Time Finance plc (B5D1.F) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the Time Finance plc Investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it's appropriate to do so. And before I begin, as usual, we would just like to submit the following poll. And if you could give out your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Time Finance plc. Ed. Good afternoon, sir.

Well, good afternoon, and thank you, everyone, for joining. This is our half year results and updated strategic plan. So look forward just to taking you through the current plan, which we put in place nearly 4 years ago now in June '21 and a bit of an update on where we are looking to take the business in the next 3-year cycle when we get to the current end of the year through to May '28. In the middle of that, James, is going to take you through our numbers, and let's get started. So just by way of introduction. I'm Ed Rimmer, Chief Executive of the business. I've been involved with SME lending for nearly 30 years now. A good chunk of that time was spent with Bibby Financial services, which became the largest independent lender in the invoice finance market. And I've been with Time in the role of Chief Executive for just 4 years, coming up to 4 years. I came into that role in June '21 when we put this plan in place. And James?

Thanks, Ed, and yes, good afternoon, everybody. My name is James Roberts. I'm the Chief Financial Officer. I've been with Time Finance now since the middle of 2017, within a month or so of Ed joining. Unlike Ed, I haven't quite got the 30 years FS experience, but I've got about 25 years financial services experience in a variety of businesses, including, as I say, the last 7 or 8 years now with Time Finance.

James, so just to update shareholders and investors on our current plan. It's worth saying just before I start that there are 3 slides at the back of the presentation as an appendix which really gives the basic information around the business in terms of what we do, the markets we play in, our key product offerings, and we've decided to put those as an appendix because we appreciate a lot of people have probably heard the basics before, but they're useful to refer to if anyone wishes to. So we'll get sort of straight into the current strategic plan update. By way of a reminder, it was a 4-pronged attack when we put this in place in June '21. The first objective was to double the gross lending book from the starting point, which was obviously coming out of the COVID years. The second was to become a nationally recognized SME funder. That was basically on the back of rebranding the business at the end of 2020 from what was 1pm plc to Time Finance and very much also focused in our core commercial finance market, particularly at the introducer network that we get our business from. The fourth -- sorry, the third objective was to achieve run rate profitability back up to the pre-COVID levels of 2019. And the final objective was to significantly strengthen the balance sheet through primarily focusing on own book lending. The business in the 1pm days was more of a mix of broked out business as well as own book, so very much more a focus on own book lending. So just in terms of a progress update on those 4 objectives. You can see there that the gross lending book is now up to GBP 209 million at half year. So we're 80% of the way there towards our target. And that has been driven very much by invoice finance and hard assets in terms of that subdivision of the Asset Finance division where you can see the growth has been very significant. So GBP 68 million in invoice finance is the book and GBP 93 million in hard asset. And between those 2 offerings combined, we're now up to 77% of our lending book. The run rate profitability. There's some small text at the bottom, which gives a comparative at the half year in the final year prior to COVID. And you can see there that we've surpassed those half yearly revenue and profitability numbers. And obviously, all things being equal with the market guidance that we have out there at the moment by the time we get to the end of the current year and the current plan, we will have achieved that objective, which is very pleasing to see. In terms of our positioning and our branding and our profile in terms of becoming a nationally recognized SME lender, we've made great strides. We've introduced the Trust Pilot mechanism for reviewing satisfaction with our customers and our clients. And you can see there that there's been some fantastic reviews, and it's relatively early days. Really, the last 12 months we've been doing that, but we've got a fantastic rating of 4.9 out of 5 stars from the ratings we've got on there at the moment. We appointed a new very experienced head of market into the business 12 months or so ago and that's very much helped us position the business within our key introducer partners that we get business from. We sponsored the National Association of Commercial Finance Brokers for 2 years in 2023 and '24. We've won a number of awards and been nominated for other awards, and we were ranked #1 in the Business Money Intermediary Index, whereas previously we haven't figured in that index prior to putting this plan in place. So we're happy with the progress we've made in terms of really getting the name Time Finance recognized amongst the SME community, particularly our introducer network. And finally, strengthening the balance sheet. Well, our net tangible assets have increased 46% from when we started the plan. They're now up to GBP 41.5 million at half year. I mentioned before the focus on own book lending, that's moved on a pace as well. It's now 96% in favor of own book. We do still have a small element of business that's broked out within our Asset Finance division. And the secured lending focused on -- again, on invoice finance and hard assets, 77%, as I mentioned, is the total book across those 2 products, and that was up from 50% when we started the plan. So much more focus on secured lending through those 2 lead products. And we've really, I suppose, transitioned the business from what was predominantly a soft asset business doing smaller ticket deals to a secured lending business focused on IF and hard assets, which is a slightly bigger ticket deals. So our average size of deal now in invoice finance is around GBP 150,000. And in asset finance, it's now in excess of GBP 50,000. In the COVID years, it was down at GBP 20,000. So that gives you an idea of how we've transitioned the business from what we had in the days of 1pm and the early days of Time Finance to where we are now. And at that point, I'll hand you over to James to talk you through the numbers.

