MIDAS SHARE TIPS: Fintel is an acquisition hungry tech specialist focused on results
The Huddersfield Giants are in the midst of a revolution. After a string of losses, the rugby side fired one coach, hired another and appointed a new director to inject momentum into the team.
A well-known side with an illustrious 150-year history, the Giants 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, valued at £130 million, changed its name to Fintel in 2021, and is now worth nearly £300 million on the stock market.
The surge in value follows a combination of organic growth and a series of acquisitions, which have transformed Fintel from a firm focused on regulation and compliance to a technology specialist, providing a range of software designed to help advisers and their customers make better financial decisions.
The biggest transaction took place within a year of flotation, when Fintel bought ratings group DeFaqto for £74 million.
Winners: Huddersfield Giants have thrived under chairman Ken Davy, founder of Simplybiz
Known for rating almost every kind of financial product, from car insurance to mortgages to life cover, the deal was costly at the time but has proved extremely canny.
Back in 2019, DeFaqto rated 21,000 financial products. Today, it's more than 40,000, with 60 researchers analysing them on a daily basis, before assigning ratings between one and five stars, based on specific criteria.
Some 90 per cent of consumers use these ratings when buying financial products and DeFaqto also works with thousands of financial advisers, providing them with financial planning technology so they can swiftly assess which investment products are appropriate for individual customers.
The financial services market runs into billions of pounds and most of us rely on advice to help us choose the right thing, be it price comparison websites for car and home insurance or qualified advisers for guidance on pensions and savings.
Around 25,000 financial advisers, wealth managers and mortgage brokers operate across the UK, most of them small, independent firms, that face ever-increasing costs as regulation becomes more onerous and the financial world becomes more complex.
Still based in Huddersfield, West Yorkshire, Fintel makes it easier for firms to navigate through these waters, with a range of simple software tools that help advisers do everything from ensuring they are up to speed with the latest products, to keeping customers' data safe and accessible, to constructing investment portfolios and offering well-researched mortgage and savings advice.
Davy remains on the board but Fintel is run by Matt Timmins and Neil Stevens, who have been at the helm since 2010.
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Joint stewardship works a treat in this business, not least because Timmins and Stevens grew up on the same street, have been friends for 40 years and each focuses on a different part of the company. 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 advisers and their customers, but Fintel has proved resilient, delivering a steady increase in sales, profits and dividends since flotation.
Brokers expect a 19 per cent increase in revenues to £77 million this year, with underlying profits up 8 per cent to just over £22 million and a 3 per cent rise in the dividend to 3.4p. Continued growth is pencilled in for the next two years, with sales approaching £90 million by 2026, accompanied by a dividend of 3.8p.
Timmins and Stevens have made eight acquisitions over the past year. Shareholders should reap the benefits of those deals in the years ahead, including Davy, who remains the largest investor with a 24 per cent holding.
Midas verdict: Choosing the right mortgage, insurance or savings products can seem like a minefield, with numerous choices and costly consequences from poor decisions. Fintel helps advisers to steer their customers through this minefield, the company is well managed and should deliver long-term growth. At £2.90, this home-grown technology firm is a buy.
Traded on: Aim Ticker: FNTL Contact: wearefintel.com
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