Fintel reports “significant strategic progress” as it announces further acquisitions
(), the leading provider of fintech and support services to the UK Retail Financial Services sector, pointed to “significant strategic progress” in a trading update for the six months ended 30 June 2023
The group has been busily investing in its business this year, and today announced the acquisitions of MICAP and Competent Advisor, two technology platforms which collectively serve over 15,000 users. MICAP brings independent research and advice tools for tax-advantaged investment products, expanding Defaqto's reach into this market, while Competent Adviser is a dynamic learning platform that enables advisers to meet increasing regulatory competency requirements.
The acquisitions complement Fintel's recent investment in CRM specialist Plannr Technologies through Fintel Labs, strengthening the company's product and service offerings in the financial services sector and taking it further towards its vision of becoming an end-to-end technology platform for the UK Retail Financial Services industry.
Fintel also strengthened its longstanding partnership with technology supplier Intelliflo by negotiating a new five-year technology contract for its member firms, reducing pass-through costs, and increasing EBITDA margin.
Despite the heavy investment Fintel ended the half-year with a cash position of £13.3 million, driven by continued robust operating cash flow conversion, which climbed 4% and exceeded 100% of operating profit. Alongside an undrawn four-year £80 million Revolving Credit Facility, the group has significant firepower to fund organic investment and further M&A opportunities.
Headline trading figures were also strong, with core revenue up 1.6% to £27.6 million, or 4% on a like-for-like basis, while core adjusted EBITDA also improved, reaching £8.8 million, an approximately 8% rise from the previous year's figure.
Matt Timmins, Joint CEO of Fintel plc, commented: “We are confident that our strategic progress, coupled with strong organic growth drivers, firmly positions us for sustainable growth and ongoing success, as we continue to inspire better outcomes for all."
Fintel's long-term growth prospects are underpinned by regulatory and structural changes in the UK financial services market, not least the increased regulatory burden around consumer duty and the rising adoption of technology and data-driven services. With a strong balance sheet and a robust M&A pipeline to complement recent acquisitions, the company looks well-positioned to accelerate growth and deliver further strategic progress in the coming months.
Broker Zeus is forecasting EPS of 12.4p a share in 2023, rising to 13.5p in 2024, which leaves the shares trading on a forecast PE ration of 15.6x. It argues that its high EBITDA margins justify a much higher rating. Interim results are due on 19 September.
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