Time Finance (AIM: TIME) posts record £8.4m profit as 59.1p takeover awaits clearance

Time Finance plc (AIM: TIME), a United Kingdom-based specialist provider of asset finance and invoice finance to small and medium-sized enterprises, reported a 6% increase in annual pre-tax profit to £8.4 million for the year ended 31 May 2026. Revenue increased 4% to £38.5 million, while its lending book expanded 16% to £251 million and own-book deal originations rose 29%. The audited results, released on 5 November 2026, arrive after shareholders approved a recommended cash acquisition by Bentley Park (UK) Limited at 59.1 pence per share. Although the business continues to demonstrate growth, shareholders’ immediate financial outcome depends on the remaining takeover conditions, including regulatory clearance and court sanction.

What do Time Finance’s latest annual results reveal about its lending business?

Revenue increased from £37.1 million to £38.5 million, while profit before tax rose from £7.9 million to £8.4 million. Fully diluted earnings per share advanced from 6.3 pence to 6.8 pence, equivalent to growth of approximately 8% on the company’s reported rounded figures. The increase in profit and earnings per share indicates that the group continued to translate growth in its funding activities into a higher annual financial return.

The stronger expansion in the lending book provides additional insight into the trajectory of the business. Own-book originations rose from £96.6 million to £124.1 million, an increase of 29%, while the lending book at the reporting date expanded from £216.7 million to £251 million. The difference between origination growth and period-end portfolio growth reflects the fact that lending is a continuing flow of new advances alongside repayments, maturities and other changes.

A larger lending portfolio creates the potential for greater future interest and fee income, subject to its pricing and credit performance. However, revenue does not necessarily rise at the same rate as originations because loans can be advanced at different times during the year and their income is recognised over their contractual lives. The group’s deferred income increased 17% to £31.2 million, providing another indication of future revenue associated with its lending activity under the relevant accounting treatment.

The reported figures therefore present two distinct growth measures. Annual income and profit improved at single-digit rates, while new business generation expanded considerably faster. The commercial opportunity is to convert that enlarged portfolio into future income without allowing funding costs and credit losses to consume the additional return.

Is Time Finance maintaining credit quality while expanding lending?

Time Finance’s net arrears stood at 4.8% of its gross lending book at 31 May 2026, compared with 4.6% a year earlier. The 0.2-percentage-point increase indicates some deterioration in this measure, but it is relatively limited against the 16% expansion in the loan book. Net bad debt write-offs were equivalent to 0.9% of the average lending book, compared with 1.0% in the previous financial year.

The combination suggests that credit performance remained broadly stable during a period of stronger lending activity. A lower bad debt write-off ratio is encouraging, though historical write-offs are not a complete measure of future credit risk. Lending portfolios can experience deterioration after origination, especially if borrowers face prolonged pressure on cash flow, interest costs or demand.

Time Finance serves businesses that may require flexible funding for equipment, working capital and invoices. Its customers can be affected by changing economic conditions, including labour costs, delayed customer payments and investment uncertainty. Those exposures are relevant to credit performance but do not, by themselves, establish that the portfolio is experiencing unusual stress.

An expanded lending book also makes effective underwriting increasingly important. If the group can preserve portfolio quality while increasing the amount of capital deployed, the larger asset base could support improved profitability. A deterioration in arrears or write-offs would instead reduce the benefit of faster origination growth and potentially increase the capital required to support lending.

What does the £55 million Bentley Park takeover mean for Time Finance shareholders?

Bentley Park (UK) Limited, the parent company of Ultimate Finance Group Limited, announced a recommended cash acquisition of Time Finance on 17 August 2026. The offer of 59.1 pence per ordinary share valued the company at approximately £55.13 million on the announced transaction terms. Time Finance shareholders approved the proposed acquisition at the relevant meetings on 1 October, advancing the transaction towards completion.

The structure is a court-sanctioned scheme of arrangement rather than an already completed transfer of ownership. As confirmed in the 5 November results, completion remains subject to outstanding conditions, including the relevant Financial Conduct Authority condition and sanction of the scheme by the court. Shareholder approval reduces one significant obstacle, but it does not remove the remaining legal and regulatory requirements.

