Fintel (FNTL), a provider of fintech and support services to the UK Retail Financial Services sector, has issued a trading update for the year ended 31 December 2022.
The company reported core revenue growth of around 8% to £56.4m and core SaaS and Subscription revenue growth of around 7% to £36.8m. Total revenue growth was £2.6m to £66.5m. Adjusted EBITDA growth was around 6%, in line with expectations.
The performance was driven by further progress in the shift to Distribution as a Service – which has seen 70% of target Distribution partner revenues converted so far - and the release of major upgrades to their proprietary advice software aimed at intermediaries. The company was named "Best Professional Adviser Service Company of the Year" for the fifth consecutive year.
The company also reported a net cash position of £12.8m - helped along by continued high operating cash conversion, expected to be in excess of 100% - and a new £80m Revolving Credit Facility on more favourable terms. As well as underpinning further investment to drive sustained organic growth, the strength of its balance sheet supports plans to make further strategic acquisitions.
Chief executive Matt Timmins commented: "Our resilient operating cashflow conversion, combined with our enhanced funding capacity provide considerable financial agility as we pursue strategic acquisitions , and we remain confident that Fintel is in a strong position to deliver both our strategic goals and growth ambitions."
Full-year results are expected on 21 March 2023.
View from Vox
Fintel is quietly and successfully taking the asset management and professional advice industry into the digital age, most importantly through the continued rollout of Distribution Service, a subscription-based service that includes research, data, product design and distribution services that enable product providers to develop, iterate and target tailored propositions.
That’s reflected in the company’s continued success in signing important strategic partnerships with major organisations, including the recent expansion of its strategic distribution partnership with Schroders that will see the asset manager join Fintel’s Risk Controlled range.
The company’s fintech and research offering is also delivering rapid growth, as financial intermediaries seek to manage an ever-changing regulatory backdrop with solutions that focus on improving client outcomes. Yet the shares trade on a modest PE rating of 17x - as broker Zeus puts it, "Fintel is a digital business trading on an analogue rating".