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

All right. Let's make a start. Good afternoon, everybody. Welcome to the Time Finance webinar. My name is James Roberts. I'm the CFO. Myself and Ed Rimmer, the CEO, will take you through the results for the last financial year and the first quarter of trading. If you can make sure you're on mute, that would be greatly appreciated. If you would like to post any questions, Ed and I will do our best to answer them towards the back end of the presentation. There should be a function to ask questions, just type them in and we'll get through as many as we can before the end of the presentation. But without further ado, I will hand over to Ed.

Thanks, James, and good afternoon, everybody. We're going to turn our cameras off for the actual presentation. It's just a bit easier to view a full screen, and then we'll come back on camera for the questions at the end. So without further ado, we'll get into the body of the presentation. So by way of introduction, I'm Ed Rimmer, the Chief Executive of the business. I came into this role in June '21 as the business and everyone else was coming out of the COVID pandemic, we put ourselves a 4-year strategy in place at that time. We've just completed that. So that's obviously one of the things we're going to talk about today. I've spent over 30 years in the SME lending space a good time of that was in Bibby Financial Services, where I was in that group for 22 years, 5 years as the U.K. Chief Executive before joining Time Finance. James, do you want to just give your introduction?

Yes, thanks, Ed. Yes, as I said just now, I'm James Roberts. I'm the CFO. I've got 25 years or so experience in financial services. and I've been with Time Finance as CFO since May 2017.

Thanks, James. So a brief introduction to Time Finance. We have got a little bit more detail on who we are, what we do and where we compete at the end of the slide deck, just for information, we sort of assume that people have some understanding of the business. So we don't go through that in detail. But very simply, we're a nonbank alternative finance provider, which means that we have to source our money. We're not a deposit taker, we source our money from the retail banks and challenger banks and lend on at a margin to U.K.-based SMEs. We have a multiproduct offering. So we offer Invoice Finance, Asset Finance and Loan Finance or a combination of all three of those. That makes us slightly different in the market. We're very much focused on personal service, being flexible and very quick to market through our introducers and our customers and clients. And we have a consistent track record of delivery, most notably over the last 4 years. And I'll take you through that plan and how we've done in a moment. So yes, our 4-year plan that was put in place in June '21 has recently been completed to our last financial year. I'll come on to the new plan in a moment. But it was a 4-pronged plan really to double the gross lending book from where we started coming out of the COVID pandemic to increase our brand so that we were more nationally recognized within the commercial finance space, that was having rebranded the business at the end of 2020 to get run rate profitability back up to where we were, the pre-COVID pandemic and also to significantly strengthen our balance sheet through a focus on own book lending the business previously and the days of 1pm, was more split between Own Book lending and Broked-on business. So how have we done? Well, the four key areas that are summarized there briefly. So the first one was to double our gross lending book. We just about got there, GBP 217 million where we ended up at the end of May. And the growth was significantly driven by the Invoice Finance business and the hard asset elements of the Asset Finance division. You can see there between them, there was significant growth achieved in those two divisions, those two product offerings over the last 4 years, which we're pleased with. The run rate profitability got back to where we were back in 2019, we achieved GBP 7.9 million, and that's where the previous peak was when the business was a very different business. And pleasingly, revenue surpassed where we were previously to GBP 37.1 million which was 117% of where we've previously seen the high position at. To become a nationally recognized lender, well we focused heavily on increasing our profile within the commercial finance space. We achieved some really good Trustpilot ratings. We joined that scheme about 18 months ago. Really pleased with how that's gone. We've hired some well-known people into the business, and they've brought with them contacts and other people, and that's helped build our profile. We've sponsored the National Association of Commercial Finance Brokers a couple of years on the trot. We've achieved some awards. And we were -- really pleasingly gained a 1-star accreditation as a very good company to work through the best company survey last year, which was the first time we've done that. So pleased with how we've repositioned the business, having rebranded at the end of 2020 as Time Finance. Strengthening the balance sheet through our own book lending has been a real focus, and you can see there a few key points. We've increased the tangible net assets up from where we were to GBP 44 million, which was a 52% increase from June '21. The split between Own Book and Broked-on has now broadly sort of settled at 97%, where we've been for the last 2 years. As I said, there was a bit more of a bias towards Broked-on business. Very little Broked-on business now, although we do still have that opportunity to broke on a small amount of business, which tends to be either too high risk or the margin is too low for what we want. And the secured lending element now, which is typically hard assets and invoice finance as well as our ABL products now makes up 83% of our lending book. It was at 52% when we started the 4-year strategy. And 90% of the new business has been made up of secured lending. So I guess, where we are now, is having delivered the 4-year plan. We're well positioned to continue that growth. And I'll come on to the new 3-year strategy where -- after James has taken you through the financial results for the end of the year and also the first quarter.

