17 September 2024
Fintel
plc
("Fintel", the "Company", the "Business" or the
"Group")
Half year results for the six
months ended 30 June 2024
Strong performance; strategic
expansion to accelerate future growth
Fintel (AIM: FNTL), the
award-winning provider of fintech and support services to the UK
Retail Financial Services sector, today announces its unaudited
results for the six months ended 30 June 2024.
"Fintel
delivered a strong financial performance during the first half of
2024, whilst continuing to expand strategically through further
acquisitions and organic investments.
"Completing four acquisitions
year-to-date, totalling eight in the last twelve months, we have
significantly enhanced our scale, capabilities and IP, whilst
accelerating investment into our core propositions and technology
offering.
"With our strategic foundations
firmly in place, we are strongly positioned to capitalise on the
growth opportunities across our extensive family of brands,
underpinned by the strength of our balance sheet.
"Current trading is robust, and we
are confident of meeting our full year revenue expectations,
as we continue to inspire better outcomes for
retail financial services."
Matt Timmins, Joint CEO
|
|
HY24
|
HY23
|
Change
|
|
Core1 business
|
|
|
|
|
Core revenue
|
£31.2m
|
£27.6m
|
13%
|
|
Core SaaS & subscription revenue
|
£20.0m
|
£18.8m
|
6%
|
|
Core adjusted EBITDA2
|
£9.3m
|
£8.8m
|
5%
|
|
Core adjusted EBITDA margin
|
29.7%
|
31.9%
|
-220bps
|
|
|
|
Fintel alternative performance measures
|
|
|
|
|
Adjusted EBITDA
|
£9.6m
|
£9.0m
|
7%
|
|
Adjusted EBITDA margin
|
26.8%
|
28.3%
|
-150bps
|
|
Adjusted EPS2
|
5.0p
|
5.0p
|
-
|
|
Cash
conversion3
|
101%
|
104%
|
-30bps
|
|
|
|
Statutory measures
|
|
|
|
|
Statutory revenue
|
£35.7m
|
£31.7m
|
13%
|
|
Statutory EBITDA
|
£6.8m
|
£6.7m
|
-1%
|
|
Statutory EPS
|
2.0p
|
3.2p
|
-38%
|
|
Cash position
|
£7.4m
|
£13.3m
|
-44%
|
|
Interim dividend per
share
|
1.2p
|
1.1p
|
9%
|
Financial highlights
· Core1 revenue growth to £31.2m (HY23: £27.6m), up 13%
· Increased SaaS & Subscription revenue of £20.0m (HY23:
£18.8m), up 6%
representing 65% of core revenue
· Core
adjusted EBITDA2 increased
to £9.3m (HY23:
£8.8m), up
5%
· Gross
cash of £7.4m (FY23: £12.7m; HY23: £13.3m), following deployment of
£6.4m into strategic acquisitions, and ongoing organic investment
into product development of c.£2.5m in the period, underpinned by
continued strong cash conversion
of 101% (HY23: 104%)
· Net
debt of £8.6m (HY23: net cash of £13.3m); comfortable leverage with
net debt to EBITDA ratio of 0.4x and £64m of headroom in £80m
Revolving Credit Facility
· Four
acquisitions completed in FY23 with a further three completed
during HY24, delivering combined core revenues of £4.8m in the
period
· Statutory revenue of £35.7m (HY23:
£31.7m), up
13%
· Adjusted EBITDA2
increased to £9.6m (HY23: £9.0m), up 7%
· Solid
adjusted EBITDA2
margin of 26.8% (HY23: 28.3%), down 150bps,
during a period of organic and inorganic investment
· Adjusted EPS2 consistent at 5.0 pence per share
(HY23: 5.0 pence per share) demonstrating continued strong
profitability, offsetting the impact of UK wide increase in
corporation tax rate from 19% to 25% on 1 April 2023
· Interim dividend of 1.2p (HY23: 1.1p) announced,
up 9%, recognising the
strength of the underlying business and confident
outlook
Strategic and operational highlights
· Strong
visibility of earnings, recurring revenues and earnings
quality
o SaaS
& Subscription revenue grew 6% to £20m (HY23: £18.8m),
representing 65% of core revenues (HY23: 68%), which reflects the
impact of acquisitions over the period
· Leveraging of enhanced technology and data footprint to inform
investment in and scaling of core propositions, driving recurring
revenues and further organic growth
o Intermediary
Services
§ Enhanced
membership technology
§ Upgraded
financial planning software
§ Extended
consumer duty support, with launch of new event series and training
courses
o Distribution
Channels
§ Expanded
DaaS proposition into the employee benefits sector
§ Further
growth of Strategic Asset Allocation through extended partnerships
including Invesco, and Legal and General
§ Enhanced
DaaS proposition with development of a mortgage portal delivering
industry insights
o Fintech &
Research
§ Expanded
product ratings proposition, with launch of new model portfolio
comparison tool, and customer insights portal
§ Scaled
consumer proposition with new distribution partnership with The
Times, providing features and rates insights
§ Continued
investment in market and competitor intelligence software Matrix
360
· M&A and strategic investments expanding capabilities and
offering
o Completion of Fintel IQ capability set, with strong initial
demand
o Four
acquisitions completed year-to-date
§ Threesixty
Services, a provider of compliance
and business support services
§ ifaDASH, a reg-tech solution
provider
§ Owen
James, the leading provider of
strategic engagement events
§ Synaptic
Software, an independent provider of
financial adviser planning and research software
o One
conditional acquisition announced post period end, subject to
regulatory approval
§ Rayner Spencer Mills
Research, one of the most recognised
fund ratings and research agencies in the UK
o Minority investment in Mortgage Brain, one of the leading
providers of technology to the mortgage industry, alongside a new
distribution agreement
Current trading and outlook
The business continues to trade
well, and the Board is confident that revenue expectations will be
met based on key structural drivers:
· Continued organic growth expected with expansion of
proposition and synergistic opportunities from recent
acquisitions
· Positive market dynamics including regulatory pressure, demand
for data and insights, and ongoing need for integrated
technology
· The
initial cut in interest rates has not yet filtered through to our
mortgage business, however we are well placed to benefit from a
recovery as further cuts are implemented
We will incur some additional staff
costs in H2 2024, which will impact underlying EBITDA this year.
This is partly relating to additional investment in Matrix 360 and
Enterprise sales, as we work on realising revenue synergies from
our acquired portfolio; and also relating to the initial
realisation of future cost synergies across the business following
the acquisitions. This will likely result in the underlying FY24
EBITDA being marginally lower than expectations although it is
expected that these synergies will benefit FY25 and
beyond.
In terms of specific transaction
related activity in H2, we expect the acquisition of threesixty to
increase FY24 revenue by c.£3.0m. We also expect an EBITDA
contribution of £150k for the rest of the year. The purchase price
was £14.6m, albeit the business had £2.7m cash in hand resulting in
an increase in net borrowing of c.£12m, which will in turn incur
additional borrowing costs of c.£420,000 in H2.
