Fintel (FNTL.L) -Interim Results
In a low interest rate environment, companies have gotten used to be able to buy pretty much anything and pay daft multiples and get to claim an earnings-enhancing acquisition, which the market then bids up the shares to reflect. Fintel appear to have found out to their cost that what you pay matters. These results show that their acquisitions have proven to be earnings dilutive after interest costs. Perhaps this will come good as they grow (and interest rates fall), but not within any reasonable forecasting horizon.In response to this, broker Zeus took 7% out of their forecast. This means that EPS has failed to grow for several years despite the company being on an acquisition spree. This begs the question: How on earth are people paying 20x earnings for this serial underperformer?
Mark Simpson: Small Caps Life
Exited a couple of years ago and currently still have no position here. |
Further to my post on 2nd April, in today's results:
"The Intermediary Services division delivered an 8% growth in core revenue. Structural headwinds in the mortgage market and the rapid, temporary growth in consolidation has led to reduction in member numbers in this division" |
In this upbeat interview, joint CEO Matt Timmins of Fintel takes me through the strategic rationale behind this week's £14.6m acquisition of 'threesixty', how the deal fits into the wider group, and where the business hopes to be in 5 years' time. |
Rathbones double bubble |
As a customer of Fintel I won't be investing in this business as I suspect their milking of members is likely to see significant exits before long.
First their annual increase in membership charge of the higher of 5% or inflation which saw a rise of 10% in charges last month will have to be broken eventually - its unsustainable.
Secondly they've just emailed to put up the cost of the client management software by 17% from October.
Boasting about the extra they are getting out of their subscribers in their listed results is not great PR either.
I suggest watching reported member numbers carefully to see if this starts to happen. That should be a key metric for them going forward to be judged on. |
Fintel (FNTL) Full Year 2023 results presentation - March 24
Fintel Joint Chief Executive Officers, Matt Timmins and Neil Stevens, and Chief Financial Officer, David Thompson present full year results for the year ended 31 December 2023.
Watch the video here:
Or listen to the podcast here: |
Fintel (FNTL) HY23 results presentation - September 23
Fintel Joint CEO’s Matt Timmins and Neil Stevens, and CFO, David Thompson present interim results for the six months ended 30 June 2023.
Watch the video here:
Or listen to the podcast here: |
Just to let shareholders and prospective investors know that Fintel plc and The Property Franchise Group plc will be presenting on the MelloMonday webinar at 5pm on Monday 25th September 2023.
There will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions.
Tickets are still available and if you would like one at half price then enter the code MMTADVFN50.
For more information, click here:
Mello Events have many events coming up over the next few months, check them out here:
You can get 70% off their Oct- Nov 2023, giving you access to all events until the end of October (at least 9), as well as the archive events and exclusive partner discounts! Use code NOVAP70 |
Very quiet here. Currently I have no position after exiting in July 2022 but it remains on my watchlist. Interims due on 19 September.
"Fintel's long term growth is underpinned by regulatory and structural changes in the UK financial services market, with continued expansion of our products and services supporting our customers through this evolving landscape. A strong balance sheet with significant liquidity, coupled with recent acquisitions and a strong M&A pipeline, positions us well to accelerate growth. The Board is confident of delivering further strategic progress in line with its expectations for the full year." TU: 27 July 23. |
Just to let shareholders and prospective investors know that Fintel will be presenting on our Mello2023 webinar, which begins at 1pm today.
The programme for the evening is as follows:
1.00 pm A nostalgic interview with David Hornsby, ex Ideagen
1.30 pm Company presentation by Wise Alpha
2.00 pm Company presentation by Belvoir Group PLC
2.30 pm David Stredder interviews another Mello hero, Peter Harrison, CEO Bioventix
3.00 pm Company presentation by Frenkel Topping Group
3.30 pm Company presentation by Fintel plc
4.00 pm Gervais Williams presents ‘How can it be that UK-quoted microcaps might be one of the prime beneficiaries of the retreat of globalisation?’
