REG - Fintel PLC - Full Year Results
18/03/2025 07:00
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RNS Number : 0237B Fintel PLC 18 March 2025
18th March 2025
Fintel plc
("Fintel", the "Company", the "Business" or the "Group")
Full year results for the year ended 31 December 2024
Positive financial performance and significant strategic advancements
Fintel (AIM: FNTL), a 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 2024.
Matt Timmins, Joint CEO of Fintel said:
"2024 has been a seminal year for Fintel, marked by continued strategic
advancements and strong financial performance. The company has delivered
robust results, with complementary acquisitions contributing to substantial
growth in SaaS and subscription-based revenues.
We have expanded the Fintel group by welcoming four new businesses in 2024,
with the previously announced acquisition of RSMR successfully completing in
January 2025. These strategic acquisitions, combined with ongoing investments
in our proprietary technology and data solutions, have enhanced our
intellectual property, scale, and market presence, laying the foundation for
sustained organic growth.
Looking ahead, we remain confident in our ability to achieve further progress.
We have started the year positively, trading in line with Board expectations,
and onboarding six new customers to our Matrix 360 market intelligence
software. With our comprehensive technology platform strongly positioned to
capitalise on further growth opportunities within the fragmented retail
financial services sector, we see material opportunities for value creation
across our family of brands."
Financial highlights - Positive performance and significant strategic
progress
· Core(1) revenue increased to £68.9m (FY23: 56.6m), up 22%,
supported by revenue of £15.0m (FY23: £1.5m) from our acquired portfolio.
· Adjusted EBITDA(2) growth of 8.5% to £22.2m (FY23: £20.5m),
following investment to expand products, services and capabilities.
· Core SaaS & Subscription revenue up 17% to £44.1m (FY23:
£37.6m) building on our quality recurring revenue streams.
· Four acquisitions completed in 2024 with initial net cash
investment of £16.6m, delivering combined core revenues of £7.5m in the
period.
· Strong balance sheet with £6.3m of cash (FY23: £12.7m), and
£50m of headroom in £80m Revolving Credit Facility, providing flexibility
for further investment.
· Net debt position(3) of £23.7m (FY23: net cash of £1.7m),
representing comfortable leverage of 1.1x, following spend on acquisitions and
step up in investment.
· Adjusted EPS(2) of 13.2 pence per share (FY23: 12.2 pence per
share), reflecting continued strong profitability. Adjusted EPS benefitted
from the recognition of a £0.8m one-off tax benefit due to improving
financial performance of acquired entities enabling crystallisation of prior
tax losses.
· Final dividend of 2.45 pence per share proposed, resulting in a
full year dividend of 3.65 pence per share, an increase of 5.8% on prior year.
Financial highlights 2024 2023 change
Alternative performance measures
Core(1) revenue £68.9m £56.6m 21.9%
Core SaaS & subscription revenue £44.1m £37.6m 17.3%
Core adjusted EBITDA(2) £21.3m £20.2m 5.6%
Core adjusted EBITDA margin 30.9% 35.7% (480 bps)
Adjusted EBITDA(2) £22.2m £20.5m 8.5%
Adjusted EBITDA margin 28.3% 31.5% (320 bps)
Adjusted EPS(2) 13.2p 12.2p 8.2%
Statutory measures
Statutory revenue £78.3m £64.9m 20.6%
Statutory EBITDA £15.3m £14.4m 6.3%
Statutory EPS 5.7p 6.8p (16.2%)
Net debt / (cash) (3) £23.7m (£1.7m) -
Dividend per share 3.65p 3.45p 5.8%
Strategic and operational highlights - Significant progress
· Sustained growth across Core activities with enhanced earnings
o Significant growth in Core SaaS and Subscription revenue, up 17%
to £44.1m (FY23: £37.6m) supported by acquired portfolio following selective
acquisitions in the year
o Strong growth in software licence revenues driven by expanded
proprietary technology platform and adoption across expanded membership base
and broader market
o Significant growth in Fintech and Research revenues, increasing
14.5% to £25.4m (FY23: £22.3m)
· Four strategic acquisitions and one investment completed in 2024,
and a further acquisition completed in 2025, in line with our strategy to
enhance scale, IP and capabilities through complementary M&A.
o Owen James - strengthening our flagship events programme and data
and insights strategy
o Synaptic Software - expanding Fintel's planning and research tools
into the Protection sector
o ifaDASH - extending Fintel's regulatory technology capabilities to
enable back-office digitisation
o Mortgage Brain - minority investment and enterprise distribution
deal, making its leading CRM, sourcing and submission software available to
Fintel's wide network of advisers
o Threesixty Services - expanding our compliance services offering
for large and medium intermediary businesses and discretionary fund managers
· Rayner Spencer Mills Research - acquisition successfully
completed on 7 January 2025, extending Defaqto's fund research and ratings
platform.
· Continued investment into technology and service platform, with
positive synergies driving organic growth opportunities, including:
o Release of proprietary market intelligence software Matrix 360 (phase 1)
in January 2025, an industry first tool for insurers to optimise product
design and performance. First customers already signed up with a strong
pipeline of future opportunities
o Launch of Fintel IQ proposition in May 2024, offering a customisable,
modular technology and data platform to larger IFA firms in response to market
consolidation
o Extension of Fintel's proprietary technology, data and insight
propositions, leveraging capabilities and datasets acquired through M&A,
including development of:
§ Protection quote and apply platform following the acquisition of Synaptic
Software
§ Digitised back-office solution following the acquisition of ifaDASH
§ Extended product and risk ratings platform to cover financial strength
ratings and tax advantaged products
§ New strategic events series, extending Simplybiz's flagship events
programme
Current trading and outlook - Good start to the new financial year, confident
of further strategic progress
· Strong momentum going into the new financial year, with current
trading in line with the Board's expectations
· The commercial opportunity within the UK market remains strong,
underpinned by the dynamic and fragmented UK financial services sector,
including increasing regulatory requirements and demand for data and insights
as intermediaries and product providers navigate an evolving market
· Signs of an improving housing market following latest interest
rate decision, with the business well placed to benefit from a further
recovery
· Strong pipeline of opportunities following launch of Matrix 360
(phase 1) to the insurance market, with the potential to expand into other
markets
· We are confident of delivering further strategic and financial
progress in 2025, as we focus on ongoing integration of recent acquisitions,
realising further synergies and achieving sustained organic growth
Notes
(1) Core business excludes revenues from panel management and surveying
(2) Adjusted EBITDA and adjusted EPS are alternative performance measures for
which a reconciliation to a GAAP measure is provided in note 8 and note 10
(3) Net debt excludes any adjustment under IFRS 16 "Lease Accounting" and
compares gross cash balances to gross borrowings under the Group's £80m
Revolving Credit Facility.
(4) Like-for-like basis strips out the impact of acquisitions and the changes
in revenue recognition of a software reseller agreement.
Analyst presentation
An analyst briefing is being held at 9:30am on 19 March 2024 via an online
video conference facility. To register your attendance, please
contact fintel@mhpgroup.com (mailto:fintel@mhpgroup.com) .
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
David Anderson
Kamalini Hull
MHP Group (Financial PR) +44 (0) 7710 117 517
Reg Hoare Fintel@mhpgroup.com (mailto:fintel@mhpgroup.com)
Veronica Farah
Lexi Iles
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
(https://protect.checkpoint.com/v2/r06/___http:/www.wearefintel.com___.ZXV3MjpuZXh0MTU6YzpvOjY4ZGY4MGZlOGMwODVhYzkwYWM2YTBhY2U0YjE3YzUxOjc6M2VlNDpjMDI5N2E4MWZhODViYWI4MjQ2YmEzM2IwOTRhNGJiZTg2OWEwMzc0MzhjNmVhNGNjNTBkOTc4Mjg1ZjRjOThjOnA6VDpU)
Chair's statement
Inspiring better outcomes across retail financial services
I am pleased to present our annual report and accounts as Chair of Fintel, a
leading fintech and support services business to the UK retail financial
services sector. Operating at the very heart of a complex and fast-moving
marketplace, we provide critical tools, services and data to inspire better
outcomes for all participants.
Year in review
Having witnessed both material global socio-economic uncertainty and landmark
changes to the UK regulatory environment in the prior year, the year under
review was characterised by further volatility in the UK market, as advisers
prepared for and supported their clients through the impacts of major events,
including the new Government's first UK budget. Against this backdrop, our
role has never been so important, resulting in a solid market for our
services.
Fintel has continued to demonstrate its ability to concurrently deliver
organic and inorganic growth to its shareholders, to be agile when markets are
volatile, and to operate within a restrained risk appetite. We have done so
again across 2024, continuing to deliver progress against our growth strategy
at a balanced pace.
In 2023, the market opportunity for complementary investments, and our
capacity to execute efficiently, were optimally aligned. Having identified
where customers needed further products and services, we invested both
organically and through multiple bolt-on acquisitions to bolster our
capabilities and market reach, supported by our balance sheet.
Strategically, this approach continued into 2024 with four further successful
acquisitions. This allowed us to pivot our focus in the second half onto the
integration of these acquisitions, developing synergies including cross
selling opportunities, and ensuring that our organic financial performance
delivered to plan. Each of these was successfully delivered by the executive
team to the expectations of the Board.
Our acquisition strategy remains clear and will continue to be a key, but a
measured element of our medium-term strategy as we move into the next phase of
growth. We look for technology and data-led businesses which offer cultural
alignment, a strong forward growth profile and, most crucially, a clear place
in the service needs of our expanding client base. Most of all, they must
offer good value to our shareholders in relation to their risk weighted return
profile.
For example, our acquisition of threesixty underscored our commitment and
ambitions in the IFA sector. It is the unparalleled market leader in
compliance for medium and large intermediary businesses and discretionary fund
management firms, and has materially expanded our client base, providing
significant medium-term organic growth opportunities for our products and
services. Equally, taking a minority stake in Mortgage Brain underscores our
long-term commitment to the UK mortgage market, and strategic intent to
disrupt the sector through the deployment of new technologies and data
services over the next market cycle.
Organic growth and development remain our core long-term focus as we develop a
comprehensive service and technology platform for retail financial services.
To sustain momentum, all technology and data-driven businesses need to
innovate, develop products to meet emerging market needs, and adapt in light
of rapidly changing competition. Our financial strength allowed us to do so
across 2024, with a material investment into our product intelligence software
"Matrix" With a focus on the growing insurance market, we are expanding the
data footprint to provide a comprehensive, dynamic view of the market in a
multifaceted solution called "Matrix 360". Since launch in the second half of
2024, we have already signed up six customers and have a strong pipeline of
future partnerships. This underpins our expectations for high margin revenue
and organic growth in this area, and a clear opportunity for Defaqto to be the
market leader in this space.
The advice market is the centrepin of our commercial position, economic
strength, and forward strategy. 2024 continued the macro trends of adviser
consolidation, slow dilution of the 'network' market, and the gradual
reduction of number of small directly authorised advisers. Consumer Duty
adoption materially impacted market activity and is starting to have a
profound effect on the business models in the marketplace. This has created
short-term slowdown in the trend for digital enhancement as operating budgets
and capacity were applied elsewhere, but we will see this come back into focus
in 2025/6. We are absolutely clear on how this marketplace is developing, and
confident that our business model is uniquely equipped to benefit from it.
The UK mortgage sector, whilst solid in 2024, did not rebound to high
watermark activity levels seen in 2022. UK base rate uncertainty and wider
market challenges left a 'muted' mortgage market, with both consumers and
providers operating cautiously across the year. Our business improved on its
robust, if reduced, performance in 2023 and is very well placed for the return
to more normalised market activity levels. We aim to be material strategic
players in this sector going forward.
Our institutional clients in the product provider market have worked with us
extensively to enhance their ability to demonstrate the quality of their
products and services to the market, and to optimise their distribution
strategies. As with the mortgage market, a high degree of caution has resulted
in a 'wait and see' approach by the majority of the larger players as they
look to protect rather than grow their client reach. This can be most easily
seen in the reduction in assets under management ("AUM") inflows in the
platform and asset management markets, with notable exceptions. Our
Distribution as a Service ("DaaS") proposition could not be more relevant to
the market in these circumstances.
Financial performance and dividend
Financially, the business has delivered consistently throughout 2024,
demonstrating the largely recurring nature of its growing revenue streams and
its ability to control operating costs, and invest significantly in its
future. 2024 has demonstrated that Fintel continues to be a highly resilient,
predictable growth engine that operates uniquely in a dynamic market.
We have actively used the strength of our balance sheet to acquire businesses
and through utilising our external banking facilities, without the need to
raise equity. This will provide significant long-term benefits to our
shareholders. We have a comfortable level of leverage of just 1.1x, which is
both within the fiscal capacity of the business and the risk appetite set by
the Board.
The underlying resilience and cash-generative nature of our business have been
clearly demonstrated through our strong financial performance for FY24,
despite the backdrop of uncertainty in capital markets both domestically and
internationally.