In addition, our commitment to the
CRM market remains strategically important and we are looking to
optimise the timing of triggering our equity options over minority
investments to attain best value for Fintel shareholders. As a
result, we are likely to exercise the second equity call option for
Plannr, taking us to 49% ownership, at a cost of c.£3.5m. As Plannr
approaches its break-even point in mid-2025 based on recent sales
trajectory, we believe it is right to exercise the call option in
the window. This will require us to consolidate the relevant
proportion of its near-term losses, forecast at c.£150k in Q4
2024. This will also incur additional borrowing costs of
c.£150k in Q4 2024.
The Group had utilised £16m of the
Revolving Credit Facility as at 30 June 2024. We expect to have
borrowed an additional £20m to fund threesixty, Plannr and the
first round of deferred consideration, taking total gross
borrowings to £36m from our £80m facility. With cash balances on
hand, this equates to approximately £30m of net debt, which would
represent a net debt to EBITDA ratio of c.1.34x at the end of FY24,
which would then start to deleverage due to our significant ongoing
cash generation.
Notes
1Core business excludes
revenues from panel management and surveying.
2Core adjusted EBITDA and
adjusted EPS are alternative performance measures for which a
reconciliation to a GAAP measure is provided in note 8 and note
10.
3Underlying operating cash
flow conversion is calculated as underlying cash flow from
operations (adjusted operating profit, adjusted for changes in
working capital, depreciation, amortisation, CAPEX and share-based
payments) as a percentage of adjusted operating
profit.
Analyst presentation
An analyst briefing is being held at
9:30am on 17 September 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)
David Anderson
Kamalini Hull
|
+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 a UK fintech and support
services business, combining award-winning intermediary business
support services, and leading research, ratings and fintech
businesses.
Fintel provides technology,
compliance and regulatory support to thousands of intermediary
firms, data and targeted distribution services to hundreds of
product providers and empowers millions of consumers to make better
informed financial decisions. We serve our customers through three
core divisions:
The Intermediary Services division provides
technology, compliance, and regulatory support to thousands of
intermediary businesses through a comprehensive membership model.
Members include directly authorised IFAs, Wealth Managers and
Mortgage Brokers.
The Distribution Channels division delivers
market Insight and analysis and targeted distribution strategies to
financial institutions and product providers. Clients include major
Life and Pension companies, Investment Houses, Banks, and Building
Societies.
The Fintech and Research division (Defaqto)
provides market leading software, financial information and product
research to product providers and intermediaries. Defaqto also
provides product ratings (Star Ratings) on thousands of financial
products. Financial products are expertly reviewed by the Defaqto
research team and are compared and rated based on their underlying
features and benefits. Defaqto ratings help consumers compare and
buy financial products with confidence.
For more information about Fintel,
please visit the website:
www.wearefintel.com
|
JOINT CHIEF EXECUTIVES' STATEMENT
Overview
Fintel has delivered a positive
financial performance in the first half of the year, with revenue
growth of 13%.
Profitability and earnings quality
further improved across the business, with core adjusted EBITDA up
5% and SaaS and subscription revenues growing 6%, as we innovate
and scale our core propositions.
Recognising the positive performance
of the Business, the Board has announced an interim dividend of 1.2
pence per share, up 9% (HY23: 1.1 pence per share).
Core Business
As we integrate recent acquisitions
and invest in our service and technology platform, core revenues
have grown in each division.
· The
Intermediary Services division delivered an 8% growth in core
revenue. Structural headwinds in the mortgage market and the rapid,
temporary growth in consolidation has led to reduction in member
numbers in this division. Both of those headwinds are now calming,
and with the increased services and technology offered within this
division, combined with acquisition of threesixty significantly
enhancing this customer base we are confident of continued
growth.
· In the
Distribution Channels division core revenue increased by 15%, with
recurring revenues up by 7%, driven by continued scaling of our
distribution solutions with expansion of the DaaS proposition into
the employee benefit market and continued scaling of the Strategic
Asset Allocation ("SAA") solution through existing strategic
distribution partnerships.
· The
Fintech and Research division delivered a 19% increase in core
revenues, driven by strong growth across product ratings, software
and fintech revenue lines, following service developments in our
product and risk ratings propositions, and enhancements to
competitor intelligence and benchmarking software
Matrix.
Strategic delivery and priorities
Fintel's value creation strategy
combines selective acquisitions and organic growth, underpinned by
long term, positive market dynamics including an increasing demand
for technology, insights and data and rising regulatory
pressure.
During the last twelve months we
have leveraged the underlying strength of our cash generative model
to significantly invest in our future growth, acquiring four
complementary businesses to Fintel year to date, and investing at
record levels in our technology offering. As we enhance our scale,
IP and capabilities, we are well positioned to capitalise on growth
opportunities arising within both our expanded group and the
broader market.
Outlook
We have entered the second half of
the year with continued momentum from our portfolio of
acquisitions, with additional upside from the expected completion
of the conditional acquisition of another complementary business in
Rayner Spencer Mills Research, one of the most recognised fund
ratings and research agencies in the UK.
With the first interest rate cut
announced post period end and expectations of further cuts by the
end of the year, we remain well placed to capitalise on any
positive development as the mortgage market
progresses.
Fintel's long-term growth remains
underpinned by the evolving UK financial services and regulatory
landscape, supporting the continued expansion of our market
position and technology and service platform. With a diverse client
base and proposition, we are confident of continuing to capitalise
on growth opportunities across an expanded family of
brands.
Having evolved Fintel through
significant strategic investment, we are well positioned for
long-term growth.
Neil Stevens & Matt
Timmins
Joint Chief Executive
Officers
FINANCIAL REVIEW
For
the six months ended 30 June 2024
|
|
Period
ended
|
Period
ended
|
|
|
30 June
|
30 June
|
|
|
2024
|
2023
|
|
|
|
|
|
Group revenue
|
35.7
|
31.7
|
|
|
|
|
|
Adjusted EBITDA
|
9.6
|
9.0
|
|
Adjusted EBITDA margin %
|
26.8%
|
28.3%
|
|
Depreciation
|
(0.3)
|
(0.2)
|
|
Depreciation of lease
asset
|
(0.2)
|
(0.2)
|
Amortisation of development
expenditure and software
|
|
|
|
Adjusted EBIT
|
8.4
|
8.0
|
|
Operating costs of an exceptional
nature
|
(2.0)
|
(1.5)
|
|
Share option charges
|
(0.8)
|
(0.8)
|
|
Amortisation of other intangible
assets
|
(1.6)
|
(1.0)
|
|
|
|
|
|
Profit before tax
|
3.4
|
4.5
|
|
|
|
|
|
|
|
|
Adjusted earnings per share**
("EPS")
|
|
|
** Adjusted EPS excludes
operating exceptional costs and amortisation of intangible assets
arising on acquisition, divided by the average number of Ordinary
Shares in issue for the period.
Revenue
The core business performed
positively during the first six months of 2024. Core revenues grew
13% to £31.2m (HY23: £27.6m), and 3% on a like-for-like basis,
adjusting for both revenue from acquired businesses during HY24
and, the change in revenue recognition arising from the
renegotiation of a contract with an existing vendor in May 2023 to
take the form of a new technology reseller
contract.