Thanks, Ed. I'll just do a whistle-stop tour of the two sets of numbers. And I suppose the four key points here on this page, if you take anything out of the numbers section, these are the four points I'd sort of like you to try and take away from you. One is that we it recorded a record annual revenues and profit in the full year to May '25. We also had our record quarterly revenues and profits in the quarter to the end of August. So both sets of numbers are record numbers over their respective periods. We've enjoyed 17 consecutive quarters of loan book growth through to the end of August from the beginning of the plan. Our balance sheet has continued to strengthen month-on-month. We make profits every month. There's no dips in that respect. So every month, the balance sheet gets ever stronger. And all of this is predicated on well-controlled arrears and write-offs, which in the lending game is absolutely key. The numbers to May '25, if you've seen, they were sort of flagged pretty comprehensively in June, so I will go through these very, very quickly and focus more on the quarter to the end of August, which was released for the first time today. So these ones are a little bit have been seen before. But they're worth going over because in the current macroeconomic environment, they're numbers we're very proud of and think they showed a strong end to the full year plan. Origination was up 5% to just under GBP 97 million. And what do we mean by origination. Those are deals that come to us, and we write them on our Own Book. So they're not every deal that we see. They're just the ones that we think are right for us, and we're able to write them ourselves. And it's effectively the lifeblood of the business going forward. If your origination continues to grow, all other things being equal, that should increase the size of your lending book which in turn should drive increased revenue over the coming months and years. And if you got the underwriting correct, that will drop through to profits as well. So if your origination is growing and it's the right type of deals, that is a positive indicator moving forward. So we were pleased with the 5% growth in our origination compared to May '24. That did lead to the book growing, as you can see below, up GBP 16 million to about GBP 217 million at the end of May, which is an all-time record high, 8% growth. And that then dropped through into revenue. And you can see the revenue increased by 12% to just over GBP 37 million, as I said already, a record high revenue for the business. I'll come on to the arrears and write-offs, but without spoiling it and he says spoiling it, they were well controlled, which meant that this did drop through to profit. And we can see profit grew by over 30% to GBP 7.9 million profit before tax. Margins are becoming ever more of a focus of ours, and Ed will talk about those a bit more later on. But what we can see here is our PBT margin increasing, in our view, relatively significantly from 18% to about 21%, so about 300 bps. We also have unearned income on the balance sheet of GBP 26.6 million. Unearned income is revenue stored up in the leases and loans on the balance sheet, assuming they work properly, will drop into the revenue and in turn profit on the months and years of the -- remaining of the lease. So we've got that revenue in our back pocket, assuming things go to plan already of GBP 26.6 million, which is 5% up on the year before. I've said areas and write-offs are key, just to bring them slightly to life. Arrears aren't necessarily deals that will be written off. They are deals that are perhaps aren't going to plan. Anything from they could be a day down because I don't know if somebody's going to hold there and got to pay us through to -- in the depth of the legal process, and we've not been able to cure them. But many we are able to cure. But they, again, like origination is an early warning indicator one way or the other if will revenues increase in time. Arrears are potentially an early warning indicator of will write-offs increase over time. And you can see that they're static. So in the current macroeconomic environment, if you can ever be pleased with arrears, keeping arrears static means there shouldn't be, touchwood, any trouble stored up for the future. And that was reflected in the next line, which is a very key one, which is in the bad debt write-offs. We are in the lending game. There will unfortunately be some deals we cannot cure and get back on track, and we end up writing them off. But in this environment, we've managed to maintain that at 1%. So we've grown the book significantly, but you could argue it's the right type of deals going on to the book as arrears and in turn write-offs have remained very static and in the year before, they were 5% and 1% or 6% and 1%, respectively. So it's been relatively static for a relatively long length of time. We've reinvested all our profits into the business. So our tangible assets and net tangible assets, the final two indicators have increased, consolidated tangible assets just under GBP 72 million. Now there is a fair amount of goodwill in there from a legacy Buy and Build program back in 2015, 2016. So we tend to focus on consolidated net tangible assets, which is the bottom figure. You can see there, 14% growth to just over GBP 44 million. So every metric