Both our revenue and adjusted profit before tax continued to perform in line
with the Board's expectations for the full year. This, coupled with our
continued strong cash flow conversion and balance sheet, has again enabled us
to demonstrate our progressive dividend policy with a further year-on-year
increase of 6%. I am pleased to announce that the Directors are recommending a
final dividend of 2.45 pence per share payable on 18 June 2025, which together
with the interim dividend of 1.2 pence per Ordinary Share, paid in November
2024, results in a full year dividend of 3.65 pence per share.
Progress against our strategy
Our medium-term strategy to: (a) sustain growth across our core activities,
(b) increase our organic investment into our future technology and research
offerings, and (c) take significant advantage of market conditions through a
series of targeted acquisitions, remained.
Each of these reflects our strategic ambition for medium to long-term
profitable growth, and the establishment of a market leading position and
significant market share within our target sectors. We have invested
significantly across 2024, and we will continue to do so across 2025, as we
have clear sight of material and sustainable shareholder value creation
opportunities.
Fintel remains a business with a well-defined strategy, a positive market
environment looking forward, and a team that combines vision with a proven
ability to deliver consistent strategic progress year on year.
Environmental, social and governance ("ESG") commitments
As a purpose-led organisation, we continue to strengthen our environmental,
social and governance ("ESG") commitments, aligning to key external reporting
standards and expanding our internal KPIs as we embed ESG principles across
our operations. With a focus on long-term sustainable value creation for all
of our stakeholders, we are committed to delivering measurable benefits for
our business, the financial sector and broader society.
Board Transition
The Board of Directors has remained stable and unchanged during 2024, whilst
making efforts to build appropriate succession into the underlying business
structure as we head towards planned changes that will take place in 2025.
As announced on 11th February 2025, Joint CEO Neil Stevens has decided to step
down from his executive responsibilities as of 30th June 2025 and will not
stand for reappointment to the Board of Directors at the AGM. Until then, he
will continue in his current role, ensuring an orderly transition to
individuals within the existing executive team in line with the Board's
succession plan.
Following the AGM on 20th May 2025, Joint CEO Matt Timmins will assume sole
responsibility as Chief Executive Officer of Fintel plc, supported by Chief
Financial Officer David Thompson. Together, they will continue to lead as the
Executive Directors of Fintel plc.
With Matt Timmins at the helm, we have an outstanding leader fully equipped to
drive the next phase of our strategic growth. Our strategy is firmly in place,
and we remain focused on executing it with pace and precision to deliver
strong returns for our shareholders.
On behalf of the Board and the entire business, I extend my sincere gratitude
to Neil for his exceptional leadership and vision over the past 20 years. His
immeasurable contribution has defined not only the business we are today, but
our unique market position and future growth opportunities.
I would also like to thank my Board colleagues for their unwavering support,
diligence, and commitment throughout 2024.
Section 172 and stakeholder engagement
We strongly believe that effective stakeholder engagement is one of the keys
to our success, helping the Board and management make better decisions. The
Board recognises its responsibility to understand and consider stakeholder
views as part of its decision-making process and remains committed to
fostering effective business relationships.
External factors
Macroeconomic considerations
The Board remains conscious of and continually monitors the external
environment, assessing how sustained volatility and change impact its ability
to deliver shareholder value. In 2024 we again have witnessed continued
uncertainty on inflation and base rates, each leading to significant and
sustained consumer impact. This was further impacted towards the end of the
year with acute political uncertainty, and material impending change in the
taxation environment likely to compound these underlying risks as we enter
2025.
We remain confident that the mechanisms we have in place ensure ongoing
resilience against this challenging backdrop.
Geopolitical environment
Conflicts in the Middle East and Ukraine continued to weigh heavily on the
market over the last twelve months. This was compounded by political
uncertainty in the UK particularly, but also across Europe and the United
States. We are transitioning at many levels internationally and these directly
correlate to UK financial services at all levels. These geopolitical
uncertainties have a direct impact on the UK financial services market, and we
continue to monitor them closely.
Our risk management process, and the underlying risk appetite set by the
Board, prepare us well to deal with risks as they arise with no materially
negative exposure identified. Our resilience has been clearly demonstrated by
our continued ability to navigate the slowdown in the UK mortgage market, and
by our ability to absorb the material unplanned cost rises that will impact
2025 resulting directly from the UK elections last year.
Annual general meeting
The Company's AGM will be held at Fintel House, St Andrew's Road, Huddersfield
HD1 6NA, on 20 May 2025 at 10:00am (UK time). I look forward again to meeting
shareholders in person at Fintel House.
Outlook
We continue to operate our business in a challenging domestic and
international macroeconomic environment. UK businesses will be absorbing
significant unplanned cost increases this year, and these will have directly
correlated impacts on both its commercial activities and, indeed, business
models in many cases.
I am, however, confident that the UK financial services sector will continue
to offer clear growth opportunities, most particularly in the sub-sectors of
technology and data analytics. It is probable, if not certain, that we will
see a resurgence of activity in the mortgage sub-sector alongside these. As
such, we are strongly positioned to take advantage of this emerging landscape,
leveraging our existing client relationships, and forming new and significant
ones in the year ahead.
We will deliver on our appetite for controlled revenue growth, revenue
diversification, margin improvement, and ultimately, the enhancement of
shareholder returns across the coming year. We have the leadership, talent
base, product set, and financial strength to execute with pace and clarity.
Our business is powered by the ingenuity and dedication of our people across
each of our activities and brands, and on behalf of the Board, I would like to
express our immense gratitude to those very people who generate the true value
for our investors.
Equally, our gratitude extends to all of our client and supplier
relationships, the vast majority of which are long-term and built on the
mutual respect for each other's business.
Phil Smith
Non-Executive Chair
18th March 2025
JOINT CHIEF EXECUTIVE OFFICERS' STATEMENT
2024 has been a seminal year for Fintel, marked by continued strategic
advancements and strong financial performance. The Company has delivered
robust results, with complementary acquisitions contributing to substantial
growth in SaaS and subscription-based revenues.
We have expanded the Fintel Group by welcoming four new businesses in 2024,
with the previously announced acquisition of RSMR successfully completing in
January 2025. These strategic acquisitions, combined with ongoing investments
in our proprietary technology and data solutions, have enhanced our
intellectual property, scale, and market presence, laying the foundation for
sustained organic growth.
Looking ahead, we remain confident in our ability to achieve further progress.
Our comprehensive technology platform is well positioned to capitalise on
numerous growth opportunities within the fragmented retail financial services
sector and we see material opportunities for value creation leveraging our
extensive data footprint.
During a year of continued macroeconomic uncertainty and ongoing investment to
expand our products, services and capabilities, our total revenues grew 20.6%
to £78.3m (FY23: £64.9m), while our adjusted EBITDA(2) grew 8.5% to £22.2m,
(FY23: £20.5m), and adjusted EBITDA margin of 28.3% (FY23: 31.5%), in line
with Board expectations.
Strategic priorities
Our strategic priorities focus on driving growth, enhancing margins, and
improving the quality of our core revenues in line with our medium-term
objectives. To achieve these goals, we maintain a balanced approach, fostering
sustainable growth across our core propositions and expanded customer base,
investing organically in our technology and research platform, and pursuing
inorganic investments to expand our scale, intellectual property, and
capabilities.
During early 2024, we leveraged our financial agility to capitalise on
favourable M&A market conditions and execute our inorganic growth
strategy. In the second half of the year, we focused on driving organic value,
expanding our leading research platform, identifying positive synergies
following acquisitions, and enhancing the scope of our innovative market and
product intelligence software through an investment of £2.7m.
Looking ahead, we see significant opportunities to consolidate a fragmented
market landscape, maximising our unique market position to increase market
penetration in our target sectors and deliver material and sustainable
shareholder value.
Strategic delivery - sustained growth across our core activities
We remain focused on scaling our core business and enhancing the quality of
our revenues. Our strategic objectives balance sustainable growth with
reinvesting in our core capabilities as we continue to digitise and enhance
our service and technology platform.
Core revenue growth
Objective: core business revenue growth of 5-7% annually.
Our core business delivered a positive performance, with revenues rising 21.9%
to £68.9m (FY23: £56.6m), driven by £15m in revenue (FY23: £1.5m) from our
acquired portfolio, alongside significant scaling of our fintech and product
ratings revenues.
On a like-for-like4 basis, core organic revenue increased by 2% (LfL: FY24:
£52.6m; FY23: £51.7m), stripping out the impact of acquisitions and the
gross-to-net recognition of revenue on a re-contracted software re-seller
agreement.
EBITDA margin
Objective: core EBITDA margin of 35-40%.
During a year of sustained investment in our scale, services, and
capabilities, our core business achieved 5.6% adjusted EBITDA² growth,
reaching £21.3m (FY23: £20.2m), with an EBITDA margin of 30.9% (FY23:
35.7%). Excluding acquisitions, the core margin on an organic basis improved
slightly to 36.1%, reflecting growth in fintech and research sales offset by
additional investment in Matrix 360 product development and Fintel IQ
Enterprise sales infrastructure. The acquisitions have been dilutive to
EBITDA margin in 2024 as expected, with the realisation of synergies and
enterprise sales expected to offset this in the coming years.
Earnings quality
Objective: 70-80% of core revenue from SaaS and subscriptions.
Core SaaS and Subscription revenue increased 17.3% to £44.1m (FY23: £37.6m),
representing 64% (FY23: 66%) of core revenues. Key drivers included recurring
revenue streams acquired through recent acquisitions, with additional growth
fuelled by deeper strategic partnerships and scaling of our Distribution as a
Service "DaaS" proposition. The strong growth in non SaaS and subscription
revenue, mainly from ratings and marketing services, results in an overall
slightly lower percentage mix. We continue to focus on driving quality
recurring revenues through our acquired portfolio that further enables
enterprise level sales.
Organic and inorganic investment to capitalise on growth opportunity
The UK retail financial services market is competitive, independent, and
offers consumers a wide range of choices and value. However, it remains
complex and fragmented, with thousands of products from hundreds of providers,
distributed through numerous intermediaries, all within an evolving regulatory
landscape.
In this dynamic environment, Fintel delivers technology and services to
financial product manufacturers, intermediaries, and consumers. With extensive
sector reach and unique market insight powering distribution and informing
product design we are well positioned for sustained growth. Our clear growth
strategy, underpinned by structural market trends, integrates diverse and
recurring revenue streams with a proven ability to adapt to industry shifts,
meet customer needs, and innovate. This approach unlocks significant
opportunities for both organic and acquisitive growth, enhances revenue
quality, and drives sustainable value creation for all stakeholders.
Rising tide of regulation
The UK financial services regulatory landscape is continuously evolving,
requiring firms to adapt swiftly and efficiently while maintaining
profitability. These regulatory changes are increasing pressure on financial
intermediaries and product providers, driving demand for dynamic compliance
and operational solutions.
In response to this need and the ongoing consolidation in the intermediary
market, we expanded our compliance services for medium to large firms and
discretionary fund managers through the acquisition of threesixty,
significantly extending our market reach to its highest level yet. We also
strengthened our regulatory technology capabilities with the acquisition of
ifaDASH. The increased visibility and transparency ifaDASH offers to a heavily
regulated market will prove immensely valuable for advisers, particularly
since the implementation of the Consumer Duty, and will enable us to embed and
further develop digitised compliance solutions. Leveraging our recently
acquired dynamic learning platform, Competent Adviser, we also developed two
new regulatory learning academies and enhanced our flagship event programme
through collaboration with our recently acquired strategic events provider
Owen James. As intermediaries continue to adapt to and embed the Consumer
Duty regulatory requirements, we extended the provision of our Elevation
client feedback tool, integrating it with Plannr CRM to help users action
client feedback more effectively. The tool now supports more than 7000
intermediaries to collect client feedback and use this is evidencing their
regulatory requirements.
With 200 in-house specialists, an expanding regulatory technology capability
and the most comprehensive compliance service platform available, we are
firmly positioned to meet evolving needs across the intermediary market and
continue benefiting from the tailwind of regulatory change.
Product value as important as price
The UK financial services market provides a wide range of products, offering
consumers extensive choice. However, this variety also introduces complexity,
particularly for today's well-informed consumers. With growing regulatory
requirements to demonstrate suitability, the emphasis on quality and
appropriateness has become increasingly important for both consumers and
intermediaries when making financial decisions.
Defaqto Star Ratings provide an independent, expert assessment of a product's
features and benefits. Recognised by 98% of intermediaries, they are also
trusted by consumers, with 89% of people more likely to choose a Defaqto rated
product. In 2024 we extended our consumer reach through content partnerships
with The Times, The Sunday Times, and Times Money Mentor to provide Best Buy
content and expert insights. We also introduced the Defaqto Awards, which
evaluate insurance product providers based on product quality and service
standards, reinforcing Defaqto's reputation for expertise and independence.