There will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions.
Tickets are £25 and still available. Use code ME23Virtual for 70% off! |
Just to let shareholders and prospective investors know that Fintel will be presenting on the MelloMonday webinar at 5pm on Monday the 27th of March.
The programme for the evening is as follows:
5.00 pm Interview with Georgina Brittain, portfolio manager of JPMorgan UK Smaller Companies
5.30 pm Company presentation by Vector Capital plc
6.10 pm Company presentation by Fintel plc
6.40 pm Special guest interview David Cicurel
7.00 pm Company presentation by CentralNic Group plc
7.30 pm Mark Bentley introduces ShareSoc’s ‘Bank failures and their broader implications’ in-conversation event
7.35 pm Mello BASH with Damian Cannon, Kevin Taylor and Mark Simpson
There will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions.
Tickets are still available and if you would like one at half price then enter the code MMLINK50. |
A slow burner here with the shareprice back to the IPO of 170p when it first listed in April 2018. I'm currently sitting on the sidelines having taken a marginal profit and exited @205p after the last TU at the end of July. I still think that this is a solid business with good forward prospects but it really needs to re-rate when we have a more positive market environment. This is now sitting on my watchlist as a potential re-entry candidate at some point in the future when prospects are more promising. |
Last night's webinar from FNTL [...] is on Vox |
FREE RESULTS ROUND UP
Just to let shareholders and prospective investors know that S&U plc, Fintel plc, Brave Bison and Avation plc will be presenting at the Results Round Up Webinar at 2pm on Thursday 29th September 2022.
The programme is as follows:
2.00 pm Amati’s David Stevenson discusses “The Small Cap Discount : Opportunity Knocks” with David Stredder
2.30 pm Company presentation by Fintel
3.00 pm Results Round-up from Graham Neary
3.30 pm Company presentation by Brave Bison
4.00 pm Company presentation by Avation
4.40 pm Introduction to Rex by Kit Atkinson of Peel Hunt
5.00 pm Results Round-up from Mark Simpson including the Good, the Bad and the Ugly
5.30 pm Company presentation by S&U
The event is FREE and there will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions. |
 Solid progress, positive cashflow, £7.6m net cash and plenty of financial headroom for both organic growth and strategic acquisitions.
Trading Update
Robust core business performance drives continued growth following strategic disposals
Fintel issues a trading update for the six months ended 30 June 2022.
Financial Highlights
-- Core revenue growth of c.9% to £27.1m (HY21: £24.9m)
-- Total revenue growth of 2% to £32.2m (HY21: £31.7m)
-- Adjusted EBITDA up 5% to £8.7m (HY21: £8.3m)
-- Improved Adjusted EBITDA margin of 27.0% (H1 2021: 26.1%)
-- Significant financial resources with £7.6m cash and undrawn £45m RCF
-- Underlying operating cash flow conversion expected to exceed 120% (HY21: 135%)
Operational update
In the first six months of 2022 the Business has continued to trade well with strong Core revenue(1) growth in line with the Board's expectations and outpacing the revenue impact of strategic disposals. Continued progress in the conversion of Distribution as a Service ("DaaS") revenue has seen a greater proportion of these existing revenues recognised in H1. On a full year basis, the current core revenue expectation is trading at the upper end of the range of our medium term objective. With the continued digitisation of the Business and successful conversion and scaling of DaaS, earnings quality continues to grow in absolute terms with SaaS and subscription income delivering c.66% of our expanded Core revenues. Underlying operating cash flow conversion remains strong, in excess of 120%. £7.6m of cash at 30 June 2022, together with the £45m Revolving Credit Facility fully undrawn, provides significant financial resources to fund growth both through organic investment and strategic acquisitions.
Fintel intends to publish its interim results for the 6 months ended 30 June on 20 September 2022.
