British fintech minnow Fintel is seeing more acquisitions after six deals last year in attempts to boost growth

Fintel is looking for acquisition opportunities in the mortgage and non-life market in 2024, after the company AIM-All Share made six acquisitions in just over a year.

The British fintech minnow, which provides technology and support to financial advisors and asset managers, has embraced acquisitions as a key part of its growth strategy, sending its shares up about 50 percent in the past year.

Fintel spent £13.5m on acquisitions in the 2023 financial year, delivering a combined core turnover of £1.5m for the period, before shortly afterwards buying Synaptic Software for £3.5m and Owen James Events for a non disclosed compensation.

The company also spent around £4.5 million on organic investment during the year, which, combined with high M&A spending, helped reduce statutory profits by 13.5 percent to £14.4 million .

But co-chief executive Matt Timmins told This is Money that Fintel “maintains an active pipeline of mergers and acquisitions”, with the group focusing on companies and sectors that offer scale.

He added: “(We are looking at) companies that provide support services to financial intermediaries that bring a specific technology or solution.

‘We are mainly looking at the mortgage market and the non-life market, but also at companies that bring data and intellectual property with them.

‘We have an active pipeline with a mix of deals. There are some that are about the same size and scale as we are in 2023, plus some large-scale opportunities.”

Neil Stevens, co-CEO of Fintel

After listing on the London junior market in 2018, the group’s market capitalization has grown to approximately £286 million and Fintel shares at that time by about 70 percent.

Its main brands are SimplyBiz and Defaqto, which sells technology and data to advisors and asset managers.

Timmins has previously expressed frustrations about the experience of growing a London-listed company, which can bring undervaluation, poor share price performance and weak liquidity.

Fintel performed in line with market expectations last year, with core revenues up 0.3 percent to £56.6 million and adjusted profits up 5.6 percent to £20.5 million.

It allowed the group to announce a full-year dividend of 3.45 cents, up 6 percent year-on-year and earlier than expected.

Analysts at Investec raised Fintel’s price target by 18 percent to 320p in the wake of the results.

Investec said: ‘The strategic and financial performance in FY23 gives us confidence in the group’s ability to realize its ambitions and provide digital and data-based solutions within the retail financial services market.’

Timmins described Fintel’s 2023 performance as “resilient… given the state of the mortgage market” last year, when transactions slumped due to weaker mortgage availability and affordability.

But co-CEO Neil Stevens said the mortgage market appears to be getting a tailwind this year as interest rates fall and many Britons are forced to refinance their mortgages.

He said: ‘This year 1.6 million fixed-term mortgage deals expire – that’s 1.6 million households with a decision to make.

‘About 80 percent of all mortgages are now processed through independent professional brokers. Regardless of the (home) purchasing market, there is a huge need for people to seek professional advice.

“Rates will become more favorable and the product market is competitive – these are the fundamental factors that will drive a strong mortgage market.

“So we need better technology, better data and better systems to help advisors sort through the market, work out the affordability and eligibility criteria for loans, and make that process smooth.”

Fintel shares have started to gain momentum over the past year