Ensuring a consistent improvement in
the quality and visibility of our earnings is a key strategic focus
of the Group and we continued to deliver significant progress. SaaS
and subscription-based revenues grew 6% to £20.0m (HY23: £18.8m),
with 65% SaaS and subscription income in the core business (HY23:
68%).
On a statutory basis the Group,
including the non-core property surveying business, revenues grew
13% to £35.7m (HY23: £31.7m).
Divisional performance
Intermediary Services
Our Intermediary Services division
provides compliance and business services to financial intermediary
firms through a comprehensive membership model. Members, including
financial advisers, mortgage advisers and wealth managers, are
regulated by the FCA.
Intermediary Services core revenue
increased 8% to £12.4m (HY23: £11.5m). Excluding revenue from
acquisitions and the revenue impact of the change in contractual
terms of the software reseller agreement, revenue remained stable
(LfL: HY24: £8.8m HY23: £8.9m). The Intermediary Services
division is well positioned to continue benefitting from increasing
regulatory pressure, including Consumer Duty regulation.
Fintel has made 4 acquisitions into
the Intermediary Services division since July 2023, contributing
combined revenues of £2.9m (£1.7m to membership fee income, £0.8m
software license income and £0.4m to other services) and total
gross profit of £0.3m in HY24.
In the six months to 2024 the
Intermediary Services division delivered:
· Membership fee income of £7.5m
(HY23: £6.0m) - an increase of 25% driven by the acquisition of
VouchedFor with organic membership fees down £0.2m to
£5.8m;
· Software licence income of £2.1m (HY23: £2.7m) - reduced
revenues 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 offset by £1.2m of inorganic revenue from
Competent Adviser and Synaptic;
· Additional services income of £2.8m (HY23: £2.8m),
consistent with the prior period;
· Gross
profit* of £5.3m (HY23: £5.2m) with gross profit margin**
of 42.7% (HY23: 45.2%).
* Gross profit is
calculated as revenue less direct operating costs.
** Gross profit margin is
calculated as gross profit as a percentage of revenue.
Distribution Channels
The Distribution Channels division
delivers data, distribution and marketing services to product
providers.
Distribution Channels revenue grew
by 11% to £11.1m (HY23: £9.9m). Excluding revenue from
acquisitions and non-core surveying services, distribution revenues
remained stable (LfL: HY24: £5.8m HY23: £5.8m). Whilst we have not
seen the effects of the slowly recovering mortgage market flow
through to the HY24 core business, any increase in completions will
start to flow into the second half of the year.
In January 2024, Fintel expanded its
Distribution Channel division by acquiring Owen James Events, which
added £0.8m in marketing services revenue and £0.2m in gross profit
during the first half of 2024.
In the six months to 30 June 2024
Distribution Channels delivered:
· Core
commission revenues of £3.2m (HY23: £3.4m), a decrease of 6% as the
business starts to see a stabilising UK housing market towards
mid-2024;
· Marketing services revenues of £3.4m (HY23: £2.3m); stripping
out revenue from acquired business, revenue grew 10% on a
like-for-like basis (LfL:HY24: £2.6m, HY23: £2.3m);
o DaaS has grown well to £2.0m
(HY23: £1.8m). This growth has come largely from internal
conversion from non-DaaS revenues;
· Non-core panel management and valuation services revenues grew
7% to £4.5m (HY23: £4.1m); again, reflecting a stabilising UK
housing market during 2024; and
· Gross
profit of £4.1m (HY23: £3.6m) with gross profit margin of 36.6%
(HY23: 36.7%).
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 19% to £12.2m (HY23: £10.3m). Stripping out revenues from
acquisitions, fintech and research revenues grew by 8% (LfL: HY24:
£11.2m, FY23: £10.3m) as the business further enhances Fintech and
Research capabilities.
Fintel acquired MICAP and AKG in H2
2023 contributing combined revenues of £1.1m in product ratings
revenue, and gross profit of £0.04m during the first six months of
2024.
In the six months to 30 June 2024
Fintech and Research division delivered:
· Software revenue of £5.4m (HY23: £5.2m) - an increase of
6%;
· Product ratings revenue of £5.9m (HY23: £4.5m) - stripping out revenue from acquired business, revenue grew 9%
on a like-for-like basis (LfL: HY24: £4.8m, HY23:
£4.5m);
· Other
income of £0.9m (HY23: £0.6m) from consultancy and ad hoc work;
and
· Gross
profit of £7.1m (HY23: £6.3m) with a strong gross
profit margin of 58.5% (HY23: 61.0%).
Profitability
Our adjusted EBITDA increased by 7%
achieving £9.6m (HY23: £9.0m). The resulting adjusted EBITDA
margin of 26.8% (HY23: 28.3%) has reduced year-on-year during a
period of growth, with multiple synergy opportunities identified in
newly acquired entities.
Adjusted EBITDA margin is calculated
as adjusted EBITDA (as defined in note 8), divided by
revenue. Whilst adjusted EBITDA is not a statutory measure, the
Board believes it is a highly useful measure of the underlying
trade and operations, excluding one-off and non-cash
items.
Adjusted EBITDA in our core business
also performed well, increasing 5% to £9.3m (HY23: £8.8m). Core
adjusted EBITDA is the adjusted EBITDA calculated above excluding
the trading results of our non-core property surveying
business.
The business continues to deliver
towards its medium-term goals and is well positioned for continued
growth.
Exceptional items
These are items which are
non-recurring and are adjusted on the basis of either their size or
their nature. As these items are one-off or non-operational
in nature, management considers that their exclusion
aids
understanding of the Group's
underlying business performance.
Operating costs of an exceptional
nature of £2.0m (HY23: £1.5m) comprised the following:
· M&A
transaction costs £1.1m (HY23: £0.4m)
· Share settlement
costs £0.6m (HY23: £nil)
· Transformation
costs of £0.3m (HY23: £0.8m) - includes implementation costs to
enhance Fintel's customer relationship management platform ("CRM")
and a new enterprise resource planning system ("ERP"), delivered
during HY24
· Restructuring
related costs £nil (HY23: £0.3m)
No other costs have been treated as
exceptional in the period to 30 June 2024.
Share-based payments
Share-based payment charges of £0.8m
(HY23: £0.8m) have been recognised in respect of the options in
issue.
Financial income and
expense
Finance costs of £0.7m (HY23: £0.3m)
relate to the Group's four-year revolving credit
facility.
Finance income of £0.1m (HY23:
£0.1m) relates to interest earned on short term deposit of
available funds.
Taxation
The tax charge for the period has
been accrued using the tax rate that is expected to apply to the
full financial year.
The underlying tax charge of £1.7m
for the period (HY23: £1.7m) represents a full year effective tax
rate of 24.5% (HY23: 23.7%). 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.£1.8m in corporation tax
during the 6-month period.
Earnings per share
Earnings per share has been
calculated based on the weighted average number of shares in issue
at each balance sheet date. Adjusted earnings per share in the
period amounted to 5.0 pence per share (HY23: 5.0 pence per
share).
