Its gross profit margin also improved from 40.4 per cent to 48.9 per cent.
The revenue generated by this division, which includes Simplybiz, fell slightly by 4.9 per cent to £22.4m. Fintel said that, excluding the impact of contractual term changes relating to software reseller agreements and acquisitions, the intermediary business saw its revenue rise by 5.4 per cent on a like-for-like basis to £18.3m.
Fintel acquired training and competence provider Competent Adviser and financial services review website Vouchedfor last year, which contributed combined revenues of £800,000 and £300,000 in gross profit to its intermediary services business.
The average revenue per customer came to £8,109, which was 2.7 per cent more than the year before. The division’s income from membership fees rose 3.2 per cent to £11.8m.
Fintel’s core organic revenue from mortgage commissions dropped from £5m in 2022 to £4m in 2023.
Acquisition strategy
Fintel said it would capitalise on “favourable market conditions” this year to carry out its “inorganic growth strategy”. The group plans to expand its market position and increase market penetration with further mergers and acquisitions (M&A), it said.
Last year, it made four acquisitions with an initial net cash investment of £13.3m and invested £4.8m in its technology and services platform.
A ‘defining year’ for Fintel
Fintel’s distribution channels division posted a drop in gross profit from £9.2m in 2022 to £7.6m last year. It said that, excluding mortgage market volatility, income generated by this division was consistent.
Its core commission revenues fell by 16.4 per cent to £6.8m.
Its fintech and research division, which includes the Defacto subsidiary, saw its gross profit rise from £12.5m to £14.2m year-on-year (YOY).
In 2023, it acquired portfolio ratings and reviews platform AKG and investment research platform MICAP.
The group’s core revenue rose by 0.3 per cent to £56.6m in 2023, and Fintel closed the year with a profit before tax of £9.6m, down from the previous year’s £12.4m.
Fintel said it was trading in line with expectations, and growth in its fintech software revenue as well as software licence sales offset the challenges in the UK housing market.
It said that, with an improved outlook for the housing market, the business was positioned to benefit from a recovery in the mortgage sector.
Matt Timmins, joint CEO of Fintel, said: “2023 has been a defining year for Fintel. We have delivered a resilient financial performance and significant progress against our strategy, which balances growth across our core activities, organic investment and complementary mergers and acquisitions.
“We are executing our strategy at pace, enhancing our service and technology platform, increasing our scale and reach, and strengthening our position at the heart of the UK retail financial services sector to inspire better outcomes for all.”
He added: “The cash-generative nature of our business, underpinned by our financial resources, positions us well to capitalise on the favourable market conditions for mergers and acquisitions while delivering further organic growth and value to all of our stakeholders.
“In the new financial year to date, we are trading in line with expectations and remain well-positioned to take advantage of opportunities in our market.”