Matt Timmins, Joint CEO of Fintel plc, said:"We are delighted to report continued solid trading and earnings quality in the first half of the year, in line with our strategic goals and Board expectations. Growth in our Core business has been strong and in-line with the top end of our medium-term objectives communicated in our CMD (Dec20)with the balance of new revenues continuing to come through SaaS and subscriptions. Increasing regulation continues to drive market demand for our unique Services and fintech offering. Our strong balance sheet and cash flow conversion provides the financial agility to pursue strategic acquisitions and we remain confident of delivering our strategic goals and growth ambitions." |
Increased regulation drives demand for Defaqto services
Fintel announces that is has expanded key product lines in its research and fintech division, operating under the Defaqto brand, in response to ongoing market demand driven by new regulation. Defaqto, the leading financial information, ratings and fintech business, has seen consistent growth in usage over the last three years for both its Risk Ratings and Investment Reviews. Risk Ratings provide an independent risk mapping of a financial product and enables wealth managers and financial advisers to select suitable investment portfolios for their clients. Due to the growth in regulation and focus on investment suitability, this service has grown to cover over 1,500 financial products. Investment Reviews, which combine qualitative and quantitative analysis of an investment proposition to give intermediaries and consumers further insights at point of sale, has expanded to cover over 400 propositions in response to market demand.
The business has also seen greater demand for both its Matrix software solution, which enables product providers to assess the competitiveness of a proposition through benchmarking the market, as well as the Star Ratings service, an expert assessment of a product's quality, features and benefits, which is recognised by 75% of consumers. The new era of Consumer Duty and Fair Value pricing is expected to further increase demand for Defaqto services as well of those of sister company, SimplyBiz, who provide regulatory support services to 3000 intermediary firms.
John Milliken, Defaqto CEO commented:"As we enter a new regulatory era of Consumer Duty and Fair Value Pricing, Defaqto is uniquely positioned to support product providers such as banks and general insurers in designing appropriate products evidencing the suitability and quality of their propositions. With the largest product database in the UK, we're able to provide crucial market insights that allow them to consider consumer suitability during product design, whilst our independent, expert Ratings and Reviews help to educate intermediaries and consumers in assessing the appropriateness of a product at point of purchase. We expect this demand to continue with the incoming Consumer Duty Regulation driving an increased focus on product fit and consumer outcomes, and as we continue to develop the insights and solutions the market needs, we are well positioned for future growth.
Defaqto was acquired by Fintel in 2019 to support the group's rapid digitisation as it focuses on developing insight and data led services such as the 'Managed Distribution Service' - a first of its kind subscription-based service spanning research, data, and distribution which has contributed to the increasing levels of recurring revenues generated by the Company (SaaS and subscription revenues represented 66% of core revenues in 2021). The continued demand for Defaqto's research services further underpins current strategic growth plans of the Group. Fintel intends to publish a pre-close announcement ahead of the publication of its interim financial results in September." |
Fintel and M&G plc sign long term strategic distribution partnership
Fintel announces that M&G plc has become the latest partner to commit to a multi-year agreement for its Managed Distribution Service (MDS), with the agreement covering M&G's retail and savings business, primarily Pru UK, and M&G Investments. This latest partnership builds on the successful scaling of the offering during 2021 and will further increase the level of recurring revenues generated by the Company (SaaS and subscription revenues represented 66% of core revenues in 2021).
Introduced in early 2021, Fintel's Managed Distribution Service is a subscription-based service that combines data, product research and distribution services. Using segmental and behavioural insights combined with access to regulatory expertise, product providers are able to develop tailored propositions and distribute them through financial intermediaries. Over 20 partners have now signed up to the Managed Distribution Service, including leading brands such as Fidelity, Aviva, Just, Guardian, Schroders, BMO, Premier Miton, Carmignac and Tatton, with the service also being taken up by a number of SimplyBiz's Protection and Mortgage Partners. |
Fintel PLC is focused on business support and financial market services to provide advice on mortgages protection, investments, estate planning and taxation. As a result, the firm has partnered with insurance, investment, and mortgage providers. This initiative was explained by the cash hike of £7.8m from £2.6m last year. Given the solid cash performance, P/FCF reached 13.1x, which is above most peers across the industrial sector, which in turn resulted in a robust EPS growth of 12.6%, hence enabling market participants to optimise returns on investment.
