Fintel (LSE:FNTL) — Interim Results

0:02 Good afternoon, ladies and gentlemen, and welcome to the FINTEL Interim Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just click Q and A, scroll to the bottom, type your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and you'll be notified once they're ready for your review. I'd also like to remind you that this

0:32 presentation is being recorded. Before we begin, I would like to submit the following poll. I'd now like to hand you over to Matt Timmins, Neil Stevens, and David Thompson of FINTEL PLC. Good afternoon. Good afternoon, Mark. Thank you, and good afternoon to everyone watching. Welcome to the FINTEL half year twenty twenty one interim results presentation. I'm Matt Simmons. I'm the joint CEO of FINTEL, and I'm delighted today to be joined by my co CEO of the last eleven years, Neil Stevens, and also to welcome for the first time our new CFO, David Thompson. I'll let David introduce himself in a a few minutes' time. But David has joined us relatively recently from Smart Metering Systems.

1:17 He is an incredibly experienced CFO, used to running, the the the finances for listed businesses and joins the FINTEL team and is already making a huge impact. So delighted to welcome David, and as I said, he will introduce himself in a few minutes' time. So we what we want to cover today is a relatively quick agenda. We're gonna go through some key highlights in the first half of the year. I'll then hand to David who will run through a financial review, and then Neil will pick up from David and cover key aspects of strategic delivery in the first half of twenty twenty one, and then also touch on the our current trading and our outlook for the future. So first of all, a quick introduction to the company. For those of you who are unfamiliar with FINTEL, we essentially provide fintech and support services to the retail financial services market.

2:14 So this is a huge market, and we operate right at the middle of the market providing fintech and support services to the the the key main players in the market. Now in terms of retail financial services, there's there's sort of three key components to to this market. First of all, the product manufacturers, the life companies, the pension companies, the asset managers, the banks, the building societies. And so those product providers spend their time creating and building financial solutions, which they then want to get in the hands of a consumer. So another one of our key customer groups are consumers. And then very uniquely to UK retail financial services, sitting in the middle is this huge intermediated distribution force.

3:02 So you've got the likes of IFAs, financial advisers, mortgage brokers, wealth managers, consolidators, etcetera, etcetera. And around about 80% of all investment business goes from, an asset manager or product provider into the hands of a consumer via an intermediary of some description. So it's a heavily intermediated market. And around 75% of the sale of all mortgage products go from a bank building society lender into the hands of a consumer via a financial intermediary of some description. So it's a really important market, and The UK retail financial services market works incredibly well for consumers. They get access to, lots of different financial products, thousands of products to choose from at a price and value, which is hugely compelling.

3:54 So it's great for consumers. For everyone else in the market, it's quite difficult to navigate. There are lots of players in the market. It's highly fragmented. And so this is where, FINTEL comes in. So we provide services to product manufacturers, to financial intermediaries, and to consumers. And, essentially, really high level, what we aim to do is to help product manufacturers to build and create better products, products for the future, and products that are built on consumer demand. We also help manufacturers to distribute those products through this huge intermediary market. What we should do for intermediaries is we provide intermediaries with a, regulatory compliance support to help them navigate the rules of the regulator, to help them operate a compliant and successful business.

4:46 And on top of that, we provide intermediaries with a piece of fintech that they use to give advice to their clients. So this is a financial planning system where the intermediary can log in and enter their client's details, enter information about, what the client's looking to do in terms of their investment goals, their attitudes of risk. They can do asset allocation modeling on the platform, and then all the way through to fund selection. So advisers and intermediaries using our fintech platform gives us a huge wealth of data and information, live trends on what's happening in the market and what consumers are buying, if they're selling what they're selling, and the sort of, process that an adviser goes through to recommend the solution to a client.

