19 March 2024
Fintel
plc
("Fintel", the "Company", the "Business" or the
"Group")
Full year results for the
year ended 31 December 2023
Resilient financial
performance and significant strategic and operational
progress
Fintel (AIM: FNTL), the 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 2023.
Matt Timmins, Joint CEO of Fintel
"2023 has been a defining year for
Fintel. We have delivered a resilient financial performance and
significant progress against our strategy, which balances growth
across our core activities, organic investment and complementary
M&A.
"We are executing our strategy at
pace, enhancing our service and technology platform, increasing our
scale and reach, and strengthening our position at the heart of the
UK retail financial services sector to inspire better outcomes for
all.
"The cash-generative nature of our
business, underpinned by our financial resources, positions us well
to capitalise on the favourable market conditions for M&A,
whilst delivering further organic growth and value to all of our
stakeholders.
"In the new financial year to date,
we are trading in line with expectations and remain well positioned
to take advantage of opportunities in our market."
Financial highlights -
Resilient performance, in line with expectations
· Adjusted EBITDA1
growth of 5.6% to £20.5m (FY22: £19.4m) and adjusted EBITDA margin
of 31.5% (FY22: 29.1%), during period of significant organic and
inorganic investment
· Core2 SaaS & Subscription revenue up 2.2%
to £37.6m (FY22: £36.8m); up 11.8% on a like-for-like basis
excluding the gross to net revenue impact from a change in
contractual terms of key software reseller agreement and
acquisitions (FY23: £34.2m; FY22: £30.6m)
· Core
revenue increased c.0.3% to £56.6m (FY22: £56.4m) and grew 5.6% on
a like-for-like basis (FY23: £47.7m; FY22: £45.2m), excluding the
impact of volatility in the mortgage market, the gross to net
revenue change of the software reseller revenues and
acquisitions
· Four
acquisitions completed in 2023 with initial net cash investment of
£13.3m, delivering combined core revenues of £1.5m in the
period
· Strong
balance sheet with £12.7m of cash, and £69m of headroom in £80m
Revolving Credit Facility, providing flexibility for further
investment
· Net
cash of £1.7m (FY22: £12.8m), having invested significantly in the
business and M&A
· Adjusted EPS1 of
12.2 pence per share (FY22: 12.2 pence per share),
consistently demonstrating strong profitability
· Final
dividend of 2.35 pence per share proposed, resulting in a full year
dividend of 3.45 pence per share, an increase of 6.2% on prior
year
Financial highlights
|
2023
|
2022
|
% change
|
Alternative performance measures
|
|
|
|
Core2 revenue
|
£56.6m
|
£56.4m
|
0.3%
|
Core SaaS & subscription revenue
|
£37.6m
|
£36.8m
|
2.2%
|
Core adjusted EBITDA
|
£20.2m
|
£18.6m
|
8.6%
|
Core adjusted EBITDA margin
|
35.7%
|
32.9%
|
280 bps
|
Adjusted EBITDA1
|
£20.5m
|
£19.4m
|
5.6%
|
Adjusted EBITDA margin
|
31.5%
|
29.1%
|
240 bps
|
Adjusted EPS1
|
12.2p
|
12.2p
|
-
|
Statutory measures
|
|
|
|
Statutory revenue
|
£64.9m
|
£66.5m
|
(2.4%)
|
Statutory EBITDA
|
£14.4m
|
£16.7m
|
(13.5%)
|
Statutory EPS
|
6.8p
|
9.5p
|
(28.2%)
|
Net cash
|
£1.7m
|
£12.8m
|
(86.7%)
|
Dividend per share
|
3.45p
|
3.25p
|
6.2%
|
Strategic and operational highlights - Significant
progress
· Fintel
has made continued strategic progress, with sustained growth across
core activities, organic investment into technology and research
platforms, and inorganic investment to increase our scale, IP and
capabilities
o Sustained growth across core activities
§
Growth in SaaS and Subscription revenue, which now
represents 66.4% of core revenues (FY22: 65.1%)
§
Strong growth in fintech software revenue of
11.5%, following significant extension of proprietary software
solutions
§
24.9% growth in Distribution as a Service
revenue
o Increased organic investment
of £4.8m into technology and service platform
§
Enhanced Consumer Duty support and technology
package, helping intermediaries to implement
requirements
§
Expanded proprietary financial planning and
competitor and market intelligence software solutions with launch
of four new modules
§
Extended ratings and reviews portfolio and
expanded into tax advantaged market
§
Deepened insights for Product Providers through
upgraded partner portal, and scaling of Strategic Asset Allocation
and Distribution as a Service partnerships
o M&A investment to increase
our scale, IP and capabilities, capitalising on favourable market
conditions
§
Four acquisitions completed over the
period:
· MICAP,
a provider of independent research and advice
tools
· Competent Adviser, a dynamic learning platform enabling
advisers to meet increasing regulatory competency
requirements
· VouchedFor, a leading review site for Financial Advisers,
Mortgage Advisers, Solicitors and Accountants
· AKG, a
leading provider of independent assessments and ratings of
financial strength
· Acquisitions are performing as expected
§
Two further acquisitions completed post period
end:
· Owen
James, the leading provider of strategic engagement events in UK
financial services
· Synaptic Software, an independent provider of financial
adviser planning and research software, and Webline, a quote and
apply portal for advised sales of protection products
§
Investment in Plannr through Fintel Labs
technology incubator
· Expanding Fintel's technology proposition and extending the
capabilities of Defaqto Engage through a two-way
integration
· With
Fintel's support, Plannr has now successfully launched to the
intermediary market
Current trading and outlook - Continue to trade in line with
expectations
· Current trading remains in line with expectations, with growth
in fintech software revenue and software license sales offsetting
pressures in the UK housing market
· With
expectations that interest rates and housing market activity will
become more positive in 2024, Fintel is well positioned to benefit
from a recovery in the mortgage market
· Clear
growth strategy with demand underpinned by positive market dynamics
and structural drivers including regulatory pressure, the FCA
Consumer Duty regulation and demand for technology and
data
· Organic growth
expected to be driven by ongoing software adoption across
membership base, further technology penetration across the wider
market, and synergies arising from recent acquisitions
· Qualified M&A
pipeline, underpinned by financial resources and favourable market
conditions
Notes
1Adjusted EBITDA and adjusted
EPS are alternative performance measures for which a reconciliation
to a GAAP measure is provided in note 8 and note
10
2Core business excludes
revenues from panel management and surveying.
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.
For
further information please contact:
Fintel plc
Matt Timmins (Joint Chief Executive
Officer)
Neil Stevens (Joint Chief Executive
Officer)
David Thompson (Chief Financial
Officer)
|
via MHP Group
|
Zeus (Nominated Adviser and Joint Broker)
Martin Green
Dan Bate
|
+44 (0) 20 3829 5000
|
Investec Bank (Joint Broker)
Bruce Garrow
David Anderson
|
+44 (0) 20 7597 5970
|
MHP Group (Financial PR)
Reg Hoare
Robert Collett-Creedy
|
+44 (0) 7736 464749
Fintel@mhpgroup.com
|
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
Chair's statement
Year in review
2023 was a year of material global
socio-economic uncertainty and significant change within the UK
advice market. In addition, the landmark Consumer Duty regulation
was introduced by the FCA, and the impact of technology, data and
automated processes on the financial services market
intensified.
Despite these external changes,
Fintel once again demonstrated its agility with a positive step
change of our own, accelerating our strategic momentum and risk
mitigation.
The advice market is the centrepin
of our commercial position, economic strength, and forward
strategy. 2023 was a period of tumultuous change for advisers, with
material volatility across the financial needs of their clients,
the adoption of Consumer Duty, ongoing market consolidation, and an
accelerating race to respond to the digital future of efficient
advice provision in the UK.
We enhanced our Intermediary
Services support model, technology suite, and product research
offering, retaining our position as the leading provider to the
directly authorised intermediary market. As a result, we further
deepened our key relationships, as we deliver aligned capabilities
that will strengthen our members' market position, as well as our
own.
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. This has led to further solid growth in our
Distribution as a Service ("DaaS") proposition, and significantly
deeper relationships.
Following the 2023 launch of Fintel
Labs, a venture designed to strengthen our technology proposition
and foster innovation in the sector, we invested in and supported
an innovative technology business, customer relationship management
("CRM") entrant Plannr. CRM is mission critical to the technologies
deployed by our client base, and our early-stage investment in and
collaboration with Plannr will provide us with the leading
strategic CRM platform for small to medium-sized intermediary firms
long into the future. Alongside this, we renewed our strategic
partnership with Intelligent Office, the leading medium to
large-sized adviser CRM platform in the UK, with a revised
five-year partnership agreement. This new agreement gave rise to a
material change in how we account for the business between us,
reducing our reportable run-rate revenues, whilst significantly
increasing our reportable profit margin percentage from these
activities.
Coming into 2023 we were acutely
aware that asset prices across global financial technology,
research and services had dropped significantly, as the increasing
cost of capital directly impacted private equity investment and
those incumbents backed by it, whilst trading uncertainties
dampened the inorganic ambitions of larger institutions in the
market.