With the UK's largest financial product database, mapping over four million
product features, and a widely recognised expert ratings brand, Defaqto Star
Ratings influence an estimated 55 million consumer financial decisions. We see
significant opportunities to expand our Star Ratings insights in line with
market needs, capitalise on our unique position in this space, and integrate
these insights within our broader technology solutions and financial planning
journeys.
Demand for data and insights
With the rise of digital product distribution and increasing regulatory focus
on suitability and fair value, the demand for high-quality financial data
throughout the product lifecycle has never been stronger. As a central player
in the retail financial services market, we provide data and insight services
across the entire value chain-empowering consumers to make informed financial
decisions, enabling intermediaries to recommend suitable products, and
supporting providers in designing and distributing better offerings.
In this evolving landscape, our opportunity is to develop data led services
that help the market operate more efficiently, using our extensive data
footprint to inform proposition design. In 2024 we delivered the first release
of Matrix 360, an industry first market and product intelligence software
enabling insurers to target, develop and improve their products using a single
source of intelligence. With six partnerships signed in the first quarter
following its release, we see a clear need in this area and continue to
develop the Matrix 360 data capabilities. We also expanded our data services
by launching a mortgage portal and introducing Pulse, a digital insights
service that tracks strategic themes within the intermediary market. Pulse is
delivered through Owen James, our recently acquired strategic events provider.
By integrating new data sets and methodologies from our acquisitions of MICAP
(independent research on tax-advantaged products) and AKG (financial strength
assessments), we have enhanced our product ratings coverage, further
solidifying our leadership in independent product ratings and research within
the UK retail financial services market.
As we continue to realise synergies from these acquisitions and scale our data
and technology platform, we see significant opportunities to enrich our
services and expand our market presence in this rapidly growing sector.
Demand for flexible, integrated technology
The consolidation of the intermediary market is increasing the demand for
flexible, modular operating systems. As advisers rely on multiple software
solutions, seamless integration and scalability have become essential for
driving efficiency.
Our belief is that connected technology and integrated services will form the
bedrock of modern advice, providing access to quality, real-time data,
centralised data and insights and workflows. In this context, our goal is to
lead innovation in the sector through the expansion of our service and
technology platform, delivering products and solutions that create value and
streamline operations for our clients and the broader market. Driven by our
purpose, in 2024, we continued to enhance and integrate our technology
platform, improving the solutions available to both our members and the wider
market. We secured an enterprise deal with Mortgage Brain, enabling our
members to access leading mortgage sourcing and submission software as part of
our integrated platform. Additionally, we will continue investing in Mortgage
Brain's product roadmap, ensuring its solutions remain at the cutting edge of
the industry.
We also upgraded our proprietary financial planning software, enhancing the
user experience and interface, and launched Fintel IQ, a customisable, modular
platform designed for larger intermediary firms in response to market
consolidation.
Looking ahead, we remain committed to investing in our technology platform,
helping financial intermediaries operate more efficiently while increasing
value per customer. As we enhance and integrate our technology, we see
significant opportunities for growth across our expanded client base and the
broader market.
Value generation
Our financial resilience, driven by a diverse customer base, high quality
recurring revenue streams, disciplined cost control, and strategic investments
in growth, allows us to expand our offerings and revenue streams despite an
uncertain macroeconomic environment.
By leveraging our cash-generative business model and substantial revolving
credit facility, we have successfully executed our selective M&A strategy.
This has further strengthened our revenue streams, enhanced earnings, and
extended our medium-term growth opportunities, delivering value for all
stakeholders.
We continue to invest in our people, data, and digital capabilities. This
commitment enhances our technology, knowledge, and IP while delivering
valuable services to customers, supporting our people and ensuring responsible
operations to build a strong foundation for sustainable growth. Our strong
adjusted earnings per share "EPS" performance of 13.2 pence per share (FY23:
12.2 pence) demonstrates our profitability and commitment to delivering
shareholder value, while making significant investments throughout the year.
This is reinforced by our progressive dividend policy.
On a statutory basis, EPS was 5.7 pence per share (FY23: 6.8 pence),
reflecting the impact of substantial investment in system transformation,
positioning us for long-term growth and efficiency.
Ensuring better outcomes
Fintel's purpose of inspiring better outcomes is at the centre of everything
we do. Launching our holistic environmental, social and governance strategy in
2022, we cemented our long-term commitment to sustainable value creation for
all of our stakeholders. In 2023 we focused on integrating ESG principles
within our operations to drive measurable change in our business, our industry
and wider society with our progress recognised by the ICA Compliance Awards
2023, seeing us shortlisted as a finalist for the "ESG Initiative of the Year"
award. In 2024 we have continued to embed our ESG commitments, gaining
industry recognition again as a finalist for the Diversity Award and winner
the Sustainability Initiative of the Year at the MoneyAge Awards 2024.
During the year we also conducted a refreshed materiality assessment, an
important step in making sure that we continue to focus on the areas that are
most important to our stakeholders as we reinforce our long-term commitment.
Our people
As we scale our business, we remain committed to investing in our people,
recognising that our team is the bedrock of our continued success. With a
focus on creating an engaging and inclusive workplace, where everyone can
thrive, we actively monitor and respond to employee feedback and needs.
We are proud that this approach has once again been recognised, with our
inclusion in the top 20 "Best Companies to Work For" in financial services,
voted for by our people, and our shortlisting for the Diversity Award at the
MoneyAge Awards 2024.
Outlook
We have entered 2025 with strong momentum, successfully acquiring RSMR, one of
the UK's most recognised fund ratings and research agencies and securing six
new customers following the release of our market intelligence software,
Matrix 360 (phase 1).
Our core business remains robust, with pressures in the UK housing market
being offset by growth in SaaS and Subscription revenues, driven by selective
M&A, as well as increasing fintech software revenue, software licence
sales, and product ratings revenue.
Our expanded market position, diverse customer base, and recurring revenue
streams provide resilience against macroeconomic uncertainty, while we
continue to benefit from structural growth drivers such as increasing
regulatory requirements under FCA Consumer Duty and rising demand for data and
insights across the retail financial services sector.
Looking ahead, we are confident in executing our growth strategy, delivering a
comprehensive service platform for UK retail financial services, and
consolidating the fragmented fintech market to enhance our future earnings,
proposition, and growth opportunities, ultimately inspiring better outcomes
for all.
FINANCIAL REVIEW
Year ended 31 December 2024
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Group revenue 78.3 64.9
Expenses (56.1) (44.4)
Adjusted EBITDA 22.2 20.5
Adjusted EBITDA margin % 28.3% 31.5%
Depreciation (0.4) (0.4)
Depreciation of leased assets (0.5) (0.4)
Amortisation of development expenditure and software (1.5) (1.3)
Adjusted EBIT 19.8 18.4
Operating costs - non underlying (5.9) (4.4)
Gain on disposal of equity investment 0.2 -
Impairment on sale of operations (0.1) (0.2)
Share option charges (1.1) (1.5)
Amortisation of other intangible assets (3.2) (2.2)
Net finance costs (2.0) (0.5)
Profit before tax 7.7 9.6
Taxation (1.4) (2.2)
Profit after tax 6.3 7.4
Adjusted earnings per share* ("EPS") 13.2 12.2
* Adjusted EPS excludes non-underlying costs and amortisation of
intangible assets arising on acquisition, divided by the average number of
Ordinary Shares in issue for the period.
Revenue
Our core business delivered strong performance, with revenues rising 21.9%
to £68.9m (FY23: £56.6m), driven principally by £15m in revenue (FY23:
£1.5m) from our acquired portfolio.
On a like-for-like basis, core organic revenue increased by 1.8% (LfL: FY24:
£52.6m; FY23: £51.7m), removing the impact of the portfolio of eight
acquisitions made since July 2023 and the gross-to-net recognition of a
re-contracted software seller agreement, which has been recognised on a net
basis since May 2023.
Statutory revenue increased circa 20.6% to £78.3m (FY23: £64.9m) with the
non-core business performing in line with expectations with revenues up 12.4%
to £9.4m (FY23: £8.4m).
In line with the Group's strategy, four acquisitions were successfully
completed during the year, broadening our reach into adjacent markets and
strengthening our scale, intellectual property, and overall offering. The
total inorganic revenue recognised from acquisitions made in 2023 and 2024
amounted to £15.0m (FY23: £1.5m). We refer to these as inorganic as a
whole in the current year to allow the holistic effect of our strategic
M&A programme over the last 18 months to be seen separately from the
existing business. We expect these acquisitions to contribute well to
organic growth in 2025. In total we have invested £31.7m net cash
consideration as at the balance sheet date for this acquired portfolio of
eight companies, and their contribution to Adjusted EBITDA in the year to 31
December 2024 was £2.7m, highlighting the value accretive nature of our
M&A strategy to date.
Mortgage activity remains profitable, and H2 2024 saw some market recovery
with signs of continued stabilisation, while a full return to previous
performance levels is expected by 2026 as the UK housing market normalises
throughout 2025.
Ensuring a consistent improvement in the quality and visibility of our
earnings is a key strategic focus of the Group and we continued to deliver
significant progress. SaaS and subscription-based revenues grew 17.3%
to £44.1m (FY23: £37.6m), with 64% SaaS and subscription income in the
core business (FY23: 65%).
31 Dec 24 31 Dec 23 Change Change
Core organic revenue ex. Mortgage commissions £48.6m £47.7m £0.9m 2.0%
Core organic revenue from mortgage commissions £4.0m £4.0m - -
Core organic revenue, like-for-like basis(*) £52.6m £51.7m £0.9m 1.8%
Core organic revenue from software reseller agreements £1.3m £3.4m (£2.1m) (59.8%)
Total core organic revenue £53.9m £55.1m (£1.2m) (2.0%)
Core revenue from acquisitions £15.0m £1.5m £13.5m n/a
Total core revenue £68.9m £56.6m £12.3m 21.9%
* Like-for-like basis strips out the impact of acquisitions and the changes in
revenue recognition of a software reseller agreement.
Divisional performance
Intermediary Services
Our Intermediary Services division provides compliance and business services
to financial intermediary firms through a comprehensive membership model.
Members, including financial advisers, mortgage advisers and wealth managers,
are regulated by the FCA.
Intermediary Services revenue increased by 30.5% to £29.1m (FY23: £22.4m).
Excluding revenue from acquisitions and the impact of changes to contractual
terms in the software reseller agreement, underlying revenue saw a slight
decline during 2024 (LfL: FY24: £17.4m, FY23: £18.3m) predominantly relating
to the anticipated fall in compliance membership fees as we experienced the
short term effect of industry consolidation taking place. This further
underpins our strategic rationale for the acquisition of threesixty services,
thereby growing our membership revenues inorganically by £3.4m, or 29%, and
validates our wider strategy for Enterprise licence sales to support the
consolidators.
The Intermediary Services division is well positioned to continue benefiting
from increasing regulatory changes, including the Consumer Duty regulation,
with demand for services driving growth across a number of its key revenue
lines.
Fintel has made five acquisitions into the Intermediary Services division
since July 2023, contributing combined inorganic revenues of £10.3m (FY23:
£0.8m) broken down as £3.9m from membership fees, £5.2m from software
license income, and £1.2m from other services. These acquisitions contributed
a total gross profit of £0.7m in FY24 (FY23: £0.3m).
In 2024 the Intermediary Services division delivered:
· membership fee income of £15.0m (FY23: £11.8m) - an increase
of 27.1% driven by the acquisition of Threesixty and Competent Advisor, with
organic compliance membership fees down 5% by £0.6m;
· software licence income of £7.0m (FY23: £3.7m) - includes the
change in contractual terms of primary software reseller agreement now
recognised on a net basis through revenue since May 2023, and £5.2m of
inorganic revenue from VouchedFor and Synaptic acquisitions. Organic
software licence income remained stable year-over-year.
· additional services income of £7.1m (FY23: £6.1m) - an
increase of 14.7% driven by acquisition of VouchedFor and Threesixty.
· gross profit* of £11.2m (FY23: £10.9m) with gross profit
margin** of 38.7% (FY23: 48.9%).
* Gross profit is calculated as revenue less direct operating costs.
** Gross profit margin is calculated as gross profit as a percentage of
revenue.
Distribution Channels
The Distribution Channels division delivers data, distribution and marketing
services to product providers.
Distribution Channels revenues grew by 16.6% to £23.8m (FY23: £20.2m). Core
distribution revenue grew by 19.5% to £14.4m driven by £2.1m revenue from
acquisitions (Owen James) and £0.4m organic growth. We continue to scale
our Distribution as a Service ("DaaS") offering into adjacent markets and
extending our partnerships, as we convert our revenue to long term
subscription agreements with 80.3% of partner revenue converted to DaaS.