5:34 So we look at all of the filters and sorts and sifts that an adviser uses, and we're able to play that information back to the manufacturers to tell them where they're successful in in terms of product choice or if they're unsuccessful in the advice process, where they kind of filter out and where they didn't win. So it's a it's a massive amount of data, market insights created through live transactions with intermediaries in front of their clients and then played back to the manufacturers to help them build products that are based on consumer demand. And then what we do for, the end consumer is to help them to understand the difference between products. So our de facto business, performs product research on over 30,000 products, available, 30,000 retail products.

6:27 And then we also rate those products in terms of a,

6:32 star rating. So that helps consumers understand the relative difference between product a and product b. So as I said, we help manufacturers, we help intermediaries, and we help consumers. So that's essentially what we do as an organization. In terms of the first, sort of, six months of of this year, we have delivered a solid financial performance, really robust trading. Our revenues are up 10%. Our adjusted EBITDA is up 12%, and we've stepped our margin out by 60 basis points. So a solid start to the year in terms of financial performance. We have also delivered, strong cash flows. We are a highly cash generative business.

7:21 And along with the cash, proceeds that we've received from the two disposals, which I'll talk about in a minute, we have used that cash to delever the business. When we acquired DeFacto back in 2019, we took on some debt within the business. We went up to about two and a half times leverage, and David will talk about how, by the end of this year, we'll be, net cash positive. So really good year in terms of financial performance, good cash flows, paying down that debt, and giving us firepower ready to move forward and giving us huge financial flexibility. We've also continued this huge pathway to digital acceleration that we started when we were essentially at the start of the lockdown.

8:09 So we've been on this digital acceleration journey for the last kind of eighteen months or so, and the latest addition to to that journey is the launch of a product portal or a provider portal, which allows our manufacturing customers to log on to a portal and to access all of that data and information that I've talked about. So this is a multi year contract with large organizations with, you know, the the likes of the big life and pension companies and asset managers. Now all of those companies were clients of ours and have been clients of ours for a long period of time. But in the past, they have essentially operated through annual contracts with the annual repeatable contracts.

8:56 And we have now moved that model over to a long term multiyear recurring income contract or recurring income relationship where we are providing data as a service and distribution as a service. I talked about the the fintech product and about the value of that product. And an important KPI for us is the the the value of recommendations that flow through that product. So the more an adviser uses the fintech product, the more data that we create and the more we're able to help manufacturers understand the market. And in the first six months of this year, we the the value of recommendations through that platform stepped out significantly. And on an annualized run rate, that platform now has over £37,000,000,000 worth recommendations flowing through it.

9:49 So really good year for us in terms of financial performance and a good year in terms of, or good start to the year in terms of digital acceleration. On top of that, we have delivered, on our strategic ambitions. So one of the things that we signposted to investors in our Capital Markets Day last December was that we had a couple of noncore, assets within within the business. And one of those was a business called Zest. Zest is a is a fabulous business providing technology to the employee benefits market, but it didn't suit our desire to be core to UK retail financial services. So we sold Zest, earlier this year. We received £10,000,000 cash consideration for that business on on on deal day, which represents 22 times trading EBITDA multiple for the business.

10:40 And then there is a up to a further 1,500,000 of cash to be paid depending upon the performance of the business, in the latter part of this year. So that's a disposal of Zest. We have then created a strategic partnership with a business called Tatin Asset Management, and that partnership essentially, allows us to increase our customer base by up to 30%. So what we have done with Tatin is Tatin have taken a, five year enterprise license deal for our technology, which gives them up to two and a half thousand licenses of our tech to be able to, essentially provide that technology to the advisers they support.

11:27 Now Tatin is a great asset management business, and we had a relatively small funds business called Verbatim. So we sold our verbatim business to Tappan as part of this arrangement. They're sticking to what they're good at, which is which is running money, and we're sticking to what we're good at, which is providing fintech and services to the market. So a huge extension of our client base, up to 30% extension of our client base. We received 2,800,000 cash on completion for the sale of the funds with a further 3,000,000 to come depending upon the performance over the next sort of three or four years' time. So really good strategic relationship with Totten. It's the largest enterprise deal that we've done as a fintech, and we believe that will navigate the way for further large deals.