financially in the year gone nice green tick or maintain stability, which is what we're after in arrears next to it, which is good. As I said, this morning, we published the quarter 1 results for the first quarter of our new strategy. Again, all nice green ticks down the right-hand side or stability on the areas and write-offs, so it's a very, very similar story. We can see origination is up quite significantly, 30% increase in origination, which bodes well, as I said, for future months and years as that in book. The book has grown a further 8% on where we were last August, over GBP 220 million now, and that's all flowed through to revenue and profit. So revenue for the quarter, GBP 9.4 million, a quarterly record, as I've said, and PBT, GBP 2.1 million another quarterly record, both up double-digit growth on PBT on the period 12 months earlier. Margin focus again continues to bear fruit. So from a year before, we're 100 bps or 1% up from where we were before and our arrears and our write-offs remain at that 5% and 1%, respectively. And all of that's led to net tangible assets now nearing GBP 46 million, just over GBP 45.5 million. So again, a set of numbers that we're quite pleased with. Just bringing a couple of other things to life, if I may, before handing back to Ed. We've touched on arrears and the balance sheet. But as a lender and a known book lender, particularly, they're both absolutely key. The graph on the left shows the level of arrears since we sort of came out of COVID back in May and June of 2021. The purple line is the total group arrears, the green dots are hard asset and the blue dash is invoice finance. So our two core growth areas and areas of focus. And you can see all of those have come down, grew sort of 12%, 13% back in the day, fell below 6% in early 2023 and has remained in that 5% to 6% target range that we think is acceptable risk and reward for a business like ourselves ever since hard asset and invoice finance have also remained in their respective target ranges now for all of '23, '24 and so far in '25 as well. So a very consistent arrears performance. And that's reflected again on the table on the right with the write-offs, you can see they come down from about 2% in '21, '22 and '23 to now settle at about the 1% level, which again is in our target range for the areas we operate in. And then finally, on the right-hand side, just to show the strengthening of the balance sheet. We can see it's grown from about GBP 28 million to over GBP 45 million now during the period we're looking at. So we're a much more robust and strong balance sheet, which is, we think, has weathered the financial headwinds that we've seen. The final slide for me is just on funding. We can only do what we do. Thanks to our funding partners. We have a number of products we offer that we need funding for, and we're quite pleased to see we've got over GBP 0.25 billion of funding in place with about GBP 100 million of headroom at the end of August. Specific funding lines for our asset business and specific funding lines for our back-to-back facility. We think we like to have a wide diversified funding panel, a number of long-term supportive funding partners who've grown with us over the last 3, 4, 5, even 10 years, some of them and supported us on our growth journey, and you can see their names there down below. Two things to draw out. One is we don't pay nonutilization fees. So the fact of having headroom is not costing us money for having headroom that's not being utilized. But also, we like to look forward and have the headroom to grow into over the next 2 or 3 years, we don't want to be scrambling around to get new funding in place at the last minute. So we like to have clear visibility. And we have in place as of today, funding to meet our 3-year plan, which Ed will come on to talk about in a sec. The funding is in place to do that. Now we're going to -- always looking at it, see if we're going to improve things and tweak things here or there. But as a base case, we have the funding firepower to meet the 3-year plan that Ed will talk to you about in a sec. And then finally, just to reiterate the points we've made a few times on these presentations, we spread our risk by diversified lending. And what you can see here is that no one sector that we lend to is particularly overweight our biggest sector, freight transport, is about 13% of the book. And you can see once you get to the tenth biggest sector, it's about 1% of the book and our top 10 then are about 1/3 of the book. So we have a very well diversified and spread lending. Our largest lend itself isn't more than 2% of the business. So if we did have a bad debt that we couldn't cure, it will obviously be a pain even if it was our largest client, but it's not the end of the world. And similarly, if a particular sector had a really bad run of it, again, it would be a pain, but it wouldn't be the end of the world. So we have this diversification to add a layer of security to us as well as taking security and where we can, such as debentures, cross-company guarantees, charges over properties and PGs, et cetera. So hopefully, that brings the numbers to life, solid end to the 4-year plan through to May '25, numbers we are very proud of and a good start to Q1 of the new financial -- the new strategic plan, which Ed will now talk you through.