Thanks, Ed. Yes, there's 4 key takeouts from the numbers. Before I get into the detail, it's probably these 4 areas here. A set of numbers that we're very pleased of the first half of the year. Record revenues for the first 6 months and record profits for the first 6 months. That built on 14 consecutive quarters now of loan book growth. And also, at the same time, focusing on quality of the book. So the arrears and the write-offs are well controlled. So record revenues and profits, growth in the loan book, but not at the expense of quality is the sort of 4 key takeouts. But delving into a little bit more detail. These are the sort of key half a dozen or 10 or so key financial indicators that we look at. And you can see on the right-hand side, all green ticks, lots of green ticks everywhere because everything is going in the right direction and is in line with or better than we expected. So that's particularly pleasing. You see revenue up 16% to GBP 18.2 million for the 6 months of trading. As I said, that's a record first half of the year, the revenue ever experienced by the group. Profit before tax at GBP 3.9 million is 44% up. Again, as I said, record 6 monthly first half of the year performance for profit. And you can see the movement of 16% revenue leading to 44% growth in profit is because we've been focusing on our margins and our operational leverage. And you can see that our PBT margin has moved from 17% in the 6 months to November '23 to about 21% for the 6 months to November '24. Our balance sheet has continued to strengthen. Our consolidated tangible assets up to GBP 69 million, probably more pertinent now given there was -- there is a fair amount of goodwill on our balance sheet following our buy-and-build strategy in the mid- to late 2010s. There's net tangible assets and that's risen 14% year-on-year to GBP 41.5 million, as Ed alluded to. And another point to make is that we aren't particularly cyclical. So our net tangible assets grow month-on-month as we are profitable every single month of the year. So that has grown beyond that now given December and January through as well. So that's pleasing. All this is driven partially by the loan book, the lending book. As the lending book grows, so that leads to increases in revenue and in turn, profits. And that's grown 11% to GBP 109 million at the end of November, which is again an all-time high. And that lending book then has some unearned or deferred income in it. This is future interest on the leases that still have to run. So we're not starting from nothing every month. We've got GBP 26.1 million of revenue stored up. But assuming those leases perform as we expect, that will drop into our P&L over the coming months and, in some cases, years. Performance there on the deal is vitally important. There's no point in growing your own book if the quality isn't there. And so the next 2 stats are equally, if not more important than any of the others potentially, and that's arrears and write-offs. Just to stress, arrears aren't deals that we have gone completely wrong and there's no way back. They're just deals that aren't working quite to plan. That could be anything from one payment down because someone's gone on holiday and forgot to pay us all the way through to we're in the legal process of trying to get our money back. But they're an early warning indicator of the quality of the book and whether things are getting a bit more challenging. And you can see that year-on-year, the arrears fell by 1%, which in the current macroeconomic environment, we're particularly pleased about if you can ever be pleased about areas, but that's pleasing stat for us. And at the end, unfortunately, we're in the lending game, some things will not be able to be recovered. But you can see that despite the growth, the net bad debt write-offs have remained static year-on-year at 1%. So we've grown the book significantly, but not at the expense of quality, and that's a key factor in what we do. And all of that combined has led to earnings per share growth of 39% year-on-year, now at GBP 3.24 per share. So every metric we're quite pleased with. We think it's a very solid and pleasing 6-month set of numbers. Just a couple of other slides from me before I hand back to Ed. I've touched on it, the lending book is absolutely key. If we get the book growing and the right quality, then that will lead, as I say, to revenue and in turn profits over many months, even years. And you can see here, this is the growth in the lending book from when we started the plan back in the middle of 2021. It's about GBP 115 million. And you can see, it's grown continuously over the 3.5-year period. There's some peaks and troughs, which goes down a bit over Christmas or in the summer holidays or Easter, et cetera, et cetera. But quarter-on-quarter, when you look at it that way, it's grown consistently for 14 quarters now and hugely surpassed the pre-pandemic historic high of about GBP 145 million as we stand at about GBP 209 million today. Again, just to focus on those areas to show you how they're doing. The graph on the left-hand side, 3 lines, the purple line is the group arrears and then I've also called out the hard asset and the invoice finance arrears because they are 2 growth areas and the 2 key areas we're focusing upon. And you can see here, the trend is very similar across all of them. As we came out of COVID in the middle of 2021, arrears fell significantly. And then for roughly the last 2 years or so, arrears have been relatively consistent. So at a group level, they fell from the low teens down to between 5% and 6%. And they've been in that sort of 5%, 6% range now, as I say, for 2, 2.5 years, which is particularly good. And hard assets, similar story, started at a slightly higher base, about 15% or so, And has now consistently been in the 3% to 4% range for the last 2 years or so. And if even lower level has fallen to within the 2% to 4% range and consistently been there for a number of months and years as well. So you can see the 2 key drivers, which will become even more part of our book actually have low arrears in the overall group arrears position. So that bodes well for the future. On the right-hand side, we just got a table there showing the increase in the net tangible asset, as Ed alluded to, and I said as well, growing for over 40% during the period of this medium-term plan from the high GBP 20 million to GBP 41.5 million and continues to grow month on month. And the net bad debt write-offs have fallen during the plan from about 2% to about 1%, and they've been about 1% now for a year or so. So again, another slide with all metrics moving in the right direction. And the final slide for me is we can only do what we do, thanks to the funding partners we have in place who provide money to us that we then lend onto the right deals. We're very pleased that we have a number of long-term supportive funding partners. We have a very diversified funding base. So we're not just embedded with one party. There's a number of parties there. And you can see there, we've got funding facilities of in excess of GBP 230 million, usage at the end of November was about GBP 140 million, GBP 141 million. So we've got a GBP 90 million plus of headroom in our funding facilities. Crucially, there's no non-utilization fees. So we've effectively front-loaded our funding facility to give us the firepower to carry on what we think for the next 3.5 years through to the end of the new 3-year plan that Ed will talk about in a sec, at May '28. So we're well supported by our funding partners. It's a very diversified funding base and the firepower now is in place to see us through to May '28. And what May '28 involves, I will hand back to Ed to tell you about.