Fintel has strategically mapped
acquisition targets within adjacent markets since its highly
successful acquisition of Defaqto in 2019, but we paused activity
in the run-up to 2023, as asset prices were prohibitive to
shareholder value creation. That changed significantly in 2023,
when the fiscal capacity and deal foundations we created over
recent years combined with attractive asset prices, enabled us to
participate tactically in the M&A market. We have done so with
great success, without equity dilution to our shareholders, and at
an efficient cost of capital through the use of our own liquidity
and favourable debt conditions, whilst retaining a positive net
cash position at the year end.
Our acquisition strategy is clear.
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 client base.
Financially, the business has
delivered consistently throughout 2023, demonstrating the largely
recurring nature of its growing revenue streams and its ability to
control operating costs, and invest significantly in its future.
2023 has demonstrated that Fintel is a highly resilient,
predictable growth engine that operates uniquely in a growing
market sector.
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.
Our progress this year is a
testament to our exceptional people, unique culture, and focused
client engagement as we continue to simplify and improve a rapidly
changing market.
Financial performance and dividend
The underlying resilience and
cash-generative nature of our business have been clearly
demonstrated through our strong financial performance for FY23,
despite the backdrop of a challenging macroeconomic environment
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 enhancement. This resulted in an interim dividend of
1.1 pence per Ordinary Share, paid in November 2023, and I am
pleased to confirm that the Directors are recommending a final
dividend of 2.35 pence per share payable on 19 June 2024, resulting
in a full year dividend of 3.45 pence per share.
Progress against our strategy
Our primary focus for 2023 was 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. Each of these reflects
our strategic ambitions for medium to long-term profitable growth,
and the establishment of a market leading position and dominant
market share within our target sectors.
I am pleased to report that despite
considerable negative market sentiment, most notably in the
connected sectors of mortgages and surveying, we have progressed
well against each of these objectives.
We have invested significantly
across 2023, and we will continue to do so across 2024, as we have
clear sight of material and sustainable shareholder value creation
opportunities.
Fintel is a business with a clear
strategy, a positive market environment in which to execute it, and
an experienced team that combines vision with a proven ability to
deliver consistent strategic progress year on year.
Board transition
The Board of Directors has remained
stable and unchanged during 2023, enabling a smooth transition of
the Chair role from Ken Davy to me, with Ken returning to standard
non-executive status as indicated to our shareholders this time
last year. This demonstrates the robustness of our succession
planning and the cohesiveness of our Board in managing structural
change effectively.
I would like to take this
opportunity to thank Ken directly for his excellent support
throughout both my entry into Fintel and the transition to Chair.
Furthermore, I would also like to thank the remaining Board members
for their support, diligence and commitment throughout
2023.
Outlook
It remains clear that the
macro-economic environments, both domestically and internationally,
remain challenging for UK businesses in the medium term. That said,
I am confident that the UK financial services sector will continue
to offer opportunities for a business such as ours to grow,
diversify and enhance shareholder value. We have the Executive
team, the strategy, and the financial strength to take direct
advantage of structural changes in the market.
Throughout 2023 we have demonstrated
our ability to deliver significant strategic progress. We enter
2024 with momentum and are confident in our ability to continue to
enhance shareholder value across the medium term.
I would like to express the Board's
deep gratitude to each of our Fintel colleagues for their
innovation, hard work, commitment and dedication to the Company
and, indeed, to our many external partners and customers, all of
whom bring value to us each day.
These are the bedrocks of our future
success over the years to come, as we continue to inspire better
outcomes for all.
Phil Smith
Non-Executive
Chairman
JOINT CHIEF EXECUTIVE OFFICERS' STATEMENT
Strategic expansion capitalising on market
opportunities
2023 has been a defining year for
Fintel. We have delivered a resilient financial performance and
invested significantly, enhancing our service and technology
platform and increasing our scale and reach through the completion
of four complementary acquisitions in the year.
We have strengthened our unique
position at the heart of the retail financial services sector, and
in a rapidly changing market, we have helped financial
professionals deliver better outcomes for their clients, remain
compliant in the face of changing regulation, and drive their
businesses forward at pace.
As we scale our compelling
proposition, enhancing our insight, IP and technology capabilities
to meet evolving market needs, we are strongly positioned for
continued organic and acquisitive growth, creating sustainable
value for all of our stakeholders.
In a year of significant volatility,
in particular within the mortgage market, our total statutory
revenue remained resilient, decreasing by 2.4% to £64.9m (FY22:
£66.5m), while our adjusted EBITDA increased by 5.6% to £20.5m
(FY22: £19.4m) and adjusted EBITDA margin to 31.5% (FY22: 29.1%),
in line with Board expectations.
Strategic priorities
Our strategic priorities are to
deliver growth, enhance margin and improve the underlying quality
of our core revenues in line with our medium-term objectives. To
deliver these objectives we balance sustainable growth across our
core activities, organic investment into our technology and
research platforms with inorganic investment to increase our scale,
IP and capabilities.
Following significant organic
investment into our technology and services platform of £4.8m and
into four acquisitions with initial net cash investment of £13.3m
in 2023, we see further opportunities to capitalise on favourable
market conditions and execute our inorganic growth strategy in
2024. We will continue to realise our active M&A pipeline,
leveraging our financial agility to expand our market position,
increase market penetration in our target sectors and deliver
material and sustainable shareholder value.
Strategic delivery - sustained growth across
our core activities
We continue to focus on scaling our
core business and improving the underlying quality of our revenues.
Our three medium-term (2021-2024) strategic objectives balance
continued growth with re-investment in our core capabilities as we
digitise and enhance our service and technology
platform.
Progress against strategic targets
Strategic focus
|
2023
|
2024 target
|
Core Revenue growth
|
5.6%*
|
5-7%
|
Margin
|
35.7%
|
35-40%
|
Earnings quality
|
66.4%
|
70-80%
|
Core revenue growth
Objective: core business revenue growth of 5-7%
annually.
In 2023 our core business continued
to perform well and in line with our target range, growing 5.6%
(FY23: £47.7m; FY22: £45.2m) on a like-for-like basis*. Key
drivers consisted of strong growth in fintech software and
membership services revenue, combined with expansion of data
services and ongoing adoption of the Distribution as a Service
("DaaS") proposition. Our total core revenue remained resilient,
increasing by 0.3% in the year (FY23: £56.6m; FY22: £56.4m),
enhanced by £1.5m revenue from the four acquisitions completed in
the year.
*Like-for-like basis strips out the impact of acquisitions,
mortgage market volatility and the changes in revenue recognition
of a software reseller agreement
EBITDA margin
Objective: core EBITDA margin of 35-40%.
Our core business delivered an
adjusted EBITDA of £20.2m (FY22: £18.6m) and an EBITDA margin of
35.7% (FY22: 32.9%), during a year of significant organic and
inorganic expansion of our scale, IP and capabilities, performing
in line with our target range.
Earnings quality
Objective: 70-80% of core revenue from SaaS and
subscriptions
SaaS and subscription revenue has
increased by 2.2% to £37.6m, now representing 66.4% (FY22: 65.1%)
of the core revenues. Key drivers were continued expansion of our
DaaS proposition, and quality recurring revenue streams added
through recent acquisitions. These positive drivers offset the
impact of the amendment of our largest software reseller
agreement.
Organic and inorganic investment to capitalise on
growth opportunity
The UK retail financial services
market is open, independent,
and competitive, providing choice and value to
consumers. However, it is also complex and fragmented, with
thousands of products to choose from, delivered by hundreds of providers, through thousands of intermediaries,
within a changing regulatory environment.
In this dynamic landscape, Fintel
provides technology and services to financial product
manufacturers, intermediaries and consumers. Fintel's wide-reaching
sector presence and unparalleled market insight ensure continued
and numerous opportunities for growth. Benefiting from a clear
growth strategy underpinned by structural market drivers,
our model combines diverse
and recurring revenue streams with a proven ability to adapt to
industry trends, respond to customer demand and develop new
products. This creates significant opportunities for both organic and acquisitive
growth, enhanced revenue quality, and
sustainable value creation for all of our stakeholders.
Rising tide of regulation
The UK financial services regulatory
landscape is constantly evolving, and financial firms need to adapt
quickly and efficiently to the changing requirements whilst
continuing to operate profitably. The recent changes resulting from
the FCA Consumer Duty regulation require intermediaries to evidence
suitability at point of sale, and financial product providers at
the point of product design, creating opportunities for Fintel
across the value chain.
Responding to this need, we expanded
our Consumer Duty support package, helping intermediaries to
implement requirements across all four consumer outcomes included
in the regulation. We also adapted two of our key software
solutions including the launch of Consumer Duty Profiles within our
proprietary financial planning software, enabling advisers to
benchmark products and evidence fair value, as well as the Customer
Appeal module within our market and competitor intelligence
software, showing the relative importance that different customer
profiles place on the insurance product features, and enabling
product providers to evidence fair value and suitability. We also
expanded our regulatory technology capability, acquiring Competent
Adviser, a regulatory learning platform for intermediaries, and
VouchedFor, provider of the Elevation feedback tool, helping
intermediaries monitor Consumer Duty compliance.
