REG - Fintel PLC - Acquisitions and Trading Update

FintelAnnouncement

14/11/2023 07:15

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RNS Number : 3020T  Fintel PLC  14 November 2023

14 November 2023

Fintel plc

 

("Fintel", the "Company" or the "Business")

Strategic Progress through Acquisitions and Trading Update

Acquisition of two market leaders continues the expansion of our platform

Fintel (AIM: FNTL), the leading provider of fintech and support services to
the UK Retail Financial Services sector today provides an update on two
further strategic acquisitions.

Strategic Progress - Two further acquisitions completed

·      Acquisition of VouchedFor via Fintel IQ, a technology and
knowledge platform

o  VouchedFor is a leading review site for Financial Advisers, Mortgage
Advisers, Solicitors and Accountants, serving over 5,000 intermediary
customers

o  The strategic acquisition will broaden Fintel's services to the advice
market through its technology and regulatory services platform

o  Fintel will accelerate the reach and growth of VouchedFor going forward,
providing increased growth opportunities for our customers and enhancing its
value to consumers

o  Completed in November 2023, the transaction was part debt funded with a
net upfront cash consideration of £7.5m, of which £6.5m was drawn from the
Group's £80m revolving credit facility

o  A contingent earnout, based on a multiple of recurring revenue generated
over the next two years, is capped at £10m

o  VouchedFor has launched the new "Elevation" product that helps firms
monitor Consumer Duty compliance that will both complement the current product
offerings and drive significant future growth. The business is currently
break-even after a period of investment.

 

·      Acquisition of AKG by Defaqto, the leading provider of financial
information, ratings and fintech

o  AKG is a leading provider of independent assessments and ratings of
financial strength for a range of organisations including life companies,
investment platforms and discretionary fund managers

o  The acquisition further extends Defaqto's industry-leading portfolio of
ratings and reviews for financial services and investment professionals

o  Defaqto will draw on resources from across Fintel to invest in AKG and
accelerate distribution of its proposition, both within the sectors that it
currently operates and adjacent areas

o  Completed in November 2023, the transaction was funded entirely from cash
reserves with a net upfront cash consideration of £1.6m.  In addition, up to
£0.4m contingent earnout is based on certain trading criteria being delivered
in the first three years of ownership

 

·      Further strategic investment to accelerate future growth

o  VouchedFor and AKG mark the third and fourth acquisitions by the Company
this year, following the acquisitions of learning and development provider,
Competent Adviser, and tax efficient investing specialists, Micap completed in
July 2023

o  The acquisitions are in line with Fintel's strategy to improve the retail
financial services market, promote the value of financial advice and increase
consumer confidence and trust

o  Fintel remains confident in continuing to deliver strategic progress,
supported by its strong balance sheet and positive M&A pipeline

 

Trading Update and Outlook

The Core business continues to deliver resilient earnings in line with board
and market expectations for FY23, with the ongoing pressures in the UK housing
market being largely offset by continued progress in software license sales
and acquisitions.

Matt Timmins, Joint CEO of Fintel, commented:

"Our positive trading momentum has continued into the second half, with
continued growth in SaaS and Subscriptions revenues, supported by our
resilient, diversified revenue base.

"VouchedFor and AKG are two market leading businesses which are highly
complementary to our offering and share our vision. VouchedFor is the UK's
standard bearer for Trusted Advice while AKG has been at the forefront of
financial strength ratings and consultancy for over 20 years. Both have strong
adjacencies in terms of our capabilities and customers, and we look forward to
further developing their compelling growth prospects.

"We continue to deliver growth organically and make progress consolidating the
fragmented software market, providing efficiencies for advisers and creating
better outcomes for all participants. With a strong M&A pipeline,
underpinned by our balance sheet and cash position, we are confident in making
further strategic progress."

For further information please contact:

 

 Fintel plc                                     via MHP Group

 Matt Timmins (Joint Chief Executive Officer)

 Neil Stevens (Joint Chief Executive Officer)

 David Thompson (Chief Financial Officer)

 Zeus (Nominated Adviser and Joint Broker)      +44 (0) 20 3829 5000

 Martin Green

 Dan Bate

 Investec Bank (Joint Broker)                   +44 (0) 20 7597 5970

 Bruce Garrow

 David Anderson

 Harry Hargreaves

 MHP Group (Financial PR)                       +44 (0) 20 3128 8147

 Reg Hoare                                      Fintel@mhpgroup.com (mailto:Fintel@mhpgroup.com)

 Robert Collett-Creedy

 

 

Notes to Editors

Fintel is the UK's leading fintech and support services business, combining
the largest provider of intermediary business support, SimplyBiz, and the
leading research, ratings and Fintech business, Defaqto.

Fintel provides technology, compliance and regulatory support to thousands of
intermediary businesses, data and targeted distribution services to hundreds
of product providers and empowers millions of consumers to make better
informed financial decisions. We serve our customers through three core
divisions:

 

The Intermediary Services division provides technology, compliance, and
regulatory support to thousands of intermediary businesses through a
comprehensive membership model. Members include directly authorised IFAs,
Wealth Managers and Mortgage Brokers.

 

The Distribution Channels division delivers market Insight and analysis and
targeted distribution strategies to financial institutions and product
providers. Clients include major Life and Pension companies, Investment
Houses, Banks, and Building Societies.

 

The Fintech and Research division (Defaqto) provides market leading software,
financial information and product research to product providers and
intermediaries. Defaqto also provides product ratings (Star Ratings) on
thousands of financial products. Financial products are expertly reviewed by
the Defaqto research team and are compared and rated based on their underlying
features and benefits. Defaqto ratings help consumers compare and buy
financial products with confidence.

 

For more information about Fintel, please visit the
website: www.wearefintel.com (http://www.wearefintel.com/)

 

 

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