Time Finance is quickening while Billington Holdings is getting stronger

3 mins. to read
Time Finance is quickening while Billington Holdings is getting stronger

Time Finance (LON:TIME) – given more time and these shares will double

Yesterday’s results from the alternative finance provider, for the year to end May, were very much as expected.

Ed Rimmer, CEO, and his management team have cleared down the near £16.0m capitalised group’s decks of its consumer vehicle brokerage side and are now looking to focus upon its three main areas of lending.

It is now concentrating upon its core products of Asset Finance, Invoice Finance and Commercial Loans.

Analyst Andrew Renton, at the company’s brokers Cenkos Securities, is understandably rating the group’s sharers as a Buy.

He is estimating a small lift in total revenues in this current year to end May 2023 of £25.0m (£23.6m), upon which he sees adjusted pre-tax profits rise to £3.5m (£3.0m), increasing earnings to 3.0p (2.6p) per share.

However, it is the following 2024 year when he envisages the most progress – to £29.0m revenues, £5.0m profits and 4.1p in earnings per share.

I spoke at length with Ed Rimmer early yesterday morning and certainly liked what I heard from him about how the company is moving forward again.

Having followed this company for some years, I now consider that given some more time Rimmer will really bring the profits through.

He has a 12.44m share stake (13.4%) riding on his success.

I have profiled the company twice, looking for its shares to rise to 30p, achieved just once so far, but I am sticking firmly to my current price aim and see them rising from the current 17p to around 22p within the next few months, before achieving my price goal within the year.

(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)

(Profile 07.01.22 @ 23.5p set a Target Price of 30p)

Billington Holdings (LON:BILN) – strong structure and undervalued

Next Tuesday morning this construction industry steel structure and safety solutions provider will declare its interim results for the six months to the end of June this year.

The UK fabricator makes some 90% of its money by providing its services to the construction sector and is one of the largest such companies doing so.

In a note published on Wednesday, analyst David Buxton, at the group’s new brokers finnCap, initiated his research on the companI clearly stating that he considered the shares as being undervalued.

His estimates for the current year to end December are for £90.0m (£82.7m) of revenues and a near tripling in its adjusted pre-tax profits at £3.0m (£1.3m), lifting earnings up to 20.1p (8.1p) and an over 50% rise in its dividend from 3.0p to 4.6p per share.

For the coming year he sees £100.0m sales, £4.0m profits, 24.8p earnings and a handsome 7.0p per share dividend.

Taking it a stage further for 2024 his estimates are for £107.0m revenues, £5.1m profits, earnings of 32.1p and a 9.0p dividend per share.

His price objective is 270p – which I consider to be conservative.

My current Target Price holds very firm, with the group’s shares currently at just 185p I reckon that there is a lot of upside left to play for over the next few months.

(Profile 02.04.19 @ 266p set a Target Price of 314.5p*)

(Profile 13.06.22 @ 217.5p set a Target Price of 295p)

And finally …..

Next week we have The Brighton Pier Group (LON:PIER) announcing its finals (Monday).

On Tuesday Cohort (LON:CHRT) holds its AGM, then Card Factory (LON:CARD) and AG Barr (LON:BAG) both announce their interims.

Avingtrans (LON:AVG) declares its finals on Wednesday and Zinc Media (LON:ZIN) informs its interims.

Thursday sees both Coral Products (LON:CRU) and Van Elle Holdings (LON:VANL) holdings their AGMs, McBride (LON:MCB) declaring its finals and Bango (LON:BGO) reporting its interims.

And rounding off a busy week, on Friday CMO Group (LON:CMO) will announce its latest interim results.

(Asterisks * denote that Target Prices have been achieved since Profile publication)

Comments (1)

  • tolle says:

    There is a reason Time will take time to lift profits , no matter what the company broker punts.

    Time (or 1PM) as it used to be was worth about 70p and paid a dividend. It had grown by buying growth rather than organic growth. This we were told was the reason for the plummeting of the share price to 20p and the removal of the dividend.

    Ed Rimmer who had been with the company before was brought in a year ago. New strategy, Time to be growth stock, and target lending to SMEs . So the car finance section had to go. Also along came Covid. This brought out the gov loans guarantee buisness which took away the meat of lending from Time. That Time survived these gov headwinds is to me no small miracle.

    Time also supported their workforce through all of this but post covid, Ed Rimmer decided that their would be “right sizing” (hate that word ) for the new post covid buisness. Also hired a lot of sales persons with we are told good reputations.

    So looking at the end of year results for this year , just published. Profit after tax and eps are tiny compared to the companies (1PM) hay day. This seems weird given all figures like turnover and EBITDA were very similar to year before. Administrative costs have not gone up despite new hirings. Bizarre

    Turns out it was a hefty write off of goodwill from the loss m aking car finance arm which caused the drop.

    One would have expected profits to rise because the percentage of own book lending had increased significantly, as the margins are higher. The reason they did not rise was because buisness booked from brokers went straight on the bottom line, whereas own book builds up over time , depending the length period of the loan.

    The first quarter results for this financial year do indeed show an improvement with the goodwill write off gone and the higher own book lending kicking in.

    There is also a 20% stakeholder who bought a job lot of 20% of shares which became available (long history behind this) last year. The buyer says they are just interested in small cap investment, nothing else.

    So despite the BOE raised rates, this is one stock which should appreciate over “Time” as the larger lending book and higher margin own book kick in.

    Hope this helps your understanding of the company direction . FYI

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