid model combines specialist financing with flexible terms, positioning it as a key enabler for UK business growth amid tightening credit markets.
Time Finance presents a mixed investment profile. Strengths include its diversified revenue streams (spanning asset, vehicle, and invoice finance) and a strategic focus on underserved SME lending, which supports premium pricing. The company’s £4.4 million net income (13.4% margin) and low debt-to-equity ratio (~0.03) suggest prudent financial management. However, risks loom: negative operating cash flow (£-170k) and minimal dividend payouts may deter income-focused investors. Its beta of 1.26 indicates higher volatility versus the market, reflecting sensitivity to UK economic cycles. While government-backed loan schemes (e.g., Recovery Loan Scheme) provide short-term revenue stability, reliance on discretionary business spending exposes it to macroeconomic downturns. Valuation appears modest at ~1.6x revenue, but growth depends on scaling niche products in a competitive market.
Time Finance competes in the fragmented UK alternative finance sector, differentiating through product specialization and agility. Its competitive edge lies in hybrid offerings (e.g., combining invoice finance with asset-backed loans), which larger banks often avoid due to complexity. The company’s SME focus allows for higher-margin, relationship-based lending, though this also limits scale. Unlike peer-to-peer lenders, Time Finance balances risk via secured lending (e.g., hire purchase collateral), reflected in its stable net income. However, it lacks the digital-first platforms of fintech rivals like Funding Circle, potentially hindering customer acquisition efficiency. Its regional UK presence contrasts with global competitors, limiting geographic diversification. Key challenges include competing with lower-cost online lenders and navigating regulatory scrutiny in invoice financing. Strengths include deep sector expertise in asset finance (e.g., vendor partnerships) and a sticky client base, but margin pressure from rising interest rates could erode profitability versus larger players with cheaper funding.