21 March 2023

Full year results for the year ended 31 December 2022

 

A strong performance, strategic delivery, and confident outlook

 

Financial highlights

2022

2021

Change

Alternative performance measures

 

 

 

Core1 revenue

£56.4m

£52.2m

8%

Core SaaS & subscription revenue

£36.8m

£34.3m

7%

Core adjusted EBITDA2

£18.6m

£17.1m

9%

Core adjusted EBITDA margin

32.9%

32.7%

20bps

 

 

 

 

Adjusted EBITDA

£19.4m

£18.3m

6%

Adjusted EBITDA margin

29.1%

28.6%

50bps

Adjusted EPS2

12.2p

10.5p3

16%

Cash conversion4

118%

116%

200bps

 

Statutory measures

 

 

 

Statutory revenue

£66.5m

£63.9m

4%

Statutory EBITDA

£16.7m

£25.0m

-33%

Statutory EPS

9.5p

15.7p

-39%

Net cash

£12.8m

£2.6m

392%

Dividend per share

3.25p

3.00p

8%

 

Financial highlights

  • Financial performance in line with Board expectations
  • Strong core revenue growth of 8% to £56.4m ahead of our medium-term target, underpinned by significant growth in Fintech and Research division
  • Solid adjusted EBITDA margin of 29.1% delivered alongside continued reinvestment into digital capabilities   
  • Improved quality of earnings across all divisions, with SaaS and subscription revenue growing 7% to £36.8m
  • Statutory EBITDA of £16.7m (FY21: £25m) and Statutory EPS 9.5 pence per share (FY21: 15.7 pence per share). FY21 results benefit from one off exceptional gains of £7.8m.
  • Net cash position of £12.8m (FY21: £2.6m) with Revolving Credit Facility (“RCF”) fully repaid and undrawn since June 2022 driven by operating cash conversion of 118% (FY21: 116%)
  • Strong balance sheet with new and increased four year £80m RCF completed in December 2022, on more favourable terms, providing significant, flexible funding capacity for inorganic and organic growth opportunities arising in the market
  • Final dividend of 2.25 pence per share proposed, resulting in a full year dividend of 3.25 pence per share, an increase of 8% on prior year, reflecting the Group’s strong business performance and cash generation

 

Strategic and operational highlights

  • Growth in recurring revenue across all three operating divisions:
    • Continued growth in core SaaS and Subscription revenue across all three operating divisions, driven by demand for technology and insights services across customer base
    • Significant progress in conversion to Distribution as a Service (“DaaS”): c.70% (target 60%) of Distribution Partner revenue converted to multi-year subscription agreements by 31 December 2022
  • Multiple growth drivers:
    • Extension of core compliance offering with launch of comprehensive support package in response to the FCA Consumer Duty regulation
    • Continued expansion of Defaqto’s research and ratings platform to help intermediaries and product providers meet increasing regulatory requirements
    • Major upgrade to proprietary financial planning technology with additional modules and new back office integration enhancing the intermediary software service offering
    • Partner Portal phase two to launch in 2023 and intermediary member portal in development, streamlining access to service and technology platform
    • Launch of Fintel Labs incubator to strengthen technology proposition and support innovation across the market
    • Selective M&A pipeline expected to enhance growth in the medium term, underpinned by enhanced financial reserves and strong cashflow conversion
  • Industry recognition for business, staff and ESG strategy:
    • Industry leading intermediary support service provider, winning Professional Adviser “Best Support Services for Advisers” award for an incredible, fifth consecutive year
    • Rated as an “Outstanding Company to Work for” and included in the top 20 “Best Companies to Work for” in financial services by Best Companies
    • ESG strategy shortlisted for “ESG Initiative of the Year” by ICA Compliance Awards, and further commitments outlined via launch of the 2023 Better Outcomes Plan

 