Cash flow and closing cash
position
At 30 June 2024 the Group reported a
robust liquidity position, featuring a total cash balance of £7.4m
(HY23: £13.3m), £8.6m net of debt (FY23: £nil), and substantial
headroom in the £80m revolving credit facility with £64m undrawn.
Net debt to adjusted EBITDA ratio is 0.4 times (net cash to EBITDA
ratio FY23: 0.1 times; HY23: 0.7 times).
Underlying operating cash flow
conversion was strong at 101% (HY23: 104%), which reduced by 30bps
due to increased capital investment for growth of £2.2m (HY23:
£1.9m; HY22: £0.7m). 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 during this current
investment phase.
Dividend
Recognising the underlying financial
strength of the business, the Board has announced an interim
dividend of 1.2p (HY23: 1.1p). It is the Board's intention that
this will be paid on or around 1 November 2024 to shareholders on
the register on 27 September 2024. The Board intends the
ex-dividend date to be 26 September 2024.
Accounting policies
The accounting policies applied in
these condensed consolidated interim financial statements are the
same as those applied in the Group's consolidated financial
statements in the 2023 Annual Report & Accounts.
Going concern
The Directors have undertaken a
comprehensive assessment to consider the Company's ability to trade
as a going concern for a period of 18 months to March
2026.
The Directors have robustly tested
the going concern assumption in preparing these financial
statements, taking into account a number of severe but plausible
downside scenarios, which would collectively be considered remote.
The Group continues to enjoy robust cash generation and benefits
from a strong liquidity position at 30 June 2024. The
Directors remain satisfied that the going concern basis of
preparation in the financial statements is appropriate.
On the basis of the Company's
current and forecast profitability and cash flows, and the
availability of committed funding, the Directors consider and have
concluded that the Company will have adequate resources to continue
in operational existence for at least the next 18 months. As
a result, they continue to adopt a going concern basis in the
preparation of the financial statements.
David Thompson
Chief Financial Officer
Consolidated statement of profit or
loss and other comprehensive income
for the six months 30 June
2024
|
|
|
|
2024
|
2024
|
|
2023
|
2023
|
|
|
|
2024
|
Underlying
|
Period
ended
|
2023
|
Underlying
|
Period
ended
|
|
|
|
Underlying
|
Adjustments*
|
30
June
|
Underlying
|
adjustments
|
30
June
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
6
|
35.7
|
-
|
35.7
|
31.7
|
-
|
31.7
|
|
Operating expenses
|
7-8
|
(28.1)
|
(2.0)
|
(30.1)
|
(24.5)
|
(1.5)
|
(26.0)
|
|
Amortisation of other intangible
assets
|
13
|
-
|
(1.6)
|
(1.6)
|
-
|
(1.0)
|
(1.0)
|
|
Group operating profit
|
|
7.6
|
(3.6)
|
4.0
|
7.2
|
(2.5)
|
4.7
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
7.0
|
(3.6)
|
3.4
|
7.0
|
(2.5)
|
4.5
|
|
|
|
|
|
|
|
|
|
Profit for the financial
period
|
|
|
|
|
|
|
|
|
Profit attributable to shareholders:
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
|
2.1
|
|
|
3.3
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - adjusted
(pence)
|
10
|
|
|
5.0p
|
|
|
5.0p
|
|
Earnings per share - basic (pence)
|
10
|
|
|
2.0p
|
|
|
3.2p
|
Earnings per share - diluted (pence)
|
|
|
|
|
|
|
|
There are no items to be included in
other comprehensive income in the current or preceding
period.
Consolidated statement of financial
position
as at 30 June 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Fixed asset investments
|
11
|
2.5
|
|
1.0
|
|
1.2
|
|
|
Property, plant and equipment
|
12
|
1.1
|
|
1.3
|
|
1.2
|
|
|
Lease assets
|
12
|
2.1
|
|
2.0
|
|
2.2
|
|
|
Intangible assets and goodwill
|
13
|
124.1
|
|
95.2
|
|
118.2
|
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
13.2
|
|
11.6
|
|
10.2
|
|
|
Current tax asset
|
|
0.1
|
|
0.5
|
|
-
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Share capital
|
15
|
1.0
|
|
1.0
|
|
1.0
|
|
|
Share premium account
|
15
|
67.1
|
|
67.0
|
|
67.0
|
|
|
Other reserves
|
17
|
(52.6)
|
|
(50.6)
|
|
(50.0)
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to the owners of the
Company
|
|
|
98.7
|
|
99.2
|
|
102.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
21.7
|
|
19.5
|
|
20.9
|
|
|
Lease liabilities
|
14
|
0.4
|
|
0.4
|
|
0.4
|
|
|
Contingent consideration
|
|
5.4
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Loans and borrowings
|
|
15.8
|
|
-
|
|
10.7
|
|
|
Lease liabilities
|
14
|
1.3
|
|
1.7
|
|
1.5
|
|
|
Deferred tax liabilities
|
|
5.6
|
|
4.8
|
|
5.7
|
|
|
Deferred consideration
|
|
1.0
|
|
-
|
|
5.1
|
|
|
|
|
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Consolidated statement of changes in
equity
for the six months ended 30 June
2024
|
|
Share
|
Share
|
Other
|
Non-
controlling
|
Retained
|
Total
|
|
|
capital
|
premium
|
reserves
|
interest
|
earnings
|
equity
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2023
|
1.0
|
67.0
|
(50.6)
|
0.4
|
81.8
|
99.6
|
|
Total comprehensive income for the
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the
period
|
|
|
|
|
|
|
|
Transactions with owners, recorded
directly in equity
|
|
|
|
|
|
|
|
Dividends
|
-
|
-
|
-
|
(0.3)
|
(1.1)
|
(1.4)
|
|
Share option charge
|
-
|
-
|
0.7
|
-
|
-
|
0.7
|
|
Release of share option reserve on
exercise
|
-
|
-
|
(0.1)
|
-
|
0.1
|
-
|
Total contributions by and distributions to
owners
|
|
|
|
|
|
|
Balance at 31 December
2023
|
|
|
|
|
|
|
|
Balance at 1 January 2024
|
1.0
|
67.0
|
(50.0)
|
-
|
84.6
|
102.9
|
|
Total comprehensive income for the
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the
period
|
|
|
|
|
|
|
|
Transactions with owners, recorded
directly in equity
|
|
|
|
|
|
|
|
Issue of shares
|
-
|
0.1
|
-
|
-
|
-
|
0.1
|
|
Dividends
|
-
|
-
|
-
|
(0.3)
|
(2.4)
|
(2.7)
|
|
Share option charge
|
-
|
-
|
0.8
|
-
|
-
|
0.8
|
|
Release of share option reserve on
exercise
|
-
|
-
|
(3.4)
|
-
|
(1.1)
|
(4.5)
|
Total contributions by and distributions to
owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of cash
flows
for the period to 30 June
2024
|
|
|
Period
ended
|
Period
ended
|
|
|
|
30
June
|
30 June
|
|
|
|
2024
|
2023
|
|
|
|
|
|
Net cash generated from operating
activities
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
Equity investments
|
|
(1.1)
|
(1.0)
|
|
Purchase of property, plant and
equipment
|
|
(0.2)
|
(0.3)
|
|
Development expenditure
|
|
(2.0)
|
(1.6)
|
|
Cost of acquisitions - net of cash
received
|
|
(4.7)
|
-
|
|
M&A transaction costs
|
|
(0.8)
|
-
|
|
Loan to equity interest
|
|
(0.6)
|
-
|
|
|
|
|
|
Net cash flows (used in)/from
investing activities
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Finance costs
|
|
(0.6)
|
(0.2)
|
|
Drawdown of loans
|
|
5.0
|
-
|
|
Payment of lease liability
|
|
(0.2)
|
(0.2)
|
|
Cash settled Value Builder scheme
|
|
(5.2)
|
-
|
|
Issue of share capital
|
|
0.1
|
0.2
|
|
|
|
|
|
Net cash flows used in financing
activities
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
|
(5.3)
|
0.5
|
Cash and cash equivalents at start of
period
|
|
|
|
Cash and cash equivalents at end of
period
|
|
|
|
Operating costs of an exceptional
nature, as per note 7, are included in net cash generated from
operating activities.
