Hello. Good morning, and welcome to the 2021 full year results presentation from Fintel. Thank you very much for taking the time to dial in this morning. In a moment, we'll run through the results presentation, and then we'll have plenty of time afterwards for questions and answers. I'm delighted today to be joined by my Co-CEO, Neil Stevens. Neil and I have worked together in the business for almost 20 years, and have operated as joint CEOs for the past 12 years. Working alongside Neil and I on the exec team is David Thompson. David joined the business last year following five successful years as CFO at Smart Metering Systems. David has already made a really significant and positive contribution to the business, and we're delighted that he's chosen to join us as a key member of the team here at Fintel.
In terms of the agenda today, on the next slide, we're going to cover a quick overview of the business, and then I'll hand over relatively quickly to David Thompson, who will take you through a financial review of the last 12 months' performance. David will hand to Neil, who will talk about our strategic delivery in 2021, along with the current trading and outlook as we move forward. On to the next slide and a brief explainer of Fintel. Fintel operates right at the very heart of the U.K.'s retail financial services market. Launched in 2002 and operating for almost 20 years, the business has a really solid track record of growth and success through challenging and changing market conditions over the years. Last year, following the successful acquisition and integration of Defaqto, we rebranded to become Fintel.
Benefiting now from the combination of SimplyBiz and Defaqto, Fintel is uniquely positioned in the market. We provide a combination of fintech research and support services to hundreds of product manufacturers and thousands of intermediary firms that dominate the advice and sales of retail financial products in the U.K. On the next slide, you'll see that we occupy a really unique position in the market. Our model benefits from a true network effect due to the interrelationship between our customers and the way they access different parts of our tech and services platform, which in turn drives and feeds data right the way across the platform. Put simply, we serve both manufacturers and distributors from the same core platform. Sitting at the heart of our business are three core competencies or business assets, which drive our platform and create our unique business.
First and foremost, we are experts in retail financial services regulation, serving thousands of financial advice businesses. Second, we are experts in financial products, in researching and rating almost 40,000 products and funds in-house, which gives us the largest database of rated financial products in the U.K. Third, we are experts in fintech and workflow systems, which carry our product research and ratings, as well as our regulatory IP. Our fintech and research systems are used by hundreds of product providers and thousands of intermediaries all across the U.K. As these financial intermediaries use our fintech to give advice and product providers use our product database to build and compare products, the network effect of this builds a unique and valuable dataset which gets bigger and more enriched the more it is used.
Turning now on the next slide to our performance over the last 12 months. We have delivered a robust financial performance and progressed our strategic objectives at pace. We have delivered revenue growth across the business and our core business, we have seen revenues increase by 5% year-on-year. This growth in revenue has been delivered while maintaining a solid 33% margin, and cash flow conversion continues to be a real strength for the business, delivering 115% in 2021. We have also made significant strategic progress. The work we undertook in 2020 to start converting our product provider revenue to distribution as a service has really helped increase our percentage of SaaS and subscription revenue.
This is now up to 66% in terms of the percentage of SaaS and subscription revenue as a percentage of total core revenue. 2021 also saw us enter into our largest strategic partnership and enterprise technology deal with Tatton Asset Management. Furthermore, during the year, we disposed of two non-core assets, which has enabled us now to focus on our core business growth. As we look forward to the future, we are well-positioned for growth, with opportunities to build on the huge scale we have in our intermediary business. We support larger and more complex firms with compliance and regulatory service, and we see that customer base growing over the medium term.
Finally, we see a real opportunity in the provision of data and insights to the product provider community, and we believe that we'll be able to monetize this potential over the medium term. In summary from me, we have delivered a robust financial performance against a difficult market backdrop. We have invested in our business and made real progress towards our strategic objectives. There are plenty of opportunities for future growth, and we are well-positioned to go forward with real pace and determination. I'll now hand over to David Thompson, who will take you through a financial review of the last year.
Thanks, Matt. Again, it is great to say it's a pleasure to present my first full year results for Fintel. Over on slide eight, I think just by way of opening context, remember a year of ongoing COVID-related disruption to strategic disposals partly through the year. It's a strong testament to the current cash flow nature of the business model that we can present a robust set of financial highlights showing growth in revenue and profitability, a delevered balance sheet, and an increase again in cash conversion. As you can see there, revenue's up 5%, GBP 63.9 million. Adjusted EBITDA up 6% to GBP 18.3 million, and adjusted PBT up 9% to GBP 14.1 million. Again, showing that consistent revenue growth converting to margin flowing through to bottom line profitability.