In 2024 Distribution Channels delivered:
· core commission revenues of £6.8m (FY23: £6.8m), reflecting a
similar performance year on year as the UK housing market began to show
stability from mid-2024;
· organic marketing and other services revenues of £5.5m (FY23:
£5.1m) - an increase of 7.8%, as we see the continued conversion of product
provider revenue to long-term subscription agreements with DaaS revenues of
£4.3m (FY23: £3.7m), an increase of 14.8%;
· inorganic marketing and events revenues of £2.1m from the
acquisition of Owen James;
· non-core panel management and valuation services revenues of
£9.4m (FY23: £8.4m) - an increase of 12.4% reflecting a stabilising UK
housing market during 2024; and
· Gross profit of £9.0m (FY23: £7.6m) with gross profit margin of
37.8% (FY23: 37.8%).
Fintech and Research
Fintech and Research includes our Defaqto business and provides market-leading
software, financial information and product research to product providers and
financial intermediaries.
Fintech and Research revenues of £25.4m (FY23: £22.3), an increase of 14.5%
driven by acquisitions of AKG and MICAP and ongoing product enhancement and
capabilities.
We further enhanced our Fintech and Research capabilities, accelerating
deployment of our proprietary financial planning software, and expanding our
research and ratings platform, including the launch of Matrix 360 providing
more informed financial insight to product providers.
Fintel acquired MICAP and AKG during 2023 and in the year contributed combined
revenues of £2.6m (FY23: £0.7m) in product ratings revenue, and gross profit
of £0.7m (FY23: £0.2m).
In 2024 Fintech and Research division delivered:
· Software revenue of £11.0m (FY23: £10.7m) - an increase of
2.8%;
· Product ratings revenue of £12.6m (FY23: £10.1m) - an increase
of 24.8%;
· Other income of £1.8m (FY23: £1.5m) from consultancy and ad
hoc work; and
· Gross profit of £15.5m (FY23: £14.2m) with a gross profit
margin of 60.8% (FY23: 63.4%).
Profitability
Adjusted EBITDA remains strong at £22.2m (FY23: £20.5m), increasing by 8.5%.
Our core business delivered a solid overall adjusted EBITDA margin of 30.9%
(FY23: 35.7%). Excluding acquisitions, the core margin on an organic basis
improved slightly to 36.1%, reflecting growth in fintech and research sales
offset by a slight decline in core organic membership fees and costs relating
to the launch of Fintel IQ, the industry's first connected technology and
workflow platform. The acquisitions have been dilutive to EBITDA margin in
2024 as expected, with the realisation of synergies and enterprise sales
expected to offset this in the coming years.
The adjusted EBITDA in our core business has also performed well, increasing
5.6% to £21.3m (FY23: £20.2m). The core adjusted EBITDA is the adjusted
EBITDA calculated above excluding the trading results of our non-core property
surveying business.
The business continues to deliver towards medium-term targets and is well
positioned for continued scalable growth.
Adjusted EBITDA margin is calculated as adjusted EBITDA (as defined in note
8), divided by revenue. Whilst adjusted EBITDA is not a statutory measure, the
Board believes it is a highly useful measure of the underlying trade and
operations, excluding one-off and non-cash items.
Non-underlying adjustments
The operating charge to the income statement in respect of non-underlying
items of £9.0m (FY23: 6.8m) includes the following:
· operating expenses of £5.9m, including:
o £4.0m M&A-related costs - consisting of professional advisory fees on
completed and pipeline acquisitions and fair value adjustments of contingent
consideration;
o £0.8m employee restructuring costs relating to M&A synergies;
o £0.5m transformation costs - implementation costs to enhance Fintel's
customer relationship management ("CRM") platform and a new enterprise
resource planning ("ERP") system, both of which went live in April 2024;
o £0.6m award related costs; and
· £3.2m amortisation of other intangible assets relating to
intangibles acquired on acquisition;
· (£0.2m) gain on sale of equity divestment; and
· £0.1m reduction in contingent deferred consideration receivable
from the previous disposal of a subsidiary in 2021.
Non-underlying interest adjustments include (£0.3m) net interest unwind on
contingent consideration.
No other costs have been treated as non-underlying.
Share-based payments
Share-based payment charges of £1.1m (FY23: £1.5m) have been recognised in
respect of the options in issue and include the IFRS 2 cost of the long-term
growth incentive plan issued on 18 August 2023.
Financial income and expense
Finance income of £0.4m (FY23: £0.3m) relates to interest earned on surplus
cash on short term deposits.
Finance expenses of £2.4m (FY23: £0.8m) include interest costs on the
drawn portion of the RCF, interest on leasing arrangements and the commitment
fee for the unutilised facility.
Taxation
The underlying effective tax rate of 21.5% for the period (FY23: 20.7%)
includes the estimated beneficial impact of research and development claims
for Defaqto and recognition of a £0.8m one-off tax benefit due to improving
financial performance of acquired entities enabling crystallisation of prior
tax losses. As significant UK corporation tax paying Group, we settle our
liability for corporation tax on a quarterly basis in advance and have paid
c.£3.5m (FY23: £2.8m) in corporation taxes evenly throughout the year.
Earnings per share
Earnings per share has been calculated based on the weighted average number of
shares in issue at each balance sheet date. Adjusted EPS in the period
amounted to 13.2 pence per share (FY23: 12.2 pence per share) reflecting
strong profitability of the underlying business. Adjusted EPS benefitted
from the recognition of a £0.8m one-off tax benefit due to improving
financial performance of acquired entities enabling crystallisation of prior
tax losses. Statutory earnings per share in the period amounted to 5.7 pence
per share (FY23: 6.8 pence per share).
Cash flow and closing cash position
At 31 December 2024 the Group reported a robust liquidity position, featuring
a total cash balance of £6.3m (FY23: £12.7m), and £50m of headroom (FY23:
£69m) in the £80m revolving credit facility.
The Group reported a net debt position of £23.7m (FY23: net cash of £1.7m),
representing comfortable leverage of 1.1x, following significant spend on
acquisitions in 2024 and continued organic investment.
Underlying operating cash flow conversion was strong at 78% (FY23: 88%),
despite a significant increase in development expenditure to £5.4m (FY23:
£4.5m). This is calculated as underlying cash flow from operations as a
percentage of adjusted operating profit. Underlying cash flow from operations
is calculated as adjusted operating profit, adjusted for changes in working
capital, depreciation, amortisation, CAPEX and share-based payments. A
reconciliation of free cash flow and underlying cash flow conversion is
provided in note 9 to the financial statements.
The Group's significant capitalised development expenditure, M&A and
transformation costs impact the Group's cash generation.
Financing
The Group has a revolving credit facility ("RCF") committed through to
December 2026 following a refinancing in 2022. The facility limit is £80.0m
with an additional uncommitted "accordion" facility of up to £20.0m. At 31
December 2024, £30.0m of the RCF was drawn (FY23: £11m).
The Group is subject to two financial covenants which are reviewed quarterly.
At 31 December 2024, there was significant headroom and facility interest
cover and net debt to EBITDA covenants were comfortably achieved:
Covenant Position as at
Covenant Requirement 31 December 2024
Interest cover >4.0:1 12.6:1
Leverage <3.0:1 1.1:1
Acquisitions
Investments in four acquisitions were made during 2024 of £16.6m (net of cash
acquired of £4.4m). Upfront consideration of £21.0m for these four
acquisitions was part funded from cash reserves and from the Group's £80m
revolving credit facility.
During the year ended Synaptic Owen James Newdez Threesixty Total
31 December 2024
£m £m £m £m £m
Cash consideration 5.1 0.8 0.5 14.6 21.0
Less: net cash acquired (1.5) (0.2) - (2.7) (4.4)
Net investing outflow in respect of acquisitions completed in the year 3.6 0.6 0.5 11.9 16.6
Transaction costs and expenses paid 0.2 0.1 0.1 0.9 1.3
Total cash outflow in respect of acquisitions completed in the year 3.8 0.7 0.6 12.8 17.9
For each acquisition the fair value of contingent consideration at the
acquisition date represents the estimated most likely pay-out based on
management's forecast of future trading and performance discounted at the
Group's incremental borrowing rate. The fair value of deferred consideration
at the acquisition date of £0.5m represents the amount payable discounted at
the Group's incremental borrowing rate.
On 16 July 2024, we announced a conditional agreement to acquire 70% of Rayner
Spencer Mills Research Limited ("RSMR"), a UK-based company specialising in
providing independent investment research, ratings, and support to financial
advisers, investment professionals, and financial services firms. The
remaining 30%, owned by management, will be acquired over the following 24
months, subject to price and performance. Regulatory approval was granted in
late December 2024, and the acquisition was successfully completed on 7
January 2025, for an initial net cash consideration of £5.2m.
Transactions relating to acquisitions completed in 2023
During the year £1.8m was paid to satisfy deferred and contingent obligations
relating to companies acquired during 2023.
Capital allocation
The Group's priority is to strike a balance between sustaining the core
business, pursuing growth through acquisitions and delivering value to
shareholders. Strategic initiatives include organic investment in enhancing
and broadening our product offering; and inorganic investment in strategically
aligned acquisitions. The Group manages its capital structure through regular
review by the Board ensuring alignment with the Group's objectives and
responsiveness to changing market conditions. If the Group needs to adjust
its policy, we retain an agile approach in order to meet the ever-changing
needs of our business and market.
Dividend
During the year the Company paid the final dividend in respect of FY23 of
£2.4m, and an interim dividend in respect of FY24 of £1.3m. The Board is
proposing a full year dividend in respect of FY24 of 3.65 pence, an increase
of 5.8% on the FY23 dividend of 3.45 pence. The proposed final dividend of
2.45 pence (FY23: 2.35 pence) reflects the Group's strong business performance
and cash generation during the year. The dividend is payable on 18 June 2025,
to shareholders on the register on 23 May 2025 with an ex-dividend date of
22 May 2025, subject to shareholder approval at the Company's annual general
meeting.
Accounting policies
The Group's consolidated financial information has been prepared consistently
in accordance with UK-adopted International Accounting Standards ("UK-adopted
IAS"). The Group applied for the first time certain standards and amendments,
which are effective for annual periods beginning on or after 1 January 2024.
Their adoption is not expected to have a material effect on the financial
statements.
Going concern
The Directors have undertaken a comprehensive assessment to consider the Group
and Company's ability to trade as a going concern for a period of 18 months to
30 September 2026.
The Directors have tested the going concern assumption in preparing these
financial statements, considering a number of severe but plausible downside
scenarios reflecting the Group's base plan adjusted for severe but plausible
impacts from the Group's principal risks, which would collectively be
considered remote. The Group's central planning scenario reflects a balanced
projection aligned to the Group's strategy, a balanced assumption for economic
uncertainty and capital expenditure and dividends and an appropriate
reflection of the impact of recent acquisitions. As a sensitivity, this
central planning scenario has been flexed to reflect the aggregation of severe
impacts arising linked to our principal risks which in total represents a 15%
downgrade to revenues from the Group's central planning scenario in the 18
month period to September 2026, in comparison to the base case with no
decrease in forecast costs, as well as the associated consequences for EBITDA
and cash. In each of the severe but plausible downside scenario the Group
continues to have available cash and remains in compliance with covenants on
the revolving credit facility. The board consider any scenario which would
lead to a breach of covenants or absence of liquidity to be remote given
current trading performance.
The Group had available cash of £6.3m as at 31 December 2024. In addition,
the Group has access to a £80m revolving credit facility which matures in
December 2026, £30m is drawn at 31 December 2024. The Group expects to
continue to rely on the facility throughout the going concern period. The
Group is in compliance with the covenants for the revolving credit facility as
at 31 December 2024. Details of cash, borrowings and facilities are set out in
notes 22 and 24 to the financial statements. Whilst outside of the going
concern assessment period, the Group have considered renewal of the revolving
credit facility ahead of maturity in December 2026 and are confident that this
will be available based upon the recent financing discussions and given the
time available to complete refinancing.
On the basis of the Group and Company's current and forecast profitability and
cash flows, and the availability of committed funding, the Directors consider
and have concluded that the Group and Company will have adequate resources to
continue in operational existence for the going concern period to September
2026. As a result, they continue to adopt a going concern basis in the
preparation of the financial statements.
David Thompson
Chief Financial Officer
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2024
2024 2024 2023 2023
2024 Underlying Year ended 2023 Underlying Year ended
Underlying adjustments* 31 December Underlying adjustments* 31 December
Note £m £m £m £m £m £m
Revenue 6 78.3 - 78.3 64.9 - 64.9
Operating expenses 6.7 (59.6) (5.9) (65.5) (48.0) (4.4) (52.4)
Amortisation of other intangible assets 12 - (3.2) (3.2) - (2.2) (2.2)
Gain on sale of equity investment 7 - 0.2 0.2 - - -
Impairment on disposal of operations 7 - (0.1) (0.1) - (0.2) (0.2)
Group operating profit/(loss) 18.7 (9.0) 9.7 16.9 (6.8) 10.1
Finance income 9 0.3 0.1 0.4 0.3 - 0.3
Finance expense 9 (2.0) (0.4) (2.4) (0.8) - (0.8)
Profit/(loss) before taxation 17.0 (9.3) 7.7 16.4 (6.8) 9.6
Taxation (2.9) 1.5 (1.4) (3.4) 1.2 (2.2)
Profit/(loss) for the financial year 14.1 (7.8) 6.3 13.0 (5.6) 7.4
Profit attributable to shareholders:
Owners of the Company 5.9 7.1
Non-controlling interests 0.4 0.3
6.3 7.4
Earnings per share - adjusted (pence) ** 10 13.2 12.2p
Earnings per share - statutory (pence) ** 10 5.7p 6.8p
There are no items to be included in other comprehensive income in the current
year or preceding year.