Within net cash flows from investing
activities, fixed asset investments include the acquisition in
Fintel Labs Limited of a 5.8% equity interest in mortgage
technology company, Mortgage Brain Holdings Limited. Also included
is the sale in Fintel Labs of its 9.9% equity interest in Cardan
Financial Group Limited.
NOTES TO THE INTERIM FINANCIAL
INFORMATION
1 Reporting
entity
Fintel plc is a company domiciled in
the UK. These condensed consolidated interim financial statements
("interim financial statements") as at and for the six months ended
30 June 2024 comprise Fintel and its subsidiaries (together
referred to as "the Company"). The Company is the leading provider
of digital, data led and expert services to product providers,
intermediaries, and consumers to help them navigate the
increasingly complex world of retail financial services. Fintel
provides technology, compliance and regulatory support to thousands
of intermediary businesses, data and targeted distribution services
to hundreds of product providers and empowers millions of consumers
to make better informed financial decisions.
2 General
information and basis of preparation
These interim financial statements
have been prepared in accordance with IAS 34 Interim financial reporting and should
be read in conjunction with the Company's last annual consolidated
financial statements as at and for the year ended 31 December 2023
("last annual financial statements"). They do not include all the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the Company's financial position and performance
since the last annual financial statements.
The financial information set out in
these interim financial statements for the six months ended 30 June
2024 and the comparative figures for the six months ended 30 June
2023 are unaudited. The comparative financial information for the
period ended 31 December 2023 in this interim report does not
constitute statutory accounts for that period under 435 of the
Companies Act 2006.
Statutory accounts for the period
ended 31 December 2023 have been delivered to the Registrar of
Companies. The auditors' report on the accounts for 31 December
2023 was unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
The interim financial statements
comprise the financial statements of the Company and its
subsidiaries at 30 June 2024. Subsidiaries are consolidated from
the date of acquisition, being the date on which the Company
obtained control, and continue to be consolidated until the date
when such control ceases.
The interim financial statements
incorporate the results of business combinations using the
acquisition method. In the consolidated balance sheet, the
acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the
acquisition date.
These interim financial statements
were authorised for issue by the Company's Board of Directors on 16
September 2024.
3 Critical accounting estimates and judgements
In preparing these interim financial
statements, management has made judgements and estimates that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income, and expense. Actual
results may differ from these estimates.
The significant judgements made by
management in applying the Company's accounting policies and the
key sources of estimation uncertainty were the same as those
described in the last annual financial statements.
4 Changes in significant accounting policies
The accounting policies applied in
these condensed consolidated interim financial statements are the
same as those applied in the Company's consolidated financial
statements in the 2023 Annual Report & Accounts.
5 Going
concern
The Board has concluded that it is
appropriate to adopt the going concern basis, having undertaken a
rigorous review of financial forecasts and available
resources.
The Directors have robustly tested
the going concern assumption in preparing these financial
statements, taking into account the Group's strong liquidity
position at 30 June 2024 and a number of severe but plausible
downside scenarios have been modelled, which collectively would be
considered remote, and remain satisfied that the going concern
basis of preparation is appropriate.
6 Segmental information
During the period, the Company was
domiciled in the UK and all revenue is derived from external
customers in the United Kingdom.
The Group has three operating
segments, which are considered to be reportable segments under
IFRS. The three reportable segments are:
• Intermediary
Services;
• Distribution
Channels; and
• Fintech and
Research.
Intermediary Services provides
compliance and regulation services to individual financial
intermediary Member Firms, including directly authorised IFAs,
directly authorised mortgage advisers, workplace consultants and
directly authorised wealth managers.
Distribution Channels provides
marketing and promotion, product panelling and co-manufacturing
services to financial institutions. This division of the Group also
undertakes survey panelling and surveying work for mortgage
lenders.
The Fintech and Research segment
provides proprietary advice technology; 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
|
Period ended 30 June 2024
|
|
|
|
|
|
|
Revenue
|
12.4
|
11.1
|
12.2
|
-
|
35.7
|
|
|
|
|
|
|
|
|
Gross profit
|
5.3
|
4.2
|
7.1
|
-
|
16.6
|
Administrative and support
costs
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
9.6
|
|
Operating costs of an exceptional
nature
|
|
|
|
|
(2.0)
|
|
Amortisation of other intangible
assets
|
|
|
|
|
(1.6)
|
|
Amortisation of development costs
and software
|
|
|
|
|
(0.7)
|
|
Depreciation
|
|
|
|
|
(0.3)
|
|
Depreciation of leased
assets
|
|
|
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intermediary
|
Distribution
|
Fintech
and
|
Admin
and
|
|
|
|
Services
|
Channels
|
Research
|
support
costs
|
Group
|
Period ended 30 June 2023
|
|
|
|
|
|
|
Revenue
|
11.5
|
9.9
|
10.3
|
-
|
31.7
|
|
|
|
|
|
|
|
|
Gross profit
|
5.2
|
3.6
|
6.3
|
-
|
15.1
|
Administrative and support
costs
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
9.0
|
|
Operating costs of an exceptional
nature
|
|
|
|
|
(1.5)
|
|
Amortisation of other intangible
assets
|
|
|
|
|
(1.0)
|
|
Amortisation of development costs
and software
|
|
|
|
|
(0.6)
|
|
Depreciation
|
|
|
|
|
(0.2)
|
|
Depreciation of leased
assets
|
|
|
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In determining the trading
performance of the operating segments central costs have been
presented separately in the current period. Segmental performance
in the prior period has been presented consistently on the same
basis.
The statement of financial position
is not analysed between the reporting segments by management and
the CODM considers the Group statement of financial position as a
whole.
No customer has generated more than
10% of total revenue during the period covered by the financial
information.
7 Operating profit
Operating profit for the period has
been arrived at after charging:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Depreciation of tangible assets -
owned
|
0.3
|
0.2
|
|
Depreciation of lease
assets
|
0.2
|
0.2
|
Underlying adjustments
Underlying adjustments include
amortisation of other intangible assets and operating and finance
costs of an exceptional nature.
