Time Finance Reports Record Q1 Revenues and Profit Growth

Time Finance Q1 trading update: record revenue, profit and book growth

Time Finance has kicked off its new financial year with a clean set of “records” across revenue, profits and balance sheet strength. For the quarter to 31 August 2025, the specialist SME lender reports its seventeenth consecutive quarter of lending book growth, a firmer profit margin, and no deterioration in credit quality.

If you’re tracking execution against the three-year plan to May 2028, this quarter reads like a steady tick-up in all the right places, with a clear pivot towards secured lending continuing to reshape the book.

Key numbers at a glance

Mix shift to secured lending is deliberate – and de-risks the book

The strategy unveiled in January is plain: prioritise secured lending through Invoice Finance and the “Hard” subset of Asset Finance (think equipment and vehicles with tangible resale value). These two now make up approximately 85% of the entire lending book, up from 76% a year ago, and accounted for over 95% of new deals written in the quarter.

Why it matters: secured lending typically carries lower loss severity because it is backed by assets or receivables. In tougher economic patches, that can be the difference between stable credit costs and nasty surprises. The unchanged arrears at 5% and steady net write-offs at 1% suggest underwriting discipline is holding up as volumes scale.

Profitability quietly improved despite modest revenue growth

PBT rose 11% to £2.1m on revenue up 3% to £9.4m, lifting the PBT margin by 100 basis points to 22%. That tells you operating efficiency and/or yield mix improved in the quarter. It is encouraging to see profits outpacing top-line growth, especially while the business pivots its product mix.

Two quick definitions for newer readers:

• Own-book lending: funding loans from the company’s own balance sheet rather than broking them to third parties. It usually means keeping the interest income – and the risk.
• Arrears: loans where payments are overdue. Net arrears at 5% is the proportion of the book that is behind on payments after adjusting for security and recoveries.

Balance sheet: higher net tangible assets provide a stronger buffer

Net tangible assets increased 14% to £45.6m year-on-year. In plain English, there is more equity backing the loan book. That gives Time Finance more capacity to lend and a thicker cushion against any future credit bumps.

The gross lending book climbed 8% to £221.1m as at 31 August 2025, marking seventeen consecutive quarters of growth. Sustained momentum through multiple quarters is a strong signal that distribution, product fit and underwriting are working together.

Origination up 30% but revenue up 3% – what’s going on?

It is normal for origination and reported revenue to move at different speeds. New lending volumes flow into revenue over time as interest and fees are recognised across the life of a deal. With a larger share of secured and invoice finance facilities, some income is earned steadily rather than upfront.

In short: a bigger Q1 origination number seeds future revenue and profit, provided credit quality remains steady. The uptick in PBT margin indicates early benefits from the mix shift and cost control.

Risk lens: arrears and write-offs steady and within target ranges

Credit metrics are unchanged: net arrears at 5% of the book and net write-offs at 1% of the average book. Management reiterates these are within target ranges. For a specialist SME lender, these levels are consistent with prudent underwriting, particularly given the push into secured products.

The key watch-out is whether arrears stay flat as the larger Q1 origination cohort seasons. For now, the discipline box is ticked.

Outlook: guidance “at least in line” keeps the bar sensible

The Board expects trading for the year to 31 May 2026 to be at least in line with market expectations. The company has not disclosed the consensus number, so we cannot compare directly. There is no explicit guidance upgrade here, but the combination of record quarterly revenue, a higher margin and stable credit reads supportive.

If you want more colour, the company is hosting a live presentation at 1pm BST today alongside its FY 2024/25 results. You can sign up at investors.timefinance.com and browse additional materials on the investor hub at this link.

Why this update matters for shareholders

• Compounding book growth: seventeen straight quarters is not an accident. It suggests repeatable origination channels and a product suite SMEs value.
• De-risked mix: 85% of the book now in Invoice Finance and Hard Asset Finance should keep loss severity in check through cycles.
• Profits outrunning revenue: margin up to 22% points to better efficiency and pricing discipline.
• Stronger equity base: net tangible assets up 14% enhances resilience and lending capacity.
• Conservative guidance: “at least in line” leaves room to surprise if momentum continues, without overpromising.

What I’ll watch next

• Funding costs and net interest margin: not disclosed here. Funding terms will influence how much of the origination surge converts to profit.
• Arrears trend through H1: stable at 5% today, but seasoning of new cohorts is the real test.
• Operating leverage: can PBT continue to grow faster than revenue as the book scales?
• Mix continuity: maintaining >95% of new deals in secured products would keep risk-reward balanced.

Bottom line: a disciplined, quietly confident start to the year

This is a solid, execution-led quarter: record revenue, higher profits, a bigger book and no wobble in credit. The strategy to prioritise secured lending is clearly taking hold and improving the quality of earnings. With guidance held to “at least in line”, management is signalling confidence without stretching targets.

For retail investors, this reads as steady compounding rather than a moonshot. If Time Finance sustains origination quality and margins while keeping arrears in check, the three-year plan has a strong foundation.