Good morning, everyone, and welcome to the Fintel FY 2024 results presentation. I'm Matt Timmins, the Joint CEO of Fintel, and I'm delighted today to be joined by my colleague, Neil Stevens, Co-CEO, and our CFO, David Thompson. Throughout the results presentation, we're going to cover an overview of the business, then we'll go into the financial results, followed quickly by a divisional summary, and then we'll concentrate on some of the M&A activity that we've been undertaking over the course of the last 18 months. Finally, we'll look forward to 2025 and beyond with an outlook. In terms of the overview of the business, Fintel operates right at the heart of the U.K. retail financial services market. We think this is an incredibly important market, and it's a market that works incredibly well for consumers.
Consumers have access to thousands of different retail financial services products from hundreds of well-capitalized manufacturers at a price and value which is commensurate with the competitive nature of this market. The issue for consumers is how do they choose which one of the financial products best suits their needs. For most consumers, they go out and look for advice from their peers or professional advisors, and this is the market in which we operate. We provide services to the professional advice market, and we also help consumers through our Defaqto ratings service. In this market, financial intermediaries and product providers operate in a very complex and fragmented market. It is heavily regulated. It's highly fragmented. There are thousands of intermediary businesses all over the U.K. operating out of various different geographical locations, giving advice to clients.
Throughout the market, there's a lack of quality data, and intermediaries use a number of different fintech solutions to give advice to clients. It is a highly fragmented market, heavily regulated, and there's lots of issues around technology and having the right solutions for clients. However, all participants have a common and binding need for compliance and regulatory support, for better data and insights, and for product information and comparison. This is where Fintel sits, right at the heart of the market, providing solutions to our three core customer sets. On the next slide, you'll see who the three core customer groups are. They are financial intermediaries, product manufacturers, and consumers. Our role is to help these three customer groups to deliver better solutions and services to their clients. First and foremost, we help product providers to design and distribute their solutions across the market.
We help financial intermediaries to give advice to clients by providing them with everything they need to do their job in terms of regulatory support and technology. For consumers, we help them to enable smarter financial decisions through our research and ratings proposition. In 2024, we delivered a strong financial performance. It was a really good year for us. We delivered 22% revenue growth in our core business, 17% growth in SaaS and subscriptions. The majority of our business is built on recurring and repeating revenue. We delivered really strong performance in terms of SaaS and subscription growth. Our adjusted EBITDA was up by 6%, and our adjusted EBITDA margin delivered at 31%. We increased the dividend by 6% from FY2023. On top of the strong financial performance, we also invested heavily into the business during 2024.
It was a year of significant progress where we invested GBP 5.4 million into product development. This is primarily around our two core de facto products. De facto Engage, which is a financial planning tool used by 8,500 advisors. We revamped that tool and invested into the UX and UI. We also invested heavily, over GBP 2.6 million, into Matrix, which is a product used by the general insurance market. Strong financial performance, good investment back into the business. We also completed five acquisitions during the period, and I'll go on and talk about why they're so important in a couple of slides' time. We developed some new partnership wins with the likes of Timeline and Towergate, who've become strategic partners of ours from a distribution perspective. As we look forward to 2025 and beyond, we are in a really strong position.
In terms of the outlook, we've invested into the right kind of software and services that we believe will help us win in this challenging market. We have high levels of recurring income and repeating income, which sets us up for future growth. The business is operating at an unrivaled size and scale in the marketplace, allowing us to grow rapidly. In terms of the investment that we made into the business, as I said, we spent GBP 2.7 million on investing into Matrix 360. Our original product called Matrix is used by the general insurance market. We generate around GBP 2.1 million of revenue for that product, and it's a product used by general insurance providers to be able to assess and benchmark their products against others in the market.
