TIDMFNTL
RNS Number : 8353M
Fintel PLC
19 September 2023
19 September 2023
Fintel plc
("Fintel", the "Company", the "Business" or the "Group")
Half year results for the six months ended 30 June 2023
Positive performance; strategic investments to accelerate future
growth
Fintel (AIM: FNTL), the leading provider of Fintech and support
services to the UK retail financial services sector, today
announces its unaudited consolidated results for the six months
ended 30 June 2023.
" Fintel delivered a positive financial and operational
performance during the first half of 2023 and continued to make
significant progress in line with its strategic plan. We have
increased investment into our technology and service platform, with
earnings enhancing acquisitions expanding our unique proposition
and driving future growth opportunities.
Our diverse client base and proposition, combined with the cash
generative nature of our business, provide resilience to tough
market conditions and ensure we are well placed to capitalise on
the growth opportunities arising from an evolving UK financial
services landscape.
Current trading remains encouraging and in line with our
expectations. Together with the strength of our balance sheet and
positive qualified M&A pipeline, we are confident of delivering
further strategic progress and accelerating growth, as we continue
to inspire better outcomes for retail financial services."
Matt Timmins, Joint CEO
HY23 HY22 Change
Core business
--------- --------- ----------
Core (1) revenue GBP27.6m GBP27.1m 2%
--------- --------- ----------
Core SaaS & subscription
revenue GBP18.8m GBP17.8m 6%
--------- --------- ----------
Core adjusted EBITDA (2) GBP8.8m GBP8.2m 8%
--------- --------- ----------
Core adjusted EBITDA margin 31.9% 30.1% 180bps
--------- --------- ----------
Fintel alternative performance
measures
--------- --------- ----------
Adjusted EBITDA GBP9.0m GBP8.7m 3%
--------- --------- ----------
Adjusted EBITDA margin 28.3% 27.0% 130pbs
--------- --------- ----------
Adjusted EPS(2) 5.0p 5.3p -6%
--------- --------- ----------
Cash conversion(3) 104% 124% -2,000bps
--------- --------- ----------
Statutory measures
--------- --------- ----------
Statutory revenue GBP31.7m GBP32.2m -2%
--------- --------- ----------
Statutory EBITDA GBP6.7m GBP8.0m -16%
--------- --------- ----------
Statutory EPS 3.2p 4.6p -30%
--------- --------- ----------
Cash position GBP13.3m GBP7.6m 75%
--------- --------- ----------
Interim dividend per share 1.1p 1.0p 10%
--------- --------- ----------
Financial highlights
-- Core (1) revenue growth to GBP27.6m (HY22: GBP27.1m) up 2%;
and up 4% on a like for like basis
-- Core adjusted EBITDA (2) increased to GBP8.8m (HY22: GBP8.2m) up 8%
-- SaaS and subscription revenue up 6% to GBP18.8m (HY22:
GBP17.8m), now representing 68% of core revenue
-- Strong liquidity with cash position of GBP13.3m (HY22:
GBP7.6m), as a result of consistently strong cash conversion (3) of
104% (HY22: 124%)
-- Strength of balance sheet together with undrawn GBP80m
Revolving Credit Facility ("RCF") provides significant financial
flexibility and headroom to capitalise on organic and M&A
opportunities
-- Statutory revenue of GBP31.7m (HY22: GBP32.2m), down 2%,
reflects both new net revenue recognition on major software
reseller contract extension in current period and reduced activity
in non-core business
-- Adjusted EBITDA (2) up 3% to GBP9.0m (HY22: GBP8.7m)
delivered during a period of significant investment
-- Solid adjusted EBITDA (2) margin of 28.3% (HY22: 27.0%), up
130bps, driven by improved revenue mix and growth on higher margin
business lines
-- Adjusted EPS(2) down 6% to 5.0 pence per share (HY22: 5.3
pence per share) driven largely by the UK wide increase in
corporation tax rate from 19% to 25%
-- Interim dividend of 1.1p (HY22: 1.0p) proposed, recognising
the strength of the underlying business
Strategic and operational highlights
-- Strategic developments and investments expected to accelerate future growth:
o Acquisition of MICAP by Defaqto extending its reach into the
tax-advantaged market, expanding both its data footprint and
research capabilities
o Acquisition of Competent Adviser, a dynamic learning platform
enabling advisers to meet increasing regulatory competency
requirements
o Investment in Plannr through Fintel Labs techn ology
incubator, expanding Fintel's technology proposition and extending
the capabilities of Defaqto Engage through a two-way
integration
o A new five-year minimum term technology contract with
long-standing supplier Intelliflo on improved terms, reducing pass
through costs and the associated revenues, and increasing EBITDA
margin
-- Maintained a steady improvement in earnings quality,
enhancing visibility of future earnings:
o Solid growth in core SaaS and Subscription revenue up 6% to
GBP18.8m (HY22: GBP17.8m), now representing 68% of core revenue
o Strong progress in conversion to Distribution as a Service
("DaaS"); 79% of Distribution Partner revenue converted to
multi-year subscription agreements (HY22: >60%; Target: 60%)
-- Enhanced and expanded proposition, driving organic growth:
o Intermediary Services
-- Expanded regulatory technology capability with four new
software distribution agreements
-- Strengthened core compliance offering including expanded
Consumer Duty support and digital compliance services
o Distribution Channels
-- Scaled Daa S proposition into mortgage and protection markets
and further growth of Strategic Asset Allocation service
-- Deepened insights for product providers with partner portal
phase two launched and digital events platform upgraded
-- Strengthened distribution agreement with BlackRock
o Fintech & Research
-- Expanded competitor intelligence and benchmarking
software
-- Launch of new financial planning software modules
-- Expanded research and insights platform
Current trading and outlook
-- Trading continues to be in line with the Board's expectations
-- Sustainable organic growth expected with expansion of
proposition and increasing technology penetration
-- Qualified M&A pipeline, underpinned by enhanced financial
resources, expected to accelerate medium term growth
-- Increased demand as a result of positive market dynamics and
structural growth drivers including regulatory pressure, demand for
technology and insights, and market consolidation and
disaggregation
Notes
(1) Core business excludes revenues from panel management and
surveying.
(2) Core 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) Underlying operating cash flow conversion is calculated as
underlying cash flow from operations (adjusted operating profit,
adjusted for changes in working capital, depreciation,
amortisation, CAPEX and share-based payments) as a percentage of
adjusted operating profit.