With an experienced team of nearly
150 in-house product and regulatory experts and a growing suite of
technology solutions supporting delivery of compliance
requirements, we are strongly positioned to continue benefiting
from regulatory change.
Product value as important as
price
The UK's financial services market
offers thousands of financial products to choose from. This wealth
of choice creates complexity for today's educated consumers, who
increasingly pay attention to quality and suitability of financial
products, looking beyond the price.
Providing an independent, expert
assessment of a product's features and benefits and distilling this
into ratings, Defaqto Star Ratings are recognised by 98% of
intermediaries and trusted by consumers, with 89% of people more
likely to choose a Defaqto rated product. In 2023 we built on this
brand equity, refreshing the Star Ratings proposition with an
updated brand identity and expanding our reach through a new
distribution partnership with one of the leading comparison sites,
MoneySupermarket. We also enhanced the ratings coverage to include
tax-advantaged products, leveraging the data from MICAP, provider
of independent research and advice tools for tax-advantaged
investment products, acquired in July 2023.
Maintaining the UK's largest
financial product database with over four
million product features mapped, and a wide-reaching, unique expert
product ratings brand, with Defaqto Star Ratings present in an
estimated 52 million of consumer financial decisions, we continue
to be well positioned to capitalise on the growing consumer demand
for product insight and comparison.
Demand for data and insights
With the growth in digital product
distribution and regulatory focus on suitability and fair value,
the demand and need for quality financial data throughout the
product development and sales lifecycle is stronger than
ever.
From our position at the heart of
the retail financial services market, we provide data and insight
services throughout the value chain, helping consumers make better
informed financial decisions, intermediaries to recommend suitable
products and product providers to design and distribute better
products. In 2023 we improved our partner portal insights, scaled
our Distribution as a Service offering, and expanded our ratings
and reviews platform into adjacent markets. We also completed the
successful acquisition of MICAP, provider of independent research
and insight on tax-advantaged products, and AKG, provider of
financial strength assessments, significantly increasing the scale
and IP of our subsidiary business Defaqto.
As we realise synergies resulting
from these recent acquisitions and continue to scale our data and
technology platform, we see material opportunities to enrich our
services and deepen our market penetration in this
sector.
Demand for flexible, integrated technology
Ongoing consolidation in the
intermediary market has created a need for flexible, modular
operating systems. With advisers currently using multiple pieces of
software, integration and scalability are key to
efficiency.
In this context our objective is to
lead innovation, delivering products and solutions that add value
and eliminate effort for our clients and the wider market. In 2023
we enhanced our proprietary financial planning software with the
launch of a product and platform switching module and a cash flow
planning tool, and completed a two-way integration with new CRM
solution Plannr. We also completed two acquisitions, Competent
Adviser and VouchedFor, through our knowledge and technology
platform Fintel IQ, designed to provide modular, integrated
solutions to the retail financial services market whilst widening
our addressable market and penetration.
We will continue to invest in our
technology platform, helping financial intermediaries operate more
effectively and increasing value per customer. We see further
opportunities for growth in this area, as we continue to realise
our active M&A pipeline and consolidate a fragmented UK
financial technology market.
Value generation
Our underlying financial resilience,
underpinned by a diverse customer base, growing quality revenue
streams, disciplined cost control and significant investments in
future growth, enables us to continue to expand our proposition and
revenue streams despite the backdrop of a
challenging macroeconomic environment.
We continue to re-invest in our
people, data and digital capabilities, focusing on enhancing our
technology platform, knowledge and IP, with a record organic
investment in our technology and service platform of £4.8m during
the year. We do this whilst developing valuable services for our
customers, supporting our people and ensuring we manage our
operations responsibly, building a strong platform for sustainable
growth.
The cash-generative nature of our
business, combined with a significant revolving credit facility,
positions us well to continue realising our active M&A
pipeline, further enhancing our revenue streams and delivering
value to all of our stakeholders.
Our robust adjusted earnings per
share ("EPS") performance of 12.2 pence per share (FY22: 12.2 pence
per share), taking
into account significant investment in the year underscores our strong profitability and commitment to
generating substantial value for our shareholders, underpinned by a
progressive dividend policy. On a statutory basis EPS was 6.8 pence
per share (FY22: 9.5 pence per share), which is reflective of
significant investment in system transformation and M&A adviser
costs.
Ensuring better outcomes
Fintel's purpose of inspiring better
outcomes is at the centre of everything we do. Guided by that
purpose, in 2022 we launched a holistic environmental, social and
governance strategy, cementing our long-term commitment to
sustainable value creation for all of our stakeholders. In 2023 we
focused on integrating ESG principles within our operations and
delivering on commitments set out in our Better Outcomes Plan,
driving measurable change in our business, our industry and wider
society in line with our stakeholder priorities and leading
reporting standards and frameworks. This progress has been
recognised by the ICA Compliance Awards 2023, seeing us shortlisted
as a finalist for the "ESG Initiative of the Year"
award.
Our people
We invest in our people, recognising
that our team is fundamental to our ongoing success. As we seek to
cultivate an engaging, inclusive workplace where everyone can
thrive, we prioritise addressing our employee feedback and needs.
We are delighted to see this approach reflected in our strengthened
position in the top 20 "Best Companies to Work For" in financial
services, as well as the "Outstanding Company to Work For"
accreditation awarded for the second consecutive year and a further
accolade, winning "Employer of the Year" at the FT Adviser
Diversity in Finance Awards 2023.
We are also delighted to welcome
Phil Smith's appointment as Chair of Fintel, succeeding our founder
Ken Davy. Ken's leadership and dedication have been instrumental in
shaping the robust foundation and remarkable trajectory of our
Company over the years. Looking ahead, we are confident that Phil's
stewardship will further our commitment to excellence, innovation,
and sustained growth.
Outlook
We have started 2024 with momentum,
completing the acquisitions of Synaptic Software, an independent
provider of financial adviser planning and research software, and
Owen James, the leading provider of strategic engagement events
in UK financial services.
The core business continues to trade
well, with pressures in the UK housing market offset by growth in
fintech software revenue and software licence sales. With
expectations that interest rates and market activity will adjust
positively in 2024, we are well positioned to benefit from a
recovery in the mortgage market.
Our expanding market position,
diverse customer base and recurring revenue streams provide
resilience against these macroeconomic headwinds and we continue to
benefit from structural drivers including increasing regulatory
requirements as a result of the FCA Consumer Duty regulation and
ongoing demand for data and insights across the retail financial
services value chain.
As we realise our active M&A
pipeline, we are well placed to capitalise on favourable market
conditions, leveraging our financial agility and the significant
headroom in our £80m revolving credit facility.
Looking to the future, we are
confident in executing our growth strategy, delivering an
end-to-end service platform for UK retail financial services and
consolidating a fragmented fintech market to enhance our future
earnings, proposition and growth opportunities, as we inspire
better outcomes for all.
Matt Timmins and Neil Stevens
Joint Chief Executive
Officers
FINANCIAL REVIEW
Year ended 31 December 2023
|
Year ended
|
Year
ended
|
|
31 December
|
31
December
|
|
2023
|
2022
|
|
|
|
Group revenue
|
64.9
|
66.5
|
|
|
|
Adjusted EBITDA
|
20.5
|
19.4
|
Adjusted EBITDA margin %
|
31.5%
|
29.1%
|
Depreciation
|
(0.4)
|
(0.3)
|
Depreciation of leased
assets
|
(0.4)
|
(0.4)
|
Amortisation of development
expenditure and software
|
|
|
Adjusted EBIT
|
18.4
|
17.6
|
Operating costs - non
underlying
|
(4.4)
|
(0.7)
|
Impairment on sale of
operations
|
(0.2)
|
(0.7)
|
Share option charges
|
(1.5)
|
(1.3)
|
Amortisation of other intangible
assets
|
(2.2)
|
(2.0)
|
|
|
|
Profit before tax
|
9.6
|
12.4
|
|
|
|
|
|
|
Adjusted earnings per share*
("EPS")
|
|
|
* 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
The business continued to perform
well throughout 2023, with our diverse customer base offsetting the
impact of the mortgage market. Core revenue grew 0.3% to
£56.6m (FY22: £56.4m), slightly ahead of the same period last year
and in line with the Board's expectations.
Core organic revenue of £55.1m
(FY22: £56.4m) is impacted by an amendment in contractual terms of
our primary software reseller agreement which has been recognised
on a net basis since May 2023. Core organic revenue, on a
like-for-like basis, has increased by 2.9% (LfL: FY23: £51.7m;
FY22: £50.2m), stripping out the impact of acquisitions and the
gross to net revenue recognition of the renegotiated software
seller agreement.
Excluding the impact of mortgage
market volatility, core organic revenue grew by 5.6% in line with
our medium-term target (LfL: FY23: £47.7m; FY22: £45.2m).
Whilst mortgage related activities experienced a significant 21.2%
revenue decline during the year, the segment remains profitable,
and is well positioned for a rapid return to previous performance
levels as the UK housing market normalises.
In line with the Company's strategy,
four acquisitions were completed during the year with expansion
into adjacent markets enhancing our scale, IP, and proposition. The
combined core revenue from these acquisitions recognised during the
period amounted to £1.5m.