Thanks, James. So continuing on from where we left the 4-year plan. This is very much based on evolution rather than anything too revolutionary. So we're very much focused still on growing the book. But that's at the -- with a focus on operational leverage so that we can grow with improving efficiencies and ultimately, that will increase the margins. Still focusing on resilient lending, which I'll take you on a bit more detail in the next slide and leveraging our brand awareness. So a little bit more detail on the next slide. Thanks, James. So the objective now in terms of the growth of our lending book is to get through the GBP 300 million barrier, and that's by May '28. How we're going to do that? Well, there's a few things that are noted there that are key to our plan, expanding the invoice finance sales team further. There's still some geographical areas of the country that were a little bit weak in that we think we can increase business from. London and the Southeast is one of them. And the wider Yorkshire area is another just to give you a couple of examples. We're also looking to expand our product range, very much evolving out of Invoice Finance and Asset Finance, but also our loan products. So our loan offering is only really offered in conjunction with invoice finance and/or asset finance at the moment. We're looking at potentially offering secured loans as stand-alone product. A direct-to-market strategy. Most of our business comes from introducers at the moment where we pay commission. And we believe there's an opportunity to increase the amount of business we get direct. A lot more to that, but not for today, but that's an area that we're looking to develop. And acquisitions is something that we haven't looked at in the last few years. We did look at previously in the 1pm days. That's how the business came about really in terms of its initial expansion. Some of those acquisitions were better than others. But we do think there's opportunities moving forward. And those acquisitions would be focused on probably more bolt-ons to assets or Invoice Finance rather than taking into something weird and wonderful, which we're not interested in doing. So there are some areas there that we're looking to focus on to help increase the lending book growth over and above the GBP 300 million target. That won't be at the expense of taking on business that we're not comfortable with. So focusing on resilient lending and making sure our arrears continue to be controlled within the 5% to 6% target is still very much key to that growth. How are we going to do that? Well, more secured lending focus, so continuing that theme that I've already talked about, Invoice Finance and Hard Asset and our multiproduct offering. And we're targeting that book growth to be more than 90% by the end of the plan. You may recall, it's already 83%. So as we grow, the more secured lending we'll do that will take the book over 90% being in that -- those two key areas. We further strengthened the risk team. We've now got a dedicated head of risk in the Invoice Finance business. That's obviously with the future in mind to gear up that division. And we're also in the process of enhancing our systems in both of the divisions. We've recently put a new front office into our Asset Finance business. And we've also just very recently changed to a Microsoft system in the Invoice Finance business as well. So both of those divisions are running off a Microsoft Dynamics platform. And that sort of leads very nicely into the operational leverage. So our target here is to increase the PBT ultimately up to the mid-20s. It's currently in the low 20s and that will increase return on equity to shareholders. How are we looking to do that? Well, it's very much growing the business. with a lower staff headcount than what we would previously have grown the business by. So we're not looking to reduce our headcount. We're not looking to make masses of redundancies or anything like that, far from it. But we are looking to grow with a commensurate lower head count than we have done. And that's really through improving our data, our systems, our reporting and importantly, our process management, how we do things. Certain things have been done certain ways in the businesses for a long time. We've now got a dedicated business improvement team. It's quite small, but we have dedicated resource to make sure that we stay in our lanes effectively. People are doing things that are value-added and not getting too confused with the amount of things that they do. And that will improve the processes and improve efficiencies and it will help us grow by not taking on further people and that's a big part of our plan. As well as continuing to enhance our systems, the