In terms of non-P&L metrics, if you go to slide nine, please. In terms of earnings per share, 10.5 pence is the adjusted result. Although a significant factor preventing that being compared directly to the prior year was a one-off GBP 1.5 million non-cash tax charge, and that related to the increase in tax rates in the U.K. from 19% to 25%. You can see that over in slide 9, that if tax rates had remained consistent, that the adjusted earnings per share would have grown 6% to 12 pence per share. Over in slide nine, we've got operating cash flow conversion. That compares how efficient we are operating the business and controlling working capital.
In both this year and last year, we saw improvements in working capital, hence a result in excess of 100% conversion. On an ongoing basis, we'd expect that conversion percentage to rest between 90%-100%, and that reflects CapEx investment on a normalized working capital pattern. Again, on slide nine, if you turn to leverage, and there's more detail on a later slide. It's great to show a cash positive position, having now repaid a significant majority of the debt that was used to fund the Defaqto acquisition in 2019. Again, a testament to the cash generating ability of the business that we're in a net cash positive position of GBP 2.6 million.
Over on slide 10, you know, again, responding to a number of bits of feedback, we've got a newly presented slide here that shows our revenue progression in one place and its makeup. We felt that was important to present 2019 as well for comparison, because that shows how robust the business was during 2020 when COVID first hit, and it was still growing from that resilient base, and most importantly, ahead of where 2019 was. I draw your attention to the presentation of our core SaaS and subscription revenue, which is the green segment at the bottom, the foundational layer. That showed continued growth both in quantum and as a percentage of the core business.
Importantly, we remain on track to achieve the medium-term goal of exceeding 70% of the core business coming from SaaS and subs revenue. There's two main ways of growing that revenue quality. You can see the conversion of existing revenue into SaaS and subs by way primarily of successful Distribution as a Service offering for financial product providers. That's been taken up by a number of our customers. You can track that by the RNSs we've been releasing over in recent times. As well as simply software sale arrangements to our large and diverse customer base. Over in slide 11, one of our key performance slides, we present the results in a divisional way.
In a year, over in slide 11, where there's been two strategic disposals, underlying organic growth and improvement in revenue quality has been offset by the year-on-year effect of the disposed of revenues of that. Just quickly, in intermediary services, you can see core revenues have actually grown 5%, up from GBP 21.1 million to GBP 22.1 million. Although overall divisional revenue, it went down GBP 1 million because it was affected by the sale of Zest Technology at the half year stage. That sale and continued investment in the delivery platform during 2021 ensures we're positioned well for continued growth. That has seen the gross margin reduce a little, but we'd expect that to increase again during 2022, certainly back to at least 2020 levels.
Over in distribution, the sale of our Verbatim funds in September has offset other organic core growth. Core revenue showing effectively flat year-on-year, down just under GBP 100,000. Total revenue increased 12% in distribution. That's a result of strong recovery from the non-core property surveying business. Although that has an impact on those margins, that's a more people-intensive business, less able to be digitized, and that mix ultimately affects the margin flow through. Over in FinTech and Research, a real solid area of growth across core revenue, quality of revenue, and gross margin, and that's due to continued software sales on a subscription basis. Strong profitability against two disposals in the year to keep showing growth. Over in slide 12, if we look at cash conversion.
As I mentioned earlier, as a business performance metric, we look at how efficient we are at operating the business. We've got a large fixed element to our cost base and also our control over working capital. Really key is the SaaS and subs style business to demonstrate the robust nature of the recurring business model and how that operates profitably and flows through to cash. A result over 100% here would typically indicate working capital inflows. We see that in both years. Although a typical run rate, as I said, would be between 90% and 100%, reflecting investment in the business and normalized working capital levels. Historically, we presented conversion of EBITDA down to free cash flow after debt service and tax payments.
As you can see, the business is very successful at paying down leverage in short periods. The debt service costs from one year to the next can vary significantly. We also have the varying corporation tax rate coming. Nevertheless, to compare to the metric used previously, you can see in the bottom section there, improvement from 69% to 77%. I'm always a fan of if we introduce a new metric, you know, you always got to reconcile it back to one that was used previously so that everyone's got transparency as to how and why we've made that transition. We contextualize like-for-like performance year-on-year and see that we've improved the cash flow conversion from 69%- 77% on that basis.