12:17 So with that in mind, hopefully, that's given you a good overview of the sort of first half of this year, what we've been concentrating on. It's been about delivering on our on our promises in terms of hitting our financial objectives. It's been about accelerating the digital journey of the business and two key real sort of strategic

12:40 moves from the business in terms of disposing of Zest and creating that wonderful partnership with TAM. So with that in mind, I'll hand over to David Thompson, our new CFO, and David will take you through the give you a financial overview. Over to you, David. Thanks, Matt. Again, just to say hello from me and and give you a couple of minutes on my background and why I've decided to join FINTEL. What a privilege I've been to join Matt and Neil on the bolt in in the business is very well positioned going forward. You know, I'm a great believer in value creation through long term, sticky, recurring revenues. And previously, in infrastructure style businesses, that has been a real driver of value.

13:28 So looking at FINTEL, clearly, the the double edge of digitization and and getting efficiencies that way margin drop through and the growth in terms of frictionless license sales, getting them for a longer period of time. You can see we can grow margin any year, but also secure that for a longer period of time. That's a doubling up effect on multiple expansion. So again, delighted to have joined the the management team and and a pleasure to present these first half twenty twenty one results. So going down the income statement, it's great to be able to report double digit growth all through the income statement. The revenue is up 10%, adjusted EBITDA up 12%, and that flow straight through to PBT also up 12%.

14:16 The the the state here, I'll stay out of the details because I think it's really important to get the key thing that runs through this business, which helps establishes its current really strong position. And looking at adjusted EPS, there's there's a noncash one off tax charge in there that that is a consequence of The UK corporation tax rate increasing from 19 to 25%. And the if you strip that out on a constant tax rate basis, we'd have actually reported a 5p EPS in the first half of this year, which is an 18% increase period on period. You can see that it flows all the way through from the top line performance. The real reason there is its cash flow conversion.

15:04 Now we've got 81% cash flow conversion in the period. And it's important to note our metric is from adjusted EBITDA all the way through to post tax. So 19% effective tax rate, 81 is really the mathematical limit you can reach. So the first period last year was a really terrific effort in terms of cash flow conversion. Again, highlighting the resilience of the business model during what is still a COVID affected period most. And the real end result here is how quickly this business can deleverage. We can deploy an efficient use of capital in terms of debt, and we can pay it down quickly as Matt alluded to.

15:51 We acquired the de facto business in 2019. We used two and a half tons of of leverage and now with two strategic divestments, that's that's all paid off. So on a pro form a basis at the end of June twenty twenty one, we would have 0.2 tons, and now forecast out in this financial year net a cash neutral, if not positive, position. So, again, great to have that income statement growth, but watch the the proof of the pruning, so to speak, as how that can be us back into cash, and, hopefully, you can see a high level as a very cash generative business. We we look at the business in three divisions, but I think speaking about another way we class our revenues being core or noncore, we'll hopefully give you a real feel for what has decreased the value in the business.

16:45 So the two non core business areas are the red, which is ZEZT technology, the recent investment we made, and the green is in a a property valuations business that we own that aligns closely to our other mortgage financial services product. But the the surveying business is very much a people business. Have really dedicated qualified experienced team members that have to grow and pay a physical visit to a property and value that and have to stand behind that valuation. And and it's it's a profitable business, but it it's difficult to digitize that business and get increased drop through margin. But most importantly, this is this is the new point.