operating platforms that we look at are being reviewed in the next 3 years as well as part of our plan. And the final part in terms of leveraging our brand to make sure that people are aware of who we are and what we're doing and ultimately refer business to us. So we'll continue to focus very much on that brand recognition within our introducer market. We're looking to gain a Net Promoter Score this year across our introducers, our clients and our customers. And then we can obviously target improvements in that over the 3-year period. And we're also looking to do another engagement survey across our internal colleagues and increase our best company's rating further from the 1 star that we got this year. So all in all, those initiatives will further improve our brands and who we're known as being and obviously, hopefully, attract more customers, clients, introducers and colleagues to come and work for us. So just by way of a summary, in terms of the annual results and also the Q1 results. James has summarized those and giving you the headline numbers. Just to recap, record gross lending up to GBP 221 million, record annual revenues, GBP 37.1 million and a record annual PBT of GBP 7.9 million. We've significantly focused on increasing the secured lending element within the book, moving away from the soft assets, where the old 1pm business was focused more towards Invoice Finance and Hard Assets. And that journey is very much complete in the sense that 83% of our book is now in those two key areas. And the trend is for that to continue to over 90% as we get towards the end of the current 3-year plan. And the arrears and write-offs have been well maintained between 5% to 6% in terms of arrears. And 1% to 2% in terms of write-offs. Our 4-year strategy is complete, and we've delivered pretty much everything that we set out to do. I won't repeat all that. You've heard the presentation. And our new strategy has now been launched. The Q1 has got us off to a good start in the new 3-year plan. And it's very much a balance. Our business is very much a balance between achieving the growth, the bottom line return, making sure it's against businesses that we feel confident of getting our money back and not taking too much risk, improving efficiencies, which will help deliver those bottom line margins as we increase the top line growth and ultimately improving those margins as well. So it's very much a balance of those three key things, really, top line growth, making sure risk and arrears are controlled and delivering the bottom line through increasing efficiencies. The market conditions have been quite favorable for alternative lenders like ourselves. There's lots of competition in the market. But as businesses struggle, particularly SMEs, insolvencies are a challenge at the moment, but that means the bigger lenders, the more mainstream lenders become -- tend to become more risk-averse. And for people like ourselves who are quick to market, agile and very clear in terms of the business we want, introducers like that. So it has been a relatively good time for us. And we do have a really experienced senior management team, where we're delivering this strategy from. So the team is in place. The plan has been built off solid foundations over the last 4 years and confidence in the future. And that brings us to the last slide, which is the investment case. As well as the last 4 years, we do have 10 years plus track record of delivering profitability. The business has always remained profitable even in the depths of challenges like COVID, it still remain profitable, the last 4 years has recovered really strongly. So we have a good track record, and I think we've improved the consistency, the confidence and the credibility for how Time Finance is seen. We've outperformed expectations with a number of upgrades over the last few quarters. We do think we've got a proven and sustainable business model. James talked about the spread of debt and the focus on secured lending provides us with more sustainability in terms of the confidence we have. We have improving margin through further leveraging operational efficiencies. Our funding is in place to grow the business, and we have strong visibility of future earnings now within the interest that sits within the agreements that we write each quarter. And all that has led to an increased share price over the last 3 years, which has broadly doubled. So all in all, a good set of results for the final year of the plan, a good start for the new quarter in quarter 1, and the business is well positioned for further growth and sustainable lending to get us up to our targets over the next 3 years. Thank you for listening. So I think James is now going to run us through the Q&A.