We would use the underlying operating cash flow conversion basis going forward. Over in slide 13 in relation to leverage, what we've done here is taken a snapshot of the net debt-to-EBITDA ratio over the last two full reporting periods, so full year, half year, full year, half year, full year. Now, we've de-levered the balance sheet in that short period after the Defaqto acquisition on a net basis with GBP 2.6 million of our net cash positive position at December 2021. That's a real testament to the cash generative nature of the business model and provides an attractive flexible base to fund future growth efficiently using debt. On a gross basis, we've reduced the gross debt from a peak of GBP 45 million in early 2020 to just GBP 7 million of gross drawn position at December 2021.
Not all that de-leveraging, it's important to say, comes from a windfall from the two strategic disposals. After fees, there was a net just over GBP 11 million that came from those disposals. You can see that de-leveraging, while that certainly contributed to it, the majority simply comes from trading and cash conversion. Again, just indicative of a really strong balance sheet that's positioned us well for both organic and acquisitive growth. Finally from me over in slide 14. What we can see here is, you know, a robust set of results from a resilient cash generative business model. We get continued growth in the quality of earnings towards our medium-term targets.
A strong balance sheet positioning us extremely well for efficiently funding future growth and a progressive dividend policy to return some capital to shareholders annually, albeit a focus predominantly on growth over time from the recurring business model. With that, I would pass over to Neil, and he's gonna tell you about the great progress we're making with our strategic objectives. Over to you, Neil.
Thank you, David, and thank you, Matt. It's a pleasure to have some time with everyone today. Robust financial performance, good strategic delivery, and I believe we are very well positioned for growth moving forward. We'll have a quick look over the page at our current trading and outlook, starting firstly with progress to our medium-term objectives. Back in December 2020, we ran a capital markets day, and we set out what it is we're trying to achieve from our core business. Essentially, quality earnings growth. Growing revenues organically between 5%-7% while improving margins and getting the benefits of scale. We get the core business EBITDA margin between 35%-40%. The quality of those earnings underpinned by the business model moving increasingly to SaaS and subscriptions, generating lots of recurring income with great cash flows and growing out our core.
The core business doesn't include panel management, as we've said before. We've made really good progress in just getting towards the lower end of our objectives one year on from setting them out to everybody at the capital markets day. As David said, there was continued disruption in 2021, but I still believe we've made very significant progress. We've dealt with some of the important non-core disposals and delivered those figures you see on screen. 5% core revenue growth, 33% core business margin, and moving the SaaS and subs up to 66%. It's some really good progress. Next, over the page, we'll start to look at some divisional highlights. I think it's great that we've delivered positive performance again across each of our three divisions.
Really strong across the piece for us. Starting first with intermediary services. This is the area of our business where we provide regulatory and business services to financial intermediaries, operating at great scale for a specialist market, and we have over 3,000 customers who use us to run their business, keep them compliant, and help them give advice to their customers. We saw good growth in software adoption. This is where we provide the practice management software that our clients run their business on, generating extra licenses, extra SaaS revenue growth for us. This is really good as well because it deepens our relationship with our customers, and it generates lots of very valuable data.
We've continued to digitize what was historically a very entirely people side of our business, which is very important, but we're bringing much more software and digital services. That's gonna help us grow faster. It's gonna help us increase the average revenue per customer as we put them on a nice platform, and they can buy more of what we have to offer, and it improves the customer satisfaction. Our kinda net promoter, customer advocacy, and our customer satisfaction has been really strong. Getting this balance right is very important to us. Good quality services tailored for our customers, delivered by expert people using a great digital infrastructure. You'll see some key stats there on delivering compliance, support, and consultancy.
We've got a great mix of on-site when the customer needs it, digital and remote when that's the most appropriate way of doing things as well. As we start to connect these services on a platform, it means we can win bigger deals. We can put together more of our services into enterprise solutions and go out there and target bigger customers. This is gonna be one of the ways we grow faster by using that platform. We've also, as you've heard, realized good value for shareholders on the successful sale of a non-core business, Zest Technology. Good accomplishment in the year. Turning over now to the next page to look at distribution channels. Again, some really important highlights. I think we've been working on the right things in 2021. Most important is implementing this new distribution service.