Thank you, James. So yes, we're getting to the end of our current cycle, which was the plan through to May this year. And we've been obviously putting together our new plan, which is a 3-year cycle through to May '28, and I'll take you through the key thoughts now. The first thing to say is this is not revolutionary. This is purposefully an evolving strategy. And that's because we've done a huge amounts of work over the last few years to simplify the business, get us on more solid footing, focus on secured lending, the key products that I've mentioned, bring some new people in, change the team, look at processes. We're not about to go and throw all that good work away by taking the business into something weird and wonderful. So it's very much an evolving plan to continue building on the good work that we think has happened over the last 3 years. Having said that, there's still a lot that we can do with the business, and that's, for the next few minutes, I'll take you through what the thoughts are. So it's, again, a 4-sort-of-pronged attack. First one is very much around continuing that growth. The second one is around resilient lending. We are looking to continue to do some larger deals, but very much still in the SME space, and it's -- I suppose the best phrase is stick to the knitting around that whole resilient lending in terms of our markets. Operational leverage through efficiencies is a key part of the plan. Ultimately, those 3 things should lead to an increased return on equity for shareholders. So just taking you through those in a bit more detail. Lending book growth. So we believe that we can take the lending book to in excess of GBP 300 million by the end of the next 3-year cycle. Some key areas of how we think we can do that. Well, the invoice finance sales team has been expanded, but there are still some geographical gaps in the U.K. where we can see further growth. And to give you an example, we only actually have, at the moment, one business development manager in London and the Southeast for invoice finance. And clearly, that's a key area of the country. So there's a couple of other areas where we're underrepresented. So that expansion of the sales team can continue and will help us to grow towards that GBP 300 million book. Product development is another area, again, focusing on the key divisions. So there are sub-offerings within asset finance and invoice finance stroke asset-based lending, where we can develop. Our ABL offering is fairly embryonic. It's only been in place for 12 months. So that's really maximizing our multiproduct offering first. We've really only got to sort of stage 1 of that and there's further growth that we can see. And that's one of our key USPs in terms of our multiproduct offerings. So that's another area of growth we can see. A direct-to-market strategy. So pretty much all of our origination in terms of new business is through intermediaries. We believe we can start to develop a direct strategy, so dealing with customers directly in asset finance, which has started, and also getting to clients directly through invoice finance. Now that's not to say that we're not going to continue with our introducer strategy. That's key to what we do. But it is, I think, sensible to try and diversify that a little bit and use the margin that we would have paid to introduce us to develop our marketing and our own brand development, which has got the sort of longevity of the business more in mind. And acquisitions is another area where we believe we can grow. So again, I would stress the point, this has not taken us into weird and wonderful new areas of the business. This would be aligned to hard assets or invoice finance where there may be small bolt-on opportunities or more significant opportunities where we can use our listing to help, which we haven't been able to do over the last few years because of where the share price historically has been. And they will be carefully selected and aligned with our current strategy. So I think growth is still very much the theme of this plan. There's some areas there that we think we can focus on to help us grow. And that will be not taken us away from what the next point will focus on, which is resilient lending. So James has mentioned, the arrears have been well controlled in the 5% to 6% range, and we want to continue that. And how do we see that happening? Well, the focus on secured lending through invoice finance and hard asset will continue, and it will continue to grow. So we believe that we can increase that further to 90% of the overall book. We do still have a legacy soft asset business. It's relatively small, but it does provide us with healthy returns and a very well-spread portfolio, and we are still continuing with that. But as we focus on growing hard assets and invoice finance, then the soft asset will naturally just become smaller and smaller as an overall percentage of the business. So that's where the focus will be on secured lending. We are looking to further strengthen the risk team. We've actually just made a fairly senior appointment in the last couple of weeks through bringing in a Risk Head -- Head of Risk