MIDAS STOCK TIPS: Fintel is an acquisition-hungry technology specialist focused on results
Huddersfield Giants are in the midst of a revolution. After a string of losses, the rugby team fired a coach, hired another and appointed a new director to bring momentum to the team.
The Giants, a well-known team with an illustrious 150-year history, may have made dramatic changes on the field, but chairman Ken Davy has been a fixture since 1996.
Rugby is Davy’s passion. Finance is in his blood. Now 83, Davy founded Simplybiz in 2002, a consultancy designed to help financial advisers with regulation and compliance.
The group listed on Aim in 2018, worth £130 million, changed its name to Fintel in 2021, and is now worth almost £300 million on the stock market.
The increase in value follows a combination of organic growth and a series of acquisitions, which have transformed Fintel from a regulatory and compliance focused company to a technology specialist providing a range of software designed to help advisors and their clients make better financial decisions. to take.
The largest transaction took place within a year of the IPO, when Fintel bought rating group DeFaqto for £74 million.
Winners: Huddersfield Giants thrived under chairman Ken Davy, founder of Simplybiz
Known for rating almost every type of financial product, from car insurance to mortgages to life insurance, the deal was expensive at the time but proved extremely smart.
In 2019, DeFaqto reviewed 21,000 financial products. Today there are more than 40,000, with 60 researchers analyzing them daily before awarding ratings between one and five stars based on specific criteria.
About 90 percent of consumers use these ratings when purchasing financial products, and DeFaqto also works with thousands of financial advisors, providing them with financial planning technology so they can quickly assess which investment products are suitable for individual clients.
The financial services market is worth billions of dollars and most of us rely on advice to help us choose the right one, whether it’s price comparison websites for car and home insurance or qualified advisers for advice on pensions and savings.
There are around 25,000 financial advisers, asset managers and mortgage brokers operating in the UK, most of which are small, independent businesses, facing ever-increasing costs as regulation becomes tougher and the financial world becomes more complex.
Fintel, still based in Huddersfield, West Yorkshire, is making it easier for businesses to navigate these waters, with a range of simple software tools that enable advisers to do everything from ensuring they are up to date with the latest products to keeping them safe keeping customer data accessible and accessible, to building investment portfolios and offering well-founded mortgage and savings advice.
Davy will remain on the board, but Fintel will be led by Matt Timmins and Neil Stevens, who have been at the helm since 2010.
Joint stewardship works well in this industry, not least because Timmins and Stevens grew up on the same street, have been friends for forty years and each focus on different parts of the business. Recent results inspire confidence. Covid, inflation, rising interest rates, the cost of living crisis and an influx of new regulations have made life difficult for financial advisors and their clients, but Fintel has proven resilient and has seen a steady increase in sales, profits since going public and dividends realized. .
Brokers expect a 19 percent increase in turnover to £77 million this year, with underlying profits rising 8 percent to just over £22 million and a dividend increase of 3 percent to 3.4p. Continued growth is planned for the next two years, with turnover approaching £90m by 2026, accompanied by a dividend of 3.8p.
Timmins and Stevens have made eight acquisitions in the past year. Shareholders should reap the benefits of these deals in the coming years, including Davy, who remains the largest investor with a 24 percent stake.
Midas judgment: Choosing the right mortgage, insurance or savings products can seem like a minefield, with countless choices and costly consequences of bad decisions. Fintel helps advisors guide their clients through this minefield, the company is well managed and should achieve long-term growth. At £2.90, this homegrown tech company is a bargain.
Traded on: Goal ticker: FNTL Contact: wearefintel.com
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