Yes. Thanks, Ed. Yes, we've had some questions submitted during the meeting, which is great. Thank you. If anyone does have any others, please continue to type them in, and we'll answer them as best we can, but we'll just rattle through some of these. Ed, most of them, unfortunately, will be aimed at you. So first one, Jim has asked raising your gross lending book to GBP 300 million and return on equity to the mid-teens have been strategic objectives. Where are you with these at present? And can you tell us when they will be achieved?

Well, yes, hopefully, Jim, from listening to the presentation, we've clarified that. So obviously, the GBP 300 million target is over the next 3 years to May '28 and the same with the other objectives we've talked about. We're pretty early, obviously, in that journey. We've just gone through the first quarter, but it's been a pleasing and solid first part of that financial year. So yes, we're pleased with where we are, and we're on track to deliver those albeit early in the new plan that was set out.

Thanks, Ed. Joe has asked, do you proactively look to expand into any particular sectors?

We do focus on more user-friendly sectors for Asset and Invoice Finance. So James mentioned, one of our largest sectors is road transport, logistics, haulage. Transport businesses typically are conducive to what we do, but it's only 13% of the book. So that's our most favored industry. It's a relatively small percentage. It's not up at 30% or 40% or 50%. So it's very widespread. There are some industries that are more favorable to invoice discounting. So temporary recruitment agencies, security guard companies as I said, haulage business is anyone that has to wait 30 or 60 days to get paid, and it's got a clear paper trail for us to take assignment of invoices. Asset Finance does go into other areas like construction, the invoice finance doesn't because we finance a lot of yellow plant, construction equipment, diggers, trucks, trailers, excavators, things like that. So yes, we did focus on certain sectors, but it's still very widespread. And that's obviously deliberate to make sure that we haven't got all our eggs in one basket.

Great. Thanks, Ed. How would you differentiate from other lenders, Joe asks.

Yes. Our differentiation, I think, is really two key areas. One is us being very personable, very approachable, very fast, very flexible and very agile. That's a differentiator still in the market. There are other people that talk about those things that are generally the independent players in the market. But there's still room for improvement across all lenders. And as we know from being consumers, we get very frustrated when things are made complicated and you can't talk to people and you don't get answers quickly. And that's exactly the same in small business lending. And there's absolutely still a place for that focus on service. So that's the first thing that we focus on. The second thing is our multiproduct offering A lot of those smaller businesses, the independent businesses do compete with us around that personal service. But a lot of them are single product providers so either invoice or asset. With us having the asset business, the invoice business and the loans offering, which we can overlay enables us to get to deals that other competitors can't get to particularly in the smaller end of the market, the sort of sub GBP 1 million lending. And that does make us a bit more unique. So I think they are the two key differentiators are our whole service offering and also our multiproduct offering.

Gary has asked, you mentioned a focus on increasing the direct to market channel for origination. What is the risk that this cannibalizes the broker channel?

That's a very good question. Clearly, we don't want to cannibalize the broker channel. We put a lot of emphasis on our key brokers and our partners that we work with. And a lot of those relationships are very long-standing. So we're not looking to go and jeopardize those. But from our own perspective, it's sensible to have a bit of diversification of risk. If we can get to business and we don't have to pay a commission for it, that makes sense. It helps us build our brand. And it helps us mine our database as well where we've got our own customers that may be not attached to brokers, that we can obviously target for additional business in the future. So there's lots of things that make sense, but we're not looking to cannibalize that business. I would say we're maybe looking to take it from what at the moment is probably 95% plus introducer based. So probably 80%-20%, something like that, and that would be over the 3-year plan. So it's definitely not looking to cannibalize what we're already doing. It's additional business that we feel we can get through direct relationships that business development managers have with customers and also some potential vendor supply agreements.

Thanks, Ed. Keith has asked, well, appreciating the excellent way that the company is being run. Thank you, Keith. When can the shareholders expect to see some direct benefit from their ownership of the company?