dedicated to invoice finance. And that's to really support this plan moving forward, doing slightly bigger deals, obviously, expanding invoice finance, looking at potentially product development and acquisitions and direct-to-market strategy. We need a dedicated Risk Head in that Invoice Finance division, and that's already been made and we'll continue to strengthen the risk side of the business as we see fit. And the final point there will be enhanced systems and that really crosses into the next point, which is the operational leverage, which I'll mention around systems as well. So what does operational leverage mean? Well, it means growing the business but by improving margins. So yes, we will look to take head count on but it will be at a lower rate than we look to grow income. And that's mainly because, obviously, we've got a basis now of our business, we've expanded it, and we believe we can expand it quicker than bringing on overhead. How are we going to do that? Well, part of it is the people that we bring on to the business and their experience and credentials and knowledge. But a big part of it is improving the efficiencies of the back office. Now our business is predominantly people-orientated, and we will continue with that plan because we are a people business, clients and customers and introducers like to deal with people. But behind that sit lots of historical procedures, processes, the way that we run the back office. And obviously, that's underpinned by systems. So we are looking to improve the systems and the technology that we have into the business, also the data and the reporting and challenge ourselves around doing things a bit better and differently and more efficient. And to back that up, we've taken on a new business improvement head, who joined at the start of the current year. And we've now got a small team in place to drive this initiative forward. And it will be very much aligned to the day-to-day operations of the business and embracing the work that we do. And I see this as really important to get behind, and that's something that me and the senior team are very much committed to doing. And ultimately, we see this helping improve the profit margin to the mid-20s by the end of the current plan. And all that combined, growth, resilient lending focus and the operational leverage should mean that the increased return on equity that we're forecasting through to the mid-teens will be delivered by the end of the plan, May '28. So just by way of summary, before we open up to any questions and an investment case, the H1 results have been really good. The gross lending book has continued to expand. The revenue and the profit has got to record levels. The focus on hard asset and invoice finance has continued, whereby we're at the moment around 80% of the current lending book and the arrears and write-offs are well controlled within the targets that we set ourselves as James has outlined. The strategy, as I've mentioned, the current strategy is on target to be delivered in terms of the lending book growth, the strengthening of the balance sheet through own book lending, the profitability increase from where we were pre-COVID and getting the brand well-known in the core commercial finance market. We're pleased with the progress we've made. The new strategy has been set out now, and it will be focusing, as I've mentioned, on the continuing growth, making sure that we stick to the knitting and have the resources in place to ensure we have resilient lending, improving the efficiencies is a big part of supporting that growth plan and ultimately improving margins. And the investment case very much comes down to the fact that we are a business that's growing and has been successful and hopefully, will continue being successful. We help thousands of U.K. small businesses to thrive and survive. We have a growing lending book, which has seen 14 consecutive quarterly increases. The profitability year-on-year has increased and we will expect to be at least in line with the current market expectations of GBP 7.2 million by the time we get to May this year. The strong and robust balance sheet has continued to grow. It now stands at over GBP 41 million TNAV and the favorable market conditions, which is always the point that I like to finish certainly in the last 12 months or so because yes, it's very difficult for businesses, particularly SMEs at the moment. The conditions are challenging with everything that's going on, the increased interest rates over the last 12 months, continuing supply chain challenges, obviously, wider political and economic challenges and increase in insolvencies, but actually, that provides a better environment for alternative lenders like ourselves because the banks tend to sort of go more risk averse, more internally focused. And as long as we have our mix of risk and reward set up in the right way, with the right people and procedures in the business, then we should do well. And that's proved to be the case. What our challenge is to make sure that continues and we make the most of our opportunities. So with that in mind, I will finish there and open it up to any questions.