Analyst Presentation
An analyst briefing is being held at 9:30am on 19 September 2023
via an online video conference facility. To register your
attendance, please contact 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)
Martin Green
Dan Bate
Kieran Russell +44 (0) 20 3829 5000
Investec Bank (Joint Broker)
Bruce Garrow
David Anderson
Harry Hargreaves +44 (0) 20 7597 5970
MHP Group (Financial PR) +44 (0) 20 3128 8147
Reg Hoare Fintel@mhpgroup.com
Robert Collett-Creedy
Notes to Editors
Fintel is the UK's leading fintech and support services
business, combining the largest provider of intermediary business
support, SimplyBiz, and the leading research, ratings and Fintech
business, Defaqto.
Fintel provides technology, compliance and regulatory support to
thousands of intermediary businesses, data and targeted
distribution services to hundreds of product providers and empowers
millions of consumers to make better informed financial decisions.
We serve our customers through three core divisions:
The Intermediary Services division provides technology,
compliance, and regulatory support to thousands of intermediary
businesses through a comprehensive membership model. Members
include directly authorised IFAs, Wealth Managers and Mortgage
Brokers.
The Distribution Channels division delivers market Insight and
analysis and targeted distribution strategies to financial
institutions and product providers. Clients include major Life and
Pension companies, Investment Houses, Banks, and Building
Societies.
The Fintech and Research division (Defaqto) provides market
leading software, financial information and product research to
product providers and intermediaries. Defaqto also provides product
ratings (Star Ratings) on thousands of financial products.
Financial products are expertly reviewed by the Defaqto research
team and are compared and rated based on their underlying features
and benefits. Defaqto ratings help consumers compare and buy
financial products with confidence.
For more information about Fintel, please visit the website:
www.wearefintel.com
JOINT CHIEF EXECUTIVES' STATEMENT
Overview
Fintel has performed well in the first half of the year,
delivering a positive financial performance during a period of
increased strategic investment.
As we innovate and expand our customer proposition,
profitability and earnings quality continued to improve across the
business. Core adjusted EBITDA grew 8% and SaaS and subscriptions
now represent 68% of core revenue.
The diversity of our client base and proposition positions us
resiliently and allows us to capture growth in challenging markets.
Excellent growth in our Fintech and Research division mitigated the
impact of a weaker mortgage market in our Distribution Channels
division, contributing to our core business delivering growth
across all key metrics.
In light of the performance and in recognition of the underlying
business' quality, the Board has proposed an interim dividend of
1.1p per share.
Core Business
HY23 HY22 Medium-term
target
Core Revenue Growth 2%(*) 9% 5-7%
------ ------ ------------
Adjusted EBITDA Margin 31.9% 30.1% 35-40%
------ ------ ------------
% Revenues from SaaS and
Subscriptions 68% 66% 70-80%
------ ------ ------------
*4% on a like for like basis taking into account the change in
revenue recognition on major software contract
As we enhance and expand our services and technology platform,
we continue to drive performance, increasing margin, revenue
quality and earnings in our core divisions.
-- The Intermediary Services division delivered a 15% growth in
gross profit, driven in part by the expansion of our regulatory
technology offering, and the digitisation and expansion of our core
compliance offering.
-- In the Distribution Channels division earnings quality
increased with 79% (HY22: >60%) of our partner revenue converted
to multi-year Distribution as a Service ("DaaS") contracts as we
scale our distribution solutions through expansion of the DaaS
proposition into the mortgage and protection market.
-- The Fintech and Research division delivered a 9% increase in
revenue, driven by significant growth in software and fintech
revenues, following expansion of our competitor intelligence and
benchmarking software, and enhancements to our proprietary
financial planning software.
With current trading in line with our expectations, the progress
we have delivered against our strategy and the resilience of our
membership and subscription based operating model, the Board
remains confident in achieving its medium-term strategic
ambitions.
Strategic Delivery and Priorities
The Company's value creation strategy combines selective
acquisitions and organic growth, driven by increasing regulatory
pressure, and continued technology adoption across both our
membership base and the broader market.
In 2023 we accelerated investment in the business, acquiring two
complementary businesses to Fintel and investing in Plannr
Technologies Ltd, adding significant scale and increasing our
capabilities and IP. We also continued to innovate and expand our
service and technology platform organically, delivering margin
growth, robust cash flow and capital efficiency.
During the period, we agreed a new five-year technology contract
with an existing vendor on improved terms, reducing pass through
costs and the associated revenues and increasing EBITDA margin.
Prudent capital management remains a priority, and together with
our cash resources ensures, we have the capacity to continue to
invest in our core platform, and deliver further strategic
progress.
Outlook
Fintel's long-term growth is underpinned by the evolving UK
financial services and regulatory landscape, supporting ongoing
expansion of our product and service platform. In addition, our
diverse client base and proposition provide resilience to tough
market conditions. This ensures we are well placed to capitalise on
multiple growth opportunities.
With increasing profitability and earnings quality, underpinned
by high levels of cashflow conversion, and a series of strategic
investments expanding our reach, scale and IP, we are confident of
accelerating our future growth.
Current trading remains encouraging and in line with our
expectations. Together with the strength of our balance sheet and
qualified M&A pipeline, we are confident of delivering further
strategic progress and a strong financial performance , as we
continue to inspire better outcomes for UK retail financial
services.
Neil Stevens & Matt Timmins
Joint Chief Executive Officers
FINANCIAL REVIEW
For the six months ended 30 June 2023
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
-------------------------------------------- -------- --------------
Group revenue 31.7 32.2
Expenses (22.7) (23.5)
-------------------------------------------- -------- --------------
Adjusted EBITDA 9.0 8.7
Adjusted EBITDA margin % 28.3% 27.0%
Depreciation (0.2) (0.1)
Depreciation of lease asset (0.2) (0.2)
Amortisation of development expenditure and
software (0.6) (0.5)
-------------------------------------------- -------- --------------
Adjusted EBIT 8.0 7.9
Operating costs of an exceptional nature (1.5) -
Share option charges (0.8) (0.7)
Amortisation of other intangible assets (1.0) (1.0)
Net finance costs (0.2) (0.3)
-------------------------------------------- -------- --------------
Profit before tax 4.5 5.9
Taxation (1.1) (1.1)
-------------------------------------------- -------- --------------
Profit after tax 3.4 4.8
-------------------------------------------- -------- --------------
Adjusted earnings per share** ("EPS") 5.0 5.3
-------------------------------------------- -------- --------------
** Adjusted EPS excludes operating exceptional costs and
amortisation of intangible assets arising on acquisition, divided
by the average number of Ordinary Shares in issue for the
period.