The proposed consideration can be compared with the latest reported earnings and balance-sheet figures to understand the financial scale of the transaction. At approximately £55.13 million, the equity valuation represents around 6.6 times Time Finance’s £8.4 million annual pre-tax profit. Compared with reported net tangible assets of £50.2 million, it represents approximately 1.1 times book value.

Those are simplified comparisons based on the disclosed consideration and historical financial statements, not a complete independent valuation of the business. A specialist lender’s earnings quality, funding structure, future credit costs and capital requirements all affect how much a buyer may reasonably pay. The acquisition valuation is also shaped by the benefits Bentley Park expects to obtain from combining the businesses.

The proposed transaction was originally presented as creating a broader specialist lending platform serving United Kingdom small and medium-sized enterprises. An enlarged group could have advantages in financing capacity, product distribution and operating scale, although the transaction documents do not establish guaranteed cost savings or future profits. For existing Time Finance shareholders, those potential benefits would accrue through the acquiring group rather than directly through continued ownership of the AIM-listed company if the scheme becomes effective.

Why are Time Finance shares trading close to the cash offer price?

Time Finance’s shares were quoted at approximately 58.9 pence in the latest independently identified market snapshot from 3 November 2026. That was 0.2 pence below the proposed 59.1-pence cash consideration, equivalent to a discount of roughly 0.34%. The narrow gap is consistent with a share price whose immediate reference point is the announced takeover consideration, rather than short-term changes in profit expectations.

The discount is not a guaranteed investment return. It can reflect transaction timing, trading costs, dealing spreads, opportunity cost and the residual possibility that conditions are not satisfied. A shareholder acquiring shares close to the offer price is exposed to the economic consequences of a delay or unsuccessful completion, while the potential gain from the announced consideration is comparatively small.

This means the interpretation of Time Finance’s record results differs from that of an independent, actively traded growth company. Stronger lending activity might ordinarily encourage investors to reconsider the value of future earnings. Under a recommended fixed-price cash acquisition, however, improved earnings do not automatically increase the consideration payable to shareholders.

Equally, a deterioration in operating performance would not automatically reduce an agreed offer price, although sufficiently material developments could affect the broader transaction circumstances. The critical distinction is between the operational health of the business and the conditions governing the acquisition.

What could still prevent or delay the Time Finance takeover?

The latest results identify the Financial Conduct Authority condition and court sanction as outstanding steps. The court process must be completed in accordance with the scheme timetable, while regulatory requirements must be satisfied or, where permitted, waived. The parties have not announced that these conditions were completed as of the 5 November results.

The scheme documentation originally contemplated the sanction hearing during the fourth quarter of 2026, with the specific date dependent on the completion of relevant conditions. The expected timetable remains subject to updates through formal announcements, and investors should not treat an indicative quarter as a confirmed completion date.

Until the scheme becomes effective, Time Finance remains a separately listed company with its own operating performance, assets and liabilities. Shareholder approval does not itself transfer ownership or entitle shareholders to immediate receipt of the cash consideration. Any future delisting would follow the relevant completion steps rather than the publication of annual results.

The next measurable milestone is therefore a regulatory or court-related announcement confirming progress towards completion. Time Finance has produced another year of growth with relatively stable reported credit indicators, but the outstanding investment question is no longer simply whether it can expand the lending book profitably. It is whether the agreed acquisition can satisfy the remaining conditions and deliver the contracted cash consideration.

What should Time Finance (TIME) shareholders know about the results and takeover?

• Revenue rose 4% to £38.5 million for the year ended 31 May 2026.
• Pre-tax profit increased 6% to £8.4 million.
• Fully diluted earnings per share increased to 6.8 pence.
• Own-book originations grew 29% to £124.1 million.
• The lending book expanded 16% to £251 million.
• Net arrears were 4.8%, while bad debt write-offs remained relatively stable.
• Bentley Park has offered 59.1 pence per share, valuing the company at approximately £55.13 million.
• Shareholders approved the proposed acquisition on 1 October 2026.
• Financial Conduct Authority clearance and court sanction remain outstanding conditions.
• The next decisive catalyst is a formal update on satisfaction of those conditions and the scheme timetable.