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Fintel reports resilient performance helped by mortgage adviser business

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  • 23/03/2021
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Fintel reports resilient performance helped by mortgage adviser business
Fintel has reported a resilient performance for 2020, with good results in intermediary services and fintech and research offsetting the effects of lockdown on its distribution channels division.

 

The group posted topline revenue of £61m, down three per cent year-on year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell by two per cent to 17.3m.

The number of subscription intermediary customers grew to 3,133, up from 3,065 in 2019, while Fintech contracts rose to 1,195, from 1,092.

 The company cited operational highlights including “good growth in core intermediary customers,” and “resilience in mortgage completions”.

 

Distribution Channels

The distribution channels division was hardest hit by lockdown. Revenues fell by 23 per cent to £20.6m, from £26.8m in 2019.

Mortgage services revenues fell by 26 per cent to £5m, down from £6.8m owing to “the impact of Covid-19 on surveying and a weaker overall product mix,” the company said.

This was against a strong lending performance of £16.4bn, up 2.4 per cent on £16bn in 2019.

Mitt Timmins, joint chief executive of Fintel (pictured), said: “The quality and resilience of our mortgage adviser business enabled us to deliver modest year on year growth in lending volume, albeit with lower net fees due to product mix.” 

Revenue from valuation services dropped 35 per cent to £5.5m compared to 2019. The majority of surveyors were placed on furlough and use of government support related largely to job retention in this area. The company added the market “has subsequently improved with volumes running at 80 per cent of previous levels.”

Marketing services saw events change from in-person to digital with a 21 per cent drop in revenue to £5.7m.

Revenues at Verbatim Asset Management were broadly flat at £2.3m and Insurance Services also held steady at £2.2m.

 

Intermediary Services

The intermediary service division provides compliance and business services to regulated financial advisers, mortgage advisers and wealth managers. It grew revenue by four per cent to £25.1m, against £24.2m in 2019.

Membership fee income rose by four per cent to £10.7m, resulting from growth in customers of two per cent, and a rise in average revenue per customer of two per cent to £6,729.

Additional services income fell by four per cent to £5m, down from £5.2m. This reflected low margin discontinued services, while growth potential was strengthened by accelerated digital delivery and rising demand owing to increasing regulation.

Software license income grew by eight per cent to £5.5m, as member firms adopted practice management software through reseller arrangements.

The employee benefits solution Zest Technology grew revenues by eight per cent to £3.9m year on year.

 

Fintech & Research

Fintech and research, which comprises the Defaqto business, delivered revenue of £15.3m. This compared to a partial year of revenues in 2019 after Defaqto was acquired in March.

This division’s performance included software revenue of £7.4m, up 30 per cent year on year. The aggregate value of advice recommendations, at £30.1bn, up from £21bn, reflected the acceleration of adviser engagement with the platform.

 

Digital acceleration

Timmins said: “Rapid and ongoing digital acceleration enabled us to deliver resilient revenues with a strong adjusted EBITDA margin and adjusted earnings marginally ahead of our July 2020 guidance. 

“Our speedy deployment of our proprietary technology enabled all our customers to continue to use our services digitally, without any disruption.”

The company rebranded to Fintel earlier this month outlining plans to introduce a new workflow advice system for mortgage brokers.

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