Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Bought in here yesterday for the first time on the morning dip as it just looks too cheap and management have performed well consistently and for some time now.
Given the H1 figures, together with the order book expansion, it's likely imo that TIME will certainly meet and most likely beat expectations of 4.6p EPS for this year ending in May (which rise to 5.4p EPS for the year commencing June).
Finncap's upgrade to a 71p target (from 47p) is summarised by them as follows:
"Time to celebrate another strong set of interims
Time Finance has released a strong set of interim results to the period ending 30 November 2023. The origination capabilities were firing away with 29% YoY growth to £47m, taking the gross lending book to a new record of £189m. The quality of the book remains uncompromisingly high with invoice and hard-asset financing now making up over 70% of the book and arrears flat at 6%. Revenues increased 19% to £15.7m and PBT increased 35% to £2.7m, reflecting the operational gearing from the organic top-line growth.
Time looks extremely cheap, trading on an FY25E P/E of 7.1x and FY25E P/TNAV of 0.8x. With the sustained period of strong performance through a rising rate environment, we believe that growth will continue or even accelerate in what should be a more benign future environment and as a result we have increased our 1-year price target from 47p to 71p."
The market is starting to warm to Time Finance. First bought this at around 17p back when they were 1pm in the days of the pandemic.
However, Ed Rimmer deserves a lot of credit for putting them on the growth path and even in these difficult economic times they are making excellent progress.
I missed yesterday's presentation, but it is on YouTube
https://www.youtube.com/watch?v=KblglfU7XX8
Tipped by ST in the IC - but subscription-only so I can only see the article's intro:
Https://www.investorschronicle.co.uk/ideas/2024/01/25/tap-into-this-bargain-priced-sme-lender/
"Tap into this bargain-priced SME lender
Business is booming for a lowly rated alternative provider of finance to SMEs
January 25, 2024
by Simon Thompson
Gross lending up 24 per cent to record £188mn
First-half pre-tax profit and EPS up a third to £2.7mn and 2.33p
Business continues to boom for Bath-based Time Finance (TIME:37.5p), an alternative provider of finance to more than 10,000 small and medium-sized enterprises (SMEs).
In the latest six-month trading period, own lending book origination increased 29 per cent to £47.3mn, which in turn boosted gross lending to a record high. Importantly, credit quality remains robust, a reflection of the fact that invoice and hard asset finance account for 70 per cent of total lending, up from 50 per cent in 2021. A doubling of the average deal size since then and dealing with a lower number of enquiries from more established and credit-worthy businesses is another reason why delinquency levels are holding steady at 6 per cent. All lending is made from the company’s own balance sheet or through brokering on business that does not meet its strict lending parameters."
Here's the rest of ST's tip in the IC FYI:
""On course for double-digit earnings growth
Time Finance uses wholesale funding facilities to finance its lending and remains funded to continue cherry-picking business to hit its £230mn lending target by June 2025. That’s worth noting since an increasing proportion of incremental gross profit earned on new lending converts into operating profit given the company has a relatively fixed cost base.
This helps explain why house broker Cavendish expects 30 per cent growth in operating profit to £5.6mn on 12 per cent higher revenue of £30.8mn in the 12 months to 31 May 2024. On this basis, expect both pre-tax profit and earnings per share (EPS) to rise by more than a quarter to £5.4mn and 4.3p, respectively.
Factoring in further growth in loan receivables to £210mn by 31 May 2025, analysts expect annual revenue of £33.1mn to deliver operating profit of £6.6mn, pre-tax profit of £6.3mn and EPS of 5.1p in the 2024-25 financial year. This implies the shares are rated on modest forward price/earnings (PE) ratios of 8.5 (2024) and 7.3 (2025).
Moreover, by recycling profits back into the business, tangible net asset value (TNAV) is also delivering double-digit growth, rising 13 per cent to £36.4mn (39.3p) year on year and on course to hit £38.8mn (42p) in May 2024 and £44mn (47.5p) in May 2025. The value being created for shareholders has not been lost on investors, hence why the share price has risen 41 per cent since I spotted the opportunity (‘Alpha Research: Business is booming for this underrated lender to SME’s’, 18 August 2023) and is up 19 per cent since my last buy call (‘Six micro-caps worth buying’, 9 November 2023).
The modest single-digit earnings multiple and 21 per cent discount to May 2025 TNAV estimates suggest the re-rating has further to run and I upgrade my target from 40p to 50p. Buy."