Revenue
The core business performed positively during the first six
months of 2023. Core revenues grew 2% to GBP27.6m (HY22: GBP27.1m),
and 4% on a like for like basis, with growth impacted by two key
factors; firstly, the change in revenue recognition arising from
the renegotiation of a contract with an existing vendor in May 2023
to take the form of a new technology reseller contract, and
secondly the current volatility in the UK housing market has seen
commission income from our mortgage lending panel reduce by
c.20%.
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 6% to GBP18.8m (HY22: GBP17.8m),
with 68% SaaS and subscription income in the core business (HY22:
66%). Additionally, 79% of Distribution Partner revenue has been
converted to multi-year subscription agreements (HY22: >60%;
Target: 60%).
On a statutory basis the Group, including the non-core property
surveying business, reported revenues declined 2% to GBP31.7m
(HY22: GBP32.2m), reflecting both new net revenue recognition on
major software reseller contract extension and reduced activity in
the non core surveying business due again to the downturn in the UK
housing market.
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 core revenue increased 0.4% to GBP11.5m
(HY22: GBP11.4m). On a statutory basis, segment turnover remained
stable but like for like revenue increased by 5.6% allowing for
changes relating to the revenue recognition of the renegotiated
technology reseller agreement.
In the six months to 2023 the Intermediary Services division
delivered:
-- Membership fee income of GBP6.0m (HY22: GBP5.7m) - an increase of 6%;
-- Software licence income of GBP2.7m (HY22: GBP3.1m) - a
decrease of 14.0%; an increase of 5.3% on a like for like basis
allowing for change in revenue recognition following contract
renegotiation;
-- Additional services income of GBP2.8m (HY22: GBP2.6m) - an increase of 6.1%; and
-- Gross profit* of GBP5.2m (HY22: GBP4.5m) with gross profit
margin** of 45.2% (HY22: 39.3%). The improved margin reflects
increased investment in our delivery platform, and the beneficial
effect of net accounting under our new software reseller contract
from May 2023.
* 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 revenue fell 12 % to GBP9.9m (HY22:
GBP11.4m) as a result of housing market volatility.
In the six months to 30 June 2023 Distribution Channels
delivered:
-- Core commission revenues of GBP3.4m (HY22: GBP4.0m), a
decrease of 13.4% largely reflecting the current trends in the UK
housing market;
-- Marketing services revenues of GBP2.3m (HY22: GBP2.3m); an increase of 2.3%;
o DaaS has grown well to GBP1.8m (HY22: GBP1.5m), or 79%
converted versus 67% converted in the prior period. This growth has
come largely from internal conversion from non-DaaS revenues;
-- Non-core panel management and valuation services revenues of
GBP4.1m (HY22: GBP5.1m); a decrease of 18.0%, again reflecting
current UK housing market volatility; and
-- Gross profit of GBP3.6m (HY22: GBP4.5m) with gross profit margin of 36.7% (HY22: 39.2%).
Fintech and Research
Fintech and Research comprises our Defaqto business. Defaqto
provides market-leading software, financial information and product
research to product providers and financial intermediaries.
Fintech and Research revenues grew by 9.2% to GBP10.3m (HY22:
GBP9.4m), driven by further enhancements in our capabilities.
In the six months to 30 June 2023 Fintech and Research division
delivered:
-- Software revenue of GBP5.2m (HY22: GBP4.6m) - an increase of 13.1%;
-- Product ratings revenue of GBP4.5m (HY22: GBP4.2m) - an increase of 5.5%;
-- Other income of GBP0.6m (HY22: GBP0.6m) from consultancy and ad hoc work; and
-- Gross profit of GBP6.3m (HY22: GBP5.7m) with a strong gross
profit margin of 61.0% (HY22: 60.9%).
Profitability
Our adjusted EBITDA has increased by 3% in line with revenue
achieving GBP9.0m (HY22: GBP8.7m).
The resulting adjusted EBITDA margin of 28.3% (HY22: 27.0%)
compares well with prior periods due to improved revenue mix with
continued growth on higher margin business lines.
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.
Adjusted EBITDA in our core business also performed well,
increasing 8% to GBP8.8m (HY22: GBP8.2m). 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 its medium-term goals
and is well positioned for continued growth.
Exceptional items
These are items which are non-recurring and are adjusted on the
basis of either their size or their nature. As these items are
one-off or non-operational in nature, management considers that
their exclusion aids
understanding of the Group's underlying business
performance.
Operating costs of an exceptional nature of GBP1.5m (HY22: Nil)
comprised the following:
-- Transformation costs of GBP0.8m - includes implementation
costs to enhance Fintel's customer relationship management platform
("CRM") and a new enterprise resource planning system ("ERP"),
-- M&A pipeline costs GBP0.4m (HY22: Nil) - including costs
relating to the recent acquisition of Plannr Technologies
Limited
-- Restructuring related costs GBP0.3m (HY22: Nil)
No other costs have been treated as exceptional in the period to
30 June 2023.
Share-based payments
Share-based payment charges of GBP0.8m (HY22: GBP0.7m) have been
recognised in respect of the options in issue.
Financial income and expense
Finance costs of GBP0.3m (HY22: GBP0.3m) relate to the Group's
four-year revolving credit facility, which was fully repaid and
remains undrawn since 30 June 2022.
Finance income of GBP0.1m (HY22: Nil) relates to interest earned
on short term deposit of available funds.
Taxation
The tax charge for the period has been accrued using the tax
rate that is expected to apply to the full financial year.
The underlying tax charge of GBP1.7m for the period (HY22:
GBP1.3m) represents a full year effective tax rate of 23.7% (HY22:
20%). A blended statutory tax rate of 23.5% has been applied to
reflect the increase in the corporation tax rate from 19 % to 25%
effective 1 April 2023. All closing deferred tax balances have been
measured at 25%. As a significant UK corporation tax paying Group,
we settle our liability for corporation tax on a quarterly basis in
advance and have paid c.GBP1.8m in corporation taxes during the
6-month period.