Perfect. Ed, James, if I may just jump back in. Thank you very much indeed for your presentation this afternoon. [Operator Instructions] Ed, James, we have received a number of questions that were both pre-submitted ahead of today's event as well as those that have come in throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And James, at this point, if I may just hand back to you just to read out the questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that would be great. Thank you.

Thanks, Jake. I'll hold the controls here and bring it in as and when, if that's okay. So the first question was submitted by Anthony, it's probably one for you, Ed. And Anthony says, given the current economic climate, what is your view of the prospects for the security of your existing and prospective clients in 2025?

Yes. Well, if you read the papers or probably we don't read the papers now, do we read sort of Internet and podcasts and everything else, you get inundated innovative with doom and gloom. And it's definitely challenging out there. But what we've seen is SMEs that we fund and partner with been pretty robust. Now we have seen increase in insolvencies, yes. Some of those businesses restart again, some of them don't. But actually, lots of businesses are also still growing and some of those businesses take advantage of the ones that fail. They take on their customers, and they see it as an opportunity. By the very nature, SMEs are entrepreneurial. Of course, they are. And that means they find a way. So I think we've got a good overview of how things are progressing with SMEs. It is difficult. There are certain sectors that are more challenging than others. But overall, they're pretty robust. And I think whilst credit quality within the client and customer base is challenging, we particularly have a very well-spread book. We don't have any concentrations in any specific industries. Our most popular industry across the business for asset and invoice is haulage. So logistics, and that makes up no more than 15% of the overall book at the moment, which is still relatively modest. So I think we're quite happy with the spread of risk. We do see SMEs that are struggling, but we also see those that are growing. And overall, it's, I think, being optimistic really because it's very easy to be pessimistic and convince everyone that it's doom and gloom when actually there's still good opportunities out there.

Thanks, Ed. The next question was enormous, but it says, has hiring the right people being challenging, probably one for you as well?

It has, yes. I mean the market is -- I could talk for a long time about this. I mean I joined the industry as a young graduate in the days where the banks were still promoting lots of training and taking on lots of juniors to be the future of their businesses. That slowed down in recent years as banks have changed. Obviously, training budgets have changed. And it's been incumbent on the independent market like us to find some new talent. Now we've put our own graduate development program in place for the first time this year, this financial year. We took 4 young grads on last summer, and they're all doing really well, and we're looking to repeat that program again this year and for the next few years, and that should start to help us build our own pots of talent to bring into junior and ultimately, middle and senior management positions over the course of the next few years. And that was partly done because we do have a challenging recruitment pool. There's a bit of an aging population in commercial finance. They're not all early 50s like me. James is a little bit younger, but he's getting towards that. So it is challenging to find people, but I think we've got a good story. We've got an exciting business. We're growing the book. We're an independent lender. We're not a bank, we're not weighed down by regulation. We're a flexible business. We've got great values. So it's quite an attractive business to work for, and that's been proven through the feedback we've had from our colleagues with the various engagement surveys that we've done. So yes, it's challenging, but a bit in the same vein as the SMEs, you can look at it 2 ways, very easy to sort of think, well, we can't find the right people or actually get out there and trying to do something about it, and we've taken the latter approach.