We've had a great business for many years in events and marketing, and we work with over 400 product providers, so really great customer base. Over the last two years, we've been moving them to a different model. That new model is a new way of working on a subscription basis, and it puts a lot more value against the data and the digital assets we provide to product providers, so less reliance on physical events. We've managed to convert 20% of our partners to this new service, and we've obviously gone for the bigger ones first, which means 40% of the revenue has gone across to being high quality subscription income with more value placed on data and digital. I think it's a fantastic result and something we continue to put a lot of effort into.
The stats on the engagement with the attendees are really strong. 18,500 attendees across that hybrid program in 2021. Remembering, of course, it was a year when there was still a lot of COVID disruption and for lots of the period, running physical events just wasn't possible anyway. Finally, from distribution channels, we've seen a really strong recovery of the mortgage market. This proved very resilient right across the pandemic with mortgage brokers proving they've got good quality client relationships and doing a lot of work on remortgages and refinancing. Whereas in 2021, we came back to more house purchase in the market.
Returning to pre-pandemic levels of house purchases, which has definitely buoyed us, but we've also taken some market share to deliver record lending across our business of GBP 22 billion and a big increase on 2020. Fantastic results there. Finally, from the divisional highlights on the next page, you'll see our Fintech and research division. This comprises of the Defaqto business. Again, great scale, over 3,500 clients using this software to give advice to their customers. Big win for us in 2021 was the strategic partnership with Tatton. That gives us access to up to 2,500 new customers in a five-year fixed deal. We got great partnership, multiyears to work with Tatton and deploy some fantastic software.
We're gonna be focusing on doing more of these enterprise deals as we've connected together the different services we have into propositions for bigger customers. This is gonna accelerate our growth, winning more large clients and enterprise deals. Getting people to use the software is really important because it generates our SaaS income, which was up 8% in 2021, but it also generates our understanding of what's happening in the market. You'll see we processed GBP 40 billion of recommendations last year, up a third from the year before, and this is the unique data on who's buying which products and for what reasons. It creates enormous audience for our research products. Research was up 10% in the year as we added new research categories, and we developed some new software for financial advisors to use. That's the virtuous circle in action.
More users using more workflows, consuming more research, and generating more data for us. Finally, on this section, I think something we're really proud of is the ESG service that we've launched at Defaqto. We've been able to deploy software and research to intermediaries. And this is really crucial for us in how we think about ESG. We're very purpose-driven, thinking about how we can do things that others couldn't to make a real difference when it comes to ESG. We've engaged a very comprehensive materiality assessment, talking to stakeholders, all of our customers, shareholders, and teams, figuring out what Fintel can do, where we can put our efforts to make a meaningful difference. We formed the proper committees that are part of the culture of the business, and this year we've commenced our ESG reporting.
It's about three things for us. It's about being a better business. Of course, that includes the environmental footprint, but even more impactful for us is the way we involve corporate governance and the way we seek community engagement to make a real difference, outside the four walls of Fintel. That extends when we think about helping create a better industry. As we're innovating new technologies and new workflows, it has a real effect on the work of thousands and thousands of advisors who can do things more efficiently, who themselves can lower their carbon footprints and travel less. That translates to millions of consumers, helping them get more financial advice, more solutions to the challenges they face.
Better products and better outcomes is a really fantastic thing we can do to make this industry work better and provide those ESG services for the financial advisors to use. It is then a better future, a thriving workforce at Fintel who are being developed in a very inclusive way and able to fulfill their potential and through Defaqto, particularly helping consumers right across the country have more financial confidence through good education and clear ratings that help them understand what these products are gonna do for them. On the next slide, you'll see something that is quite detailed. This is really us just demonstrating the very engaging way we've been through the materiality assessment and figured out what Fintel needs to focus on from talking to all of our stakeholders.
Where can we have a meaningful impact and do something that's gonna make a difference? This is an example of our absolute willingness to engage with shareholders. We'd encourage any of our shareholders and stakeholders to get in touch, and this is a topic all in itself, and we can set something up to provide that extra information as well. Finally, from me, moving to our current trading and outlook. If we just move on a slide. One more, please. Thank you. We're really well-positioned for growth in our core business, and it's about that quality growth and quality earnings growth I talked about earlier. We have a very clear picture of how we're gonna create value, and we've got these medium to long objectives that we're gonna track our progress and communicate that progress to our shareholders.