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 earnings per share in the period amounted to 5.0 pence per
share (HY22: 5.3 pence per share).
Cash flow and closing cash position
At 30 June 2023 the total cash position was GBP13.3m (HY22:
GBP7.6m) with nil debt utilisation. The RCF was fully repaid and
remains undrawn since June 2022. Net cash is calculated as cash and
cash equivalents less borrowings net of amortised arrangement fees.
This represents a net cash to adjusted EBITDA ratio of 0.68 times
(HY22: 0.41 times).
Underlying operating cash flow conversion was strong at 104%
(HY22: 124%), which reduced by 2,000bps due to increased capital
investment for growth (HY23: GBP1.9m; HY22: GBP0.7m). Underlying
operating cash flow 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 8 to the financial statements.
The Company's significant non-recurring transformation and
M&A pipeline costs, capitalised development expenditure and
acquisition consideration impact the Company's cash generation.
Dividend
Recognising the underlying financial strength of the business,
the Board proposes an interim dividend of 1.1p (HY22: 1.0p). It is
the Board's intention that this will be paid on or around 3
November 2023 to shareholders on the register on 29 September 2023.
The Board intends the ex-dividend date to be 28 September 2023.
Accounting policies
The accounting policies applied in these condensed consolidated
interim financial statements are the same as those applied in the
Group's consolidated financial statements in the 2022 Annual Report
& Accounts.
Going concern
The Directors have undertaken a comprehensive assessment to
consider the Company's ability to trade as a going concern for a
period of 18 months to February 2025.
The Directors have robustly tested the going concern assumption
in preparing these financial statements, taking into account a
number of severe but plausible downside scenarios, which would
collectively be considered remote. The Group benefits from a
deleveraged balance sheet and strong liquidity position at 30 June
2023 and the Directors remain satisfied that the going concern
basis of preparation in the financial statements is
appropriate.
On the basis of the Company's current and forecast profitability
and cash flows, and the availability of committed funding, the
Directors consider and have concluded that the Company will have
adequate resources to continue in operational existence for at
least the next 18 months. 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 six months 30 June 2023
2023 2023 2022 2022
2023 Underlying Year ended 2022 Underlying Year ended
Underlying Adjustments* 31 December Underlying adjustments 31 December
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Revenue 6 31.7 - 31.7 32.2 - 32.2
Operating expenses 7-8 (24.5) (1.5) (26.0) (25.0) - (25.0)
Amortisation of other
intangible assets 13 - (1.0) (1.0) - (1.0) (1.0)
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Group operating profit 7.2 (2.5) 4.7 7.2 (1.0) 6.2
Finance expense 9 (0.2) - (0.2) (0.3) - (0.3)
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Profit before taxation 7.0 (2.5) 4.5 6.9 (1.0) 5.9
Taxation (1.7) 0.6 (1.1) (1.3) 0.2 (1.1)
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Profit for the financial
period 5.3 (1.9) 3.4 5.6 0.8 4.8
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Profit attributable
to shareholders:
Owners of the Company 3.3 4.7
Non-controlling interests 0.1 0.1
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
3.4 4.8
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
Earnings per share -
adjusted (pence) 10 5.0p 5.3p
Earnings per share -
basic (pence) 10 3.2p 4.6p
Earnings per share -
diluted (pence) 10 3.2p 4.5p
-------------------------- ---- ---------- ------------ ----------- ---------- ----------- -----------
There are no items to be included in other comprehensive income
in the current or preceding period.
Consolidated statement of financial position
as at 30 June 2023
Unaudited 30 June Unaudited 30 June
2023 2022
------------------- -------------------
Note GBPm GBPm GBPm GBPm
---------------------------------- ---- ---------- ------- ---------- -------
Non-current assets
Fixed asset investment 11 1.0 -
Property, plant and equipment 12 1.3 1.3
Lease assets 12 2.0 3.5
Intangible assets and goodwill 13 95.2 95.7
Trade and other receivables 1.1 2.6
---------------------------------- ---- ---------- ------- ---------- -------
Total non-current assets 100.6 103.1
---------------------------------- ---- ---------- ------- ---------- -------
Current assets
Trade and other receivables 11.6 9.6
Current tax asset 0.5 -
Cash and cash equivalents 13.3 7.6
---------------------------------- ---- ---------- ------- ---------- -------
Total current assets 25.4 17.2
---------------------------------- ---- ---------- ------- ---------- -------
Total assets 126.0 120.3
---------------------------------- ---- ---------- ------- ---------- -------
Equity and liabilities
Equity
Share capital 15 1.0 1.0
Share premium account 15 67.0 65.8
Other reserves 17 (50.6) (51.8)
Retained earnings 81.8 76.7
---------------------------------- ---- ---------- ------- ---------- -------
Equity attributable to the owners
of the Company 99.2 91.7
Non-controlling interest 0.4 0.3
---------------------------------- ---- ---------- ------- ---------- -------
Total equity 99.6 92.0
---------------------------------- ---- ---------- ------- ---------- -------
Liabilities
Current liabilities
Trade and other payables 19.5 17.6
Lease liabilities 14 0.4 0.5
Current tax liabilities - 2.2
---------------------------------- ---- ---------- ------- ---------- -------
Total current liabilities 19.9 20.3
---------------------------------- ---- ---------- ------- ---------- -------
Non-current liabilities
Lease liabilities 14 1.7 3.0
Deferred tax liabilities 4.8 5.0
---------------------------------- ---- ---------- ------- ---------- -------
Total non-current liabilities 6.5 8.0
---------------------------------- ---- ---------- ------- ---------- -------
Total liabilities 26.4 28.3
---------------------------------- ---- ---------- ------- ---------- -------
Total equity and liabilities 126.0 120.3
---------------------------------- ---- ---------- ------- ---------- -------
Consolidated statement of changes in equity
for the six months ended 30 June 2023
Non-
Share Share Other controlling Retained Total
capital premium reserves interest earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------- ------- -------- ------------ -------- ------
Balance at 30 June 2022 1.0 65.8 (51.8) 0.3 76.7 92.0
Total comprehensive income
for the period
Profit for the period - - - 0.2 5.1 5.3
----------------------------- ------- ------- -------- ------------ -------- ------
Total comprehensive income
for the period - - - 0.2 5.1 5.3
----------------------------- ------- ------- -------- ------------ -------- ------
Transactions with owners,
recorded directly in equity
Issue of shares - 1.0 - - - 1.0
Dividends - - - - (1.1) (1.1)
Share option charge - - 0.6 - - 0.6
Release of share option
reserve on exercise - - (0.1) - 0.1 -
