Insider: directors back fintech firm’s ambitious growth plans

Three directors of the Defaqto and SimplyBiz owner Fintel (LSE:FNTL) have spent £185,000 backing the fintech and services company to capitalise on its “multiple growth opportunities”.

Their share purchases took place on AIM at prices near to 267p, which compares with the level of 320p in August and the 330p price target of analysts at Peel Hunt.

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Matt Timmins led the buying in the week he was named in sole charge of the business, having been joint chief executive since Huddersfield-based Fintel joined the stock market in 2018.

Board chair Phil Smith, who also bought shares last week, said Timmins was an exceptional leader and fully capable of leading Fintel in the next phase of its growth.

He added: “Our strategy is firmly set and we are focused on executing it at pace to deliver returns for our shareholders."

Fintel’s technology and services address the complexity and fragmented nature of the UK retail financial services market, where there are thousands of products to choose from and delivered by hundreds of providers within a changing regulatory environment.

It boasts one of the largest databases of financial products in the UK, including research and analysis of more than four million product features.

The best known of Fintel’s brands is the Defaqto star ratings business, which it acquired in 2019. It provides an independent, expert assessment of a product and its benefits.

SimplyBiz, which was the stock market name for Fintel until 2021, helps to drive efficiencies for UK financial professionals through support and access to technology.

Across Fintel, the group lifted its top-line by 21% to £78.3 million in 2024 amid the benefit of recent acquisitions and 17% growth in software-as-a-service and subscription revenues.

Other operational highlights last year included a distribution agreement with Mortgage Brain, which will help advisers in the company’s Intermediary Services division to source and place the best mortgage products for their clients.

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The company’s recent year-end update, published ahead of annual results on 18 March, pointed to adjusted earnings up by around 8.5% to £22.2 million. Fintel reported a strong balance sheet, with £6.3 million of cash and £50 million of headroom on its £80 million credit facility.

Timmins is confident of delivering further progress this year, reflecting the “multiple growth opportunities available in a fragmented retail financial services market”.

Objectives under the company’s strategy include core revenue growth of 5-7% annually, an earnings margin of 35-40% and 70-80% of revenues from recurring streams.

Peel Hunt made no material change to its estimates following the 30 January update. It added: “We believe Fintel’s growth story is proving out, with acquisition integration and investment in technology strengthening its market position.”

Timmins purchased £93,500 of shares last week, while finance chief David Thompson made an investment of £42,300. Smith, who became chair in 2022 after stepping into the role previously held by founder and major shareholder Ken Davy, bought £50,000 of shares.

An affordable share purchase

A £40,000 purchase of shares by MJ Gleeson (LSE:GLE) boss Graham Prothero has supported his view that the affordable homes builder is strongly positioned for a market recovery.

His investment took place shortly after the FTSE All-Share company disclosed in interim results that it was seeing encouraging signs of a pick-up in demand.

Its net reservation rate in the four weeks to 31 January increased 45% on a year earlier to 0.77 per site per week. Meanwhile, the company’s land promotion division is starting to see the benefit of changes to the National Planning Policy Framework after it secured planning permission on three sites in January.

In the six months to 31 December, Gleeson Homes overcame subdued market conditions to complete the sale of 801 homes. It also made good progress against its growth strategy, having opened eight new build sites and 11 new sales outlets.

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Focused on the North of England and the Midlands, the company aims to ensure that a material proportion of its homes are affordable to a couple earning the National Living Wage.

The division’s revenues rose 10% to £156.6 million in the six months but operating profit dropped 10.8% to £9.1 million due to flat pricing and use of sales incentives.

The land division, which identifies and promotes land through the residential planning system in southern England, posted a loss of £1.9 million as no sales were completed in the half year.

Overall profits fell 50% to £3.6 million but the company backed the City’s full-year estimates, with Gleeson Land expected to complete between four and eight site sales in the second half.

It added: “Longer-term, the company remains well positioned to deliver sector-leading growth underpinned by Gleeson Homes’ programme of new site openings and a more stable planning environment for Gleeson Land.”

Prothero bought his shares at 498.7p, which compares with the 654p seen before Budget uncertainty and a cautious AGM update wiped out an earlier post-election bounce.

Singer Capital Markets reiterated its Buy recommendation and 804p price target following the interim results. It said: “Strong earnings growth alone should drive a higher share price but we also see re-rating potential as the recovery becomes more established.”