Fintel Report Robust Half Year Results with a dividend of 1p
(FNTL ) has reported half yearly results for the six month period to 30 June 2021, highlighting robust underlying trading and significant progress in its strategic plan for digital transformation into a high recurring revenue, high margin fintech.
Financial Highlights
Revenue increased 10% to £31.7m (1H20: £28.9m) with adjusted EBITDA and EBT up 12% to £8.3m and £6.0m respectively.
Of the 10% increase in total revenue, revenue from distribution channels was the stand out performer with revenue up 22% to £11.3m with the re-opening of valuations housing market (up 50% to £4.0m) more than compensating for the decrease in demand for marketing services caused by the lockdown on meetings and events. Fintech and Research revenues increased by 5% to £7.8m with continued growth across the full range of products offered, with Product Ratings particularly strong.
Infrastructure costs remained flat during the period at £5.4m delivering an EBITDA margin of 26%.
Strong positive cashflow resulted in deleveraging the balance sheet to 0.2x EBITDA. Net Debt, as at 30 June 2021, was £15.5m (FY20; £19.4m).
Given the strong balance sheet – the board has proposed an interim dividend payment of 1p per share.
Operating Highlights
The strategic highlights for the period were dominated by the strategic disposals successfully achieved during the period, including Zest Technology, Verbatim Funds, alongside the launch of new service “Distribution as a Service” and a strategic partnership with Tattaon Asset Management.
Outlook
The Outlook for the Company remains strong given the underlying robust trading which is expected to be complemented with additional receurring revenue streams.
Matt Timmins, Joint CEO of Fintel plc, commented: “I am delighted to report that Fintel delivered a robust financial performance in the first half of the year, and we remain confident of meeting our full year expectations. We have also made significant strategic progress in the period, signing our largest ever fintech contract in a partnership that includes the disposal of the Verbatim funds, and realised excellent value from the sale of Zest. The launch of "distribution as a service" is off to an excellent start.
We have significant financial resources to match our ambitions for the business, both in terms of accelerating organic growth and creating value through acquisitions"
View from VOX
SimplyBiz has delivered double digit top line growth for the period, robust cash flow and a significant reduction in debt.
This solid underlying performance will provide the Company a solid platform to execute its digital transformation strategy to increase recurring revenue and expand operating margins to accelerate earnings.
Investors should note the strategic agreement with Tatton Asset Management as a key signpost to the future direction of the Company with the balance sheet now providing the opportunity for the Company to target complementary acquisitions in the Fintech space.
Shares in Fintel have soared from 138p to 52 week intraday highs of 250p over the past 12 months. However, the shares have retraced slightly trading in a tight range between 220p and 240p over the last three months, which provides new investors an opportunity to play this emerging FinTech play in the UK equity markets.
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