Okay. So I guess that's aimed at dividend payments and obviously, the shares ultimately been acquired, I guess. So dividend, we've been fairly consistent with our view. We do review this point formally once a year and informally more frequently. The next review of that is at the end of the calendar year, so December's board meeting. But at the moment, we still feel that if we pay the dividend, the money could be spent better elsewhere increasing the value of the business because we're a growth stock. And if we did pay a dividend, it would be relatively modest. And therefore, investors would be probably better off investing in a high dividend-paying stock than Time Finance because this is a growth stock. So we ultimately look to provide a return to our shareholders through growing the tangible net assets, in turn growing the share price through the results that we deliver. And ultimately, the shareholders selling their shares for a much higher value than they bought them for, which they can do through the market or through an event that we have in the future through a sale of the company. And that is what we're here to do really on behalf of all shareholders.

Thanks, Ed. Colin has asked lots of companies have been paralyzed by security breaches. What are the recovery policies? And do you have insurance for losses due to a breach? Do you want a break, Ed, shall I take that one? Or do you [indiscernible]?

That's a good one for you to take, James, Compliance and Risk.

Thanks. Yes, very, very topical from Colin there. We do, as you'd expect, have a detailed disaster recovery plan which includes many IT backups, the ability to work remotely, et cetera, backups of the system every 24 hours, et cetera, that can be rerun. And we also do, as Colin says, at the end now, we have a comprehensive cyber insurance, both business interruption and general cyber attack insurance as well, which we think are reasonably robust. Hopefully, we never have to test them. But yes, we've got multiple insurance policies in place. So it's something very much that's topical. It's something very much that we look at on a regular basis, check that we have all the appropriate IT systems and controls in place, check that we have what we believe are appropriate disaster recovery plans. And then as the third line of defense, check that we have, what we think claimable and robust and appropriate insurance policies should this ever arise. So we think we've done what we can. So we continue to look at the cyber risk, but we think at the moment, we -- it's appropriate for where we are. Gary has asked, are you seeing any changes in customer behavior given the uncertainty around the budget?

Yes, we saw a really positive June and July. And then August, as it always tends to do, people being on holiday dropped off a little bit, but September started really well in the early part of the month. But nothing that you would class as directly to do with the budget. We did see a bit of a slowdown in October last year in run up to the first budget when obviously the new government was in place and then things started picking up after that, but nothing notable so far this year.

Okay. Thanks, Ed. Ashton has asked, you've said to the company -- sorry, you have said that the risk to the company from the Supreme Court ruling on motor finance commissions is minor. Please can you expand on how the company might be affected?

James, do you want to take that one? That's...

Sure. Okay. Yes. For those of you who aren't aware, and apologies I'm teaching [indiscernible]. In October last year, so pretty much a year ago, there was some rulings on regulated Motor Finance Commission. It went to the Supreme Court who ruled 2 or 3 months ago now, on it further. Potentially, there may be some redress for lenders who've paid commissions to brokers for regulated motor deals. It wouldn't be repaying and more back, but it could be repaying any excessive commissions that they've paid. We don't feel we're impacted by this. We don't -- we haven't done reg -- we pulled out of the regulated space completely a couple of years ago. We don't do regulated Motor Finance at all. Where we have done Motor Finance, it's on a Broked-on basis. So we were the broker rather than the funder. And it looks like the funders, if there is any redress, it will be the funders who have to potentially pay redress if there is any in certain cases. So we don't think we're affected by that. It is also worth stressing that the case where there was redress was particularly extreme. The commission was very high and the customer was cast as extremely vulnerable. So obviously, we have appropriate, we believe, vulnerable customer policies, et cetera. So we think we've acted appropriately. We haven't taken any, we would say, excessive commissions and where we have, we've been the broker rather than the funder. So we don't think it's something really that impacts us. It has had a wider contagion though of people looking, reading across the Supreme Court judgment of a couple of months ago clarified that, that it is very much focused on regulated consumer motor finance, which isn't something we do. I'm conscious of time. So we'll just do a couple more, if that's all right, because there's a poll, it would be great if people could look at towards the end. Joe has asked how are you expanding personnel-wise?

