19 March 2024

Full year results for the year ended 31 December 2023

Resilient financial performance and significant strategic and operational progress

 

Matt Timmins, Joint CEO of Fintel

“2023 has been a defining year for Fintel. We have delivered a resilient financial performance and significant progress against our strategy, which balances growth across our core activities, organic investment and complementary M&A.

“We are executing our strategy at pace, enhancing our service and technology platform, increasing our scale and reach, and strengthening our position at the heart of the UK retail financial services sector to inspire better outcomes for all.

“The cash-generative nature of our business, underpinned by our financial resources, positions us well to capitalise on the favourable market conditions for M&A, whilst delivering further organic growth and value to all of our stakeholders.

“In the new financial year to date, we are trading in line with expectations and remain well positioned to take advantage of opportunities in our market.”

 

Financial highlights - Resilient performance, in line with expectations

  • Adjusted EBITDA1 growth of 5.6% to £20.5m (FY22: £19.4m) and adjusted EBITDA margin of 31.5% (FY22: 29.1%), during period of significant organic and inorganic investment
  • Core2 SaaS & Subscription revenue up 2.2% to £37.6m (FY22: £36.8m); up 11.8% on a like-for-like basis excluding the gross to net revenue impact from a change in contractual terms of key software reseller agreement and acquisitions (FY23: £34.2m; FY22: £30.6m)
  • Core revenue increased c.0.3% to £56.6m (FY22: £56.4m) and grew 5.6% on a like-for-like basis (FY23: £47.7m; FY22: £45.2m), excluding the impact of volatility in the mortgage market, the gross to net revenue change of the software reseller revenues and acquisitions
  • Four acquisitions completed in 2023 with initial net cash investment of £13.3m, delivering combined core revenues of £1.5m in the period
  • Strong balance sheet with £12.7m of cash, and £69m of headroom in £80m Revolving Credit Facility, providing flexibility for further investment
  • Net cash of £1.7m (FY22: £12.8m), having invested significantly in the business and M&A
  • Adjusted EPS1 of 12.2 pence per share (FY22: 12.2 pence per share), consistently demonstrating strong profitability
  • Final dividend of 2.35 pence per share proposed, resulting in a full year dividend of 3.45 pence per share, an increase of 6.2% on prior year

 

Financial highlights

2023

2022

% change

Alternative performance measures

   

 

Core2 revenue

£56.6m

£56.4m

0.3%

Core SaaS & subscription revenue

£37.6m

£36.8m

2.2%

Core adjusted EBITDA

£20.2m

£18.6m

8.6%

Core adjusted EBITDA margin

35.7%

32.9%

280 bps

Adjusted EBITDA1

£20.5m

£19.4m

5.6%

Adjusted EBITDA margin

31.5%

29.1%

240 bps

Adjusted EPS1

12.2p

12.2p

-

Statutory measures

   

 

Statutory revenue

£64.9m

£66.5m

(2.4%)

Statutory EBITDA

£14.4m

£16.7m

(13.5%)

Statutory EPS

6.8p

9.5p

(28.2%)

Net cash

£1.7m

£12.8m

(86.7%)

Dividend per share

3.45p

3.25p

6.2%

 

Strategic and operational highlights - Significant progress

  • Fintel has made continued strategic progress, with sustained growth across core activities, organic investment into technology and research platforms, and inorganic investment to increase our scale, IP and capabilities
    • Sustained growth across core activities
      • Growth in SaaS and Subscription revenue, which now represents 66.4% of core revenues (FY22: 65.1%)
      • Strong growth in fintech software revenue of 11.5%, following significant extension of proprietary software solutions
      • 24.9% growth in Distribution as a Service revenue
    • Increased organic investment of £4.8m into technology and service platform
      • Enhanced Consumer Duty support and technology package, helping intermediaries to implement requirements
      • Expanded proprietary financial planning and competitor and market intelligence software solutions with launch of four new modules
      • Extended ratings and reviews portfolio and expanded into tax advantaged market
      • Deepened insights for Product Providers through upgraded partner portal, and scaling of Strategic Asset Allocation and Distribution as a Service partnerships  
    • M&A investment to increase our scale, IP and capabilities, capitalising on favourable market conditions
      • Four acquisitions completed over the period:
        • MICAP, a provider of independent research and advice tools
        • Competent Adviser, a dynamic learning platform enabling advisers to meet increasing regulatory competency requirements
        • VouchedFor, a leading review site for Financial Advisers, Mortgage Advisers, Solicitors and Accountants
        • AKG, a leading provider of independent assessments and ratings of financial strength
        • Acquisitions are performing as expected
      • Two further acquisitions completed post period end:
        • Owen James, the leading provider of strategic engagement events in UK financial services
        • Synaptic Software, an independent provider of financial adviser planning and research software, and Webline, a quote and apply portal for advised sales of protection products
      • Investment in Plannr through Fintel Labs technology incubator
        • Expanding Fintel's technology proposition and extending the capabilities of Defaqto Engage through a two-way integration
        • With Fintel’s support, Plannr has now successfully launched to the intermediary market

 

Current trading and outlook - Continue to trade in line with expectations

  • Current trading remains in line with expectations, with growth in fintech software revenue and software license sales offsetting pressures in the UK housing market
  • With expectations that interest rates and housing market activity will become more positive in 2024, Fintel is well positioned to benefit from a recovery in the mortgage market
  • Clear growth strategy with demand underpinned by positive market dynamics and structural drivers including regulatory pressure, the FCA Consumer Duty regulation and demand for technology and data
  • Organic growth expected to be driven by ongoing software adoption across membership base, further technology penetration across the wider market, and synergies arising from recent acquisitions
  • Qualified M&A pipeline, underpinned by financial resources and favourable market conditions

 

Notes

1Adjusted EBITDA and adjusted EPS are alternative performance measures for which a reconciliation to a GAAP measure is provided in note 8 and note 10

2Core business excludes revenues from panel management and surveying.

 

Analyst presentation

An analyst briefing is being held at 9:30am on 19 March 2024 via an online video conference facility. To register your attendance, please contact fintel@mhpgroup.com.

 

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

+44 (0) 20 7597 5970

MHP Group (Financial PR)

Reg Hoare

Robert Collett-Creedy

+44 (0) 7736 464749

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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