17:32 At all times, our core business is to generate further data upon data, and that metadata feeds itself so we get as ever increasing data lake that we can feedback through the system to help our product providers design and shape new financial products that people want and help our intermediaries, give the best advice to end consumers like like like you and I. So, again, it's it's it's a great business, the the property survey business, but it doesn't quite fit with that data circulation regeneration. The ZEX business, again, is that as a software business, so you would ask quite as a a fintech selling a software and platform. There's employee benefits related. And, again, it it it it doesn't quite give us a lot of other information to pull back through into the of data link that that drives additional value through and sold it to private equity firm within that space, and they can take that business and leverage it with different geographical locations. So and that was a that was a great win win transaction.

18:38 We hope to ask those really well. I'm sure it will and support the management team going forward there. So hopefully, that core, non core distinction lets you see the true value in all our core services, the the value add all the time and adding more data, more analysis to the to the call that that we can resell resell to. In terms of overall revenue, we enter three divisions now. So Intermediate Services, Distribution Channels and Fintech and Research, all of which have seen growth in the period, which is great to see. But how that flows through to profitability. So Intermediate, it it that profit in the period and to further support for our members today and we're still in a COVID period.

19:26 And that Intermediate service and contact we have for members is really important that we give them that support to continue to help them develop and grow. Distribution, the main reason for that growth is our return to full activity in the six months of the property valuations business. And in fintech and research, you're seeing full flow through of that revenue through to EBITDA. How we report segmental performance is really key because we've got a strategic imperative to both grow the top line through frictionless license sales and also through digitization.

20:11 It's important to understand what the gross profitability of each of the divisions is. And we present it in this way so that you can track the discrete performance in each of these three markets. And we show separately in the third bullet

20:25 here, what our central infrastructure and support costs are that enable the provide the backdrop for these three platforms to go. And again, it's, you know, gross profit was flat period on period. Again, that's on the back of reinvestment into our members and services that we're absolutely happy to do, you know, growth and distribution channels and fintech and research. You can see that the scalability started to accelerate away in terms of the fintech and research department, now that I'm at 60% gross margin. Again, talked about cash flow before. It's just really important to fully explain that we go from adjusted EBITDA through to post tax, and you can see you pay some tax and reinvest in the business through development expenditure because we have to keep the platform innovative, keep investing in it, keep adding new feature sets that we can sell on, etcetera. So creating again a bunch of circle, but 81% cash flow conversion was a terrific result in the period.

21:33 It should be noted that was helped by working capital inflows in the period and an annualized run rate of cash conversion of working capital was flat we'd be able to start at 70%. So 70% is a good number for us in terms of this post tax measure.

21:51 And and for me, this is the really crucial part, right, is is the the cash generation, the deleveraging, the derisking of the business. So again, and a half tons of people who've made a significant strategic acquisition of £74,000,000, we end up on pro form a basis certainly just under 0.2 tons of leverage, again forecasting for the full financial year, the return to cash neutral position. And and and so that but that's not the the end goal. But what that does is it puts us in a great possession of strength in terms of financial flexibility. We've got a £45,000,000 revolving credit facility. And, again, route two really supportive high street banks and a lot of firepower to grow and grow either organically or through acquisition or both. And, you know, we're doing to doing that over the next six to twelve months.

22:50 So so in summary, you know, hopefully, it was a thread working from top left to bottom right here where you've got business that's that's been in the market for twenty years. It's got a skilled individuals and a highly qualified, a real strong brand, particularly simply by design the fact that have really strong brands in the market. So we get on the back of that, the really robust financial performance. The the the increase in revenue quality another dimension because we're extending those revenue streams into multiyear contracts. And again, that gives us that more security over the current nature of the revenue. And a light of that flowing through to strong cash generation, it just keeps feeding the significant financial resources and the possession that we're in. So we we return a small but progressive dividend to our shareholders. That's a really important hygiene factor for a lot of people to have some income there, but the vast majority of it gets reinvested into the business to help it grow and grow in a scalable, very high drop through margin way.

23:58 So hopefully, that gives you a a relatively high level run through the main financial qualities and strengths of the business. And I'll pass over to Neil to tell you a bit more about some strategic initiatives that we've undertaken.