It's about connecting our platform, putting these products together, building a better digital backbone. That means we can grow faster through taking on large clients. We can innovate products very quickly and get more revenue per customer as we deliver new software modules to them, and it's about then expanding that data service. Every time we produce a new workflow or some new research, we create a new data about how people are buying things and what the market's doing. It's a second layer of value in our business that we're starting to bring to life through the managed distribution service. When it comes to margin, again, it's about enhancing that product platform, taking as much of our people knowledge and IP and turning it into workflows in the software. Customers get faster access to what they need.
It's more efficient, quality goes up, and it enhances the margin for us. It will help us to increase service penetration 'cause customers can add extra products and services onto their platform very quickly and use the data that's already there, therefore, growing cross-sell opportunities. It's a much more efficient way to grow with low acquisition costs of the extra growth. Then finally, when it comes to the business model, very importantly, the earnings quality, it's continuing to transition everything we do to be more SaaS, more subs and more digital. I think we've made really strong progress in 2021. Final slide, Fintel one year on. It is a high-quality business. We've got a fantastic opportunity operating at scale in a very specialist market.
Really focused on recurring income and, you know, great percentage of our business now is on this model, and we continue to move forward with that digital transformation and generate all this lovely data. There's massive opportunities for us in a large addressable market where we've got really strong brands that are recognized by each of our customer groups as being best in class. We've got that strong balance sheet, so in addition to investing in our products and our platform, we can look at where there's fragmented competition in the market, where there might be buying opportunities, and we can accelerate our growth through M&A. I think we've got a proven ability to, you know, demonstrated ability to acquire and integrate great quality businesses onto the platform. That's all from me.
Thank you very much for your time and I think we're now gonna move to Q&A.
Thank you very much indeed. As you say, we now turn to Q&A. If you would like to ask a question, then please raise your hand and we'll come to each of you in turn. Alternatively, if you prefer to type a question in, you can do that in the Q&A box. The first question comes from Rahim Karim. If you would like to unmute your microphone, and please go ahead.
Morning, gents, well done on a strong set of numbers. Three questions if I may. You've obviously made great progress in terms of non-core disposals in 2021. I was wondering if you could perhaps give us an update on your thoughts with respect to the rest of the non-core portfolio, especially given the recovery in the housing market we saw last year.
The second question was just kind of linked to that is, you know, what your view on the optimal shape of the balance sheet is now that you're kind of net cash, if you were to receive any future divestment proceeds. You know, how might you use that, and what's that kind of optimal level? Then finally, you talked about some of the enterprise opportunities that you saw in the business. It'd be useful just to get a bit more color in terms of the potential scale of that.
Obviously, the Tatton deal, you know, big in its own right, but if you could perhaps, you know, give us a few kind of data points or something just to get us a sense of how big that could ultimately be, that would be really helpful. Thank you.
Thanks, Rahim. I think we'll take those three questions in the order that you asked them. I'll cover the first one. I'll then hand over to David to talk about the balance sheet strength, and then on to Neil to talk about the enterprise fintech contracts. In terms of the non-core business, you're correct, we have disposed of Zest Technology and also the Verbatim asset management funds in 2021. That leaves us with the surveying and valuation business, which we previously described as being non-core to the business. That is a good strong business. It is performing well. That business continues to do well. However, we clearly will look to dispose of that business when we feel the time is right.
Going through the last sort of 12-18 months, especially during this pandemic, it hasn't been the right time to dispose of a surveying and valuation business, simply because the housing market has been up and down and unpredictable. You'll see during 2021, we delivered a good set of results, and that business is back up to the margins it should be operating at, and it's back up to growth and receiving strong volumes through. It feels like this year will be a good opportunity to revisit that. I'll hand over now to David to pick up on the point around the balance sheet. Then David, perhaps if you can pass to Neil on the enterprise contracts.
Yeah. Thank you, Matt. The big question, Rahim, is it's something we discuss actively as a board that's one of those quintessential nice issues to face that, you know, on a having gross debt of GBP 7 million, but gross cash of GBP 9.6 million, we're clearly in a net cash positive position.
That 9.6 cash balance will be used to delever the business further, such that in the summer, certainly the half year, I would expect to come out of everything else being equal, have no debt whatsoever and just have a normalized level of cash that we require to operate the business safely on a month-to-month basis, with you know, keeping a core level of liquidity in the business. You're spot on.