* Underlying adjustments are detailed in note 7 of the financial
statements.
** Earnings per share measure is for both basic and diluted measures, as
detailed in Note 10.
Consolidated statement of financial position
as at 31 December 2024
31 December 2024 31 December 2023
Note £m £m £m £m
Non-current assets
Investments 2.7 1.2
Property, plant and equipment 11 1.2 1.2
Lease assets 11 2.2 2.2
Intangible assets and goodwill 12 139.0 118.2
Trade and other receivables 2.2 1.5
Total non-current assets 147.3 124.3
Current assets
Trade and other receivables 13.2 10.2
Current tax asset 2.3 -
Cash and cash equivalents 6.3 12.7
Total current assets 21.8 22.9
Total assets 169.1 147.2
Equity and liabilities
Equity
Share capital 15 1.0 1.0
Share premium account 15 67.4 67.0
Other reserves 17 (52.7) (50.0)
Retained earnings 86.0 84.6
Equity attributable to the owners of the Company 101.7 102.6
Non-controlling interest 0.3 0.3
Total equity 102.0 102.9
Liabilities
Current liabilities
Trade and other payables 21.1 20.9
Contingent consideration 6.0 -
Lease liabilities 14 0.5 0.4
Total current liabilities 27.6 21.3
Non-current liabilities
Loans and borrowings 14 30.0 10.7
Contingent consideration 0.7 5.1
Lease liabilities 14 1.4 1.5
Deferred tax liabilities 7.4 5.7
Total non-current liabilities 39.5 23.0
Total liabilities 67.1 44.3
Total equity and liabilities 169.1 147.2
Consolidated statement of changes in equity
for the year ended 31 December 2024
Share Share Other Non- Retained Total
controlling
capital premium reserves interest earnings equity
£m £m £m £m £m £m
Balance at 1 January 2023 1.0 66.8 (51.3) 0.5 80.8 97.8
Total comprehensive income for the year
Profit for the year - - - 0.3 7.1 7.4
Total comprehensive income for the year - - - 0.3 7.1 7.4
Transactions with owners, recorded directly in equity
Issue of shares - 0.2 - - - 0.2
Dividends - - - (0.5) (3.5) (4.0)
Share option charge - - 1.5 - - 1.5
Release of share option reserve on exercise - - (0.2) - 0.2 -
Total contributions by and distributions to owners - 0.2 1.3 (0.5) (3.3) (2.3)
Balance at 31 December 2023 1.0 67.0 (50.0) 0.3 84.6 102.9
Balance at 1 January 2024 1.0 67.0 (50.0) 0.3 84.6 102.9
Total comprehensive income for the year
Profit for the year - - - 0.4 5.9 6.3
Total comprehensive income for the year - - - 0.4 5.9 6.3
Transactions with owners, recorded directly in equity
Issue of shares - 0.4 - - - 0.4
Dividends - - - (0.4) (3.7) (4.1)
Share option charge - - 1.1 - - 1.1
Exercise of Value Builder Plan - - - - (4.6) (4.6)
Release of share option reserve on exercise - - (3.8) - 3.8 -
Total contributions by and distributions to owners - 0.4 (2.7) (0.4) (4.5) (7.2)
Balance at 31 December 2024 1.0 67.4 (52.7) 0.3 86.0 102.0
Consolidated statement of cash flows
for the year ended 31 December 2024
Year ended Year ended
31 December 31 December
2024 2023
Note £m £m
Net cash generated from operating activities 18 6.2 12.5
Cash flows from investing activities
Purchase of property, plant and equipment (0.3) (0.3)
Finance income 0.2 0.3
Development expenditure (5.4) (4.5)
Cost of acquisitions - net of cash received (16.6) (13.3)
Deferred and contingent consideration paid (1.8) -
Sale of equity investment 0.4 -
Equity investments (1.7) (1.0)
Loan to equity interest (1.1) (0.6)
Net proceeds from sale of operations 0.6 0.6
Net cash flows used in investing activities (25.7) (18.8)
Cash flows from financing activities
Finance costs (1.6) (0.5)
Loan drawn/(repaid) 19.0 11.0
Payment of lease liability (0.6) (0.5)
Issue of share capital 0.4 0.2
Dividends paid (4.1) (4.0)
Net cash flows from/(used in) financing activities 13.1 6.2
Net (decrease)/increase in cash and cash equivalents (6.4) (0.1)
Cash and cash equivalents at start of year 12.7 12.8
Cash and cash equivalents at end of year 6.3 12.7
Non-underlying operating costs, as per note 7, are included in net cash
generated from operating activities.
During the year there were cash outflows of £16.6m (net of cash acquired of
£4.4m) in respect of investment in four acquisitions by the Group. Further
details can be found in note 20.
Notes
1 General information and basis of preparation
The consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards ("UK-adopted IAS").
The financial information for the year ended 31 December 2024 and the year
ended 31 December 2023 does not constitute the Group's statutory accounts for
those periods. Statutory accounts for the period ended 31 December 2023 have
been delivered to the Registrar of Companies. The statutory accounts for the
period ended 31 December 2024 will be delivered to the Registrar of Companies
following the Group's Annual General Meeting.
The auditors' reports on the accounts for 31 December 2024 and 31 December
2023 were unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006.
2 Going concern
The Directors have undertaken a comprehensive assessment to consider the Group
and Company's ability to trade as a going concern for a period of 18 months to
30 September 2026.
The Directors have tested the going concern assumption in preparing these
financial statements, considering a number of severe but plausible downside
scenarios reflecting the Group's base plan adjusted for severe but plausible
impacts from the Group's principal risks, which would collectively be
considered remote. The Group's central planning scenario reflects a balanced
projection aligned to the Group's strategy, a balanced assumption for economic
uncertainty and capital expenditure and dividends and an appropriate
reflection of the impact of recent acquisitions. As a sensitivity, this
central planning scenario has been flexed to reflect the aggregation of severe
impacts arising linked to our principal risks which in total represents a 15%
downgrade to revenues from the Group's central planning scenario in the 18
month period to September 2026, in comparison to the base case with no
decrease in forecast costs, as well as the associated consequences for EBITDA
and cash. In each of the severe but plausible downside scenario the Group
continues to have available cash and remains in compliance with covenants on
the revolving credit facility. The board consider any scenario which would
lead to a breach of covenants or absence of liquidity to be remote given
current trading performance.
The Group had available cash of £6.3m as at 31 December 2024. In addition,
the Group has access to a £80m revolving credit facility which matures in
December 2026, £30m is drawn at 31 December 2024. The Group expects to
continue to rely on the facility throughout the going concern period. The
Group is in compliance with the covenants for the revolving credit facility as
at 31 December 2024. Details of cash, borrowings and facilities are set out in
notes 22 and 24 to the financial statements. Whilst outside of the going
concern assessment period, the Group have considered renewal of the revolving
credit facility ahead of maturity in December 2026 and are confident that this
will be available based upon the recent financing discussions and given the
time available to complete refinancing.
On the basis of the Group and Company's current and forecast profitability and
cash flows, and the availability of committed funding, the Directors consider
and have concluded that the Group and Company will have adequate resources to
continue in operational existence for the going concern period to September
2026 .As a result, they continue to adopt a going concern basis in the
preparation of the financial statements.
3 Accounting policies
The accounting policies adopted are consistent with those used in preparing
the consolidated financial statements for the financial year ended 31 December
2023.
4 Revenue recognition
Revenue is recognised by reference to the five-step model set out in IFRS 15.
Revenue is recognised when an entity transfers goods or services to a
customer, measured at the amount to which the entity expects to be entitled.
Depending on whether certain criteria are met, revenue is recognised:
• over time, in a manner that depicts the entity's performance; or
• at a point in time, when control of the good or service is
transferred to the customer.
Revenue is measured at the fair value of consideration received or receivable
and represents amounts receivable for goods and services provided in the
normal course of business, net of discounts, VAT and other sales-related
taxes.
The Group reports revenue under the following categories and the basis of
recognition for each category is described below.
Division Revenue stream Performance obligations Revenue recognition accounting policy Timing of customer payments
Intermediary Services Membership Services Provision of compliance and business services to financial and intermediary The Group's membership is a subscription model, with income recognised in line Subscriptions are usually invoiced monthly in advance of the commencement of
firms. Specific services provided under subscription model: software as a with the access to the specific service provided (output method). the subscription period and collected in the same month by direct debit.
service, support, compliance visits, and learning and development. Membership services includes support and software and income recognised on an
over-time basis in line with the access to the services. Membership services
also includes specific services, such as, regulatory visits and learning and
development and revenue is recognised in line with the service to the
customer, at the point the service is provided.
Additional services Provision of additional compliance and business services provided on an Revenue from other membership services is recognised at the point at which the Compliance visits, file checks and website maintenance are collected monthly
ongoing or periodic basis: file checks, website hosting and maintenance, specific service is delivered, or across an agreed support period as by direct debit and billed when the service is delivered. Additional
credit checking and learning and development. necessary, based on the value agreed with the customer. Each service is services are typically on credit terms and customers pay according to terms.
assessed in line with IFRS 15 and revenue is recognised accordingly in line
with the provision of service.
Software licence income Provision (and support) of software licences to intermediary firms within our Revenue from software licences is recognised straight line over the licences Invoices are raised and collected by direct debit in the month in which the
network revenue is recognised as the performance obligation is satisfied over period. The nature of the licences is such that the Group is required to licence charge relates, prorated as necessary where agreements are signed mid
time. undertake activities which impact the software and its utility to its -month.
customers throughout the licence period.
Distributions Channels Marketing services revenues Provision of advertising, marketing services and event sponsorship to product Revenue is recognised in line with the service provided to the customer, at a Invoices are typically raised on a monthly basis with a smaller number being
providers. point in time. raised quarterly. Customers pay according to agreed terms.
Distribution as a service ("Daas") Provision of analytics and broader consultative services to provider partners. Revenue is recognised in line with the service provided to the customer, over Invoices are typically raised on a monthly basis with a smaller number being
time. raised quarterly. Customers pay according to agreed terms.
Commission revenues Commission revenues from product provider distributions. Commission is recognised in full, following the confirmation of the sale by Commission revenues are typically received between one and four weeks after
the third-party provider, who is considered to be the principal, of underlying confirmation of the sale by the third-party provider.
mortgage and insurance related products. An element of commission is clawed
back if the policy holder cancels and a clawback provision is accounted for
accordingly.
Valuation services Surveys and valuation services provided to clients. Revenue is recognised at the point at which the service is delivered to the Business-to-business valuation services are paid in advance or on credit terms
customer, based on the agreed price. and customers pay according to these terms. Business-to-consumer is usually
paid up front.
Fintech and Research Fintech software solutions Provision (and support) of software licence contracts to providers of Revenue from software licences is recognised straight line over the licence Software licences are invoiced, either, monthly or quarterly, in advance with
financial products that enable them to research, launch and distribute period. The nature of the licences is such that the Group is required to payment terms applied.
relevant products to the market. The provision of software as a performance undertake activities which impact the software and its utility to its
obligation is a promise of 'right to access' the software satisfied over a customers throughout the licence period.
period of time.
Engage products are invoiced monthly and collected in the same month by
monthly direct debit.
Provision of Engage software to help financial adviser client recommendations.
Research - Risk Mappings, Fund Reviews and Rating Services Star Ratings - an independent and trusted industry standard for assessing the Revenue from star and risk ratings is recognised straight line over the agreed Revenue from star and risk ratings is billed on an annual basis in advance,
feature quality and comprehensiveness of a financial product or proposition. contractual period of the licence, which is typically one year. and customers pay according to agreed terms.
The Rating is licenced to product providers over a period of time allowing for
promotion of products with accompanying score.
Risk Ratings - an independent review of funds to enable advisers to match
portfolios to client's risk profiles, which is provided via a licenced Risk
Rating over an agreed period of time.
Contract assets
A contract asset is initially recognised for revenue earned from services for
which the receipt of consideration is conditional on successful completion of
the service and performance obligation. Upon completion of the service, the
amount recognised as accrued income is reclassified to trade receivables.
Contract liabilities
A contract liability is recognised if a payment is received or a payment is
due (whichever is earlier) from a customer before the Group transfers the
related goods or services. Contract liabilities are recognised as deferred
income until the Group delivers the performance obligations under the contract
(i.e. transfers control of the related goods or services to the customer) at
which point revenue is recognised in line with the delivery of the performance
obligation.