24:14 David, thank you, and, I'll have my own very warm welcome to everyone joining us today. It's great to be out, at the half year mark to talk about trading performance and the strategic progress we've made in the business so far this year. We carried a lot of momentum from 2020, incredibly disruptive year for everybody, but we committed early on to accelerate the digital evolution of the business. And that really set us up to start this year with a very clear focus on the things that are gonna add value. Also, at the end of last year in December, we held a Capital Markets Day, and that recording is still on our website. It is a little bit long, but if you're interested, you can go and watch a presentation that showcases some of our products.

25:03 You'll be able to hear from much wider section of the team, and we've set out very clearly where the focus is for FINTEL. And we got to work on that straight away in 2021, so I've got some updates, to share with you. The first thing, as Matt touched on at the start, is the digital acceleration of the business and particularly here in the distribution side of our business. We've had a strong business in this area for many years, working with over 400 financial institutions, and we help them connect their products to the market. It's been a great line of business for us, annually repeating contracts that we agree the year before, schedule in, agree the prices, and we start

25:50 the following year with everything agreed and scheduled per an annual plan. And that's worked really well, but this market is changing. Product providers need more efficient and more agile ways to adapt what they're doing in the market. The market's very competitive. Margins are a bit keener, and, the needs of consumers and the preferences of advisers are changing at pace. And so our new managed distribution services means that instead of an annual in advance, we give financial institutions access to a portal where we provide them with up to date market data on buying preferences, market trends, and competitive positioning.

26:36 And we let them choose in a much more agile way which of the services they want to use to distribute and which products and campaigns they're gonna give focus to. And we think this is great for our customers. And it's great for us because it means that we are now doing multiyear subscription deals with minimum revenue commitments that I think we can improve upon in future years. Because we're in a constant dialogue with product providers rather than having a fixed annual plan, that's quite hard to change once we've got started. We can continually respond and upsell them with new services and new data assets. So this is one of the key things we set out on our Capital Markets Day, enhancing the earnings quality of our business, moving everything we can to as a service income with great cash flow profile and growing EBITDA margins.

27:34 And these managed distribution services place far greater value on the data assets and the digital assets. So over the near term, we expect this to make our income more visible, improve our cash flows, and help us step the margin out in this area of the business. We've got a very strong pipeline. As I said, we work with over 400 financial institutions and have done for over a decade with with the vast majority of them, great relationships. And we're delighted to report that we've converted several flagship clients across to this new service at the first half of this year. That represents about £1,800,000 of annualized revenue, and we've got clear ambitions to continue this transition.

28:21 We think we can convert 40% of provider revenue by year end up to 60% by the end of next year. We've got to pace this right for our partners. We need to work with them and help them transition. Working in an agile way is very attractive, but not many companies are set up to do it. The way they budget, the way that they review data, the way that they decide how they're gonna campaign on products is often down to these annual cycles. So it does need a bit of transition and a bit of change from the financial institutions, but we're confident we've got the needs of this market right. We've had a overwhelmingly positive response. We just gotta work with our partners to make sure that the pace of change is right for them, and we're confident in this kind of, set of ambitions to to make those transitions.

29:12 The second area of strategic delivery in the first half of the year has been the successful sale of Zest Technologies. Back on our Capital Markets Day in December, we called this out as noncore. It's a great business, but it's in an area that doesn't contribute to the rest of our platform. It was subscale and so not very profitable at all. And we probably spent more than the EBITDA generated on DevEx to develop the software and to to make it a great business. So the right thing to do is to create an instant shareholder value by disposing of it at a good price. More importantly even than that, though, is it lets us focus entirely on the core business and redirect that DevEx onto our core platform.