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Exceptional costs -
operating
|
|
|
|
M&A costs
|
1.1
|
0.4
|
|
Transformation
|
0.3
|
0.8
|
|
Value Builder related
costs
|
0.6
|
-
|
|
|
|
|
|
Restructuring
|
-
|
0.3
|
|
|
|
|
|
Other underlying
adjustments
Amortisation of other intangible
assets
|
1.6
|
1.0
|
|
Interest unwind on contingent and
deferred consideration
|
0.2
|
-
|
|
Profit on sale of equity
investments
|
(0.2)
|
-
|
|
|
|
|
|
Underlying adjustments - before tax
|
3.6
|
2.5
|
These are items which are
non-recurring and are adjusted on the basis of either their size or
their nature. As these items are one-off or non-operational
in nature, management considers that their exclusion
aids
understanding of the Group's
underlying business performance.
Operating costs of an exceptional
nature of £2.0m (HY23: £1.5m) comprised the following:
· M&A
transaction costs £1.1m (HY23: £0.4m)
· Share settlement
costs £0.6m (HY23: £nil)
· Transformation
costs of £0.3m (HY23: £0.8m) - includes implementation costs to
enhance Fintel's customer relationship management platform ("CRM")
and a new enterprise resource planning system ("ERP"), delivered
during HY24
· Restructuring
related costs £nil (HY23: £0.3m)
No other costs have been treated as
exceptional in the period to 30 June 2024.
8 Reconciliation of GAAP to non-GAAP
measures
The Group uses a number of
"non-GAAP" figures as comparable key performance measures, as they
exclude the impact of items that are non-cash items and also items
that are not considered part of ongoing underlying trade.
Amortisation of other intangible assets has been excluded on the
basis that it is a non-cash amount, relating to acquisitions in
prior periods. The Group's "non-GAAP" measures are not defined
performance measures in IFRS. The Group's definition of the
reporting measures may not be comparable with similarly titled
performance measures in other entities.
Adjusted EBITDA is calculated as
follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Operating profit
|
4.0
|
4.7
|
|
Add back:
|
|
|
|
Depreciation (note 12)
|
0.3
|
0.2
|
|
Depreciation of leased assets (note 12)
|
0.2
|
0.2
|
|
Amortisation of other intangible assets (note 13)
|
1.6
|
1.0
|
Amortisation of development costs and software (note 13)
|
|
|
|
EBITDA
|
6.8
|
6.7
|
|
Add back:
|
|
|
|
Share
option charge
|
0.8
|
0.8
|
Operating
costs of exceptional nature (note 7)
|
|
|
|
|
|
|
Adjusted EBITDA of non-core
surveying business
|
|
|
|
|
|
|
Operating costs of an exceptional
nature have been excluded as they are not considered part of the
underlying trade. Share option charges have been excluded from
adjusted EBITDA as a non-cash item.
Adjusted operating profit is
calculated as follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Operating profit
|
4.0
|
4.7
|
|
Add back:
|
|
|
|
Operating
costs of exceptional nature (note 7)
|
2.0
|
1.5
|
Amortisation of other intangible assets (note 13)
|
|
|
Adjusted operating profit
|
|
|
Adjusted profit before tax is
calculated as follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Profit before tax
|
3.4
|
4.5
|
|
Add back:
|
|
|
|
Operating
costs of exceptional nature (note 7)
|
2.0
|
1.5
|
Amortisation of other intangible assets (note 13)
|
|
|
Adjusted profit before
tax
|
|
|
Adjusted profit after tax is
calculated as follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Profit after tax
|
2.3
|
3.4
|
|
Add back:
|
|
|
|
Operating
costs of exceptional nature (note 7), net of tax
|
1.8
|
1.2
|
|
Amortisation of other intangible assets (note 13), net of deferred
tax
|
1.3
|
0.7
|
Profit
attributable to non-controlling interests
|
|
|
Adjusted profit after tax
|
|
|
Free cash flow conversion is
calculated as follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Adjusted operating profit
|
7.6
|
7.2
|
|
Adjusted for:
|
|
|
|
Depreciation of tangible assets
|
0.3
|
0.2
|
|
Depreciation of lease assets
|
0.2
|
0.2
|
|
Amortisation of development costs and software
|
0.7
|
0.6
|
|
Share
option charge
|
0.8
|
0.8
|
|
|
|
|
|
Net changes
in working capital
|
0.3
|
0.4
|
|
Purchase of
property, plant and equipment
|
(0.2)
|
(0.3)
|
|
|
|
|
Underlying cash flow from
operations
|
|
|
Underlying operating cash flow
conversion
|
|
|
|
Net
interest paid
|
(0.5)
|
(0.1)
|
|
Income tax
paid
|
(1.7)
|
(1.8)
|
Payments of
lease liability
|
|
|
|
Free cash
flow
|
5.3
|
5.4
|
|
|
|
|
Free cash flow conversion
|
|
|
9 Net finance expense
Finance Interest - expense
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Interest payable on financial
liabilities at amortised cost
|
0.7
|
0.3
|
|
|
|
|
Finance Interest - income
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
10 Earnings per share
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
|
|
Profit attributable to equity
shareholders of the parent (£m)
|
|
|
Weighted average number of shares in
issue
|
|
|
Basic profit per share
(pence)
|
|
|
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
Diluted earnings per
share
|
|
|
Profit attributable to equity
shareholders of the parent (£m)
|
|
|
|
Weighted average number of shares in
issue
|
103,855,666
|
103,705,423
|
Diluted weighted average number of
shares and options for the period
|
|
|
|
|
|
|
Diluted profit per share
(pence)
|
|
|
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
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 Fixed asset investment
|
|
Fixed
Asset Investments
|
|
|
|
|
At 31 December 2023
|
1.2
|
|
Additions
|
1.5
|
|
|
|
|
|
|
In March 2024, Fintel Labs Limited
acquired a non-controlling interest in Mortgage Brain Holdings
Limited, acquiring 5.8% of Ordinary Shares in exchange for £1.5m
consideration. The acquisition is recorded at cost and subsequently
recorded at fair value through other comprehensive
income.
In April 2024, Fintel Labs Limited
sold its 9.9% stake in Cardan Financial Group Limited for £0.4m,
realising a profit on disposal of £0.2m.