5 Critical accounting estimates and judgements
The Group makes certain estimates and judgements regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and judgements. The estimates and
judgements that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities are discussed below.
Acquisitions
Throughout the year four acquisitions were completed, each introducing
additional complexity, judgement, and disclosure requirements.
Acquisitions made during the period have multiple success-based contingent
consideration linked to financial performance. The contingent payments have
been fair valued at acquisition and revalued at the balance sheet date based
on the probability of success of each milestone. Due to the complexities and
uncertainties in the arrangements, management judgement has been used in
arriving at the fair values. For each acquisition, the fair value of
contingent consideration at the acquisition date represents the estimated most
likely pay-out based on management's forecast of future trading and
performance discounted at the Group's incremental borrowing rate.
In addition, the application of IFRS 3 requires us to identify and recognise
the assets acquired and liabilities assumed at their fair value. Judgement and
estimation has been applied in identifying and measuring the fair value of
separately acquired intangible assets using appropriate valuation methods.
Goodwill
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. The recoverable amount is determined based on value
in use calculations. The use of this method requires the estimation of future
cash flows and the choice of a discount rate in order to calculate the present
value of the cash flows. The major source of estimation uncertainty relates to
the estimation of future cash flows, particularly for the value in use
calculations for the Fintech and Research CGU.
More information, including carrying values of each CGU, is included in note
12.
Revenue
In the previous year, a significant judgement was disclosed in relation to the
presentation of revenue arising sales of software licences to member firms on
a "right to access" basis as principal. Following changes to the underlying
contractual arrangements in the year, such sales are now recognised as agent
and this is no longer considered to be an area of significant judgement.
6 Segmental information
During the year, the Company was domiciled in the UK and all revenue is
derived from external customers in the United Kingdom. The Group has an
operation in Norway, which is wholly immaterial to the Group's revenues.
The Group has three operating segments, which are considered to be reportable
segments under IFRS. The three reportable segments are:
· Intermediary Services;
· Distribution Channels; and
· Fintech and Research.
Intermediary Services provides compliance and regulation services to
individual financial intermediary Member Firms, including directly authorised
IFAs, directly authorised mortgage advisers, workplace consultants and
directly authorised wealth managers.
Distribution Channels provides marketing and promotion and Distribution as a
service ("DaaS") to financial institutions. This division of the Group also
undertakes survey panelling and surveying work for mortgage lenders.
The Fintech and Research segment provides proprietary advice technology;
independent ratings and reviews of products and funds.
The reportable segments are derived on a product/customer type basis.
Management has applied its judgement on the application of IFRS 8, with
operating segments reported in a manner consistent with the internal reporting
produced to the Chief Operating Decision Maker ("CODM").
For the purpose of making decisions about resource allocation and performance
assessment, it is the operating results of the three core divisions listed
above that are monitored by management and the Group's CODM, being the Fintel
plc Board. It is these divisions, therefore, that are defined as the Group's
reportable operating segments.
Segmental information is provided for gross profit and adjusted EBITDA, which
are the measures used when reporting to the CODM. The tables below present the
segmental information.
Intermediary Services Distribution Channels Fintech and Research Admin and support costs Group
Year ended 31 December 2024 £m £m £m £m £m
Revenue 29.1 23.8 25.4 - 78.3
Direct operating costs (17.9) (14.8) (9.9) - (42.6)
Gross profit 11.2 9.0 15.5 - 35.7
Administrative and support costs (13.5) (13.5)
Adjusted EBITDA 22.2
Operating costs (non-underlying) (5.9)
Impairment on disposal of asset (0.1)
Gain of disposal of equity investment 0.2
Amortisation of other intangible assets (3.2)
Amortisation of development costs and software (1.5)
Depreciation (0.4)
Depreciation of leased assets (0.5)
Share option charge (1.1)
Operating profit 9.7
Net finance costs (2.0)
Profit before tax 7.7
Admin and
Intermediary Distribution Fintech and Support
Services Channels Research costs Group
Year ended 31 December 2023 £m £m £m £m £m
Revenue 22.4 20.2 22.3 - 64.9
Direct operating costs (11.5) (12.6) (8.1) - (32.2)
Gross profit 10.9 7.6 14.2 - 32.7
Administrative and support costs (12.2) (12.2)
Adjusted EBITDA 20.5
Operating costs (non-underlying) (4.4)
Impairment on disposal of operations (0.2)
Amortisation of other intangible assets (2.2)
Amortisation of development costs and software (1.3)
Depreciation (0.4)
Depreciation of leased assets (0.4)
Share option charge (1.5)
Operating profit 10.1
Net finance costs (0.5)
Profit before tax 9.6
When assessing the trading performance of individual operating segments,
central costs have been presented separately. The presentation of gross profit
by segment to provides an overview of the trading performance for each
operating segment.
Segmental information includes revenue and costs from the date the group
obtains control of an acquiree. Intermediary services includes revenues and
costs from acquisitions made in the year of £10.3m and £9.6m respectively,
with gross profit contribution of £0.7m. Distribution includes revenue and
costs from acquisitions made in the year of £2.1m and £1.7m, with gross
profit contribution of £0.4m. Fintech and research includes revenue and costs
from acquisitions made since 2023 of £2.6m and £1.9m, with gross profit
contribution of £0.7m.
The statement of financial position is not analysed between the reporting
segments by management and the CODM considers the Group statement of financial
position as a whole.
No customer has generated more than 10% of total revenue during the year
covered by the financial information.
7 Operating profit
Operating profit for the year has been arrived at after charging:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Depreciation of tangible assets - owned 0.4 0.4
Depreciation of leased assets 0.5 0.4
Research expenditure 0.6 0.7
Underlying adjustments
Underlying adjustments include amortisation of other intangible assets and
operating and finance costs of a non-recurring nature.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Non-underlying costs - operating
M&A project costs 4.0 1.8
Transformation costs 0.5 1.5
Restructuring costs 0.8 0.7
Award related costs 0.6 0.4
Impairment on disposal of operations 0.1 0.2
Gain on sale of equity investment (0.2) -
Other underlying adjustments
Amortisation of other intangible assets 3.2 2.2
Underlying adjustments - before tax 9.0 6.8
The operating charge to the income statement in respect of non-underlying
items of £9.0m (2023: £6.8m) includes the following:
• operating expenses of £5.9m;
• £4.0m M&A-related costs - consists of professional advisory
fees on completed and pipeline acquisitions;
• £0.5m transformation cost - implementation costs to enhance
Fintel's customer relationship management platform ("CRM") and a new
enterprise resource planning system ("ERP") both of which went live in April
2024;
• £0.8m employee restructuring costs relating to M&A synergies;
and
• £0.6m share settlement costs;
• amortisation of other intangible assets of £3.2m - relating to
intangibles acquired on acquisition of Regulus Topco Limited, owner of Defaqto
Limited, Landmark Surveyors Limited, and more recently acquired entities:
Competent Advisor, VouchedFor, AKG, MICAP; Synaptic, Owen James, Newdez and
Threesixty, for which revenue arising from those acquisitions is included in
underlying and
• (£0.2m) gain on sale of equity divestment
· £0.1m impairment on disposal of subsidiary
No other operating costs have been treated as non-underlying in the period.
The above adjustments have been excluded as they are not considered part of
underlying trading performance.
8 Reconciliation of GAAP to non-GAAP measures
The Group uses a number of "non-GAAP" figures as comparable key performance
measures, as they exclude the impact of items that are non-cash items and also
items that are not considered part of ongoing underlying trade. Amortisation
of other intangible assets has been excluded on the basis that it is a
non-cash amount relating to acquisitions. The Group's "non-GAAP" measures are
not defined performance measures in IFRS. The Group's definition of the
reporting measures may not be comparable with similarly titled performance
measures in other entities.
Adjusted EBITDA is calculated as follows:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Operating profit 9.7 10.1
Add back:
Depreciation (note 11) 0.4 0.4
Depreciation of leased assets (note 11) 0.5 0.4
Amortisation of other intangible assets (note 12) 3.2 2.2
Amortisation of development costs and software (note 12) 1.5 1.3
EBITDA 15.3 14.4
Add back:
Gain on sale of equity investment (0.2) -
Impairment on disposal of operations (note 7) 0.1 0.2
Share option charge 1.1 1.5
Operating costs (non-underlying) (note 7) 5.9 4.4
Adjusted EBITDA 22.2 20.5
Adjusted EBITDA of non-core surveying business 0.9 0.3
Core adjusted EBITDA 21.3 20.2
Non-underlying operating costs have been excluded as they are not considered
part of the underlying trade.
Share option charges have been excluded from adjusted EBITDA as a non-cash
item.
Adjusted operating profit is calculated as follows:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Operating profit 9.7 10.1
Add back:
Impairment on disposal of operations (note 7) 0.1 0.2
Gain on sale of equity investment (0.2) -
Operating costs (non-underlying) (note 7) 5.9 4.4
Amortisation of other intangible assets (note 12) 3.2 2.2
Adjusted operating profit 18.7 16.9
Adjusted profit before tax is calculated as follows:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Profit before tax 7.7 9.6
Add back:
Impairment on disposal of operations (note 7) 0.1 0.2
Gain on sale of equity investment (0.2) -
Operating costs (non-underlying) (note 7) 5.9 4.4
Net finance cost (non-underlying) 0.3 -
Amortisation of other intangible assets (note 12) 3.2 2.2
Adjusted profit before tax 17.0 16.4
Adjusted profit after tax is calculated as follows:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Profit after tax 6.3 7.4
Add back:
Impairment on disposal of operations (note 7) 0.1 0.2
Gain on sale of equity investment (0.2) -
Net finance costs (non-underlying) 0.3 -
Operating costs (non-underlying) (note 7), net of tax 5.2 3.7
Amortisation of other intangible assets (note 12), net of deferred 2.4 1.7
tax
Profit attributable to non-controlling interests (0.4) (0.3)
Adjusted profit after tax 13.7 12.7
Free cash flow conversion is calculated as follows:
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Adjusted operating profit 18.7 16.9
Adjusted for:
Depreciation of tangible assets 0.4 0.4
Depreciation of leased assets 0.5 0.4
Amortisation of development costs and software 1.5 1.3
Share option charge 1.1 1.5
Settlement of non-recurring acquired liabilities 0.7 -
Research and development benefit - (0.1)
Net changes in working capital (2.6) (0.7)
Purchase of property, plant and equipment (0.3) (0.3)
Development expenditure (5.4) (4.5)
Underlying cash flow from operations 14.6 14.9
Underlying operating cash flow conversion 78% 88%
Net interest paid (1.3) (0.3)
Income tax paid (3.5) (2.8)
Payments of lease liability (0.6) (0.5)
Free cash flow 9.2 11.3
Adjusted EBITDA 22.2 20.5
Free cash flow conversion 41% 55%
9 Finance income and expense
Finance income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Bank interest 0.3 0.3
Interest unwind on contingent consideration receivable 0.1 -
0.4 0.3
Interest unwind of contingent consideration receivable is classified as
non-underlying
Finance expense
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interest payable on financial liabilities at amortised cost 1.9 0.7
Finance charge on lease liability 0.1 0.1
Interest unwind on contingent consideration payable 0.4 -
2.4 0.8
Interest unwind of contingent consideration payable is classified as
non-underlying
10 Earnings per share
Year ended Year ended
31 December 31 December
Basic earnings per share 2024 2023
Profit attributable to equity shareholders of the parent (£m) 5.9 7.1
Weighted average number of shares in issue 104,017,114 103,776,394
Basic profit per share (pence) 5.7 6.8
Year ended Year ended
31 December 31 December
Diluted earnings per share 2024 2023
Profit attributable to equity shareholders of the parent (£m) 5.9 7.1
Weighted average number of shares in issue 104,017,114 103,776,394
Diluted weighted average number of shares and options for the year 168,318 532,069
104,185,432 104,308,463
Diluted profit per share (pence) 5.7 6.8
Weighted average number of shares in issue has been adjusted for potentially
dilutive share options arising from the share scheme detailed in note 16. An
adjusted EPS has been calculated below based on the adjusted profit after tax,
which removes items not considered to be part of underlying trading.