Thanks, Ed. I think the next question is one for me to give you a break for a minute or so. But the question came in of how do you manage the relationship with your funding partners. Well, as Ed mentioned, we're a people business and we operate that with regard to our funding partners as well. We meet up with them on a regular basis to discuss our needs and their appetite. We're constantly evolving our offering. And so we need to make sure the funding that we have in place mirrors that. So we're very proactive in talking to all of our funding partners. And as you will have seen earlier on the slides before, there's half a dozen plus of them there now between anything with a GBP 5 million and a GBP 65 million facility. So there's quite a few people to see. We're audited on a quarterly basis by each and every one of them, so they do their checks and balances and they're happy with everything that we do. So it's mainly just that point on. It's the people business. We meet with them. We tell them what we'd like to have, what their appetite still is, and then we agree a route forward. And luckily, touch wood, we're viewed as a relatively safe bet or someone people would like to work with. So there are other funders semi-regularly looking to join the funding panel as well. So we see if somebody comes in and moves the dial and changes the game a bit, then we're potentially very happy to talk to those people as well. So it's constant dialogue and at the moment, it's worked very well. Back to you then Ed probably for the next one, which is will you continue to seek larger and larger individual deal sizes?

Yes. I think we touched on that when we were in the presentation. So the average deal size has gone up purposely. We've deliberately tried to reduce the very sort of high number of smaller deals that the business was doing in the past and not take it completely up to do massive deals. We're still an SME funder. So all our deals are still SMEs, but we do want to do slightly larger deals. So that's pushed the asset. The asset limit at the moment is GBP 1 million. We're looking to potentially increase that further. And the invoice finance limit, which is self-imposed at the moment, is GBP 3.5 million. We're looking to push that further. And when existing clients grow with us already and they need potentially more than that, we're already being flexible because actually, the covenants that we've got through our funders allow us to go to higher limits than we decided to do internally. It's all really about evolving the business and increasing those at the right time, not filling the book with loads and loads of big deals, but actually trying to find a nice spread of those bigger deals and gradually increasing the average deal size. So that's the plan around that.

Thanks, Ed. So I'm going to rattle off three questions now because I think they're covering the same thing. So bear with me when I read all three of them to you, Ed. But Carl has asked, when do you envisage starting to pay dividends? Gavin has said what is the dividend policy? And Keith has said, well, shareholders greatly appreciate the progress being made by the company, our reward is at the mercy of the market. Is there any other way, whereby shareholders can be rewarded for their patience?

Yes. I think as you said, James, that all comes down to a bit of guidance on the dividend policy doesn't it? So something we've talked about in the past on these forums, and we last time did this promise to review it again. And we did that at our scheduled meeting in December, where the Board met and talked about dividend policy. We agreed for the time being that the dividend policy would remain the same, which wasn't paying a dividend, and that is simply because whilst we're growing the business, and we believe we can utilize any free cash better to grow the business, that's what we should do. And quite simply, the finance facilities that James has talked about, particularly on the asset finance side, most of them allow us to draw down between 90% and 92.5% against the blocks of leases and loans. So we have to find the balance of those funds. When we're growing, obviously, we need to find more of those funds because the new business and the growth outstrips the collections that you're collecting from the previous loans and leases that were done between 1 and 5 years ago. So the model is that we can use any spare cash that we've got over and above, obviously, what we class as being needed for sensible rainy day funds to grow the business, and that's what we've decided to do. So this is still a growth stock rather than a dividend-paying stock.

Thanks, Ed. I'll give you another rest again for about a minute, probably less. But Lawson has asked, your people's business, so can you quantify how the NI hikes will affect you? Well, simplistically, it's about GBP 100,000, slightly more, but basically GBP 100,000, the NI changes that kick in, in April will affect us by. That's all factored into all our forecast and all our plans and the market guidance as well, where we say we're optimistic we will at least achieve market guidance. We factored all that in. So the NI is -- yes, it will hit the bottom line slightly, but it's -- in the grand scheme of things, it's about GBP 100,000. So it's something we're prepared for. Back to you then, Ed. Kevin has asked, to what extent are you experiencing competition from fintechs?