On a statutory basis, Group revenue,
encompassing the non-core property surveying business, experienced
a reduction of £1.6m to £64.9m (FY22: £66.5m). Excluding the impact
of the change in the software reseller agreement revenue
recognition and acquisitions, as well as the impact of increased
volatility in the mortgage market, statutory revenue for 2023
remained resilient, reflecting the inherent strength of our
subscription-based model which underpins our growth
opportunities.
|
31 Dec 23
|
31 Dec 22
|
Change
|
Change
|
Core organic revenue ex. Mortgage
commissions
|
£47.7m
|
£45.2m
|
£2.5m
|
5.6%
|
Core organic revenue from mortgage
commissions
|
£4.0m
|
£5.0m
|
(£1.0m)
|
(21.2%)
|
Core organic revenue, like-for-like
basis*
|
£51.7m
|
£50.2m
|
£1.5m
|
2.9%
|
Core organic revenue from software
reseller agreements
|
£3.4m
|
£6.2m
|
(£2.8m)
|
(46.0%)
|
Total core organic revenue
|
£55.1m
|
£56.4m
|
(£1.3m)
|
(2.5%)
|
Core revenue from
acquisitions
|
£1.5m
|
£Nil
|
£1.5m
|
n/a
|
Total core revenue
|
£56.6m
|
£56.4m
|
£0.2m
|
0.3%
|
*
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
decreased 4.9% to £22.4m (FY22: £23.5m). Stripping out the revenue
impact of the change in contractual terms of the software reseller
agreement and acquisitions, revenue grew 5.4% on a like-for-like
basis (LfL: FY23: £18.3m, FY22: £17.3m). 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.
During 2023 Fintel acquired
Competent Adviser and VouchedFor. These contributed combined
revenues of £0.8m (£0.5m to software license income and £0.3m to
membership fee income respectively), and gross profit of £0.3m to
the division from the date of acquisition.
In 2023 the Intermediary Services
division delivered:
· average revenue per customer ("ARPC") of £8,019 (FY22: £7,807)
- an increase of 2.7%;
· membership fee income of £11.8m (FY22: £11.5m) - an increase
of 3.2%;
· software licence income of £3.7m (FY22: £6.3m) - as a result
of the change in contractual terms of primary software reseller
agreement now recognised on a net basis through revenue since May
2023;
· additional services income of £6.1m (FY22: £5.7m) - an
increase of 6.0%; and
· gross
profit* of £10.9m (FY22: £9.5m) with gross profit margin** of 48.9%
(FY22: 40.4%).
* 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.
Core Distribution Channels revenues
decreased to £11.9m (FY22: £13.0m). Excluding volatility in
mortgage related commissions, core Distribution Channels income was
consistent with prior year. Whilst mortgage related activities
experienced a significant 21.2% revenue decline during 2023, this
segment remained profitable, and is well positioned for a rapid
return to previous performance levels as the UK housing market
normalises. 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 74% of partner revenue converted to
DaaS.
In 2023 Distribution Channels
delivered:
· core
commission revenues of £6.8m (FY22: £8.1m) - a decrease of
16.4%;
· marketing services revenues of £5.1m (FY22: £4.9m) - an
increase of 3.6%, as we see the continued conversion of product
provider revenue to long-term subscription agreements with DaaS
revenues of £3.7m (FY22: £3.0m), an increase of 24.9%;
· non-core panel management and valuation services revenues of
£8.4m (FY22: £10.1m) - a decrease of 17.3%; and
· Gross
profit of £7.6m (FY22: £9.2m) with gross profit margin of 37.8%
(FY22: 39.8%).
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 grew
by 12.0% to £22.3m (FY22: £19.9m), driven by ongoing software
adoption and demand for ratings.
In 2023 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 new Star and Diamond Ratings for enterprise and investment
scheme ("EIS").
During 2023 Fintel acquired MICAP
and AKG contributing combined revenues of £0.7m in product ratings
revenue, and gross profit of £0.2m from date of
acquisition.
In 2023 Fintech and Research
division delivered:
· Software revenue of £10.7m (FY22: £9.5m) - an increase of
11.5%;
· Product ratings revenue of £10.1m (FY22: £8.9m) - an
increase of 14.1%;
· Other
income of £1.5m (FY22: £1.5m) from consultancy and ad hoc
work; and
· Gross
profit of £14.2m (FY22: £12.5m) with a gross profit margin of 63.4%
(FY22: 63.0%).
Profitability
Adjusted EBITDA remains strong at
£20.5m (FY22: £19.4m), increasing by 5.6%.
Our core business delivered a solid
adjusted EBITDA margin of 35.7% (FY22: 32.9%).
The resulting adjusted EBITDA margin
of 31.5% (FY22: 29.1%) compares well with prior periods due to
improved revenue mix with continued growth on higher margin
business lines.
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.
The adjusted EBITDA in our core
business has also performed well, increasing 8.6% to £20.2m (FY22:
£18.6m). The core adjusted EBITDA is the adjusted EBITDA calculated
above excluding the trading results of our non-core property
surveying business.
Non-underlying
adjustments
The operating charge to the income
statement in respect of non-underlying items of £6.8m (FY22: £3.4m)
includes the following:
· operating expenses of £4.4m, including:
· £1.8m
M&A-related costs - consisting of professional advisory fees on
completed and pipeline acquisitions;
· £1.5m
transformation costs - implementation costs to enhance Fintel's
customer relationship management ("CRM") platform and a new
enterprise resource planning ("ERP") system both of which are
targeted to go live in April 2024;
· £0.7m
employee restructuring;
· £0.4m
award related costs;
· amortisation of other intangible assets of £2.2m - relating to
intangibles acquired on acquisition of Regulus Topco Limited (owner
of Defaqto Limited), Landmark Surveyors Limited, and 2023 acquired
entities: Competent Advisor, VouchedFor, AKG and MICAP;
and
· impairment on disposal of operations of £0.2m relating to
contingent consideration recognised in respect of the disposed
Verbatim funds.
No other
costs have been treated as non-underlying.
Share-based payments
Share-based payment charges of £1.5m
(FY22: £1.3m) have been recognised in respect of the options in
issue and include the IFRS 2 cost of the new long-term growth
incentive plan issued on 18 August 2023.
Financial income and
expense
Finance income of £0.3m (FY22: £nil)
relates to interest earned on surplus cash on short
term deposits.
Finance expenses of £0.8m
(FY22: £0.5m) includes interest costs on the drawn portion of the
RCF, interest on leasing arrangements and the commitment fee for
the unutilised facility. Of the seven acquisitions across 2023 and
this year to date, four were entirely funded through cash reserves,
while the initial consideration for VouchedFor and Synaptic
Software involved partial debt financing.
Taxation
The rate of corporation tax
applicable for 2023 is a blended average rate of 23.5% following
the corporation tax rate change in April 2023 to 25%. The
underlying effective tax rate of 20.7% for the period (FY22: 19%)
includes the estimated beneficial impact of research and
development claims for Defaqto. 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.£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 earnings per share in the
period amounted to 12.2 pence per share (FY22: 12.2 pence per
share). Statutory earnings per share in the period amounted to 6.8
pence per share (FY22: 9.5 pence per share).
Cash flow and closing cash
position
At 31 December 2023 the Group
reported a robust liquidity position, featuring a total cash
balance of £12.7m, £1.7m net of debt (FY22: £12.8m), and
substantial headroom in the £80m revolving credit facility with
£69m undrawn.
Net cash to adjusted EBITDA ratio is
0.1 times at FY23 (FY22: 0.7 times).
Underlying operating cash flow
conversion was strong at 88% (FY22: 118%), despite a significant
increase in development expenditure of £4.5m (FY22: £1.7m). 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 8 to the financial
statements.
The Company's significant
capitalised development expenditure, M&A and transformation
costs impact the Company's cash generation.
Acquisitions
Investments in four acquisitions
were made in the year of £13.3m (net of cash acquired of £1.8m and
including acquisition costs). Upfront consideration of £15.1m for
these four acquisitions was funded by £8.6m from cash reserves and
£6.5m from the Group's £80m revolving credit facility. Deferred and
business performance contingent consideration payable over the next
three years is capped at £12.5m.
Subsequent to the year end, a
further investment of £6.4m was made in a further three companies
and was funded by cash reserves and existing drawings on the RCF
facility. Details of all the
acquisitions are given in note 20 to the Financial
Statements.
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, such as
strategically aligned acquisitions. The Group manages its capital
structure through regular review by the Board ensuring alignment
with the Company's objectives and responsiveness to changing market
conditions. In the event that 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 FY22 of £2.3m, and an interim
dividend in respect of FY23 of £1.1m. The Board is proposing a full
year dividend in respect of FY23 of 3.45 pence, an increase of 6.2%
on the FY22 dividend of 3.25 pence. The proposed final dividend of
2.35 pence (FY22: 2.25 pence) reflects the Group's strong business
performance and cash generation during the year. The dividend is
payable on 19 June 2024, to shareholders on the register on 24 May
2024 with an ex-dividend date of 23 May 2024, 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 2023. 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 Company's ability to trade
as a going concern for a period of 18 months to 30 September
2025.