----------------------------- ------- ------- -------- ------------ -------- ------
Total contributions by and
distributions to owners - 1.0 0.5 - (1.0) 0.5
----------------------------- ------- ------- -------- ------------ -------- ------
Balance at 31 December 2022 1.0 66.8 (51.3) 0.5 80.8 97.8
----------------------------- ------- ------- -------- ------------ -------- ------
Balance at 1 January 2023 1.0 66.8 (51.3) 0.5 80.8 97.8
Total comprehensive income
for the period
Profit for the period - - - 0.1 3.3 3.4
----------------------------- ------- ------- -------- ------------ -------- ------
Total comprehensive income
for the period - - - 0.1 3.3 3.4
----------------------------- ------- ------- -------- ------------ -------- ------
Transactions with owners,
recorded directly in equity
Issue of shares - 0.2 - - - 0.2
Dividends - - - (0.2) (2.4) (2.6)
Share option charge - - 0.8 - - 0.8
Release of share option
reserve on exercise - - (0.1) - 0.1 -
----------------------------- ------- ------- -------- ------------ -------- ------
Total contributions by and
distributions to owners - 0.2 0.7 (0.2) (2.3) (1.6)
----------------------------- ------- ------- -------- ------------ -------- ------
Balance at 30 June 2023 1.0 67.0 (50.6) 0.4 81.8 99.6
----------------------------- ------- ------- -------- ------------ -------- ------
Consolidated statement of cash flows
for the period to 30 June 2023
Period Period
ended ended
30 June 30 June
2023 2022
Note GBPm GBPm
----------------------------------------------------- ---- ------- -------
Net cash generated from operating activities 18 6.1 8.4
----------------------------------------------------- ---- ------- -------
Cash flows from investing activities
Fixed asset investment (1.0) -
Purchase of property, plant and equipment (0.3) (0.1)
Development expenditure (1.6) (0.6)
Finance income 0.1 -
----------------------------------------------------- ---- ------- -------
Net cash flows (used in)/from investing activities (2.8) (0.7)
----------------------------------------------------- ---- ------- -------
Cash flows from financing activities
Finance costs (0.2) (0.2)
Loan repayments made - (7.0)
Payment of lease liability (0.2) (0.3)
Issue of share capital 0.2 0.2
Dividends paid (2.6) (2.2)
----------------------------------------------------- ---- ------- -------
Net cash flows used in financing activities (2.8) (9.5)
----------------------------------------------------- ---- ------- -------
Net increase/(decrease) in cash and cash equivalents 0.5 (1.8)
Cash and cash equivalents at start of period 12.8 9.4
----------------------------------------------------- ---- ------- -------
Cash and cash equivalents at end of period 13.3 7.6
----------------------------------------------------- ---- ------- -------
Operating costs of an exceptional nature, as per note 7, are
included in net cash generated from operating activities.
During the period Fintel Labs Limited acquired 25% of the share
capital of financial technology company, Plannr Technologies
Limited. The investment is included in net cash from investing
activities.
NOTES TO THE INTERIM FINANCIAL INFORMATION
1 Reporting entity
Fintel plc (formerly the Simply Biz Group Limited) is a company
domiciled in the UK. These condensed consolidated interim financial
statements ("interim financial statements") as at and for the six
months ended 30 June 2023 comprise Fintel and its subsidiaries
(together referred to as "the Company"). The Company is the leading
provider of digital, data led and expert services to product
providers, intermediaries, and consumers to help them navigate the
increasingly complex world of retail financial services. 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.
2 General information and basis of preparation
These interim financial statements have been prepared in
accordance with IAS 34 Interim financial reporting and should be
read in conjunction with the Company's last annual consolidated
financial statements as at and for the year ended 31 December 2022
("last annual financial statements"). They do not include all the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the Company's financial position and performance
since the last annual financial statements.
The financial information set out in these interim financial
statements for the six months ended 30 June 2023 and the
comparative figures for the six months ended 30 June 2022 are
unaudited. The comparative financial information for the period
ended 31 December 2022 in this interim report does not constitute
statutory accounts for that period under 435 of the Companies Act
2006.
Statutory accounts for the period ended 31 December 2022 have
been delivered to the Registrar of Companies. The auditors' report
on the accounts for 31 December 2022 was 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.
The interim financial statements comprise the financial
statements of the Company and its subsidiaries at 30 June 2023.
Subsidiaries are consolidated from the date of acquisition, being
the date on which the Company obtained control, and continue to be
consolidated until the date when such control ceases.
The interim financial statements incorporate the results of
business combinations using the acquisition method. In the
consolidated balance sheet, the acquiree's identifiable assets,
liabilities and contingent liabilities are initially recognised at
their fair values at the acquisition date.
These interim financial statements were authorised for issue by
the Company's Board of Directors on 18 September 2023.
3 Critical accounting estimates and judgements
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income, and expense. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Company's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements.
4 Changes in significant accounting policies
The accounting policies applied in these condensed consolidated
interim financial statements are the same as those applied in the
Company's consolidated financial statements in the 2022 Annual
Report & Accounts.
5 Going concern
The Board has concluded that it is appropriate to adopt the
going concern basis, having undertaken a rigorous review of
financial forecasts and available resources.
The Directors have robustly tested the going concern assumption
in preparing these financial statements, taking into account the
Group's strong liquidity position at 30 June 2023 and a number of
severe but plausible downside scenarios have been modelled, which
collectively would be considered remote, and remain satisfied that
the going concern basis of preparation is appropriate.
6 Segmental information
During the period, the Company was domiciled in the UK and all
revenue is derived from external customers in the United
Kingdom.
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, product
panelling and co-manufacturing services 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 for over 8,000 users; independent ratings and reviews of
over 14,000 financial products and funds, licensed by over 300
brands; and research of over 43,000 financial 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.