Year ended Year ended
31 December 31 December
Adjusted basic earnings per share 2024 2023
Adjusted profit after tax (note 8) (£m) 13.7 12.7
Weighted average number of shares in issue 104,017,114 103,776,394
Adjusted earnings per share (pence) 13.2 12.2
11 Property, plant and equipment
Leased assets Owned assets
Plant and Office
Property equipment Total equipment Total
Group £m £m £m £m £m
Cost
At 1 January 2023 2.9 1.0 3.9 2.9 6.8
Acquisitions 0.3 - 0.3 0.1 0.4
Additions - 0.1 0.1 0.3 0.4
Disposals - - - (0.7) (0.7)
At 31 December 2023 3.2 1.1 4.3 2.6 6.9
Acquisitions 0.1 - 0.1 0.1 0.2
Additions 0.4 - 0.4 0.3 0.7
Disposals - - - - -
At 31 December 2024 3.7 1.1 4.8 3.0 7.8
Depreciation and impairment
At 1 January 2023 1.0 0.7 1.7 1.7 3.4
Depreciation charge for the year 0.3 0.1 0.4 0.4 0.8
Disposals - - - (0.7) (0.7)
At 31 December 2023 1.3 0.8 2.1 1.4 3.5
Depreciation charge for the year 0.4 0.1 0.5 0.4 0.9
Disposals - - - - -
At 31 December 2024 1.7 0.9 2.6 1.8 4.4
Net book value
At 31 December 2024 2.0 0.2 2.2 1.2 3.4
At 31 December 2023 1.9 0.3 2.2 1.2 3.4
Acquired lease property includes Owen James Events and Threesixty Services
Limited's office.
Plant and equipment includes IT equipment and motor vehicles.
12 Intangible assets
Goodwill Brand Intellectual property Customer relationships Total other intangible assets Development expenditure Total
Group £m £m £m £m £m £m £m
Cost
At 1 January 2023 72.4 3.1 24.4 - 27.5 5.5 105.4
Additions - - - - - 4.5 4.5
Acquisitions 16.7 1.0 3.0 1.3 5.3 - 22.0
At 31 December 2023 89.1 4.1 27.4 1.3 32.8 10.0 131.9
Additions - - - - - 5.4 5.4
Acquisitions 13.5 1.5 1.9 3.1 6.5 - 20.0
Revaluation 0.1 - - - - - 0.1
At 31 December 2024 102.7 5.6 29.3 4.4 39.3 15.4 157.4
Amortisation and impairment
At 1 January 2023 0.2 1.1 6.6 - 7.7 2.3 10.2
Charge in the year - 0.3 1.8 0.1 2.2 1.3 3.5
At 31 December 2023 0.2 1.4 8.4 0.1 9.9 3.6 13.7
Charge in the year - 0.5 2.4 0.3 3.2 1.5 4.7
At 31 December 2024 0.2 1.9 10.8 0.4 13.1 5.1 18.4
Net book value
At 31 December 2024 102.5 3.7 18.5 4.0 26.2 10.3 139.0
At 31 December 2023 88.9 2.7 19.0 1.2 22.9 6.4 118.2
Capitalised development expenditure relates to the development of the software
platform in Defaqto Limited.
The £0.1m revaluation in goodwill relates to MICAP and VouchedFor
pre-acquisition amendments. The acquisition value of £13.5m is the goodwill
associated with the 2024 acquisitions. More details can be found in note 20.
The carrying amount of goodwill is allocated across operating segments, which
are deemed to be cash-generating units ("CGUs") as follows:
Year ended Year ended
31 December 31 December
2024 2023
Intermediary Services 35.6 24.4
Distribution Channels 13.9 11.5
Fintech and Research 53.0 53.0
102.5 88.9
The Group has determined that each segment is a cash-generating unit ("CGU")
as this is the lowest aggregation of assets that generate largely independent
cash inflows.
The recoverable amounts for the CGUs are predominantly based on value in use,
which is calculated on the cash flows expected to be generated using the
latest projected data available over a five-year period, plus a terminal value
estimate.
The key assumptions in the value in use calculation are the pre-tax discount
rate (range of 15.7% to 16.7%; 2023: range of 16.1% to 17.0%), annual adjusted
EBITDA growth rate (range of 2.4% to 8.1%; 2023: 3.0% to 7.0%) and terminal
growth rate 2% (2023: 2.0%). The discount rate is based on the individual CGUs
pre-tax cost of capital. The projected EBITDA growth rate is built upon the
Board-approved budget and plan, taking into account historical trends. The
terminal growth rate is based on the expected growth rate into perpetuity and
the expected long-term growth rate of the UK economy.
The Directors have reviewed the recoverable amounts of the CGUs and conclude
that the carrying value remains substantiated. Any set of reasonably possible
assumptions would not result in the carrying value exceeding the recoverable
amount.
13 Fixed asset investments
Year ended Year ended
31 December 31 December
2024 2023
At 1 January 2024 1.2 -
Additions 1.7 1.2
Disposals (0.2) -
At 31 December 2024 2.7 1.2
Group investments are those in which Fintel does not hold significant
influence and are classified and measured in accordance with IFRS 9 -
Financial Instruments. The Group classifies equity investments as financial
assets at fair value through profit or loss (FVTPL).
Prior year
In March 2023, the Group paid £1m to acquire a 25% stake in Plannr
Technologies Limited ("Plannr"). As the Group holds no voting rights and
does not have the ability to influence strategic decision-making, management
does not consider the Group to exert significant influence over Plannr.
In July 2023 the Group exercised its right under the convertible loan note
with Cardan Financial Group Limited ("Cardan") to convert the outstanding loan
into shares representing a 9.9% equity stake. The loan balance at conversion
totalled £0.2m, with the equity stake being measured at the same value.
Management do not deem the Group to have significant influence over Cardan.
Current year
In March 2024 the Group acquired a non-controlling interest in Mortgage Brain
Holding Limited, acquiring 5.8% of Ordinary Shares in exchange for £1.5m
consideration.
In April 2024 the Group sold its 9.9% stake in Cardan for £0.4m, releasing a
profit on disposal of £0.2m.
In October 2024 the Group paid £0.2m to acquire a 20% stake in Wealthwise
Media Limited ("Wealthwise"). As the Group holds no voting rights and does not
have the ability to influence strategic decision-making, management does not
consider the Group to exert significant influence over Wealthwise.
The Directors consider the carrying value of investments to be supported by
future cash flows of the businesses.
14 Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group's and
Company's interest-bearing loans and borrowings.
Year ended Year ended
31 December 31 December
2024 2023
Current
Secured bank loan - -
Lease liability 0.5 0.4
0.5 0.4
Non-current
Secured bank loan 30.0 10.7
Lease liability 1.4 1.5
31.4 12.2
Changes in liabilities from financing activities:
Loans and Lease
borrowings liability
£m £m
Balance at 1 January 2023 - 2.2
Cash flows (0.5) (0.5)
New leases - 0.1
Loan drawdown 11.0 -
Other non-cash changes 0.2 0.1
Balance at 31 December 2023 10.7 1.9
Cash flows (1.6) (0.6)
New leases - 0.4
Loan drawdown 19.0 -
Other non-cash changes 1.9 0.2
Balance at 31 December 2024 30.0 1.9
Loans and borrowings
Cash flows on loans and borrowings include £19m RCF drawdown (2023: £11.0m
RCF drawdown) and interest payments made of £1.6m (2023: £0.5m).
Other non-cash changes on bank loans include interest charges of £1.7m (2023:
£0.7m), plus a prepaid arrangement fee and agency fee of £0.2m (2023:
£0.2m).
Revolving Credit Facility (RCF)
The Group has a Revolving Credit Facility (RCF) committed through to August
2026 following a refinancing in 2022. The facility limit is £80.0m with an
additional uncommitted 'accordion' facility of up to £20.0m. At 31 December
2024, £30.0m of the RCF was drawn. The Group incurred debt issue costs of
£0.6m which have been capitalised and is being amortised to the income
statement over the term of the facility.
Interest is payable on the RCF at SONIA plus an interest margin ranging from
1.5% to 2.4% which is dependent on the Group's leverage (net debt as multiple
of adjusted EBITDA) and reduces as the Group's leverage reduces. The
interest margin as at 31 December 2024 was 1.7% (2023: 1.5%). Adjusted
EBITDA for the year was £22.2m (2023: £20.5m) and is defined as underlying
operating profit before depreciation, amortisation and share based payment
charges.
At 31 December 2024 the Group had available headroom of £50m of undrawn
committed facilities in respect of which all covenant conditions had been met.
The Group is subject to two financial covenants, which are continuously
monitored and reported on quarterly. At 31 December 2024, there was
significant headroom and facility interest cover and net debt to EBITDA
covenants were comfortably achieved:
Covenant Position as at
Covenant Requirement 31 December 2024
Interest cover >4.0:1 12.6:1
Leverage <3.0:1 1.1:1
Lease liabilities
Cash flows from lease liabilities include £0.6m of lease payments (2023:
£0.5m). Other non-cash changes on lease liabilities include interest charges
of £0.1m (2023: £0.1m) and also acquired leases of £0.1m.
15 Capital and reserves
Share capital
Ordinary
Shares
Number of fully paid shares (nominal value £0.01):
At 1 January 2023 103,648,945
Issue of share capital 199,740
At 31 December 2023 103,848,685
Issue of share capital 344,600
At 31 December 2024 104,193,285
In 2024, the Company issued 344,600 new Ordinary Shares to the open share
option schemes detailed in note 16 (2023: 199,740 new Ordinary shares).
Share
premium
£m
At 1 January 2023 66.8
Issue of share capital 0.2
At 31 December 2023 67.0
Issue of share capital 0.4
At 31 December 2024 67.4
16 Share-based payment arrangements
At 31 December 2024, the Group had the following share-based payment
arrangements.
Issued in 2021
Value Builder Plan (Tranche 1)
On 1 May 2021, the Group established the Value Builder Plan (the "VB Plan")
which creates a Value Pot consisting of a fixed allocation of 100 notional
units. The units are to be settled at the discretion of the Remuneration
Committee ("RemCo") in either Fintel Ordinary Shares or cash, subject to a
growth in market capitalisation and a floor of earnings per share ("EPS")
growth.
Number Contractual
Grant date of awards Vesting conditions life of options
1 May 2021 100 3 years' service from grant date, subject to achieving a percentage growth in 3 to 10 years
EPS of RPI over the performance period plus 3%
The scheme was settled in May 2024 and has now closed.
The Group cash settled the Value Builder scheme in May 2024, resulting in a
total cash outflow of £5.1m. This comprised a cash settlement payment of
£4.6m, which was accounted for as a reduction to equity, and an associated
Employers' National Insurance Contribution (NIC) charge of £0.6m, which was
recognised as a non-underlying cost in the income statement.
The settlement has had a material impact on the Group's financial statements,
affecting cash flows, equity, and the income statement. The £4.6m reduction
to equity represents a realised loss, while the £0.6m NIC charge has been
reflected in non-underlying costs in the profit and loss statement.
Save As You Earn ("SAYE") scheme
On 1 July 2021, the Group established the 2021 Save As You Earn ("SAYE")
scheme and invited all Group employees to enter into a three-year savings
contract linked to an option which entitles them to acquire Ordinary Shares in
the Company.
293,362 options were issued under the scheme, with an exercise price of
£1.76. The fair value of the shares at date of grant (1 July 2021) was
£0.84.
During 2024, 9,405 (2023: 14,503) shares have been forfeited as a result of
bad leavers. The scheme has now fully vested.
The fair value of services received in return for share options granted is
based on the fair value of the share options granted. The fair value has been
measured using the Monte Carlo model for the VB Plan, and the Black Scholes
model for the SAYE scheme. The following inputs were used in the measurement
of the fair values at grant date of the share-based payment plans:
Save As You Value Builder
Earn scheme Plan
Fair value at grant date £0.84 £37,000
Share price at grant date £2.33 £2.17
Exercise price £1.76 £nil
Expected volatility 45% 45%
Option life (expected weighted average life) 3 2.42
Expected dividends 2% 2%
Risk-free interest rate (based on government bonds) 0.18% 0.46%
There were no schemes issued in 2022.
Issued in 2023
Growth Share Plan
On 18 August 2023, the Group implemented a new long-term incentive plan, the
Growth Share Plan. The Plan creates a distributable Value Pot, the size of
which is determined as being a proportion of total shareholder value of the
Company.
The size of the Value Pot to be received by the beneficiaries will be
dependent on the average market capitalisation in the first quarter following
the end of each five-year vesting period, subject to an individual
participant's continued employment over the vesting period (or their having
become a "Good Leaver").
The Value Pot for each award under the Plan will be granted at the
discretion of the Remuneration Committee ("RemCo"), with each participant
acquiring a fixed number of partly paid B Shares, C Shares and/or D Shares in
an intermediary holding company, Fintel Group Holdings Limited. Subject to
continued service, the Growth Shares on vestiture will be transferable into
Fintel shares to the extent the relevant Value Pot has been earned.
The RemCo will have full discretion to amend the terms of the Plan to take
account of, for example, corporate activities such as acquisitions to ensure
the market capitalisation hurdles remain appropriate.
On 16 August 2023, the 2023 Awards were allocated under the Plan. The
Measurement Period for the 2023 Awards will be the first quarter following the
end of the five-year vesting period to 31 December 2027, being the period from
1 January 2028 to 31 March 2028.
The Value Pot under the 2023 Awards is comprised as follows:
Tier Market capitalisation at end of performance period Proportion of Shareholder Value tranche distributed in Value Pot Total number of Growth Shares in Growth Share class
Tier 1 Between £275m and £300m 8% 163 B Shares
Tier 2 Between £300m and £400m 15% 419 C Shares
Tier 3 Between £400m and £425m 20% 418 D Shares
Value will only accrue to the beneficiaries within each tier to the extent
that average market capitalisation in the Measurement Period is above the
minimum market capitalisation for that tier. The return thresholds will
exclude dividends paid to shareholders.