The Directors have robustly tested
the going concern assumption in preparing these financial
statements, considering a number of severe but plausible downside
scenarios, which would collectively be considered remote. The Group
continues to enjoy robust cash generation and maintains a strong
liquidity position at 31 December 2023 and the Directors remain
satisfied that the going concern basis of preparation in the
financial statements is appropriate.
On the basis of the Group's current
and forecast profitability and cash flows, and the availability of
committed funding, the Directors consider and have concluded that
the Group 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 year ended 31 December
2023
|
|
|
2023
|
2023
|
|
2022
|
2022
|
|
|
2023
|
Underlying
|
Year ended
|
2022
|
Underlying
|
Year
ended
|
|
|
Underlying
|
adjustments*
|
31 December
|
Underlying
|
adjustments*
|
31
December
|
|
|
|
|
|
|
|
|
Revenue
|
5-6
|
64.9
|
-
|
64.9
|
66.5
|
-
|
66.5
|
Operating expenses
|
7-8
|
(48.0)
|
(4.4)
|
(52.4)
|
(50.2)
|
(0.7)
|
(50.9)
|
Amortisation of other intangible
assets
|
12
|
-
|
(2.2)
|
(2.2)
|
-
|
(2.0)
|
(2.0)
|
Impairment on disposal of
operations
|
|
|
|
|
|
|
|
Group operating profit/(loss)
|
|
16.9
|
(6.8)
|
10.1
|
16.3
|
(3.4)
|
12.9
|
Finance income
|
9
|
0.3
|
-
|
0.3
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Profit/(loss) before taxation
|
|
16.4
|
(6.8)
|
9.6
|
15.9
|
(3.5)
|
12.4
|
|
|
|
|
|
|
|
|
Profit/(loss) for the financial year
|
|
|
|
|
|
|
|
Profit attributable to
shareholders:
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
|
7.1
|
|
|
9.8
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - adjusted
(pence)
|
10
|
|
|
12.2p
|
|
|
12.2p
|
Earnings per share - basic
(pence)
|
10
|
|
|
6.8p
|
|
|
9.5p
|
Earnings per share - diluted
(pence)
|
|
|
|
|
|
|
|
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
Consolidated statement of financial
position
as at 31 December 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Investments
|
|
1.2
|
|
|
-
|
|
Property, plant and
equipment
|
11
|
1.2
|
|
|
1.2
|
|
|
Lease assets
|
11
|
2.2
|
|
|
2.2
|
|
|
Intangible assets and
goodwill
|
12
|
118.2
|
|
|
95.2
|
|
|
Trade and other
receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
10.2
|
|
|
10.6
|
|
|
Current tax asset
|
|
-
|
|
|
0.4
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital
|
15
|
1.0
|
|
|
1.0
|
|
|
Share premium account
|
15
|
67.0
|
|
|
66.8
|
|
|
Other reserves
|
17
|
(50.0)
|
|
|
(51.3)
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to the owners of
the Company
|
|
|
102.6
|
|
|
97.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
20.9
|
|
|
18.6
|
|
|
Lease liabilities
|
14
|
0.4
|
|
|
0.4
|
|
|
Total current liabilities
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Loans and borrowings
|
14
|
10.7
|
|
|
-
|
|
|
Other payables
|
|
5.1
|
|
|
-
|
|
|
Lease liabilities
|
14
|
1.5
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
|
|
|
|
|
|
Consolidated statement of changes in
equity
for the year ended 31 December
2023
|
Share
|
Share
|
Other
|
Non-
controlling
|
Retained
|
Total
|
|
|
capital
|
premium
|
reserves
|
interest
|
earnings
|
equity
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2022
|
1.0
|
65.6
|
(52.3)
|
0.3
|
73.9
|
88.5
|
|
Total comprehensive income for the
year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the
year
|
|
|
|
|
|
|
|
Transactions with owners, recorded
directly in equity
|
|
|
|
|
|
|
|
Issue of shares
|
-
|
1.2
|
-
|
-
|
-
|
1.2
|
|
Dividends
|
-
|
-
|
-
|
(0.1)
|
(3.2)
|
(3.3)
|
|
Share option charge
|
-
|
-
|
1.3
|
-
|
-
|
1.3
|
|
Release of share option reserve on
exercise
|
-
|
-
|
(0.3)
|
-
|
0.3
|
-
|
|
Total contributions by and
distributions to owners
|
|
|
|
|
|
|
|
Balance at 31 December
2022
|
|
|
|
|
|
|
|
Balance at 1 January 2023
|
1.0
|
66.8
|
(51.3)
|
0.5
|
80.8
|
97.8
|
|
Total comprehensive income for the
year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the
year
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
Balance at 31 December
2023
|
|
|
|
|
|
|
|
Consolidated statement of cash
flows
for the year ended 31 December
2023
|
|
Year
ended
|
Year
ended
|
|
|
|
31
December
|
31
December
|
|
|
|
2023
|
2022
|
|
|
|
|
|
|
Net cash generated from operating
activities
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(0.3)
|
(0.2)
|
|
Finance income
|
|
0.3
|
-
|
|
Development expenditure
|
|
(4.5)
|
(1.7)
|
|
Cost of acquisitions - net of cash
received
|
|
(13.3)
|
-
|
Equity investments
|
|
(1.0)
|
-
|
Loan to equity interest
|
|
(0.6)
|
-
|
Net proceeds from sale of
operations
|
|
|
|
|
Net cash flows used in investing
activities
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Finance costs
|
|
(0.5)
|
(0.2)
|
|
Loan drawn/(repaid)
|
|
11.0
|
(7.0)
|
|
Transaction costs related to
borrowing
|
|
-
|
(0.5)
|
|
Payment of lease
liability
|
|
(0.5)
|
(0.5)
|
|
Issue of share capital
|
|
0.2
|
1.2
|
|
|
|
|
|
|
Net cash flows from/(used in)
financing activities
|
|
|
|
|
Net (decrease)/increase in cash and
cash equivalents
|
|
(0.1)
|
3.4
|
|
Cash and cash equivalents at start
of year
|
|
|
|
|
Cash and cash equivalents at end of
year
|
|
|
|
|
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 £13.3m (net of cash acquired of £1.8m) 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 2023 and
the year ended 31 December 2022 does not constitute the Group's statutory accounts for those
periods. Statutory accounts for the period ended 31 December
2022 have been delivered to the
Registrar of Companies. The statutory accounts for the period
ended 31 December 2023
will be delivered to the Registrar of Companies
following the Group's Annual General
Meeting.
The auditors' reports on the
accounts for 31 December 2023 and
31 December 2022 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 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 concluded that the Group will have sufficient funds
to meet its liabilities as they fall due. It is expected that
the group will operate comfortably within its financial loan
covenants for the foreseeable future including the 18-month period
from the date of approval of the financial statements to 30
September 2025, with significant headroom to draw down if
required.
The Group's financial risk
management objectives as well as details of its financial
instruments and its exposure to interest, credit and liquidity risk
are described in the financial statements. Specific consideration
has been given to climate risk. None of these factors have a
significant impact on the Group's revenues, customer base or supply
chain and therefore do not impact the Group's ability to continue
as a going concern.
At 31 December 2023 the Group
reported a strong liquidity position with total cash position of
£12.7m, with net cash of £1.7m (2022: £12.8m) and £69m of headroom
in the £80m revolving credit facility. The Group reported total net
assets of £102.9m as at 31 December 2023 (2022: £97.8m).
The Directors have robustly tested the going
concern assumption in preparing these financial statements. The
Directors' assessment takes into account the Group's strong
liquidity position at 31 December 2023. The Directors have
identified revenue as the most sensitive assumption in their going
concern assessment. A number of severe but plausible downside
scenarios have been modelled which assess the impact of
increasingly severe reductions in revenue before any mitigating
actions are considered. In addition, a reverse stress test has been
performed to determine the extent to which revenue would need to
decline throughout the entire going concern period for either
liquidity to be exhausted or covenants breached. The Directors
consider the significance of the reduction in revenues required to
breach covenants within the reverse stress test to be remote and
remain satisfied that the going concern basis of preparation is
appropriate.
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
2022.
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 firms. Specific
services provided under subscription model: software as a
service, support, compliance visits, and learning and
development.
|
The Group's membership is a
subscription model, with income recognised in line with the access
to the specific service provided (output method).