Admin and
Intermediary Distribution Fintech support
Services Channels and Research costs Group
Period ended 30 June 2023 GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------------ ------------ ------------- --------- ------
Revenue 11.5 9.9 10.3 - 31.7
Direct operating costs (6.3) (6.3) (4.0) - (16.6)
---------------------------------- ------------ ------------ ------------- --------- ------
Gross profit 5.2 3.6 6.3 - 15.1
Administrative and support
costs (6.1) (6.1)
---------------------------------- ------------ ------------ ------------- --------- ------
Adjusted EBITDA 9.0
Operating costs of an exceptional
nature (1.5)
Amortisation of other intangible
assets (1.0)
Amortisation of development
costs and software (0.6)
Depreciation (0.2)
Depreciation of lease assets (0.2)
Share option charge (0.8)
---------------------------------- ------------ ------------ ------------- --------- ------
Operating profit 4.7
---------------------------------- ------------ ------------ ------------- --------- ------
Net finance costs (0.2)
---------------------------------- ------------ ------------ ------------- --------- ------
Profit before tax 4.5
---------------------------------- ------------ ------------ ------------- --------- ------
Fintech
Intermediary Distribution and Admin and
support
Services Channels Research costs Group
Period ended 30 June 2022 GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------------ ------------ -------- --------- ------
Revenue 11.4 11.4 9.4 - 32.2
Direct operating costs (6.9) (6.9) (3.7) - (17.5)
--------------------------------- ------------ ------------ -------- --------- ------
Gross profit 4.5 4.5 5.7 - 14.7
Administrative and support
costs (6.0) (6.0)
--------------------------------- ------------ ------------ -------- --------- ------
Adjusted EBITDA 8.7
Amortisation of other intangible
assets (1.0)
Amortisation of development
costs and software (0.5)
Depreciation (0.1)
Depreciation of lease assets (0.2)
Share option charge (0.7)
--------------------------------- ------------ ------------ -------- --------- ------
Operating profit 6.2
--------------------------------- ------------ ------------ -------- --------- ------
Net finance costs (0.3)
--------------------------------- ------------ ------------ -------- --------- ------
Profit before tax 5.9
--------------------------------- ------------ ------------ -------- --------- ------
In determining the trading performance of the operating segments
central costs have been presented separately in the current period.
Segmental performance in the prior period has been presented
consistently on the same basis.
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 period covered by the financial information.
7 Operating profit
Operating profit for the period has been arrived at after
charging:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
---------------------------------------- ------- ------------
Depreciation of tangible assets - owned 0.2 0.1
Depreciation of lease assets 0.2 0.2
---------------------------------------- ------- ------------
Underlying adjustments
Underlying adjustments include amortisation of other intangible
assets and operating and finance costs of an exceptional
nature.
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
----------------------------------------- ------- ------------
Exceptional costs - operating
Transformation 0.8 -
M&A pipeline costs 0.4 -
Restructuring 0.3 -
Other underlying adjustments
Amortisation of other intangible assets 1.0 1.0
Underlying adjustments - before tax 2.5 1.0
These are items which are non-recurring and are adjusted on the
basis of either their size or their nature. As these items are
one-off or non-operational in nature, management considers that
their exclusion aids understanding of the Group's underlying
business performance.
Operating costs of an exceptional nature of GBP1.5m (HY22: Nil)
comprise the following:
-- Transformation costs of GBP0.8m - includes implementation
costs to enhance Fintel's customer relationship management platform
("CRM") and a new enterprise resource planning system ("ERP")
-- M&A pipeline costs GBP0.4m (HY22: Nil) - including costs
relating to the recent acquisition of Plannr Technologies
Limited
-- Restructuring related costs GBP0.3m (HY22: Nil)
No other costs have been treated as exceptional in the period to
30 June 2023.
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 in prior periods. 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:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
--------------------------------------------------- ------- ------------
Operating profit 4.7 6.2
Add back:
Depreciation (note 12) 0.2 0.1
Depreciation of lease assets (note 12) 0.2 0.2
Amortisation of other intangible assets (note
13) 1.0 1.0
Amortisation of development costs and software
(note 13) 0.6 0.5
--------------------------------------------------- ------- ------------
EBITDA 6.7 8.0
Add back:
Share option charge 0.8 0.7
Operating costs of exceptional nature (note 7) 1.5 -
--------------------------------------------------- ------- ------------
Adjusted EBITDA 9.0 8.7
--------------------------------------------------- ------- ------------
Adjusted EBITDA of non-core surveying business 0.2 0.5
--------------------------------------------------- ------- ------------
Core adjusted EBITDA 8.8 8.2
--------------------------------------------------- ------- ------------
Operating costs of an exceptional nature 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:
Period ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
--------------------------------------------------- ------------ ------------
Operating profit 4.7 6.2
Add back:
Operating costs of exceptional nature (note 7) 1.5 -
Amortisation of other intangible assets (note
13) 1.0 1.0
--------------------------------------------------- ------------ ------------
Adjusted operating profit 7.2 7.2
--------------------------------------------------- ------------ ------------
Adjusted profit before tax is calculated as follows:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
--------------------------------------------------- ------- ------------
Profit before tax 4.5 5.9
Add back:
Operating costs of exceptional nature (note 7) 1.5 -
Amortisation of other intangible assets (note
13) 1.0 1.0
--------------------------------------------------- ------- ------------
Adjusted profit before tax 7.0 6.9
--------------------------------------------------- ------- ------------
Adjusted profit after tax is calculated as follows:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
----------------------------------------------------- ------- ------------
Profit after tax 3.4 4.8
Add back:
Operating costs of exceptional nature (note 7),
net of tax 1.2 -
Amortisation of other intangible assets (note
13), net of deferred tax 0.7 0.8
Profit attributable to non-controlling interests (0.1) (0.1)
----------------------------------------------------- ------- ------------
Adjusted profit after tax 5.2 5.5
