Fintel posted a resilient performance for 2020, with good results in mid-level services and fintech and research offsetting the effects of foreclosure on its distribution channels division.
The group reported revenue of £ 61million, down 3% year-on-year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 2% to $ 17.3 million.
The number of intermediary subscription customers rose to 3,133, against 3,065 in 2019, while Fintech contracts went from 1,195 to 1,195.
The company cited operational highlights, including “good growth in key intermediary customers” and “resilience in mortgage completions”.
The distribution channels division has been hit the hardest by the lockdown. Revenue fell 23% to £ 20.6million, from £ 26.8million in 2019.
Mortgage services revenue fell 26% to £ 5million from £ 6.8million due to “the impact of Covid-19 on investigations and a weaker overall product mix” , the company said.
This came against a strong lending performance of £ 16.4bn, up 2.4% from £ 16bn in 2019.
Mitt Timmins, Co-Managing Director of Fintel (on the picture), said: “The quality and resilience of our mortgage advisory business has enabled us to achieve modest year-over-year lending volume growth, albeit with lower net fees in because of the product line. “
Revenue from appraisal services fell 35% to £ 5.5million from 2019. The majority of surveyors were put on leave and the use of government support was largely tied to maintaining employment in this area. The company added that the market “subsequently improved with volumes reaching 80% of previous levels.”
Marketing departments saw events go from face-to-face to digital with a 21% drop in revenue to £ 5.7million.
Verbatim Asset Management revenues were broadly flat at £ 2.3million and insurance services were also flat at £ 2.2million.
The Intermediary Services division provides compliance and commercial services to regulated financial advisers, mortgage advisors and wealth managers. Its revenue rose 4% to £ 25.1million, from £ 24.2million in 2019.
Membership revenue rose 4% to £ 10.7million, driven by growth in the number of clients of 2% and an increase in average revenue per client of 2% to £ 6,729.
Revenue from additional services fell 4% to £ 5million from £ 5.2million. This reflects the discontinued services at low margins, while the potential for growth has been bolstered by accelerated digital delivery and growing demand due to increasing regulation.
Software licensing revenue rose 8% to £ 5.5million as member companies adopted practice management software through reseller agreements.
Zest Technology employee benefits solution increased revenue 8% to £ 3.9million year-on-year.
Fintech & Research
Fintech and research, which includes the Defaqto business, generated revenue of £ 15.3million. This compares to a partial year of revenue in 2019 after the acquisition of Defaqto in March.
This division’s performance includes software revenue of £ 7.4million, up 30% year-on-year. The aggregate value of advice referrals, at £ 30.1 billion, up from £ 21 billion, reflects the acceleration of advisors’ engagement with the platform.
Timmins said, “The rapid and continuous digital acceleration has allowed us to generate resilient revenues with a strong Adjusted EBITDA margin and adjusted profit slightly above our forecast for July 2020.
“Our rapid deployment of our proprietary technology has allowed all of our customers to continue to use our services digitally, without any disruption. “
The company was renamed Fintel earlier this month, outlining its intention to introduce a new workflow advice system for mortgage brokers.