Appointment of new Chair

  • Phil Smith, currently Independent Non-Executive Director, to become Chair of Fintel following the Group’s AGM on 18 May 2023; Ken Davy to remain on the Board as Non-Executive Director
  • Phil brings deep industry knowledge, leadership qualities and a wealth of business transformation experience, along with extensive expertise in digital delivery and alignment to the Company’s values and strategic objectives

 

Current trading and outlook

  • Confident start to new financial year, consistent with the Board’s expectations
  • Organic growth is expected to be driven by ongoing software adoption across our membership base, increased financial technology penetration, and continued adoption of DaaS product.
  • Selective M&A pipeline expected to enhance growth in the medium-term; signi´Čücant funding to capitalise on market opportunities
  • Well positioned for strong and sustainable growth, underpinned by positive market dynamics and structural growth drivers, including Consumer Duty, increased demand for financial advice and regulatory change

 

Joint CEO, Matt Timmins commented:

“Fintel continues to deliver on its strategic plan of accelerating growth, digitisation and service expansion. During 2022 we delivered another set of strong financial results, while continuing to invest in our technology and services platform.

“We have started 2023 with real momentum, continuing to trade in line with expectations and progress our strategy at pace, forging multi-year strategic partnerships and developing our unique technology and service platform.

“As we look to the future, we are confident in our financial agility and growth strategy that is underpinned by our resilient and highly cash generative business. We are well positioned for strong and sustainable growth, inspiring better outcomes for all.”

 

Notes

1Core business excludes revenues from panel management, surveying and employee benefits software up to the date of strategic disposal of Zest Technology ltd in 2021.

2Core adjusted EBITDA and adjusted EPS are alternative performance measures for which a reconciliation to a GAAP measure is provided in note 8 and note 10.

3Excluding effects of a significant one-off impact of the change in corporation tax rates in the UK during 2021, EPS in 2021 would have been 12p on a comparable basis.

4Underlying operating cash flow conversion is calculated as underlying cash flow from operations (adjusted operating profit, adjusted for changes in working capital, depreciation, amortisation, CAPEX and share-based payments) as a percentage of adjusted operating profit.

 

For further information please contact:

Fintel plc

Matt Timmins (Joint Chief Executive Officer)

Neil Stevens (Joint Chief Executive Officer)

David Thompson (Chief Financial Officer)

 

via MHP Group

Zeus (Nominated Adviser and Joint Broker)

Martin Green

Dan Bate

 

+44 (0) 20 3829 5000

Investec Bank (Joint Broker)

Bruce Garrow

David Anderson

Harry Hargreaves   

 

+44 (0) 20 7597 5970

MHP Group (Financial PR)

Reg Hoare

Robert Collett-Creedy

+44 (0) 20 3128 8147

Fintel@mhpgroup.com

 

Notes to Editors

Fintel is the UK's leading fintech and support services business, combining the largest provider of intermediary business support, SimplyBiz, and the leading research, ratings and Fintech business, Defaqto.

Fintel provides technology, compliance and regulatory support to thousands of intermediary businesses, data and targeted distribution services to hundreds of product providers and empowers millions of consumers to make better informed financial decisions. We serve our customers through three core divisions:

The Intermediary Services division provides technology, compliance, and regulatory support to thousands of intermediary businesses through a comprehensive membership model. Members include directly authorised IFAs, Wealth Managers and Mortgage Brokers.

The Distribution Channels division delivers market Insight and analysis and targeted distribution strategies to financial institutions and product providers. Clients include major Life and Pension companies, Investment Houses, Banks, and Building Societies.

The Fintech and Research division (Defaqto) provides market leading software, financial information and product research to product providers and intermediaries. Defaqto also provides product ratings (Star Ratings) on thousands of financial products. Financial products are expertly reviewed by the Defaqto research team and are compared and rated based on their underlying features and benefits. Defaqto ratings help consumers compare and buy financial products with confidence.

For more information about Fintel, please visit the website: www.wearefintel.com

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