Fintel, the parent company of SimplyBiz and Defacto, has seen profits slide in the first half of the year but said it was being rewarded for expansion into the protection and mortgage markets.
In the first six months of 2023 Fintel saw its profit after tax drop 29% to £3.4m from £4.8m in the same period last year, according to its interim results.
However, the fintech and support services firm said expansion into the protection and mortgage market helped it increase earnings from its distribution channels division by almost 80%.
It cited increased use of Distribution as a Service (DaaS) contracts in the protection and mortgage as increasing its earning power.
Fintel said its distribution channels division earnings quality increased with 79% of its partner revenue converted to multi-year DaaS contracts following the market expansion, compared to about 60% for the same period in 2022.
Quality of earnings is the percentage of income due to higher sales or lower costs, removing internal or external anomalies that could give a distorted impression, it said.
Regulation and consolitation driving demand
Fintel added that trading continued to be in line with the board’s expectations and it had seen increased demand as a result of regulatory pressure, demand for technology and insights, and market consolidation and disaggregation.
Matt Timmins, joint CEO, (pictured) said: “Fintel delivered a positive financial and operational performance during the first half of 2023 and continued to make significant progress in line with its strategic plan.
“We have increased investment into our technology and service platform, with earnings enhancing acquisitions expanding our unique proposition and driving future growth opportunities.
“Our diverse client base and proposition, combined with the cash generative nature of our business, provide resilience to tough market conditions and ensure we are well placed to capitalise on the growth opportunities arising from an evolving UK financial services landscape.
“Together with the strength of our balance sheet and positive qualified M&A pipeline, we are confident of delivering further strategic progress and accelerating growth, as we continue to inspire better outcomes for retail financial services,” he added.