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.
|
Subscriptions are usually invoiced
monthly in advance of the commencement of the subscription period
and collected in the same month by direct debit.
|
Additional services
|
Provision of additional compliance
and business services provided on an ongoing or periodic basis:
file checks, website hosting and maintenance, credit checking and
learning and development.
|
Revenue from other membership
services is recognised at the point at which the specific service
is delivered, or across an agreed support period as necessary,
based on the value agreed with the customer. Each
service is assessed in line with IFRS 15 and revenue is recognised
accordingly in line with the provision of service.
|
Compliance visits, file checks and
website maintenance are collected monthly by direct debit and
billed when the service is delivered. Additional services are
typically on credit terms and customers pay according to
terms.
|
Software licence income
|
Provision (and support) of software
licences to intermediary firms within our network revenue is
recognised as the performance obligation is satisfied over
time.
|
Revenue from software licences is
recognised straight line over the licences period. The nature of
the licences is such that the Group is required to undertake
activities which impact the software and its utility to its
customers throughout the licence period.
|
Invoices are raised and collected by
direct debit in the month in which the licence charge relates,
prorated as necessary where agreements are signed mid
-month.
|
Distributions Channels
|
Marketing services
revenues
|
Provision of advertising, marketing
services and event sponsorship to product providers.
|
Revenue is recognised in line with
the service provided to the customer (output
method).
|
Invoices are typically raised on a
monthly basis with a smaller number being 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 (output
method).
|
Invoices are typically raised on a
monthly basis with a smaller number being 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 the third-party provider,
who is considered to be the principal, of underlying 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.
|
Commission revenues are typically
received between one and four weeks after confirmation of the sale
by the third-party provider.
|
Valuation services
|
Surveys and valuation services
provided to clients.
|
Revenue is recognised at the point
at which the service is delivered to the customer, based on the
agreed price.
|
Business-to-business valuation
services are paid in advance or on credit terms 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 financial products that enable
them to research, launch and distribute relevant products to the
market. The provision of software as a performance obligation
is a promise of 'right to access' the software satisfied over a
period of time.
Provision of Engage software to help
financial adviser client recommendations.
|
Revenue from software licences is
recognised straight line over the licence period. The nature of the
licences is such that the Group is required to undertake activities
which impact the software and its utility to its customers
throughout the licence period.
|
Software licences are invoiced,
either, monthly or quarterly, in advance with payment terms
applied.
Engage products are invoiced monthly
and collected in the same month by monthly direct
debit.
|
Research - Risk Mappings, Fund
Reviews and Rating Services
|
Star Ratings - an independent and
trusted industry standard for assessing the feature quality and
comprehensiveness of a financial product or proposition. 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.
|
Revenue from star and risk ratings
is recognised straight line over the agreed contractual period of
the licence, which is typically one year.
|
Revenue from star and risk ratings
is billed on an annual basis in advance, and customers pay
according to agreed terms.
|
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 in respect of the Fintech and Research 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
2023
|
|
|
|
|
|
Revenue
|
22.4
|
20.2
|
22.3
|
-
|
64.9
|
|
|
|
|
|
|
Gross profit
|
10.9
|
7.6
|
14.2
|
-
|
32.7
|
Administrative and support
costs
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Admin
and
|
|
|
Intermediary
|
Distribution
|
Fintech
and
|
Support
|
|
|
Services
|
Channels
|
Research
|
costs
|
Group
|
Year ended 31 December
2022
|
|
|
|
|
|
Revenue
|
23.5
|
23.1
|
19.9
|
-
|
66.5
|
|
|
|
|
|
|
Gross profit
|
9.5
|
9.2
|
12.5
|
-
|
31.2
|
Administrative and support
costs
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
19.4
|
Operating costs
(non-underlying)
|
|
|
|
|
(0.7)
|
Impairment on disposal of
operations
|
|
|
|
|
(0.7)
|
Amortisation of other intangible
assets
|
|
|
|
|
(2.0)
|
Amortisation of development costs
and software
|
|
|
|
|
(1.1)
|
Depreciation
|
|
|
|
|
(0.3)
|
Depreciation of leased
assets
|
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Intermediary services includes
revenue and costs from acquisitions made during the year of £0.8m
and £0.6m, with gross profit contribution of £0.2m. Fintech
and research includes revenue and costs of £0.7m and £0.5m, with
gross profit contribution of £0.2m. No acquisitions were made
in 2022.
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
|
|
2023
|
2022
|
|
|
|
Depreciation of tangible assets -
owned
|
0.4
|
0.3
|
Depreciation of leased
assets
|
0.4
|
0.4
|
Research expenditure
|
0.7
|
0.6
|
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
|
|
2023
|
2022
|
|
|
|
Non-underlying costs - operating
|
|
|
M&A project costs
|
1.8
|
0.1
|
Transformation costs
|
1.5
|
0.5
|
Restructuring costs
|
0.7
|
-
|
Award related costs
|
0.4
|
-
|
Impairment on disposal of
operations
|
0.2
|
0.7
|
Loan refinance costs -
operating
|
-
|
0.1
|
Non-underlying costs - finance
|
|
|
Loan refinance costs -
finance
|
-
|
0.1
|
Other underlying adjustments
|
|
|
Amortisation of other intangible
assets
|
|
|
Underlying adjustments - before tax
|
|
|
The operating charge to the income
statement in respect of non-underlying items of £6.8m (2022: £3.5m)
includes the following:
- operating expenses of £4.4m;
-
£1.8m M&A-related costs - consisting of
professional advisory fees on completed and pipeline
acquisitions,
-
£1.5m transformation costs - implementation costs
to enhance Fintel's customer relationship management ("CRM")
platform and a new enterprise resource planning ("ERP") system both
of which are targeted to go live in April 2024;
-
£0.7m employee restructuring, and
£0.4m award related costs.
- amortisation of other intangible assets of £2.2m - relating to
intangibles acquired on acquisition of Regulus Topco Limited, owner
of Defaqto Limited, Landmark Surveyors Limited, and 2023 acquired
entities: Competent Advisor, VouchedFor, AKG and MICAP; for which
revenue arising from those acquisitions is included in underlying;
and
- impairment on disposal of operations of £0.2m relating to
contingent consideration recognised in respect of disposed Verbatim
funds.
No other
costs have been treated as non-recurring in the period. The above
adjustments have been excluded as they are not considered part of
underlying trade.
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
|
|
2023
|
2022
|
|
|
|
Operating profit
|
10.1
|
12.9
|
Add back:
|
|
|
Depreciation (note 11)
|
0.4
|
0.3
|
Depreciation of leased assets (note 11)
|
0.4
|
0.4
|
Amortisation of other intangible assets (note 12)
|
2.2
|
2.0
|
Amortisation of development costs and software (note 12)
|
|
|
EBITDA
|
14.4
|
16.7
|
Add back:
|
|
|
Impairment on disposal of operations (note
7)
|
0.2
|
0.7
|
Share
option charge
|
1.5
|
1.3
|
Operating
costs (non-underlying) (note 7)
|
|
|
|
|
|
Adjusted EBITDA of non-core
surveying business
|
|
|
|
|
|
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
|
|
2023
|
2022
|
|
|
|
Operating profit
|
10.1
|
12.9
|
Add back:
|
|
|
Impairment on disposal of operations (note
7)
|
0.2
|
0.7
|
Operating
costs (non-underlying) (note 7)
|
4.4
|
0.7
|
Amortisation of other intangible assets (note 12)
|
|
|
Adjusted operating profit
|
|
|
Adjusted profit before tax is
calculated as follows:
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Profit before tax
|
9.6
|
12.4
|
Add back:
|
|
|
Impairment on disposal of operations (note
7)
|
0.2
|
0.7
|
Operating
costs (non-underlying) (note 7)
|
4.4
|
0.7
|
Finance
cost (non-underlying)
|
-
|
0.1
|
Amortisation of other intangible assets (note 12)
|
|
|
Adjusted profit before
tax
|
|
|
Adjusted profit after tax is
calculated as follows:
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Profit after tax
|
7.4
|
10.1
|
Add back:
|
|
|
Impairment
of contingent consideration (note 7)
|
0.2
|
0.7
|
Operating
costs (non-underlying) (note 7), net of tax
|
3.7
|
0.5
|
Amortisation of other intangible assets (note 12), net of deferred
tax
|
1.7
|
1.6
|
Profit
attributable to non-controlling interests
|
|
|
Adjusted profit after tax
|
|
|
Free cash flow conversion is
calculated as follows:
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Adjusted operating profit
|
16.9
|
16.3
|
Adjusted for:
|
|
|
Depreciation of tangible assets
|
0.4
|
0.3
|
Depreciation of leased assets
|
0.4
|
0.4
|
Amortisation of development costs and software
|
1.3
|
1.1
|
Share
option charge
|
1.5
|
1.3
|
Research and development
benefit
|
(0.1)
|
-
|
Net changes
in working capital
|
(0.7)
|
1.8
|
Purchase of
property, plant and equipment
|
(0.3)
|
(0.2)
|
|
|
|
Underlying cash flow from
operations
|
|
|
Underlying operating cash flow
conversion
|
|
|
Net
interest paid
|
(0.3)
|
(0.2)
|
Income tax
paid
|
(2.8)
|
(4.8)
|
Payments of
lease liability
|
|
|
Free cash
flow
|
11.3
|
13.8
|
|
|
|
Free cash flow conversion
|
|
|
9 Finance income and
expense
Finance income
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Bank interest
|
0.3
|
-
|
|
Finance expense
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Interest payable on financial
liabilities at amortised cost
|
0.7
|
0.3
|
Finance charge on lease
liability
|
0.1
|
0.1
|
Loan refinance costs
(non-underlying)
|
-
|
0.1
|
|
|
|
10 Earnings per share
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
|
|
Profit attributable to equity
shareholders of the parent (£m)
|
|
|
Weighted average number of shares in
issue
|
|
|
Basic profit per share
(pence)
|
|
|
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
Diluted earnings per
share
|
|
|
Profit attributable to equity
shareholders of the parent (£m)
|
|
|
Weighted average number of shares in
issue
|
103,776,394
|
103,184,717
|
Diluted weighted average number of
shares and options for the year
|
|
|
|
|
|
Diluted profit per share
(pence)
|
|
|
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
|
|
|
Adjusted profit after tax (note 8)
(£m)
|
|
|
Weighted average number of shares in
issue
|
|
|
Adjusted earnings per share
(pence)
|
|
|
11 Property, plant and
equipment
|
|
|
|
|
|
|
Plant
and
|
|
|
Office
|
|
|
|
Property
|
equipment
|
Total
|
|
equipment
|
Total
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
At 1 January 2022
|
4.0
|
0.9
|
4.9
|
|
2.7
|
7.6
|
|
Additions
|
-
|
0.1
|
0.1
|
|
0.2
|
0.3
|
|
Revaluation of lease
|
(1.1)
|
-
|
(1.1)
|
|
-
|
(1.1)
|
|
At 31 December 2022
|
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)
|
|
|
|
|
|
|
|
|
|
Depreciation and
impairment
|
|
|
|
|
|
|
|
At 1 January 2022
|
0.7
|
0.6
|
1.3
|
|
1.4
|
2.7
|
Depreciation charge for the
year
|
0.3
|
0.1
|
0.4
|
|
0.3
|
0.7
|
At 31 December 2022
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Management originally expected to
exercise the purchase option, but during 2022 reassessed the
likelihood of calling in the option to buy. The purchase option has
now lapsed unexercised. The lease was therefore revalued during the
prior year when this reassessment was made, resulting in a
reduction of the lease liability and right-of-use asset of £1.1m.