Matrix has been used for years by the vast majority of the general insurance market, and they have asked us to provide enhancements to that proposition to give them more data points to help them make better decisions. That is the investment into Matrix 360. It is revamping the existing Matrix product, so we have customers already using that product. It is an enhancement to the product set to bring in more data points, and therefore the price of the proposition is increased from the initial price at the moment. We have invested, as I said, a lot of money into Matrix 360. We have signed up the first six clients, and we believe that that product is set to grow further in 2025.
We've also invested heavily into Fintel IQ, which is our connected technology platform, and I'll come on and talk about that in more detail over the next slide. We acquired 360, and 360 is a support service business providing compliance and regulatory support to around 1,000 individual businesses with around 10,000 advisors across those businesses. It's a really strong proposition. It's been operating in the market for over 15 years. It has a great track record, a fantastic management team, and it's a high-quality brand in the market. We were delighted to acquire this business and add it into the Fintel stable. In terms of Fintel IQ, as I said, we've invested heavily into technology solutions.
The way our market operates, whether you're a small business with a couple of advisors in the business or a large national business or a consolidator, the job that you have to do for your client is pretty much the same. It's a very complex and complicated task to run an advice business, and you have to make sure that you record your data properly into a recognized CRM system, that you comply with the consumer duty rules from the regulator, that you record the relevant hours of CPD that you and your advisors need to undertake throughout the year, that you're able to give your clients access to their investment solutions via a portal of some description.
When you've done all that and you now need to give advice to a client, you have to go through quite a complicated process to do that with financial planning tools, research and rating, looking at product research and product ratings, and then going on to look at things like tax-advantaged products and then be able to trade those products via a platform of some description. As I said, the average intermediary firm uses nine pieces of software just to complete the task that you see in front of you on the screen. We believe that that's wholly inefficient. We think the best way forward for this market to operate more effectively is to have a connected platform of products so that you've got a single sign-on and access to all of the data from those products working in harmony.
We've gone out and we've acquired what we consider to be the market leaders in those various different segments, and we're connecting those products together via two-way API integrations to enable a seamless flow of client data and workflow across a connected platform. We think that this will set us apart hugely in the market. As we look forward to the future, we think that intermediary firms are going to want to operate in a much more efficient way with a single product architecture to allow them to give advice compliantly and efficiently to their clients. Therefore, we've invested into Fintel IQ, and we'll start to see over the course of the next couple of years the growth in that part of the market.
In summary from me, I think it's been a strong financial performance in 2024, and we've invested heavily into the business, both in terms of our existing products and acquiring new products and businesses that will set us up for the future. With that, I'll hand over to David, and he will take you through the financial results in more detail. Over to you, David.
Thank you, Matt. Hopefully, I've got control of the slides. Morning, everyone. I'll take you through the financial review. Over on slide nine, we can see the key metrics of the business. You've got revenue growth, adjusted EBITDA, and the quality of that earnings in SaaS and subscription revenues. You can see that organic revenues and inorganic revenues combined total GBP 68.9 million. That's growth of 22%. There's an important point here in terms of how we've delineated organic and inorganic revenues. We've called inorganic revenues all eight acquisitions that we've made over the last 18 months, and we've done it that way so that you can see the performance of the legacy SimplyBiz and de facto businesses and distill the separate performance from our strategic M&A program. That way, we can demonstrate value-accretive return to shareholders, and it also underpins the M&A strategy.
We'll go into that in the next slide. Again, core adjusted EBITDA is up 6%. You can see that revenue flowing through. It should also be said that the businesses that we acquired were at a different mixed stage of their progression. Some of those were a lower margin, some of those were a higher margin. The overall margin mix has reduced slightly to just over 30% EBITDA. Our long-term target is 35%, and that strategy underpins moving back towards that over time. You can see 17% in the growth of the SaaS and subscription element of our business. That's really pleasing because that gives us forward visibility over GBP 44.1 million of revenues that come in either by monthly direct debit or payment annually in advance. That gives us great visibility over our recurring cash flows.