Keep up to date with WealthOracle AM |
Great, and succinct, trading update !
"The Company is pleased to be able to report strong trading in the year to date, with performance in line with expectations. We have continued to improve our earnings quality by increasing our Sass and Subscription ("Saas") revenues via the conversion of annual managed services agreements to multi-year Distribution as a Service ("Daas") agreements. Our unaudited net cash position has increased to c.£7.8m of net cash as of 30 April 22 (31 Dec 2022 £2.6m). The gross drawn position of the £45m revolving credit facility is currently £4.0m following a £3.0m repayment in March 2022. We look forward to updating shareholders on our further progress at the time of the half-year results." |
Liontrust takes advantage of the recent 15% price slippage since February and adds a further 600,000. |
Another year of solid progress !
Full year results for the year ended 31 December 2021
Robust financial performance. Significant strategic progress. Positioned for strong & sustainable growth.
Fintel, the leading provider of Fintech and support services to the UK retail financial services sector, today announces its audited consolidated results for the year ended 31 December 2021.
Financial Highlights
-- 5% increase in total revenue up GBP2.9m to GBP63.9m (FY20: GBP61.0m)
-- 5% increase in core(1) revenue - up GBP2.4m to GBP52.2m (FY20: GBP49.8m)
-- 6 % increase in adjusted EBITDA(2) - up to GBP18.3m (FY20: GBP17.3m)
-- Positive net cash(3) of GBP2.6m (FY20: net debt of GBP19.4m)
-- Strong balance sheet with GBP45m revolving credit facility of which GBP38m remains undrawn
-- Adjusted EPS(4) of 10.5 pence (FY20: 11.3 pence), on a like for like basis excluding the impact of the change in the UK Corporation Tax rate EPS would have been 12 pence
-- Final dividend proposed of 2 pence per share, resulting in a full year dividend of 3 pence per share (FY20: 2.85 pence per share)
Joint CEO, Matt Timmins commented: "We have delivered strong results during a year of significant strategic progress and continued robust financial performance. Revenues, EBITDA and recurring income have all increased in line with expectations driven by organic growth, strategic enterprise partnerships and the expansion of our proprietary advice technology. We are well positioned for further growth. We have maintained earnings in line with our objectives during a year in which we have invested into our digital delivery and completed two strategic divestments. With high levels of cash conversion and a strengthened balance sheet, we now have the financial agility to scale our unique Fintech and services platform and pursue further growth in quality revenues." |
Just to let shareholders and prospective investors know that Poolbeg Pharma, musicMagpie and Fintel plc will be presenting at MelloMonday, the Mello Events webinar on Monday 28th March at 6pm.
There will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions.
Tickets are still available and if you would like one at half price then enter the code MMTADVFN50. |
Further progress in expanding significant service penetration.
Fintel expands its Management Distribution Service
Fintel has announced that Invesco, Hawksmoor and Royal London are amongst further partners to commit to multi-year agreements for its Managed Distribution Service. 20 partners have now converted to the Managed Distribution Service, including leading brands such as Fidelity, Aviva, Just, Guardian, Schroders, BMO, Premier Miton, Carmignac and Tatton.
In 2021, a first-of-its-kind partnership with Aviva and Aviva Investors was announced with Aviva Investors developing a new sustainable retirement solution in partnership with Fintel, optimally aligning product design to Defaqto's income drawdown tool and ESG specifications. This expansion of the offering has continued in 2022 with Royal London, a Simply Protect partner, also converting to a subscription based managed distribution agreement.