Following the change, the lease asset is being depreciated across
the non-cancellable term of the lease.
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 2022
|
72.4
|
3.1
|
24.4
|
-
|
27.5
|
3.8
|
103.7
|
Additions
|
-
|
-
|
-
|
-
|
-
|
1.7
|
1.7
|
At 31 December 2022
|
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
|
Amortisation and
impairment
|
|
|
|
|
|
|
|
At 1 January 2022
|
0.2
|
0.8
|
4.9
|
-
|
5.7
|
1.2
|
7.1
|
Charge in the year
|
-
|
0.3
|
1.7
|
-
|
2.0
|
1.1
|
3.1
|
At 31 December 2022
|
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
|
Net book value
|
|
|
|
|
|
|
|
At 31 December 2023
|
88.9
|
2.7
|
19.0
|
1.2
|
22.9
|
6.4
|
118.2
|
At 31 December 2022
|
72.2
|
2.0
|
17.8
|
-
|
19.8
|
3.2
|
95.2
|
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:
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Intermediary Services
|
24.4
|
12.7
|
Distribution Channels
|
11.5
|
11.5
|
|
|
|
|
|
|
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 16.13% to
17.07%; 2022: range of 15.2% to 16.0%), annual adjusted EBITDA
growth rate (range of 3.0% to 7.0%; 2022: 4.0% to 8.0%) and
terminal growth rate 2.0% (2022: 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
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
At 1 January 2023
|
-
|
-
|
Additions
|
1.2
|
-
|
|
|
|
Group investments are those in which
Fintel does not hold significant influence.
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. The
transaction has been accounted for in accordance with IFRS
9.
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 and have accounted for the transaction under
IFRS 9.
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.
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Current
|
|
|
Secured bank loan
|
-
|
-
|
|
|
|
|
0.4
|
0.4
|
Non-current
|
|
|
Secured bank loan
|
10.7
|
-
|
|
|
|
|
|
|
Changes in liabilities from
financing activities:
|
Loans
and
|
Lease
|
|
borrowings
|
liability
|
|
|
|
Balance at 1 January 2022
|
6.8
|
3.6
|
Cash flows
|
(7.1)
|
(0.5)
|
New leases
|
-
|
0.1
|
Revalued leases
|
-
|
(1.1)
|
|
|
|
Balance at 31 December
2022
|
-
|
2.2
|
Cash flows
|
(0.5)
|
(0.5)
|
New leases
|
-
|
0.1
|
Loan drawdown
|
11.0
|
-
|
|
|
|
Balance at 31 December
2023
|
|
|
Loans and borrowings
Cash flows on loans and borrowings
include £11.0m RCF drawdown (2022: repaid £7.0m) and interest
payments made of £0.5m (2022: £0.1m).
Other non-cash changes on bank loans
include interest charges of £0.7m (2022: £0.3m), offset by a
prepaid arrangement fee of £0.5m.
Lease liabilities
Cash flows from lease liabilities
include £0.5m of lease payments (2022: £0.5m). Other
non‑cash changes on
lease liabilities include interest charges of £0.1m (2022: £0.1m).
15 Capital and reserves
Share capital
|
Ordinary
|
|
|
Number of fully paid shares (nominal
value £0.01):
|
|
At 1 January 2022
|
102,878,830
|
|
|
At 31 December 2022
|
103,648,945
|
|
|
|
|
In 2023, the Company issued 199,740
new Ordinary Shares to the open share option schemes detailed in
note 28.
In 2022, the Company issued 494,118
new Ordinary Shares of 1 pence each in the Company to satisfy
certain share entitlements of members who had elected to exercise
their options pursuant to the Members Share Option Plan ("MSOP").
The remaining 275,997 shares were issued during the year to the
open share option schemes.
|
Share
|
|
premium
|
|
|
At 1 January 2022
|
65.6
|
|
|
At 31 December 2022
|
66.8
|
|
|
|
|
16 Share-based payment
arrangements
At 31 December 2023, 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
|
|
|
|
|
1 May 2021
|
100
|
3 years'
service from grant date, subject to achieving a percentage growth
in EPS of RPI over the performance period plus 3%
|
3 to 10
years
|
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.
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, and the share
options are due to vest in three years.
During 2023, 14,503 (2022: 69,838)
shares have been forfeited as a result of bad leavers. An assumed
retention rate of 75% (2022: 75%) has been applied at 31 December
2023 on the outstanding shares.
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
|
|
|
|
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)
|
|
|
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
|
|
|
|
|
|
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)
|
|
|
|
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
|
|
|
|
|
|
Outstanding at 1 January
|
731,051
|
1.16
|
1,112,782
|
1.27
|
Forfeited during the year
|
(30,533)
|
0.64
|
(103,763)
|
0.33
|
Exercised during the year
|
(201,209)
|
1.13
|
(277,968)
|
0.42
|
|
|
|
|
|
Outstanding at 31
December
|
|
|
|
|
Exercisable at 31
December
|
|
|
|
|
The options outstanding at 31
December 2023 had an exercise price in the range of £0.01 to £1.93
(2022: £0.01 to £1.93) and a weighted average contractual life of
1.6 years (2022: 2 years).
The weighted average share price at
date of exercise for option shares issued during the year was £1.99
(FY22: £2.01).
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
|
|
|
|
|
At 1 January 2022
|
(53.9)
|
1.6
|
(52.3)
|
Share option charge
|
-
|
1.3
|
1.3
|
Release of share option
reserve
|
-
|
(0.3)
|
(0.3)
|
At 31 December 2022
|
(53.9)
|
2.6
|
(51.3)
|
Share option charge
|
-
|
1.5
|
1.5
|
Release of share option
reserve
|
-
|
(0.2)
|
(0.2)
|
|
|
|
|
18 Notes to the cash flow
statement
|
Year
ended
|
Year
ended
|
|
31
December
|
31
December
|
|
2023
|
2022
|
|
|
|
Cash flow from operating
activities
|
|
|
Profit after taxation
|
7.4
|
10.1
|
Add back:
|
|
|
Finance
income
|
(0.3)
|
-
|
Finance
cost
|
0.8
|
0.4
|
|
|
|
|
|
|
Adjustments for:
|
|
|
Amortisation of development expenditure and software (note
12)
|
1.3
|
1.1
|
Depreciation of lease asset
|
0.4
|
0.4
|
Depreciation of property, plant and equipment
|
0.4
|
0.3
|
Amortisation of other intangible assets
|
2.2
|
2.0
|
Share
option charge
|
1.5
|
1.3
|
Research and development benefit
|
(0.1)
|
-
|
Impairment on sale of operations
|
|
|
Operating cash flow before movements
in working capital
|
16.0
|
18.6
|
Decrease in receivables
|
0.4
|
0.1
|
Increase/(decrease) in trade and
other payables
|
|
|
Cash generated from
operations
|
15.3
|
20.4
|
|
|
|
Net cash generated from operating
activities
|
|
|
19 Subsequent events
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 (a provider of independent adviser planning and research
software), and 100% of the issued shares of Owen James Group Ltd
along with its wholly owned trading subsidiary Owen James Events
Limited (a leading provider of strategic engagement events in UK
financial services).
On 15th March 2024 the
Group acquired 70% of the issued share capital of Newdez Limited
for initial consideration of £0.5m. The deal will assist with
digitising our compliance proposition and includes contingent
consideration based on performance over a two-year period and an
option to acquire remaining shares.
