Fintel Share Price (FNTL)

Just finished watching / listening to the presentation for the Capita(l) Markets Event. It was long and too many audible clicks to move from slide to slide. Was it convincing? Hmm... Lot's of talk about AI, but nothing specific. "We have loads of PROPRIETY data", but no evidence how this is actually valuable to customers. More promises about jam tomorrow: Unity, Matrix 360, AI. All 3 CEOs are very excited about the market opportunity, that's very reassuring. Let's see how organic revenue and EPS develop in future years (ignoring M&A, either buying revenue or selling companies to improve margin). It's good to see they believe it themselves, will they deliver real value creation? Spend £160m on acquisitions / Capex, but current market cap is ~£180m. Something is not adding up. Maybe the market knows something that management doesn't realise (yet)? The organic revenue growth / EPS growth are the only true metrics.

In my view, today’s disposals are pure margin engineering. By offloading £11m of low-margin revenue for just £600k, Fintel can claim 'improved margins' next year without actually fixing underlying performance. It looks like form over substance—selling at a likely loss to a former CEO to fix the narrative. With organic growth at just 0.8%, I'll be ignoring the spin and watching the statutory profit."

Around 20 years ago, Capita acquired 3 businesses (Webline, Synaptic, and Quay software) with the idea of creating a 'seamless' Financial Adviser solution (the Enabler programme). It spent an estimate of ~£20m for the 3 companies. Did it work? It did not; Fintel acquired the remnants in 2023 for a paltry £3.5m. Now Fintel is attempting the same, but not with 3, but 9 acquisitions. What could possibly go wrong? Well, at least Capita acquired the 3 companies with a strategy in mind. Fintel has come up with its 'Unity' service long after the 9 companies were acquired. Will Fintel succeed where Capita failed? Unlikely. What Fintel provides to advisers serves a purpose, but the key software advisers value are its CRM (Back Office) and investment platform(s). For example, MICAP data is used by advisers for EIS / VCT research, but is only relevant for some of their customers and there are limited gains to integrate the data in a workflow. Fintel is promising to solve a problem advisers don't really experience. Like Capita's Enabler programme, it sounds theoretically convincing but is based on wishful thinking, marketing spin, and is a backward rationale to justify its acquisition spree. Look at organic revenue and EPS growth to track whether it's really creating shareholder value. The (Capita) jury is still out.

Under £1.60 today.... Not surprised as Fintel has not delivered meaningful organic growth for a long time now. They have been buying (expensive) revenue. Trying to hide low organic growth in footnotes says it all. It is more marketing ‘sizzle’ than substance. Most of what it calls SaaS revenue is in reality ratings or data feeds. They have acquired a hotch potch of companies serving the same markets, but which are not complementary but parallel, limiting synergies. Where they are, integrating them into one software / data stack / service proposition is complicated and expensive and does not necessarily increase revenue or pricing power. The new divisional structure is an attempt to herald a new phase, but it does not really address the fundamental issues. Management have tried to convince the market that it has pivoted to become a fintech stock, but this is marketing spin, not reality. Key will be signs of (strong) organic growth and growing EPS. For now, Fintel is Form over Substance.

Https://www.ftadviser.com/fintel-plc/2025/3/18/fintel-we-are-done-with-acquisitions-for-now/