30:01 So we think it's a really good outcome. There's a little bit of upside potential, depending on that business trading mark for the remainder of the year, but 10,000,000 realized cash on completion, a part of our sort of building financial resources story during the first half of this year. The next area of strategic progress for us, which we only announced about a week ago, so this is after period end, but very relevant for these updates, is the strategic partnership with Forge with Tatton Asset Management. Tatton is a listed business, and it's one of the fastest growing fund management businesses in The UK. They've got a highly disruptive model. They are very adviser centric, and they've been gathering assets really well over the few years.

30:48 And we've done a deal with them which, at the headline level, generates up to 2% of AUM for the asset that we've sold them. So we had a small subscale funds business that really haven't grown for a couple of years, and we've sold that to Totten. And it's the right home for that funds management business. They do fund management, and they do it very well. But we're very excited about this deal for other reasons because that £13,000,000 deal incorporates a £7,000,000 software as a service enterprise contract. So for the next five years, we are guaranteed a minimum of £1,400,000 per year for providing software to all of Tatton's customers.

31:34 This is a big extension to our customer reach and sees us access up to 40% of The UK market. That's two and a half thousand more advisers using our technology, looking at our research, and generating more value and audience at the core of our business. So in addition to the base deal we've done, we're very confident we're gonna build extra earnings growth through our research business, and we're gonna build further earnings growth with the new technology modules that we deploy and sell to the larger user base. Really excited. In addition, Patton has signed up with a managed distribution partner. So all the things I was talking about earlier with the agile data driven distribution support we give to financial institutions, they're gonna be provided to Tatin.

32:27 And we're gonna help Tatin understand the market on a live data basis and optimize their products and launch new products into this market based on our database of buyer preference. And that partnership, we're very highly aligned with Tatton. Our distribution service fee platform scales as we get more engagement. And so we want Tappen to get more assets. We wanna get more engagement on our distribution platform, and we'll grow earnings, revenues and earnings alongside each other. So a good base deal, but most importantly, this is a platform for growth. We believe we're going to deliver significant value creation from this over the medium term, and we think this puts a FINTEL flag right at the center of The UK retail market because Tatton are not alone. There are many private equity backed consolidators or product provider backed distribution vehicles that have the same objectives as Tatton has, getting advisers to advise efficiently, compliantly, managing risk but having influence appropriate influence over the buying decisions and the decision platform that advisers use to recommend products to clients.

33:43 And we're absolutely unique. Our comprehensive platform of fintech workflows and all of our proprietary research that sits behind that is gonna be very attractive. So we want to make TATM the first, of the enterprise deals we do over the next couple of years, and I think this could be a very significant growth accelerant for us. So a bit of a a breakdown, but as I've explained, £13,000,000 is the base deal. Three of that is contingent based on asset retention over years three, four, and five, and the remainder is split largely to the fintech contract with 2,800,000 cash being received upfront and, again, adding to that financial resources story.

34:33 If, if you've seen our Capital Markets Day or or if you wanna go back and take a look at the recording, we've been very clear about the strategic focus for this business. Our core business, as you've heard Matt and David say as well, is the business that's at the heart of retail financial services, and it is a connected platform, helping providers manufacture, distribute, and optimize the right products for the market, helping advisers select those products and give good quality compliance advice to consumers, and helping consumers understand the complex market and understand what's appropriate for them and what quality is for them. And across this platform, we believe we will grow revenues to revenue growth to five to 7%.

35:22 We will grow our EBITDA margin to 35 to 40%, and we will have very high quality earnings. 70 to 80% of total revenues coming from SaaS and subscriptions and 70 odd percent cash flow conversion to make sure the earnings quality is being enhanced as it grows. And the way we're gonna do that is through digitization. We made a fantastic start in 2020, and we've really carried that momentum through into 2021. I'll say just a few words to finish, from us on current trading and outlook given we're at the half year, obviously. So it's pleasing to be able to report to our shareholders robust trading during a year that's still been disrupted by COVID.