12 Property, plant and
equipment
|
|
|
|
|
|
|
|
Plant
and
|
|
|
Leasehold
|
Office
|
|
|
|
Property
|
equipment
|
Total
|
|
Improvement
|
Equipment
|
Total
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
2.9
|
1.0
|
3.9
|
|
0.9
|
2.0
|
2.9
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2023
|
2.9
|
1.0
|
3.9
|
|
0.9
|
2.3
|
3.2
|
|
Acquisitions
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
Additions
|
0.3
|
0.1
|
0.4
|
|
-
|
0.1
|
0.1
|
|
Disposals
|
-
|
-
|
-
|
|
-
|
(0.7)
|
(0.7)
|
|
At 31 December 2023
|
3.2
|
1.1
|
4.3
|
|
0.9
|
1.7
|
2.6
|
|
Acquisitions
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
Additions
|
-
|
0.1
|
0.1
|
|
-
|
0.2
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
impairment
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
1.0
|
0.7
|
1.7
|
|
0.2
|
1.5
|
1.7
|
|
Depreciation charge for the
period
|
0.1
|
0.1
|
0.2
|
|
0.1
|
0.1
|
0.2
|
|
At 30 June 2023
|
1.1
|
0.8
|
1.9
|
|
0.3
|
1.6
|
1.9
|
|
Depreciation charge for the
period
|
0.2
|
-
|
0.2
|
|
0.1
|
0.1
|
0.2
|
|
Disposals
|
-
|
-
|
-
|
|
-
|
(0.7)
|
(0.7)
|
|
At 31 December 2023
|
1.3
|
0.8
|
2.1
|
|
0.4
|
1.0
|
1.4
|
Depreciation charge for the
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment includes IT
equipment and motor vehicles.
13 Intangible assets
|
|
Goodwill
|
Brand
|
Intellectual
property
|
Customer
list
|
Total
other
intangible
assets
|
Development
expenditure
|
Total
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
72.4
|
3.1
|
24.4
|
-
|
27.5
|
5.5
|
105.4
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
1.6
|
1.6
|
|
At 30 June 2023
|
72.4
|
3.1
|
24.4
|
-
|
27.5
|
7.1
|
107.0
|
|
Acquisitions
|
16.7
|
1.0
|
3.0
|
1.3
|
5.3
|
-
|
22.0
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
2.9
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation and
impairment
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
0.2
|
1.1
|
6.6
|
-
|
7.7
|
2.3
|
10.2
|
|
Charge in the period
|
-
|
0.2
|
0.8
|
-
|
1.0
|
0.6
|
1.6
|
|
At 30 June 2023
|
0.2
|
1.3
|
7.4
|
-
|
8.7
|
2.9
|
11.8
|
|
Charge in the period
|
-
|
0.1
|
1.0
|
0.1
|
1.2
|
0.7
|
1.9
|
|
At 31 December 2023
|
0.2
|
1.4
|
8.4
|
0.1
|
9.9
|
3.6
|
13.7
|
|
Charge in the period
|
-
|
0.1
|
1.1
|
0.4
|
1.6
|
0.7
|
2.3
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalised development expenditure
relates to the development of the software platform in Defaqto
Limited.
The carrying amount of goodwill is
allocated across operating segments, which are deemed to be
cash-generating units ("CGUs") as follows:
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Intermediary Services
|
27.9
|
12.7
|
|
Distribution Channels
|
12.1
|
11.5
|
|
|
|
|
|
|
|
|
Goodwill is determined to have an
indefinite useful economic life. The Group has determined that, for
the purposes of impairment testing, each segment is a
cash-generating unit ("CGU"). The recoverable amounts for the CGUs
are predominantly based on value in use, which is calculated on the
cash flows expected to be generated using the latest projected data
available over a five-year period, plus a terminal value
estimate.
14 Interest-bearing loans and
borrowings
This note provides information about
the contractual terms of the Group's and Company's interest-bearing
loans and borrowings.
|
|
|
|
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
0.4
|
0.5
|
|
Non-current
|
|
|
|
Lease liability
|
1.3
|
1.7
|
|
|
|
|
|
|
|
|
The Company has access to a £80m
Revolving Credit Facility, which is linked to the Sterling
Overnight Interbank Average Rate ("SONIA"). The committed credit
facilities are available at pre agreed margins of between 1.50% and
2.40%, dependent on the net leverage of the company. As at the
reporting date the group had drawn down £16m of the
facility
15 Capital and reserves
Share capital
|
|
Ordinary
|
|
|
|
|
Number of fully paid shares (nominal
value £0.01):
|
|
|
At 30 June 2023
|
103,772,215
|
|
|
|
|
At 31 December 2023
|
103,848,685
|
|
|
|
|
|
|
|
|
Share
|
|
|
premium
|
|
|
|
|
At 30 June 2023
|
67.0
|
|
|
|
|
At 31 December 2023
|
67.0
|
|
|
|
|
|
|
16 Share-based payment
arrangements
There have been no material changes
to the share-based payment arrangements in the period to those
disclosed in the annual report and accounts for the period ended 31
December 2023 other than as disclosed below:
|
CSOP 2018
|
|
During the current period, 23,529
awards were exercised. No awards were forfeited as a result of bad
leavers.
|
17 Other reserves
|
|
|
|
|
|
|
Merger
|
Share
option
|
|
|
|
reserve
|
reserve
|
Total
|
|
|
|
|
|
|
At 30 June 2023
|
(53.9)
|
3.3
|
(50.6)
|
|
Share option charge
|
-
|
0.7
|
0.7
|
|
Release of share option
reserve
|
-
|
(0.1)
|
(0.1)
|
|
At 31 December 2023
|
(53.9)
|
3.9
|
(50.0)
|
|
Share option charge
|
-
|
0.8
|
0.8
|
|
Release of share option
reserve
|
-
|
(3.4)
|
(3.4)
|
|
|
|
|
|
18 Notes to the cash flow
statement
|
|
Period
ended
|
Period
ended
|
|
|
30
June
|
30
June
|
|
|
2024
|
2023
|
|
|
|
|
|
Cash flow from operating
activities
|
|
|
|
Profit after taxation
|
2.3
|
3.4
|
|
Add back:
|
|
|
|
Finance
income
|
(0.1)
|
(0.1)
|
|
Finance
cost
|
0.7
|
0.3
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
Amortisation of development expenditure and software (note
13)
|
0.7
|
0.6
|
|
Depreciation of leased assets
|
0.2
|
0.2
|
|
Depreciation of property, plant and equipment
|
0.3
|
0.2
|
|
Amortisation of other intangible assets
|
1.6
|
1.0
|
|
Share
option charge
|
0.8
|
0.8
|
|
Profit on
sale of equity investment
|
(0.2)
|
-
|
|
Interest
unwind on deferred sale proceeds
|
(0.1)
|
-
|
|
Costs
relating to exercise of Value Builder share scheme
|
0.6
|
-
|
|
M&A
related transactions
|
1.1
|
-
|
|
Operating cash flow before movements
in working capital
|
9.0
|
7.5
|
|
Increase in trade and other
receivables
|
(0.5)
|
(0.2)
|
Increase in trade and other
payables
|
|
|
|
Cash generated from
operations
|
9.4
|
7.9
|
|
|
|
|
Net cash generated from operating
activities
|
|
|
19 Acquisitions
Acquisitions completed in the period ended 30 June
2024
Adv Data Holding
Limited
On 26 January 2024 the Group
acquired 100% of the issued shares of Adv Data Holding Limited
along with its wholly owned trading subsidiary Synaptic Software
Limited (together "Synaptic"), which is a provider of independent
adviser planning and research software. This acquisition will
extend and cement the Group's central market position as a provider
of technology, research, and consulting services to the adviser
market. Total consideration of £5.1m was paid upfront in cash upon
completion. The fair value of the total consideration at the
acquisition date was £5.1m. On acquisition, acquired intangibles
were recognised relating to customer related intangibles (£0.5m),
intellectual property (technology) related intangibles (£0.4m), and
brand name (£0.3m). The residual goodwill of £2.9m represents the
expertise of the acquired workforce and the ability to leverage
this into some of the Group's businesses, together with the ability
to exploit the Group's existing customer base. Synaptic contributed
revenue of £0.8m and losses before taxation of £0.2m to the Group
from the date of acquisition to 30 June 2024. Had the acquisition
been made at the beginning of the period, revenue would have been
£1.0m and losses 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.
