GCIFintel reports 9% core business growth in H1 on regulatory tailwind
Fintech specialist ( ) announced this morning unaudited results for the 6 months ended 30 June 2022 (H1 2022).
Financial results
The company reported strong core revenue growth of 9% to £27.1m, compared to £24.9m in H1 2021. Total revenue grew 2% to £32.2m, compared to £31.7m a year ago. Adjusted pre-tax profit also increased 15% to £6.9m.
Adjusted EBITDA rose 5% to £8.7m with an improved adjusted EBITDA margin of 27%, compared to 26.1% in H1 2021. Adjusted earnings per share was up 29% to 5.3p, compared to 4.1p a year ago.
Fintel ended H1 with £7.6m in cash, a substantial improvement over last year's £15.5m of debt. The company also reported access to an undrawn £45m revolving credit line.
Fintel said it intends to pay an interim dividend of 1p/share on or around 4 November.
Operational highlights
Fintel's strong finanical performance in H1 was driven by substantial development of its core business. The company reported accelerated growth in proprietary advice software recommendations to £42bn, increasing its data and insights footprint.
Fintel also recorded significant growth in Fintech software revenue (proprietary and resell), up 17% to £7.7m compared to £6.6m a year ago, and product ratings revenue of 12% to £4.2m. 66% of income in the company's core business came from recurring SaaS and subscription cashflow.
Matt Timmins, Joint CEO of Fintel plc, commented:
"Fintel has delivered a solid financial performance in the first half of the year, trading in line with expectations. Growth in our core business has been strong, delivering increased revenues, earnings and cash, while maintaining EBITDA margin and quality of earnings (SaaS and Subscription revenues)."
View from Vox
While Fintel traded in line with expectations in H1, the Company expressed confidence in meeting FY22 and long-term goals and stated the company remains in line with the "upper end of medium-term objectives" (5-7% core revenue growth).
Fintel's 9% core revenue growth was driven by continued progress in converting existing revenues to "distribution as a service", now having over 60% of partner revenue converted. The company has maintained 30% core adjusted EBITDA margin during continued investment in its digital platform.
Regulatory changes have provided a substantial boost in demand to Fintel's Intermediary Services and Fintech & Research divisions. Intermediary Services recorded 15% growth in gross product, driven by increasing regulation, digitisation, and enhancement of the company's core platform. Fintech and Research (Defaqto) recorded a 22% increase in revenues with substantial growth in software and product ratings services.
Fintel's decision to divest its non-core Zest Technology and Verbatim businesses has resulted in a complete turnaround of its cash position to £7.6m at the end of H1 2022 from £15.5m of debt last year, with additional access to a £45m currently unutilised loan facility.
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