MIDAS SHARE TIPS: Fintel, the investor who really knows how to obtain better results

The Huddersfield Giants are in the middle of a revolution. After a series of defeats, the rugby team fired one coach, hired another and appointed a new manager to inject momentum into the team.

The Giants, a well-known team with an illustrious 150-year history, may have made dramatic changes on the field, but president Ken Davy has been a fixture since 1996.

Rugby is Davy’s passion. Finance is in his blood. Davy, now 83, founded Simplybiz in 2002, a consultancy designed to help financial advisers with regulation and compliance.

The Aim-listed group in 2018, valued at £130m, 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 company focused on regulation and compliance to a technology specialist, offering a range of software designed to help advisors and their clients to make better financial decisions.

The biggest transaction took place a year after the listing, when Fintel bought rating group DeFaqto for £74 million.

Known for rating almost every type of financial product, from auto insurance to mortgages and life coverage, the deal was expensive at the time but turned out to be extremely shrewd.

In 2019, DeFaqto rated 21,000 financial products. Today, there are more than 40,000, and 60 researchers analyze them daily, before assigning them ratings of 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 appropriate for individual clients.

The financial services market is worth billions of pounds and most of us rely on advice to help us make the right choice, whether it’s price comparison websites for car and home insurance or qualified advisers to guide us on pensions and pensions. savings.

Around 25,000 financial advisers, wealth managers and mortgage brokers operate across the UK, most of them small, independent firms, facing rising costs as regulation becomes more onerous and the financial world becomes more complex.

Fintel, which is still based in Huddersfield, West Yorkshire, makes it easy for businesses to navigate these waters, with a range of simple software tools that help advisers do everything from making sure they are up to date with the latest products to keep customer data safe. and accessible, to building investment portfolios and offering well-informed mortgage and savings advice.

Davy remains on the board, but Fintel is led by Matt Timmins and Neil Stevens, who have been at the helm since 2010.

Joint management works wonders in this business, especially since 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 the influx of new regulations have made life difficult for financial advisors and their clients, but Fintel has proven resilient and generated a steady increase in sales, profits and dividends since its IPO. .

Brokers expect a 19 per cent rise in revenue to £77m this year, with underlying profits up 8 per cent to just over £22m and a 3 per cent rise in the dividend to 3.4p. Continued growth is forecast for the next two years, with sales approaching £90m by 2026, accompanied by a dividend of 3.8p.

Timmins and Stevens made eight acquisitions over the past year. Shareholders should reap the benefits of those deals in the coming years, including Davy, which remains the largest investor with a 24 percent stake.

Midas Verdict: Choosing the right mortgage, insurance or savings products can seem like a minefield, with numerous options and costly consequences for poor decisions. Fintel helps advisors guide their clients through this minefield; The company is well managed and should deliver long-term growth. At £2.90, this local tech company is a buy.

Traded in: Aim Heart: FNT Contact: fintel.com