The scheme has been accounted for as an equity-settled scheme in line with the
Group's expectation of final settlement. The Group has a past practice of
settling similar schemes as via equity.
The fair value of services received in return for share options granted is
based on the fair value of the share options granted. The fair value for the
Growth Share Plan has been measured using the Monte Carlo model. The following
inputs were used in the measurement of the fair values at grant date of the
share-based payment plans:
Value Builder
Plan
B Shares C Shares D Shares
Fair value at grant date £2,745 £6,190 £1,587
Share price at grant date £2.15 £2.15 £2.15
Exercise price £nil £nil £nil
Expected volatility 42% 42% 42%
Option life (expected weighted average life) 5 5 5
Expected dividends 1.5% 1.5% 1.5%
Risk-free interest rate (based on government bonds) 4.6% 4.6% 4.6%
Reconciliation of outstanding share options
The number and weighted average exercise prices of share options under the
share option programmes were as follows:
Weighted Weighted
average average
Number of exercise price Number of exercise price
options 31 December options 31 December
31 December 2023 31 December 2022
2024 £ 2023 £
Outstanding at 1 January 499,309 1.14 731,051 1.16
Forfeited during the year (41,758) 1.36 (30,533) 0.64
Exercised during the year (344,600) 2.03 (201,209) 1.13
Granted during the year - - - -
Outstanding at 31 December 112,951 1.16 499,309 1.14
Exercisable at 31 December 85,750 1.55 320,615 1.07
The options outstanding at 31 December 2024 had an exercise price in the range
of £0.01 to £1.93 (2023: £0.01 to £1.93) and a weighted average
contractual life of 2.8 years (2023: 1.6 years).
The weighted average share price at date of exercise for option shares issued
during the year was £0.49 (FY23: £1.99).
Other share plans
The Group has several other share-based payment arrangements, all of which
have fully vested, and there are only a few outstanding shares in each scheme.
17 Other reserves
Merger Share option
reserve reserve Total
Group £m £m £m
At 1 January 2023 (53.9) 2.6 (51.3)
Share option charge - 1.5 1.5
Release of share option reserve - (0.2) (0.2)
At 31 December 2023 (53.9) 3.9 (50.0)
Share option charge - 1.1 1.1
Release of share option reserve - (3.8) (3.8)
At 31 December 2024 (53.9) 1.2 (52.7)
18 Notes to the cash flow statement
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash flow from operating activities
Profit after taxation 6.3 7.4
Add back:
Finance income (0.4) (0.3)
Finance cost 2.4 0.8
Taxation 1.4 2.2
9.7 10.1
Adjustments for:
Amortisation of development expenditure and software (note 12) 1.5 1.3
Depreciation of lease asset 0.4 0.4
Depreciation of property, plant and equipment 0.5 0.4
Amortisation of other intangible assets 3.2 2.2
Share option charge 1.1 1.5
Research and development benefit - (0.1)
Profit on sale of equity investment (0.2) -
Revaluation of contingent consideration 0.9 -
Revaluation of goodwill 0.1 -
Interest unwind on contingent consideration (0.4) -
Cash settlement of Value Builder Plan (4.6) -
Impairment on sale of operations 0.1 0.2
Operating cash flow before movements in working capital 12.3 16.0
(Increase)/decrease in receivables (1.4) 0.4
Decrease in trade and other payables (1.2) (1.1)
Cash generated from operations 9.7 15.3
Income taxes paid (3.5) (2.8)
Net cash generated from operating activities 6.2 12.5
19 Subsequent events
On 16 July 2024, we announced our conditional agreement to acquire Rayner
Spencer Mills Research Limited ("RSMR"), a UK-based company specialising in
providing independent investment research, ratings, and support to financial
advisers, investment professionals, and financial services firms. Regulatory
approval was granted in late December 2024, and the acquisition was
successfully completed on 7 January 2025, for initial cash consideration of
£5.2m.
20 Acquisitions
Acquisitions completed in the year ended 31 December 2024
Adv Data Holding Limited
On 26 January 2024 the Group acquired 100% of the issued shares of Adv Data
Holding Limited along with its wholly owned trading subsidiary Synaptic
Software Limited (together "Synaptic"), which is a provider of independent
adviser planning and research software. This acquisition will extend and
cement the Group's central market position as a provider of technology,
research, and consulting services to the adviser market. Total consideration
of £5.1m was paid upfront in cash upon completion. The fair value of the
total consideration at the acquisition date was £5.1m. On acquisition,
acquired intangibles were recognised relating to customer related intangibles
(£0.5m), intellectual property (technology) related intangibles (£0.4m), and
brand name (£0.3m). The residual goodwill of £2.8m represents the expertise
of the acquired workforce and the ability to leverage this into some of the
Group's businesses, together with the ability to exploit the Group's existing
customer base. Synaptic contributed revenue of £2.0m and losses before
taxation of £0.0m to the Group from the date of acquisition to 31 December
2024. Had the acquisition been made at the beginning of the period, revenue
would have been £2.2m and losses before taxation would have been £0.2m. The
amount of goodwill expected to be deductible for tax purposes in respect of
this acquisition is £nil.
Owen James Group Ltd
On 26 January 2024 the Group acquired 100% of the issued shares of Owen James
Group Ltd along with its wholly owned trading subsidiary Owen James Events
Limited (together "Owen James"). Owen James is a leading provider of strategic
engagement events in UK financial services. This acquisition will extend the
Group's flagship industry events programme, and data and insights strategy.
Cash consideration of £0.8m was paid upfront upon completion, with a further
£0.1m payable two months later contingent upon successful completion of an
integration plan. Contingent consideration based upon certain revenue-based
and profit-based criteria over the three years following acquisition is capped
at £1.5m in total and is payable at the end of each earn-out year. The fair
value of the total consideration at the acquisition date was £1.2m. On
acquisition, acquired intangibles were recognised relating to customer related
intangibles (£0.4m), and brand name (£0.4m). The residual goodwill of £0.6m
represents the expertise of the acquired workforce and the ability to leverage
this into some of the Group's businesses, together with the ability to exploit
the Group's existing customer base. Owen James contributed revenue of £2.1m
and profit before taxation of £0.4m to the Group from the date of acquisition
to 31 December 2024. Had the acquisition been made at the beginning of the
period, revenue would have been £2.2m and profits before taxation would have
been £0.5m. The amount of goodwill expected to be deductible for tax purposes
in respect of this acquisition is £nil.
Newdez Limited ("Newdez")
On 15 March 2024 the Group acquired 70% of the issued share capital of Newdez
(brand name ifaDASH), which is a compliance tool provider to the financial
intermediary market. The deal will assist with digitising the Group's
compliance proposition. Cash consideration of £0.5m was paid upfront upon
completion. Contingent consideration based upon certain revenue-based criteria
over the year ending 31 December 2024 is capped at £1.0m and is payable at
the end of that year. The fair value of the total consideration at the
acquisition date was £0.6m. There are call options to acquire up to 50% of
the remaining shares during the year ending 31 March 2027, and all shares then
remaining during the year ending 31 March 2028. The call option represents a
derivative under IFRS 9, but its fair value is immaterial to the Group. On
acquisition, acquired intangibles of £0.1m were recognised relating to
intellectual property (technology) related intangibles. The residual goodwill
of £0.6m represents the expertise of the acquired workforce and the ability
to leverage this into some of the Group's businesses, together with the
ability to exploit the Group's existing customer base. Newdez contributed
revenue of £0.0m and losses before taxation of £0.0m to the Group from the
date of acquisition to 31 December 2024. Had the acquisition been made at the
beginning the period, revenue would have been £0.1m and losses before
taxation would have been £0.0m. The amount of goodwill expected to be
deductible for tax purposes in respect of this acquisition is £nil.
Threesixty Services Limited ("Threesixty")
On 2 July 2024 the Group acquired 100% of the issued shares of Threesixty
Services Limited ("threesixty") who are a provider of independent adviser
planning and research software. In addition, we also acquired DD Hub Limited,
a 100% owned subsidiary of threesixty. The acquisition will further strengthen
the Group's range of quality services available to professional
intermediaries. Cash consideration of £14.6m was paid upfront upon
completion. The fair value of the total consideration at the acquisition date
was £14.6m. On acquisition, acquired intangibles were recognised relating to
customer related intangibles (£2.2m), intellectual property (technology)
related intangibles (£1.4m), and brand name (£0.8m). The residual goodwill
of £9.5m represents the expertise of the acquired workforce and the ability
to leverage this into some of the Group's businesses, together with the
ability to exploit the Group's existing customer base. Threesixty contributed
revenue of £3.4m and profit before taxation of £0.4m to the Group from the
date of acquisition to 31 December 2024. DD Hub Limited contributed revenue of
£0.1m and profit before taxation of £0.0m to the Group from the date of
acquisition to 31 December 2024. Had the acquisition been made at the
beginning of the period, revenue would have been £7.0m and profit before
taxation would have been £0.8m. The amount of goodwill expected to be
deductible for tax purposes in respect of this acquisition is £nil.
The fair values of the assets and liabilities acquired during the year ended
31 December 2024 are summarised below:
During the year ended Synaptic Owen James Newdez Threesixty Total
31 December 2024
£m £m £m £m £m
Brands 0.3 0.4 - 0.8 1.5
Customer relationships 0.5 0.4 - 2.2 3.1
Intellectual property 0.4 - 0.1 1.4 1.9
Property, plant and equipment - - - 0.2 0.2
Trade and other receivables 0.5 0.5 - 0.7 1.7
Trade and other payables (0.6) (0.7) (0.1) (1.8) (3.2)
Net cash 1.5 0.2 - 2.7 4.4
Deferred tax liability (0.3) (0.2) - (1.1) (1.6)
Fair value of assets acquired 2.3 0.6 - 5.1 8.0
Goodwill 2.8 0.6 0.6 9.5 13.5
Consideration 5.1 1.2 0.6 14.6 21.5
Satisfied by fair values of:
Cash consideration 5.1 0.8 0.5 14.6 21.0
Contingent consideration - 0.4 0.1 - 0.5
5.1 1.2 0.6 14.6 21.5
Less: net cash acquired (1.5) (0.2) - (2.7) (4.4)
Transaction costs and expenses 0.2 0.1 0.1 0.9 1.3
Total committed spend on acquisitions completed in the year 3.8 1.1 0.7 12.8 18.4
For each acquisition the fair value of contingent consideration at the
acquisition date represents the estimated most likely pay-out based on
management's forecast of future trading and performance discounted at the
Group's incremental borrowing rate. The fair value of deferred consideration
at the acquisition date represents the amount payable discounted at the
Group's incremental borrowing rate.
As of 31 December 2024, the fair value of deferred and contingent
consideration was assessed at £6.7m, with £6.0m due within one year and
£0.7m payable beyond one year from the balance sheet date. This valuation
reflects the latest available information, including trading performance and
market conditions, as outlined in the purchase agreements for each
acquisition.
Contractual deferred and contingent consideration does not pertain to
post-acquisition services, and none of the contingent and deferred
consideration is contingent upon reemployment.
The cash outflow in the year in respect of acquisitions completed during the
year comprised:
During the year ended Synaptic Owen James Newdez Threesixty Total
31 December 2024
£m £m £m £m £m
Cash consideration 5.1 0.8 0.5 14.6 21.0
Less: net cash acquired (1.5) (0.2) - (2.7) (4.4)
Net investing outflow in respect of acquisitions completed in the year 3.6 0.6 0.5 11.9 16.6
Transaction costs and expenses paid 0.2 0.1 0.1 0.9 1.3
Total cash outflow in respect of acquisitions completed in the year 3.8 0.7 0.6 12.8 17.9
Transactions relating to acquisitions completed in 2023
During the year £1.8m was paid to satisfy deferred and contingent obligations
relating to companies acquired during 2023.
Acquisitions completed since the year ended 31 December 2024
On 7 January 2025, the Group completed the acquisition of a 70% interest in
RSMR, a UK-based independent investment research provider, for an initial net
cash consideration of £5.2m. The acquisition aligns with the Group's strategy
to expand its research and ratings capabilities, with control obtained through
majority ownership and governance rights.
The remaining 30% of RSMR, currently held by management, will be acquired over
the next 24 months, subject to price and performance conditions. The valuation
of contingent consideration is ongoing, and further disclosures will be
provided once finalised.
As the acquisition was completed after the reporting date and close to the
signing date of these financial statements, the initial accounting is still in
progress. The Group is assessing the fair value of acquired assets,
liabilities, and goodwill, with a full purchase price allocation to be
disclosed in future financial statements.
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