----------------------------------------------------- ------- ------------
Free cash flow conversion is calculated as follows:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
--------------------------------------------------- ------- ------------
Adjusted operating profit 7.2 7.2
Adjusted for:
Depreciation of tangible assets 0.2 0.1
Depreciation of lease assets 0.2 0.2
Amortisation of development costs and software 0.6 0.5
Share option charge 0.8 0.7
--------------------------------------------------- ------- ------------
Adjusted EBITDA 9.0 8.7
--------------------------------------------------- ------- ------------
Net changes in working capital 0.4 0.9
Purchase of property, plant and equipment (0.3) (0.1)
Development expenditure (1.6) (0.6)
--------------------------------------------------- ------- ------------
Underlying cash flow from operations 7.5 8.9
--------------------------------------------------- ------- ------------
Underlying operating cash flow conversion 104% 124%
--------------------------------------------------- ------- ------------
Net interest paid (0.1) (0.2)
Income tax paid (1.8) (1.3)
Payments of lease liability (0.2) (0.3)
--------------------------------------------------- ------- ------------
Free cash flow 5.4 7.1
Adjusted EBITDA 9.0 8.7
--------------------------------------------------- ------- ------------
Free cash flow conversion 60% 82%
--------------------------------------------------- ------- ------------
9 Net finance expense
Finance Interest - expense
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
------------------------------------------------------- ------- ------------
Interest payable on financial liabilities at amortised
cost 0.3 0.2
Finance charge on lease liability - 0.1
------------------------------------------------------- ------- ------------
Total finance expense 0.3 0.3
------------------------------------------------------- ------- ------------
Finance Interest - income
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
------------------------- ------- ------------
Bank interest receivable 0.1 -
------------------------- ------- ------------
Total finance income 0.1 -
------------------------- ------- ------------
10 Earnings per share
Period ended Period ended
30 June 30 June
Basic earnings per share 2023 2022
---------------------------------------------- ------------ ------------
Profit attributable to equity shareholders of
the parent (GBPm) 3.3 4.7
---------------------------------------------- ------------ ------------
Weighted average number of shares in issue 103,705,423 102,952,665
---------------------------------------------- ------------ ------------
Basic profit per share (pence) 3.2 4.6
---------------------------------------------- ------------ ------------
Period
ended Period ended
30 June 30 June
Diluted earnings per share 2023 2022
------------------------------------------------------ ----------- ------------
Profit attributable to equity shareholders of the
parent (GBPm) 3.3 4.7
------------------------------------------------------ ----------- ------------
Weighted average number of shares in issue 103,705,423 102,952,665
Diluted weighted average number of shares and options
for the period 734,382 751,573
------------------------------------------------------ ----------- ------------
104,439,805 103,704,238
------------------------------------------------------ ----------- ------------
Diluted profit per share (pence) 3.2 4.5
------------------------------------------------------ ----------- ------------
Period ended Period ended
30 June 30 June
Adjusted basic earnings per share 2023 2022
------------------------------------------- ------------ ------------
Adjusted profit after tax (note 8) (GBPm) 5.2 5.5
------------------------------------------- ------------ ------------
Weighted average number of shares in issue 103,705,423 102,952,665
------------------------------------------- ------------ ------------
Adjusted earnings per share (pence) 5.0 5.3
------------------------------------------- ------------ ------------
11 Fixed asset investment
Fixed Asset
Investment
GBPm
-------------------- -----------
At 31 December 2022 -
Additions 1.0
-------------------- -----------
At 30 June 2023 1.0
-------------------- -----------
On 8 March, Fintel Labs Limited acquired a non-controlling
interest in Plannr Technologies Limited, acquiring 25% of Ordinary
Shares in exchange for GBP1.0m consideration. The acquisition is
recorded at cost and subsequently recorded at fair value through
other comprehensive income.
12 Property, plant and equipment
Leased assets Owned assets
-------------------------- -----------------------------
Plant and Leasehold Office
Property equipment Total Improvement Equipment Total
Group GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- -------- --------- ----- ----------- --------- -----
Cost
At 1 January 2022 4.0 0.9 4.9 0.9 1.8 2.7
Additions - 0.1 0.1 - 0.1 0.1
Disposals - - - - - -
---------------------------- -------- --------- ----- ----------- --------- -----
At 30 June 2022 4.0 1.0 5.0 0.9 1.9 2.8
Additions - - - - 0.1 0.1
Revaluation of lease (1.1) - (1.1) - - -
---------------------------- -------- --------- ----- ----------- --------- -----
At 31 December 2022 2.9 1.0 3.9 0.9 2.0 2.9
Additions - - - - 0.3 0.3
At 30 June 2023 2.9 1.0 3.9 0.9 2.3 3.2
---------------------------- -------- --------- ----- ----------- --------- -----
Depreciation and impairment
At 1 January 2022 0.7 0.6 1.3 0.1 1.3 1.4
Depreciation charge
for the period 0.1 0.1 0.2 - 0.1 0.1
---------------------------- -------- --------- ----- ----------- --------- -----
At 30 June 2022 0.8 0.7 1.5 0.1 1.4 1.5
Depreciation charge
for the period 0.2 - 0.2 0.1 0.1 0.2
At 31 December 2022 1.0 0.7 1.7 0.2 1.5 1.7
Depreciation charge
for the period 0.1 0.1 0.2 0.1 0.1 0.2
---------------------------- -------- --------- ----- ----------- --------- -----
At 30 June 2023 1.1 0.8 1.9 0.3 1.6 1.9
---------------------------- -------- --------- ----- ----------- --------- -----
Net book value
At 31 June 2023 1.8 0.2 2.0 0.6 0.7 1.3
---------------------------- -------- --------- ----- ----------- --------- -----
At 30 June 2022 3.2 0.3 3.5 0.8 0.5 1.3
---------------------------- -------- --------- ----- ----------- --------- -----
Leased property includes the Group's head office for which the
lease was entered into during 2020. The lease had a non-cancellable
term of 10 years, and also contained an option to extend the lease
for a further 5 years beyond the non-cancellable term, and an
option to purchase the building exercisable until January 2023.
During 2022 management reassessed the likelihood of calling in the
option to buy. The lease was revalued during 2022 which resulted in
a reduction of the lease liability and right-of-use asset of
GBP1.1m. The lease asset is being depreciated across the
non-cancellable term of the lease and the option to buy has since
lapsed.
Plant and equipment includes IT equipment and motor
vehicles.