The cash generation in the business is such that, you know, again, on a everything being equal basis, we'll have north of GBP 10 million at the end of this year and north of GBP 20 million at the end of next year in terms of just completely unlevered cash resources at our disposal. The question of capital allocation is a live one. We firmly believe that as a growth business, we're not certainly ex-growth and looking at B&I for dividends.
You know, as a firmly growth story with all these fantastic areas to move into, the dividend would remain progressive from where it is and, you know, using that cash to fund an acquisition war chest and further investment in the business is probably the more likely route for it. Again, we're in the backdrop of, you know, a lot of private equity money in the market, a lot of high multiples being paid, especially for tech businesses that are of interest to us that tip the balance of that buy or build methodology.
We've got the capability within the business from the point of view of our software developers to build certain smaller products that would keep developing the business going forward. It's a question that doesn't have a finite answer other than we're in a very strong position and a flexible position to fund efficiently through debt primarily acquisitions in the market and fund growth. If that answers your question. I'll pass over to Neil now to talk about enterprise license deals.
Thanks, David and Matt, and hi, good morning, Rahim. I think about the shape of our market. We've always done well in the smaller independent part of the market. You know, we have a steady monthly inflow of customers buying from our service platform, which is great. More recently, we've kind of stepped that out to include sort of mid-size firms and discretionary managers. We're already kind of upping the averages of that steady flow of clients coming in to get higher contract values, more valuable relationships. That's kind of the day-to-day, month-to-month growth. Then we see the enterprise clients and the potential for those.
in the sector, we're seeing a lot of disruption and a lot of change, which is creating, you know, new consumer shapes for us, which we're really excited about. Some of those are regional firms where firms have merged and acquired, and they're building a big regional presence. Sometimes they're national firms where they're, you know, another step up from that. Sometimes consolidators backed by private equity money, and they wanna build a national advice business.
Maybe with some products and some customer platforms, you know, built into that model. Then we have the very big vertically integrated firms. Right now we've got customer set right across the piece, which is a brilliant extension for our business. In 2021, we won our biggest-ever regional customer, which is a PE-backed consolidator, that's again signed a multi-year deal for all of our technology, regulatory services, and also the data to help them with product development. You know, Tatton is clearly a real flagship client. 2,500 users is a really big potential. I think there's, you know, in addition, there's a half a dozen opportunities out there in the medium term that, you know, might be 20%-30% of that size.
There's some really good stuff to go at. There's also, of course, some other really big organizations that are looking right now how they are gonna grow and what technology and services, what partnerships they want to go on their growth journey. I think our brand and our platform is second to none. We'll be working very hard to win those opportunities.
Great. Thank you. I'm glad each of you had the chance to answer questions.
Thank you, Rahim. If anyone else would like to ask a question, then please click the Raise Hand icon, and we'll come to each of you. Alternatively, you can type a question in, and we've got a couple of questions submitted. The first comes from Keith Hiscock.
We continue to see consolidation in the wealth manager and IFA market. What is the impact on Fintel? Does that imply that new combination might buy one license rather than two? And do they squeeze your margin?
Thanks very much for the question. I think as Neil started to answer that in the previous reply. I'll hand over, perhaps, Neil, if you'd pick up on that point.
Yeah. Thanks, Keith. There definitely has been consolidation. It presents some fantastic opportunities for us. We work with several of the most prominent consolidators, and what we find is, they need more than just software. They need software for the advisors to use and to do the client work, which is great. We're very good at that. They also need other services on top of that. This is where our regulatory capabilities come in.
Those bigger clients want us to design their work systems and processes and to use our data to drive their risk management as well. Quite the opposite of sort of the value of the software itself getting lower, you start to get these really high-value services you layer on top. Specialist compliance work. You know, we do all the authorizations and the FCA regulation work and the policies for some big companies, and then implementing the control structures, essentially. Taking all those keystrokes and all of that data and turning it into management information the consolidator is gonna use to manage risk, develop its products, and in some cases, figure out what kinds of companies it wants to buy next. We've become a very central partner to those consolidators.
Thank you very much. The next question has been submitted by Paul Bryant.
Could you give a bit more detail on how you see the potential of the Tatton deal, top-line potential, and exactly how that revenue growth is generated and bottom-line potential, and how is it going to date?