Well, we have approximately 160 employees. That has been relatively stable now for the last 15 months. And that's obviously been a deliberate policy linked to what I was talking about before, which is growing the business with a comparable lower headcount. And the savings that we're looking to make around that are very much around the back office. So can we manage our back office systems, processes and the way we do things more efficiently. We are still expanding on the sales side. So whilst that 160 has been fairly static, it's not been fairly static in terms of the split of the roles, and we will still take on future salespeople in the right areas of the country, for example, in the Invoice Finance division where there's some areas that will help us expand further. So yes, that's an idea of how our head count is moving.

Thanks, Ed. We've got quite a vague, a high level could be a very open question here from Nick, says, can you tell us more about your credit risk policy. Ed, can you tell us more about our credit risk policy?

Yes. I can tell you more. It depends specifically what we need to know. But I guess, in general, the credit risk policy is, well, it's all documented first and foremost, in terms of the business we want to do, the size, the profile et cetera, et cetera. As you'd expect, there's a specific manual that our funders like to see from time to time and the Board reviews. But day to day, we very much use people. So of course, we have a system where everything is logged, and we use credit data, credit checking agencies to filter out business that we want to do and those that we don't want to do. But then it generally comes down to people who structure businesses and underwrite deals whether that's existing clients that are looking for additional facilities or restructuring facilities or new customers and clients that are coming to us for the first time. And we have a certain way of working in terms of the flow of those businesses that come through the door, what we need to do, who needs to do it, and ultimately, how quickly it's turned around. So yes, I mean, we could talk a lot more detail around the credit policy, but it's a formal policy where we choose what business we want to lend to, at what rates, with what security and then we structure it accordingly to what people need and how we feel comfortable engaging with people directly and also through our introducers our brokers.

Great. Thanks, Ed. I'm just very conscious of time. We're trying to sort of wrap up by 10 to 2. So I will probably take one more question. And while that's being answered, hopefully, we should have a brief poll popping up. If you are able guys to vote on the poll, it would be really helpful to Ed, I and the rest of the Board in seeing how these forums are received and what you guys think. So please do vote on the poll before you leave the presentation. But a final question then, Colin -- Colin has come with a question that says, when new loans are booked, the upside to the financial figures are taken over a number of years. Assuming the current loans don't fall through and operate as expected, how far along are you to achieving the targets of the new plan? Ed, do you want me to take that? Or you take that?

Yes. You take that one, James.

Yes, sure. So Colin is absolutely right. I touched on it. When we take on a new deal, the revenue and in turn profit, if it works, is spread over the life of the lease of the loan, which can be anything from 3 months to 5 or 6 years. On average, it's about 4 years. So yes, so revenue will drop in on a monthly basis over that period. I think I touched on it. We are -- we have about GBP 26 million, GBP 27 million of unearned income in there. So that will drop in over the period over the next few years. So we haven't achieved all of our plan. Obviously, we're looking to grow the book to GBP 300 million, which in turn will increase revenue by a significant amount. But we don't have to start from 0 every month. We have a reasonable amount in the bag as we start each month to go forward with. In terms of the book itself, we were at GBP 221 million at the end of Q1, which is in line with our plans. As we said, we need to get to GBP 300 million. So we're on target for where we want to be at the end of the quarter, but it is only a quarter into the 3 years. So it's early days, but we're exactly where we want to be, and we've got a good pipeline. And as we've said in our various announcements, we're cautiously optimistic of how things are going at the moment. It is a little bit too early to say how far it's done though at the moment. But at the interim results, and this time next year, we'll have a much better picture going forward. But so far, so good after 3 months. Okay. Right. There are a couple of questions we haven't had time to answer. So we will try and answer those on the investor hub separately after this meeting, I'm afraid. But for now, I think that Ed, do you want to quickly summarize things?

Thank you to everyone for joining and listening. Hopefully, we've given an informative summary of, obviously, where we finished off our last plan in the first 3 months of this year. And we look forward to speaking to investors, existing and new, our next update, which I think I'm right in saying, James, will be after the half year.

Yes, that's right. Yes. So we'll put a trading update out on the half year numbers in sort of mid-December. And then the full interim numbers in more detail will be released in mid- to late January.

Yes. Good. Okay. Thank you, James, and thank you to everyone for joining.

Thanks, everyone. Have a good afternoon. Cheers.