13 Intangible assets
Total other
Intellectual intangible Development
Goodwill Brand property assets expenditure Total
Group GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- -------- ----- ------------ ----------- ------------ -----
Cost
At 1 January 2022 72.4 3.1 24.4 27.5 3.7 103.6
Additions - - - - 0.6 0.6
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 30 June 2022 72.4 3.1 24.4 27.5 4.3 104.2
Additions - - - - 1.1 1.1
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 31 December 2022 72.4 3.1 24.4 27.5 5.4 105.3
---------------------------- -------- ----- ------------ ----------- ------------ -----
Additions - - - - 1.6 1.6
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 30 June 2023 72.4 3.1 24.4 27.5 7.0 106.9
---------------------------- -------- ----- ------------ ----------- ------------ -----
Amortisation and impairment
At 1 January 2022 0.2 0.8 4.8 5.6 1.2 7.0
Charge in the period - 0.2 0.8 1.0 0.5 1.5
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 30 June 2022 0.2 1.0 5.6 6.6 1.7 8.5
Charge in the period - 0.2 0.8 1.0 0.6 1.6
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 31 December 2022 0.2 1.2 6.4 7.6 2.3 10.1
Charge in the period - 0.2 0.8 1.0 0.6 1.6
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 30 June 2023 0.2 1.4 7.2 8.6 2.9 11.7
---------------------------- -------- ----- ------------ ----------- ------------ -----
Net book value
At 30 June 2023 72.2 1.7 17.2 18.9 4.1 95.2
---------------------------- -------- ----- ------------ ----------- ------------ -----
At 30 June 2022 72.2 2.1 18.8 20.9 2.6 95.7
---------------------------- -------- ----- ------------ ----------- ------------ -----
Capitalised development expenditure relates to the development
of the software platform in Defaqto Limited.
The carrying amount of goodwill is allocated across operating
segments, which are deemed to be cash-generating units ("CGUs") as
follows:
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
---------------------- ------- ------------
Intermediary Services 12.7 12.7
Distribution Channels 11.5 11.5
Fintech and Research 48.0 48.0
---------------------- ------- ------------
72.2 72.2
---------------------- ------- ------------
Goodwill is determined to have an indefinite useful economic
life. The Group has determined that, for the purposes of impairment
testing, each segment is a cash-generating unit ("CGU"). 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.
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.
Period ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
---------------- ------------ ------------
Current
Lease liability 0.4 0.5
---------------- ------------ ------------
0.4 0.5
Non-current
Lease liability 1.7 3.0
---------------- ------------ ------------
2.1 3.5
---------------- ------------ ------------
The Company has access to a GBP80m Revolving Credit Facility,
which is linked to the Sterling Overnight Interbank Average Rate
("SONIA"). The committed credit facilities are available at pre
agreed margins of between 1.50% and 2.40%, dependent on the net
leverage of the company. The facility remains fully undrawn.
15 Capital and reserves
Share capital
Ordinary
Shares
----------------------------------------------------- -----------
Number of fully paid shares (nominal value GBP0.01):
At 30 June 2022 103,011,962
Issue of share capital 636,983
----------------------------------------------------- -----------
At 31 December 2022 103,648,945
Issue of share capital 123,270
----------------------------------------------------- -----------
At 30 June 2023 103,772,215
----------------------------------------------------- -----------
Share
premium
GBPm
----------------------- -------
At 30 June 2022 65.8
Issue of share capital 1.1
----------------------- -------
At 31 December 2022 66.8
Issue of share capital 0.2
----------------------- -------
At 30 June 2023 67.0
----------------------- -------
16 Share-based payment arrangements
There have been no material changes to the share-based payment
arrangements in the period to those disclosed in the annual report
and accounts for the period ended 31 December 2022 other than as
disclosed below:
CSOP 2018
During the current period, 17647 awards were exercised. 8,823
awards under the plan have been forfeited as a result of bad
leavers
SAYE 2018
During the current period, 10,588 awards were exercised. No
awards were forfeited as a result of bad leavers.
SAYE 2019
During the current period, 83,152 awards were exercised. No
awards were forfeited as a result of bad leavers.
SAYE 2021
During the current period, 1,960 awards were exercised. The
awards forfeited totalled 14,503 as a result of bad leavers.
17 Other reserves
Merger Share option
reserve reserve Total
Group GBPm GBPm GBPm
-------------------------------- ------- ------------ ------
At 30 June 2022 (53.9) 2.1 (51.8)
Share option charge - 0.6 0.6
Release of share option reserve - (0.1) (0.1)
-------------------------------- ------- ------------ ------
At 31 December 2022 (53.9) 2.6 (51.3)
Share option charge - 0.8 0.8
Release of share option reserve - (0.1) (0.1)
-------------------------------- ------- ------------ ------
At 30 June 2023 (53.9) 3.3 (50.6)
-------------------------------- ------- ------------ ------
18 Notes to the cash flow statement
Period
ended Period ended
30 June 30 June
2023 2022
GBPm GBPm
--------------------------------------------------------- ------- ------------
Cash flow from operating activities
Profit after taxation 3.4 4.8
Add back:
Finance income (0.1) -
Finance cost 0.3 0.3
Taxation 1.1 1.1
--------------------------------------------------------- ------- ------------
4.7 6.2
--------------------------------------------------------- ------- ------------
Adjustments for:
Amortisation of development expenditure and software
(note 13) 0.6 0.5
Depreciation of lease asset 0.2 0.2
Depreciation of property, plant and equipment 0.2 0.1
Amortisation of other intangible assets 1.0 1.0
Share option charge 0.8 0.7
--------------------------------------------------------- ------- ------------
Operating cash flow before movements in working capital 7.5 8.7
Decrease/(increase) in receivables (0.2) 0.3
Increase in trade and other payables 0.6 0.7
--------------------------------------------------------- ------- ------------
Cash generated from operations 7.9 9.7
Income taxes paid (1.8) (1.3)
--------------------------------------------------------- ------- ------------
Net cash generated from operating activities 6.1 8.4
--------------------------------------------------------- ------- ------------
19 Subsequent events
On 7 July 2023 Regulus Bidco Limited, the parent company of
Defaqto, acquired 100 % share capital of MI Capital Research
Limited (MICAP). Initial consideration of GBP3.0m has been paid,
with a further GBP1.0m deferred for one year and GBP0.5m contingent
on certain trading criteria being met. The acquisition of MICAP
will extend Defaqto's reach into the tax-advantage market expanding
its data footprint and research capabilities.
On 27 July 2023, Fintel IQ Limited acquired Competent Adviser
Training Limited, the UK's fastest growing digital knowledge and
competence management system, acquiring 100% of Ordinary Shares in
exchange for GBP2.5m consideration and a GBP0.5m contingent earnout
based on trading performance. The acquisition forms part of the
Group's strategy to strengthen its technology and data
proposition.
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