20 Acquisitions
Acquisitions completed in the year ended 31 December
2023
MI Capital Research
Limited ("MICAP")
On 7 July 2023 the Group acquired
100% of the issued shares of MICAP, which is a provider of
independent research and advice tools for tax-advantaged investment
products. This strategic acquisition will extend the Group's reach
into the tax-advantaged market, expanding both its data footprint
and research capabilities to further enhance scale and IP, whilst
further growth is expected from strong customer and proposition
adjacencies. Upfront cash consideration of £3.0m was paid upon
completion. Deferred consideration of £1.0m, together with interest
at a variable annual rate of approximately 1.5%, is payable one
year after acquisition. Contingent consideration, capped at £0.5m,
based upon certain revenue-based criteria over the year following
acquisition is payable at the end of the earn-out year. The fair
value of total consideration at the acquisition date was £4.4m. On
acquisition, acquired intangibles were recognised relating to
customer related intangibles (£0.6m), brand name (£0.2m), and
intellectual property (technology) related intangibles (£0.3m). The
residual goodwill of £3.7m 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. MICAP contributed revenue of £0.5m and
profit before taxation of £0.1m to the Group for the period from 7
July 2023 to 31 December 2023. Had the acquisition been made at the
beginning the financial year, revenue would have been £1.2m and
profit before taxation would have been £0.3m. The amount of
goodwill expected to be deductible for tax purposes in respect of
this acquisition is £nil.
Competent Adviser Limited ("Competent
Adviser")
On 14 July 2023 the Group acquired
100% of the issued shares of Competent Adviser, which through its
dynamic learning platform enables financial advisers to meet
increasing regulatory competency requirements. This acquisition
will enable the Group to further extend its support services
offering to financial advisers. Upfront cash consideration of £3.0m
was paid upon completion. Contingent consideration based upon
certain revenue-based criteria, and by the meeting of certain
non-financial criteria (not linked to employment) by the former
owners over the year following acquisition is capped at £0.45m and
is payable at the end of the earn-out year. The fair value of total
consideration at the acquisition date was £3.2m. On acquisition,
acquired intangibles were recognised relating to intellectual
property (technology) related intangibles (£1.1m), customer-related
intangibles (£0.1m), and brand name (£0.1m). The residual goodwill
of £1.4m 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. Competent Adviser contributed revenue of £0.3m and profit
before taxation of £0.2m to the Group for the period from 14 July
2023 to 31 December 2023. Had the acquisition been made at the
beginning the financial year, revenue would have been £0.6m and
profit before taxation would have been £0.4m. The amount of
goodwill expected to be deductible for tax purposes in respect of
this acquisition is £nil.
AKG Group Limited
On 25 October 2023 the Group
acquired 100% of the issued shares of AKG Group Limited along with
its wholly owned trading subsidiary AKG Financial Analytics Ltd
(together "AKG"). AKG is a leading provider of independent
assessments and ratings of financial strength for a range of
organisations including life insurance companies, investment
platforms, and discretionary fund managers. The Group will
accelerate the reach and growth of the company, providing increased
growth opportunities for customers and enhancing its value to
consumers. Upfront cash consideration of £1.6m was paid upon
completion. Contingent consideration based upon a multiple of
recurring revenue over the three years ending 31 December 2026, is
capped at £0.2m in total and is payable at the end of each earn-out
year. Further contingent consideration will become payable
upon the future sale of a long-term property lease for which AKG is
the lessee. Contingent consideration in respect of the
property disposal is payable if a sale is completed within three
years of the acquisition and will not exceed the proceeds of the
sale. The proportion of the sales proceeds payable to the former
owners in the event of a sale of the property reduces over the
earn-out period. The fair value of total consideration at the
acquisition date was £2.0m. On acquisition, acquired intangibles
were recognised relating to customer-related intangibles (£0.3m)
and brand name (£0.2m). The residual goodwill of £1.2m 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. AKG contributed
revenue of £0.2m and profit before taxation of £0.1m to the Group
for the period from 25 October 2023 to 31 December 2023. Had the
acquisition been made at the beginning the financial year, revenue
would have been £0.9m and loss before taxation would have been
£0.1m. The amount of goodwill expected to be deductible for tax
purposes in respect of this acquisition is £nil.
Vouchedfor Ltd
("Vouchedfor")
On 1 November 2023 the Group
acquired 100% of the issued shares of Vouchedfor, which is a
leading review site for financial advisers, mortgage advisers,
solicitors, and accountants serving over 5,000 intermediary
customers. This acquisition further extends the Group's
industry-leading portfolio of ratings and reviews for financial
services and professionals. Upfront cash consideration of £7.5m was
paid upon completion. Contingent consideration based upon a
multiple of recurring revenue over the two years ending 31 December
2025 is capped at £10.0m in total and is payable at the end of each
earn-out year, The fair value of total consideration at the
acquisition date was £12.2m. On acquisition, acquired intangibles
were recognised relating to intellectual property (technology)
related intangibles (£1.6m), brand name (£0.5m), and
customer-related intangibles (£0.3m). The residual goodwill of
£10.4m 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. Vouchedfor contributed revenue of £0.5m and profit before
taxation of £0.1m to the Group for the period from 1 November 2023
to 31 December 2023. Had the acquisition been made at the beginning
the financial year, revenue would have been £2.8m and profit before
taxation would have been £0.1m. 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 2023 are
summarised below:
|
MICAP
|
Competent
Adviser
|
AKG
|
VouchedFor
|
Total
|
During the year ended 31 December 2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
Brands
|
0.2
|
0.1
|
0.2
|
0.5
|
1.0
|
Customer relationships
|
0.6
|
0.1
|
0.3
|
0.3
|
1.3
|
Intellectual property
|
0.3
|
1.1
|
-
|
1.6
|
3.0
|
Property, plant and
equipment
|
-
|
-
|
0.4
|
-
|
0.4
|
Trade and other
receivables
|
0.1
|
0.1
|
0.3
|
0.4
|
0.9
|
Trade and other payables
|
(0.4)
|
(0.2)
|
(0.5)
|
(0.9)
|
(2.0)
|
Net cash
|
0.2
|
0.9
|
0.2
|
0.5
|
1.8
|
Deferred tax liability
|
(0.3)
|
(0.3)
|
(0.1)
|
(0.6)
|
(1.3)
|
Fair value of assets
acquired
|
0.7
|
1.8
|
0.8
|
1.8
|
5.1
|
Goodwill
|
3.7
|
1.4
|
1.2
|
10.4
|
16.7
|
Consideration
|
4.4
|
3.2
|
2.0
|
12.2
|
21.8
|
|
|
|
|
|
|
Satisfied by fair values of:
|
|
|
|
|
|
Cash consideration
|
3.0
|
3.0
|
1.6
|
7.5
|
15.1
|
Deferred
consideration
|
1.0
|
-
|
-
|
-
|
1.0
|
Contingent
consideration
|
0.4
|
0.2
|
0.4
|
4.7
|
5.7
|
|
4.4
|
3.2
|
2.0
|
12.2
|
21.8
|
Less: net cash acquired
|
(0.2)
|
(0.9)
|
(0.2)
|
(0.5)
|
(1.8)
|
Transaction costs and
expenses
|
0.1
|
0.1
|
0.1
|
0.3
|
0.6
|
Total committed spend on
acquisitions completed in the year
|
4.3
|
2.4
|
1.9
|
12.0
|
20.6
|
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.
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 fair value of trade receivables
within trade and other receivables is £0.8m. The gross contractual
amount for trade receivables is £0.8m, all of which other than an
immaterial amount is expected to be collectible.
The cash outflow in the year in
respect of acquisitions completed during the year
comprised:
|
MICAP
|
Competent
Adviser
|
AKG
|
VouchedFor
|
Total
|
During the year ended 31 December 2023
|
£m
|
£m
|
£m
|
£m
|
£m
|
Cash consideration
|
3.0
|
3.0
|
1.6
|
7.5
|
15.1
|
Less: net cash acquired
|
(0.2)
|
(0.9)
|
(0.2)
|
(0.5)
|
(1.8)
|
Net investing cash outflow in
respect of acquisitions completed in the year
|
2.8
|
2.1
|
1.4
|
7.0
|
13.3
|
Transaction costs and expenses
paid
|
0.1
|
0.1
|
0.1
|
0.3
|
0.6
|
Total cash outflow in respect of
acquisitions completed in the year
|
2.9
|
2.2
|
1.5
|
7.3
|
13.9
|
Acquisitions completed since the year ended 31 December
2023
The fair value and
purchase price allocation work on the following acquisitions made
since the year end is at an early stage and will not be completed
until after the approval and issue of these financial
statements.
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 Software"). Synaptic Software 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. Cash consideration of £5.1m was
paid upon completion. There is no contingent
consideration.
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 upon completion, with a further £0.1m payable two
months later upon successful completion of an integration
plan. Contingent
consideration based upon certain revenue-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.
Newdez
Limited
On 15th March 2024 the Group
acquired 70% of the issued share capital of Newdez Limited for
initial consideration of £0.5m. The deal will assist with
digitising our compliance proposition and includes contingent
consideration based on performance over a two-year period and an
option to acquire remaining shares.