36:12 You know, I think maybe last year, we thought we'd all have a big Christmas and the world would come to normal in January, and that certainly isn't what's happened. So there has been continued disruption to deal with, but we've traded in line with expectations nonetheless. And not only that, I think we've made very significant strategic progress. We've done the things we signposted to the market back in December, and we've got on and executed the plan. We are very confident of meeting our full year expectations this year. We have very high revenue visibility, very, secure income streams and controllable margins as we come through the rest of the year. And we're very confident we're making the progress we need to make in order to meet those medium term targets that we set out at the Capital Markets Day. So it's been a great start to the year. Delighted to be able to update our shareholders, and we're looking forward to being back out soon as the full year closes.

37:09 Thank you very much for your time today. That's fantastic. Neil, Matt, David, thank you indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated in the top right hand corner of your screen. While the team just take a few moments to review those investor questions we've had through already, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via our investor dashboard on the investment company platform. Also, I'd remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Guys, we did receive a pre submitted question from investors. And David, perhaps I could address this to you, if I may. It reads as follows. Could the company explain further or firm up on their new dividend policy to grow in line with earnings going forward?

37:59 Yes. Happy to take that one. So again, about context in same time last year in in line with a vast number of other listed companies, the interim dividend was suspended in terms of the the uncertainty around COVID and what that might mean. But, clearly, the strong cash generation still came through and the the company restated its final dividend for for the financial year to 2020. Now as we come back through, trading is still robust and cash still be generated, so we've, intimated an attention from the board to recommence the interim part of the dividend, and that would be a a small but progressive policy going forward. Now what what what that will quite be in terms of our direct correlation to enhance and increase the earnings going forward, and I wouldn't like to to see it. You you you see more detail on full year accounts, and we come out next March, and we'll be get a clarity there. But but so all I would say is with the the the business in the financial state, and if you commence the progressive dividend policy going forward. So I would do I would expect it to grow from where it is now, but the rates will become clear in the focus of time.

39:28 Fantastic, David. Thank you so much. Obviously, we've had a number of questions through from the attendees today. If I may just ask you to click on the q and a tab and then just please read out the questions where appropriate to do so, that'd be fantastic, and give your responses. Yeah. Thank you for submitting some questions. We can see those coming in on the system, and there's there's a few good ones. So the first one is from Nick asking about the m and a landscape, and I I wonder, Matt, if you'd like to take this one. Yeah. Very happy to, Neil. Just checking you can hear me okay because I couldn't hear David's response to the last question. I'm not sure if there's a Yes. We we can hear you. That's really well. Thank you. Okay. So thanks for the question, Nick. Yeah. The m and a landscape, for for us, I guess, there are numb number of points to that. So firstly, as Davis described, we have, a great RCF facility in place.

40:25 Leverage has been brought right down, so we have the, ability to to gear up and go and acquire other businesses, which is is something that we're sort of relatively well practiced at and is a key part of our strategy. That said, we're not gonna just jump in to try and acquire, you know, the sort of first business that that that we come across. We're looking to buy, businesses that can add tech capability or scale to what we we already do at the moment. So that would be a another piece of software that is used by financial intermediaries, or it would be data capabilities, or other software related to retail financial services. Or on the other side of things, it would be an organization that has intermediaries as customers, whether they provide support services or tech to those intermediaries.

41:16 So that's the kind of businesses that we're looking at. And there are a lot of great companies around who who do exactly that. The issue for us is trying to find a business that already operates at some level of scale. So, you know, we're not VC investors. We're not we're not gonna take stakes in early stage tech businesses that don't have a a customer base or proven track record. So for us, we'll be looking at more established players. There are plenty around, and we have a healthy m and a pipeline and plenty of discussions happening all the time. Nothing on the books at this moment in time, but, you know, we're all we're always out there looking. So, hopefully, Nick, that that answers your question. And I think Neil's gonna pick up the the next one about selling into the client base.