Owen James Group
Ltd
On 26 January 2024 the Group
acquired 100% of the issued shares of Owen James Group Ltd along
with its wholly owned trading subsidiary Owen James Events Limited
(together "Owen James"). Owen James is a leading provider of
strategic engagement events in UK financial services. This
acquisition will extend the Group's flagship industry events
programme, and data and insights strategy. Cash consideration of
£0.8m was paid upfront upon completion, with a further £0.1m
payable two months later contingent upon successful completion of
an integration plan. Contingent consideration based upon certain
revenue-based and profit-based criteria over the three years
following acquisition is capped at £1.5m in total and is payable at
the end of each earn-out year. The fair value of the total
consideration at the acquisition date was £1.2m. On acquisition,
acquired intangibles were recognised relating to customer related
intangibles (£0.4m), and brand name (£0.4m). The residual goodwill
of £0.6m represents the expertise of the acquired workforce and the
ability to leverage this into some of the Group's businesses,
together with the ability to exploit the Group's existing customer
base. Owen James contributed revenue of £0.7m and losses before
taxation of £0.01m to the Group from the date of acquisition to 30
June 2024. Had the acquisition been made at the beginning of the
period, revenue would have been £0.8m and losses 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.
Newdez Limited
("Newdez")
On 15 March 2024 the Group acquired
70% of the issued share capital of Newdez. which is a compliance
tool provider to the financial intermediary market. The deal will
assist with digitising the Group's compliance proposition. Cash
consideration of £0.5m was paid upfront upon completion. Contingent
consideration based upon certain revenue-based criteria over the
year ending 31 December 2024 is capped at £1.0m and is payable at
the end of that year. The fair value of the total consideration at
the acquisition date was £0.6m. There are call options to acquire
up to 50% of the remaining shares during the year ending 31 March
2027, and all shares then remaining during the year ending 31 March
2028. On acquisition, acquired intangibles of £0.1m were recognised
relating to intellectual property (technology) related intangibles.
The residual goodwill of £0.6m represents the expertise of the
acquired workforce and the ability to leverage this into some of
the Group's businesses, together with the ability to exploit the
Group's existing customer base. Newdez contributed revenue of
£0.02m and losses before taxation of £0.03m to the Group from the
date of acquisition to 30 June 2024. Had the acquisition been made
at the beginning the period, revenue would have been £0.03m and
losses before taxation would have been £0.04m. 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 period ended 30 June 2024 are
summarised below:
|
|
Synaptic
|
Owen James
|
Newdez
|
Total
|
|
During the period ended 30 June 2024
|
£m
|
£m
|
£m
|
£m
|
|
Brands
|
0.3
|
0.4
|
-
|
0.7
|
|
Customer relationships
|
0.5
|
0.4
|
-
|
0.9
|
|
Intellectual property
|
0.4
|
-
|
0.1
|
0.5
|
|
Trade and other
receivables
|
0.5
|
0.5
|
-
|
1.0
|
|
Trade and other payables
|
(0.7)
|
(0.7)
|
(0.1)
|
(1.5)
|
|
Net cash
|
1.5
|
0.2
|
-
|
1.7
|
|
Deferred tax liability
|
(0.3)
|
(0.2)
|
-
|
(0.5)
|
|
Fair value of assets
|
2.2
|
0.6
|
-
|
2.8
|
|
Non-controlling interest share of
assets
|
n/a
|
n/a
|
-
|
-
|
|
Fair value of assets
acquired
|
2.2
|
0.6
|
-
|
2.8
|
|
Goodwill
|
2.9
|
0.6
|
0.6
|
4.1
|
|
Consideration
|
5.1
|
1.2
|
0.6
|
6.9
|
|
|
|
|
|
|
|
Satisfied by fair values
of:
|
|
|
|
|
|
Cash consideration
|
5.1
|
0.8
|
0.5
|
6.4
|
|
Contingent
consideration
|
-
|
0.4
|
0.1
|
0.5
|
|
|
5.1
|
1.2
|
0.6
|
6.9
|
|
Less: net cash acquired
|
(1.5)
|
(0.2)
|
-
|
(1.7)
|
|
Transaction costs and
expenses
|
0.2
|
0.1
|
0.1
|
0.4
|
|
Total committed spend on
acquisitions completed in the period
|
3.8
|
1.1
|
0.7
|
5.6
|
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.
Contractual contingent consideration
is not linked to post-acquisition services, and none of the
contingent consideration is contingent upon
re-employment.
The fair value of trade receivables
within trade and other receivables is £0.9m. The gross contractual
amount for trade receivables is £0.9m, all of which other than an
immaterial amount is expected to be collectible.
The cash outflow in the during the
period ended 30 June 2024 in respect of acquisitions completed in
the same period comprised:
|
|
Synaptic
|
Owen James
|
Newdez
|
Total
|
|
During the period ended 30 June 2024
|
£m
|
£m
|
£m
|
£m
|
|
Cash consideration
|
5.1
|
0.8
|
0.5
|
6.4
|
|
Less: net cash acquired
|
(1.5)
|
(0.2)
|
-
|
(1.7)
|
|
Net investing cash outflow in
respect of acquisitions completed in the period
|
3.6
|
0.6
|
0.5
|
4.7
|
|
Transaction costs and expenses
paid
|
0.2
|
0.1
|
0.1
|
0.4
|
|
Total cash outflow in respect of
acquisitions completed in the period
|
3.8
|
0.7
|
0.6
|
5.1
|
Acquisition completed since the period ended 30 June
2024
The fair value and purchase price
allocation work on the following acquisition made since 30 June
2024 is at an early stage and will not be completed until after the
issue of these financial statements.
Threesixty Services Limited
("threesixty")
On 2 July 2024 the Group acquired
100% of the issued shares of threesixty for upfront cash
consideration of £14.6m. threesixty is a provider of independent
adviser planning and research software, and the acquisition will
further strengthen the Group's range of quality services available
to professional intermediaries. threesixty clients will directly
benefit from access to the Group's extensive technology and service
platforms.
20 Subsequent events
On 2 July 2024 the Group acquired
100% of the issued shares of Threesixty Services Limited
("threesixty"). threesixty is a provider of independent adviser
planning and research software. Further details can be found in
note 19.
On 16 July 2024 the Group announced
that it had conditionally agreed to acquire Rayner Spencer Mills
Research Limited ("RSMR"). RSMR is one of the most recognised fund
ratings and research agencies in the UK. The acquisition is
expected to complete in the coming months, subject to regulatory
approval.