Well, that's another subject that I could talk for a lot longer. So yes, fintechs have got a place in the market. that's been proven, I think, in terms of the offering, the simplicity and the growth of some of the platforms. Having said that, very few of them have actually demonstrated that they can make money and the ones that have -- haven't yet done it in the long term. There were probably more of a hindrance prior to COVID and then things slowed up significantly in the whole loans market. Things have got going again. I think where more of, I suppose, a threat to us, but also an advantage for the market in terms of growing lending overall is typically still at the smaller end. Once you get into any bigger form of lending, which is more complicated and more down to the story, algorithms and systems don't understand sitting in front of a director and understanding exactly what history they have, what the challenges are, how they're going to turn around the business, that simply can't be done. And when it does try to be done, normally, there's a lot more risk that goes into those fintech businesses. So I see it being very useful and probably more threatening at the smaller end of the market and mainly on loans. That's where we've seen a reduction in the invoice finance market, particularly at the smaller end of the market. And part of that has been down to -- undoubtedly down to the fintech offering. So it's got a place in the market. I think we should embrace that. It helps drive businesses into these facilities and creates activity. And it may not be forever, anyway, because some businesses outgrow the offering and then come into more mainstream lending. So yes, that's my view on the fintechs.

Thanks, Ed. Colleen has asked, one of the objectives is to become a nationally recognized brand. Where is Time Finance not recognized by SMEs and a hole to be filled by marketing?

Yes. Okay. So whilst we've increased the brand an awful lot and the knowledge of what we want in terms of business through the door from introducers, we have to admit that if you go to an average of 100 SMEs, probably very few of them will have heard of Time Finance directly, but that goes for a lot of independent lenders because we haven't got the brand of Lloyds Bank or some of the challenger banks that help fund us like the Aldermore and the Novunas, which was Hitachi. They're more well-known brands. We're not directly with the SMEs. Hence, why we've deployed an intermediary strategy. But that doesn't mean to say that we can't start to change that, and that's really one of the thoughts around the direct strategy. And we're not going to do that simply over the course of the 3-year period, but we can start to get more known -- more well known. And even if we start to become more well known and we're still using introducers, there's a big difference between a person sat in front of somebody who's never heard of you and someone sat in front of someone who knows a bit about the business that helps you obviously further down the conversion route of negotiating. So it's all really aligned to that plan of putting a little bit more mix in the distribution channels with indirect and direct and getting the name better known within SMEs. But I'm not under any illusions. We're not going to all of a sudden put millions of pounds into market and expect every SME in the country knows who Time Finance is. That just wouldn't be realistic and nor would I expect it to be. So it's evolving the story really and the Time Finance name. And the more that we get testimonials and really good Trust Pilot reviews from brokers as well as customers and clients, that obviously helps the spreading of the name.

Thanks, Ed. Probably one for me, Mark has asked, what sensitivity do you have to base rate changes? The glib and slightly flippant answer is we're relatively -- we don't mind if interest rates go up or down, and let me explain why. When interest rates go up, it marginally benefits our IF division and hinders our Asset division and the complete opposite when they go down. And our Asset and IF divisions are roughly the same size. So they net each other off. So a very flippant answer, it doesn't really impact us that much while those 2 divisions are roughly the same size. It's a very similar equal and opposite answer. In slightly more detail, the IF division passes on interest rates. It's a variable rate both in what it draws down and what it lends to its clients. So any interest raise or fall is passed on or taken back from the clients. They lend out slightly more than they draw down. Hence, if rates go up, they make a bit more money because they're lending more than they're borrowing and vice versa if rates go down. Asset finance is slightly different. Deals that are already done and out there are both fixed from the funds we've drawn down and fixed to the client and what they're paying. So they're completely agnostic to interest rate movements. However, for new deals, if interest rates were to go up or down, we would get quoted a different rate for the next drawdown on our asset finance business from our funders. At the same time, though, we would probably charge a different rate up or down to our clients. So it's a little bit more complex in the asset world than the IF world. But as I say, at a very simplistic level and at a high level, they're equal and opposite. And so we're not impacted hugely by interest rate changes, which we think is one of the strengths of the model that we've got. Ed, probably one back to you. There's a couple of questions here, which I think is covering the same thing. Karl has asked, are you looking to make any acquisitions? And if I can just find it -- yes, Robin has asked, will all growth over the coming years be organic? So those two are sort of similar-ish.