Thank you. Again, I'll hand back to Neil for the Tatton deal.
Yeah. Thank you, Paul. I'm guessing it's not Paul Hogarth, Tatton CEO. It's probably another Paul. But you know, it's a great deal we've got with Tatton. The first thing to point out is it is a five-year deal with a fixed technology contract. Both parties have committed to the value of the five-year deal, which is a you know, wonderful underpin for this kind of relationship. There's still lots of work to do. Of course, we've still got to go and take the technology out and configure it and deploy it to a very large user base. It's not something that's done overnight.
The five-year term and the fixed nature of the underpin. It's a great position for us, and it gives us the ability to really work at this with Tatton. How do we do more than, you know, what was set for Outset? Well, it comes down to two simple things. We believe our technology and research as we deliver it around the sector will help Tatton create more sales opportunities. They're a distribution as a service customer as well. We're gonna help connect their products to more of the market, and they pay for the distribution service. As well as the core tech, they're buying the additional benefits of distribution as a service. We and they also wanna develop new software and new modules.
Together with Tatton, as well as the software we've got today, we're gonna be building other software modules and taking those out to Tatton's customers, some of which will be additional fees, and we've got a revenue share with Tatton. They're gonna get some of that. We're gonna keep that. We're both incentivized to grow sales opportunities for Tatton, and we're both incentivized to create and sell more high-value software, again, over the five-year partnership, not all at once. It gives us a great.
A great foundation to work.
Thank you very much. The next question has been submitted by Robin Savage.
Can you provide more color on your plans for R&D with particular reference to Defaqto?
The question for you there, Neil, on Defaqto R&D. In fact, do you wanna answer half then and David pick up the other half in terms of, sort of R&D stuff?
Yeah. Thank you. Back to R&D. When we sold Zest, we said, you know, we were doing what was right at the time, but we were allocating DevEx to a non-core area of the business. It was right to do that because we had to support our clients. You know, Zest is a high quality business, and even though it's non-core for us, it's important we maintain that. The sale of Zest means we can focus now on what's most important. We're reallocating the DevEx we would have spent on Zest where it's gonna count most for us and our shareholders, which is Defaqto. With that great customer base I've just talked about, and those new customers coming in who need these other high-value services, you can guess the shape of our R&D.
We're gonna invest in data, analytics and dashboarding. That's gonna provide lots of extra value to intermediaries. We're investing in cash flow planning and contract analysis, which means our advisors, as well as the specialist workflows we have for them today, can pull clients together into one holistic journey. Again, I talked about our ESG earlier. This is really meaningful stuff. It means hundreds of thousands of consumers will get better, broader, more holistic financial advice and better outcomes. We can do that through our software and helping our customers. It boosts the value of their advice and grow their revenues as well. DevEx, very much around those things, bringing data to life in the customer's business, creating specialist workflows that our customers need, and then that hub, that client view hub, so they can do more for their customers.
I'll pass to David to explain the shape of that financially.
Thanks, Neil. Such as the financial astuteness of my CEO, he's already answered the bit I was going to say. I think from a you know to play to the audience from an analyst modeling perspective, the shape of that Defaqto would be just north of GBP 2 million of DevEx capitalized certainly for the next three years, perhaps four. The important difference to note is that Zest primarily wrote its DevEx over a longer time period. The Defaqto and now the group accounting policy is that they write the DevEx off over three years. There's certainly a more aggressive profile which clearly flows through to an impact down at an EPS level. Again, it's.
I would put some color on that around the, you know, investing to grow. It's very clear how technology sales, particularly on a subscription basis, grow revenue and EBITDA, and we want that to flow through. If you can't buy something in the market at an extremely high multiple, the other option is that you look to build it yourself, and that comes with a bit of investment and a bit of cost carry and a bit of additional time to revenue. Nevertheless, that's the right strategic way forward for us. Just, you know, again, in terms of the accounting modeling shape of it's just over GBP 2 million a year, and it will be amortized more aggressively over three years as is the policy.
Thank you very much. A final reminder that if you would like to ask a question, then please click the Raise Hand icon at the bottom of your screen, and we'll come to each of you. Alternatively, you can submit questions by typing them into the Q&A box. There's one more from Robin Savage.
The partner testimonials are revealing about the impact managed distribution service has on partners' businesses. Can you provide a little more color?