Introduced in early 2021, Fintel's Managed Distribution Service is a subscription-based service that includes research, data, product design and distribution services. Using segmental and behavioural insights combined with access to strategic consultancy and regulatory expertise, product providers are able to develop tailored propositions and iterate existing ones, distributing them via financial intermediaries. Delivered by SimplyBiz and Defaqto, businesses that sit within Fintel, the solution is also designed to enhance the services provided to intermediary member firms. The multi-year partnerships help product providers to focus their outreach to intermediaries through the most effective channels whilst ensuring consumers receive products better aligned to their needs.
Matt Timmins, Joint CEO of Fintel, commented: "Fintel exists to help the market operate more effectively. As an industry connector we improve and simplify this complex market, ultimately achieving better outcomes for all. I am delighted with the success of the Managed Distribution Service to date. The progress made in its roll-out evidences our focus on combining expertise with data driven services - as well as our successful response to rapidly changing client requirements, which continue to enhance the quality of our earnings. To have more renowned and respected brands further strengthening our relationship and choosing to work with us in this way is a fantastic start to 2022." |
Latest analysis on last weeks trading update from Robin Savage of Zeus Capital. He sees a longer term potential valuation upside of circa 60% as institutional interest as the digitization of SaaS & Daas increases in the inherent quality of the business model after the year end report is issued next month. |
Excellent update!
Trading Update for the year ended 31 December 2021
Robust financial performance. Significant strategic progress. Positioned for strong and sustainable growth.
Fintel (AIM: FNTL), the leading provider of fintech and support services to the UK Retail Financial Services sector, today issues a trading update for the year ended 31 December 2021.
Financial Highlights
-- Total revenue growth, marginally ahead of expectations, up GBP2.9m to GBP63.9m (2020: GBP61.0m)
-- Core Revenue growth up c.5% to GBP52.2m (2020: GBP49.8m)
-- Solid Adjusted EBITDA*(1) growth, in line with expectations
-- Positive net cash position*(2) of GBP2.5m (2020: Net Debt of GBP19.4m) as a result of resilient cash conversion and proceeds from strategic divestment
-- Strong balance sheet with significant, flexible funding capacity for growth including net cash position and access to a GBP45m revolving credit facility
Operational Highlights
-- SaaS & Subscriptions revenue continues to grow across all three operating divisions
-- Margins maintained whilst continuing to invest in the Business's digital services platform
-- Continued digitisation of core business and new strategic partnership to deploy up to 2,500 additional Fintech licenses through Tatton Asset Management
-- Significant progress in Distribution Division with 13 Distribution partners converted to multi-year subscription agreements via the launch of Managed Distribution Service (DaaS)
-- Significant strategic progress with the successful sale of non-core Zest Technology and disposal of Verbatim Funds
-- Development of comprehensive ESG strategy, following a wide-ranging and all-inclusive Materiality Assessment with key stakeholder groups
Outlook
With the benefit of high levels of recurring income from SaaS and Subscriptions, combined with the strong customer base and positive market dynamics, the Board remains confident of delivering future earnings growth and continued strategic progress.
Matt Timmins, Joint CEO of Fintel plc, said: "2021 has been a year of significant strategic progress, continued digitisation and strong trading as the Business continues to perform well. Revenue has been delivered marginally ahead of expectations, with earnings expected to be in line, having made continued investment into our digital growth. The successful sale of non-core Zest Technology and the strategic disposal of Verbatim has streamlined the business, giving us the financial agility to support future strategic growth. The rapid digitisation of our SaaS & subscription based business has continued, improving earnings quality and delivery of key services to customers. In addition, we have built a comprehensive ESG Strategy spanning Fintel Plc's own requirements as well as those of our clients. This is core to our vision of creating better outcomes for all stakeholders. Our Defaqto ESG research platform has been expanded to cover 76 retail investment funds and our Digital ESG Client Profiler has been deployed to over 8,000 wealth managers and financial advisers."
The board is confident of continued strong trading and key strategic progress in 2022. Fintel intends to announce its Full Year Results for the year ended 31 December 2021 on 22 March 2022. |
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