Yes. Yes, again, we touched on that I think in the presentation in terms of the growth strategy moving forward, would consider acquisitions. We're not -- I don't think we're absolutely reliant on acquisitions to deliver a growing business and get the book up to GBP 300 million. But I do think there will be more opportunities than there has been over the last few years. And that's for two reasons. One is the market is now more conducive and it's been fairly benign in terms of businesses being sold or even getting into problems because of the 10 years plus fairly benign environment after 2008. So I think the conditions are changing around the opportunities for acquisitions, but our own business has changed as well. We wouldn't really have wanted to do many acquisitions, if I'm honest, in the last 3 years because we've been very focused on evolving the business, changing the strategy from soft assets to where we are now, bringing in new people, looking at the process. It has been very much internally focused, whereas now we've done a lot of that work. So we're our own -- in our own strategy is in a better place to look at these opportunities. So yes, I think there'll be -- there should be more opportunities. We're in a better place to look at them. We're certainly not going to go and just do them for the sake of it. There will be competition for these deals. But I do think we can challenge ourselves around being more proactive around the inorganic growth.

Thanks, Ed. I'm just conscious of time and the need to wrap up in a bit and things like that. So unless the IMC guys say differently, I'll just pull out last question to end on. So one for you, Ed, to summarize the 3-year plan really. Robin asks, what are the greatest risks to achieving the 3-year plan?

Yes. Okay. Well, I think the biggest risk that I don't see it as a high risk clearly is our raw material, and that's our money. So our funding partners who provide us with the funds to enable us to lend to SMEs and grow the business, we need to make sure that, that doesn't change. Now James has taken you through how we're structured. And one of the advantages, particularly on the asset finance side is that we have a range of funding partners. Yes, the British Business Bank has got the lead facility, but we have half a dozen others who have material-size facilities. So it's all well spread. And from time to time, you do find 1 or 2 lenders that go out of the market. But generally, at the same time, you find new entrants into the market as well. So -- and that's happened over the last couple of years. So I don't see that as a high risk, although it's clearly a material risk if conditions change. The other 2 risks are undoubtedly around credit, the environment, how we manage our own risk procedures and policies, the business we look at, the spread of business we look at, the size of business we look at, all those things, the systems we use. So the whole risk -- credit risk environment, yes, it's probably the most realistic risk in terms of deviating away from that. But as you've seen by the strategy, we're not looking to do that. It's very much still, yes, evolving the size of deal, but sticking to the knitting. And then the other risk is the people, which we've touched on as well. There is a challenge around finding the right people. And we've decided to try and supplement finding people within the market that are experienced by growing our own as well. So I'm happy with that as a long-term plan. Clearly, it will take a bit of time to produce people who can become middle managers in the future. But we've started that process, and I'm quite proud of the fact that we've done that because there's lots of other businesses that are out there that are bigger than us, and they haven't done that in terms of developing graduate programs and apprenticeships and the like. So that's very much part of our plan for the future.

Great. Thanks, Ed. I think we've covered most of them. Apologies if we haven't got through all the questions, but I think time is against us and we need to hand back to the IMC guys now. So Jake, back to you.

Perfect. James that's great. Thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors this afternoon. But Ed, perhaps before really just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that would be great.

Sure. Well, again, thank you for joining. I hope it's been an insightful presentation and has given everyone a good in-depth view of where we're up to with our plan and obviously, the future. It's the first time, obviously, we've set out the plans for the next 3-year cycle, and a lot of work has gone into that. So as I said, last time when we did the IMC presentation, I remain cautiously optimistic. Lots of challenges out there. I think it does depend on how you view those challenges and the view you take generally on creating success. I don't think we're ignoring those challenges. I think we sensibly deal with them, and it's very much about getting the balance right between growth, resilient lending, improving efficiencies and increasing returns, and that's very much what we're focused on in the next cycle of our plan. So I look forward to providing further updates and continuing to lead a successful business.

That's great. Ed, James, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Time Finance plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.