Thank you, Robin. Yeah. I'll take that question. We've had good long-standing relationships with hundreds of product manufacturers over the course of the last 20 years. The way those relationships have previously been managed is that we have essentially rekindled the relationship every 12 months with a new agreement and a new set of activity that we share amongst the two organizations. Where we've moved to now is distribution of services. The way this operates is that we engage on a longer-term contract basis with the product manufacturers, very often these are three-year agreements and longer. The product manufacturers pay for services on a monthly subscription basis rather than an annual repeatable contract.
Included in those services are the data and insights that we have through Defaqto, and also a brand new product provider portal that we've built, which gives the product manufacturers a really solid understanding and a deep and rich understanding of the financial intermediaries with whom they essentially sell and advise on their products. This is a relationship with organizations that we've been working with for years that's gone through many cycles of natural evolution, and we've really stepped that forward over the past sort of 12, 18 months. You know, we've firmed up those relationships over multi-year contracts.
They are regular recurring income for us, and we are delivering more and more to the manufacturers through the provision of data and insights, and also through a combination of physical and virtual meetings that we hold across the country. In 2021, we converted 20% of the number of customers, but over 40% of the income. We've stated previously that we expect that to grow to around 60% of the income by the end of 2022, and we feel we are well on track to achieve that. We're very confident that our Distribution as a Service product is growing extremely well, and we're enjoying really good relationships with our manufacturing partners. Thanks for that, Robin.
The next question comes from Manjot Heer. Manjot, if you'd like to unmute your microphone and ask a question. Manjot, do you want to give that another go? I think we can see you speaking, but we can't hear you. Try one more time, please.
Can you hear me now?
We certainly can.
Perfect. Sorry, it's just been a bad day for Wi-Fi. Just two quick questions. One, could you expand on the Tatton deal a little bit more? Apologies if you've already gone through it. There was a bit of tech issues before. Secondly, in terms of retaining and attracting new staff, what are the kind of new strategies that you're implementing?
Thank you. I'll hand to David to talk about the latter part of that question, which is about attracting and retaining staff. Perhaps if David can hand over to Neil to cover off, that's the answer to the Tatton question.
Perfect. Thank you.
Certainly, I mean, I think, you know, it is quite a high degree of tenure at Fintel, SimplyBiz and Defaqto's businesses. It's pleasing to see. It's a great culture. It's been very supportive through the pandemic, and we've had very decent pay raises. We've introduced a new staff portal where you have a flexible benefits option now. You get a free holiday on your birthday, things like that. There's a lot of really important small things that are very impactful. We get very high feedback from the Workday Peakon system that we have. We take the temperature through pulse surveys every two weeks.
We would like to think we have a really robust remuneration and reward package, but also importantly, a real culture and heritage, particularly with Neil and Matt in the business, having founded it nearly 20 years ago, that's very supportive and people see that. There's lots of opportunities to grow and develop internally. We've got a high degree of internal promotions and, you know, and people catch a ball and go work on another project and that will, you know, leads to cross-pollination of ideas within the business.
It's certainly not to be remiss that inflation and staff wages and retention isn't an issue, but we would like to think we are very well placed with the culture of the organization and the reward levels where they are as a people/professional services/technology business, that we're doing all the right things, and most importantly, listening to our staff continually every two weeks to make sure we keep adjusting and doing the right thing. I'll pass back to Neil to give you a bit more color on Tatton.
Yeah. Thank you. It's a fixed minimum, not a fixed maximum deal. Over 5 years, there's a fixed minimum deal worth almost GBP 7 million in SaaS fees for us to provide core technology to the Tatton user base. That's the basis of it. What else we do to grow more value is through the distribution services we provide Tatton, again, under contract, and also working with them to develop new software modules where we can share the revenues together by delivering new software over that five-year period. There is a little slide in the presentation deck, 46 in the appendices, that's got some of the headlines as well.
Thank you very much.
Thank you very much. Indeed, that was the final question. Matt, perhaps I could hand back to you just for a final word.
Thank you, Bob. Yeah, just a quick thank you to everyone for taking the time to dial in today and listen to the results presentation and ask the questions that you have today. We're delighted to report a great set of results for 2021, really robust financial performance and strong strategic delivery, and we look forward to coming back and presenting to you all the next set of results. Thank you for your time today. Bye-bye.