42:05 Yeah. Thanks, Matt. So we've got a question from Simon about how we sell into the client base on the core platform, how we're gonna win new business. And I I think this is related also to the question by Victor about competitive strengths and competition. So the account deal, I think, is a template for FINTEL as a combined platform. We have individual competitors for what we do. There are other fund research companies. There are other data providers. You can get financial planning software from somewhere else. You can get regulatory support from somewhere else. You can get marketing support from somewhere else. And we have to make sure that our products compete on their individual strengths and merits. It it's very important. You know? We wanna deliver something strong to our customers on each of the things that are important to them.

43:01 When you put those things together in a platform where the data flows and the value gets reused and you innovate second and third tiers of insight because you understand how customers buy and how advisers advise and how product providers design and manufacture their products and distribute them, it is absolutely unique. It's really important for us to grow scale because we have eyes on more of the market, and the power of the data and the insights we have gets exponentially bigger the more of the market that we cover. And equally so, we have to grow the breadth of the platform. So we should have some customers who use us for two or three things out of the platform, and we've got to grow that out.

43:50 We have some customers more recently. They're coming on. They're buying the whole platform day one. And that's certainly to Simon's question, how we're pitching in for new customers. We're going as a FINTEL combined platform, and I think we're gonna be very successful at that. But there's kind of a selling backwards to to all the clients we've grown over the years where we've gotta extend those relationships and grow the average revenue per client and the number of services per client and the engagement per client to really make the most of this unique platform. So I hope that covers Simon's question about focus to sell in, but also Victor's around competition. We've gotta be good in each area, but nobody's offering that connected platform in the way we are.

44:35 Thank you. Oh, and there's one more question from Jamie, which I think it'd be good for David to cover. It's about development expenditure. I think this relates to some of the things we talked about during during the talk. Absolutely. Thanks, Neil. And again, a great question, Jamie, as the as the development expenditure are likely to increase from current levels to meet your digitalization ambitions. And I think the the the core to that answer is one of the slightly hidden strategic benefits of the Zest disposal. So our our debt mix was running at one of the £2,000,000 a year split roughly equally, a million pounds in Zest and a million pounds in Defacto. So just to to achieve the same economic metrics after the the disposal of Zest, we can automatically double the DevEx and Defacto from 1 to £2,000,000 a year to to just stay within the same financial metrics.

45:32 And then we would absolutely look to do that, and that that's clearly given us the the automatic headroom to to invest further than the facto. Again, it's something that we always assess and measure and and and adjust as a management team. And if if we do need to increase the the spot part and and and it's good to rate your ton of profile, then we always assess that, and we'll we'll absolutely do that because we're incumbent on us to do what's best for for the business and and shareholder value. So great great question to, you know, try to get a follow-up and strategic synergy from the sales desk for the for the business. Thank you. Fantastic. Guys, think you've actually covered all the questions that we've had through. And, of course, any further questions do come through from investors, you will be able to review those. We can publish responses where appropriate to do so.

46:21 Just as we before we go and get to the attendees to give you some feedback, perhaps Neil or Matt, if I could just ask you for a few final words just to to wrap up, that'd be fantastic. Yeah. Thank you, Mark. So I I think sort of, you know, the the real summary is a solid financial performance in the first half of the year, continued digital acceleration with a real focus on converting revenue to as a service type revenue and extending our fintech customer base. Two big key, strategic moves for us, the disposal of Zest and the partnership deal with Tatin, which gives us our first massive enterprise client, huge extension of the fintech, and puts us on track to deliver short and medium term expectations, and we move forward with real confidence and pace and agility. So thank you very much.

47:20 That's fantastic. Matt, Neil, David, thank you indeed for updating investors today. Can I please ask investors not to close the session? You'll be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. Just trying to take a few moments to complete and is greatly valued by the company. On behalf of the management team of FINTEL PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Thank you, and good afternoon. Thank you.