Fintel sees revenue increase as regulatory changes drive market demand

Fintel [AIM:FNTL]the Huddersfield-based fintech and support services provider, today released its business update for the six months to the end of June (28e July) and recorded core revenue growth of 9% to £27.1m from £24.9m the previous year.

The company, which includes brands SimplyBiz, an intermediary business support service and Defaqto, a research and ratings business, saw its total revenue rise 2% year-on-year to £32.2m sterling. Adjusted EBITDA rose 5% to £8.7m and the company said underlying operating cash flow conversion is expected to exceed 120%.

Fintel provides technology, compliance and regulatory support to thousands of midstream companies; data and targeted distribution services to hundreds of product providers and empowers millions of consumers to make more informed financial decisions, according to a company statement.

The company was admitted to the AIM market in April 2018 and opened trading this morning at 205p. Fintel shares have returned -12.08% year-to-date and -13.98% year-on-year. The company’s market capitalization is £209.1m and its share price has been between a high of 255.22p and 184.12 over a 52-week period.

Room to invest

Matt Timmins, co-chief executive of Fintel, said the company had the room to grow its business through internal investment and via acquisitions as it had £7.6m in the bank and a £45 million revolver, which to date has not been fired.

Timmins said Fintel made continued progress converting distribution-as-a-service revenue in the first half, and revenue generation was at the upper end of expectations for the full year, distribution as a service and subscription revenue providing 66% of the company’s increased base revenue.

“Growth in our core business has been strong and in line with the upper end of our mid-term objectives, with the remainder of new revenue continuing to come from DaaS and subscriptions.

“Increasing regulation continues to drive market demand for our unique services and fintech offering. Our strong balance sheet and cash flow conversion give us the financial agility to pursue strategic acquisitions and we remain confident in achieving our strategic objectives and growth ambitions,” said Timmins.

In June, Fintel announced that M&G had become the latest partner to commit to a multi-year deal for its managed distribution service, with the deal covering M&G’s retail and savings businesses, primarily Pru UK, and M&G Investments.

Fintel will publish its interim results for the six months ended 30e June 2022 20e September 2022.


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