Over in slide 10, we can break that revenue growth down into a bit more detail. Working left to right, you've got GBP 56.6 million of core revenue brought forward from the prior year. You've got GBP 900,000 of organic revenue growth, and I'll reiterate that's the existing SimplyBiz and de facto businesses. You've got GBP 13.5 million growth from the eight acquired businesses over the last 18 months. If you look at that 2% organic growth rate, you can break that down a bit further to help you understand the moving parts to that. As we anticipated, the effect of consolidators saw a slight reduction in the core compliance membership fees. That was anticipated.
We were ahead of it, and we acquired 360, which added thousand member firms to our customer base, and also positions as well for the consolidators to drive organic growth in the future because we're well placed, as Matt said, with the Fintel IQ proposition to suit them. I really think 2024 has been a really smart alignment to the market going forward for us. The other part of that is mortgage commission and protection commission. Again, the mortgage market's been flat, and that was GBP 6.8 million year on year. Again, we're really well positioned for growth in the mortgage market through 2025 and beyond. Again, another engine of organic growth going forward in that area. The third of the four areas is in terms of marketing and other services for distribution partners. That grew 7%.
That was at the top end of our organic range. The de facto business grew just over 8%, again, beyond the top of our sort of medium-term target range of 7%. You can see that organic growth has got an important constituent part to understand that we're well positioned for 2025 and beyond for organic growth beyond the 2% that you see there. GBP 13.5 million is the increase in revenue from the eight companies that we acquired. That takes us to GBP 71 million. The last time I mentioned this software recognition adjustment that happened at H1 2023, and that's now fully worked its way through the system. Again, just a quick recap, we renegotiated a contract that saw us account for it on a net basis as opposed to a gross basis.
Where the revenue and cost of goods sold decreased proportionately, importantly, the profitability of that contract stayed the same, but it's a revenue recognition adjustment nevertheless, and that's the last time it will feature. Hopefully, you can see that we're well positioned for organic growth in 2025 and beyond. On to the next slide, we've got a revenue stack. Again, the key point there is that our SaaS and subscription revenues grew 17% to GBP 44.1 million. The dark section in the middle, again, that's repeating revenue. Mortgage commissions from members that are in a club. They're in the club and stay there for a long time. It's transactional in its inherent nature, but the customers are sticky over a long period of time. The other main element of that is the ratings revenue, and that's Defaqto and MyKat and AKG.
We have really positioned ourselves well to cover the full gamut of ratings, complemented further by the acquisition of RSMR in January 2025. Again, breaking down the segmental performance into its profitability, it is pleasing to see growth across the board in all our metrics there. Although I will point out that the gross margin on a blended basis, including the acquisitions, has decreased slightly to just over 30% on an EBITDA basis. Again, we expect that to grow back to 35% plus over the medium term in terms of our long-term targets. Looking at cash generation and leverage, back in 2019, the business purchased de facto for just under GBP 75 million. It took on debt. It went to nearly two times of leverage, and the business set about improving the profitability of de facto, realizing synergies, and it did so very, very well and ended up in 2022.
We were completely deleveraged and sitting on gross cash. That is where we started off on this 18-month-long programmatic M&A strategic program. We have used, I believe, a really efficient mix of capital. We have borrowed GBP 30 million of debt to do that, and you can see that takes us to 1.1 times of leverage, and that will deliver now as we deliver grown profitability and the acquisitions and pay down our debt with the high cash generation in the business. I like to include this slide because it basically walks the cash from the opening to the closing and tries in summary to tell you how we have invested shareholder funds. We started with GBP 12.7 million in the first of January, generated circa GBP 20 million from operations and borrowed principally 20 million as well.
We've reinvested GBP 30 million of that back into the business, be it acquisitions, the payment of deferred consideration, internal DevEx and CapEx. We've returned GBP 4 million to shareholders by way of dividend, and we've got just over GBP 5 million of tax and debt servicing costs. Now, the important point there in the bottom right is the portfolio of acquisitions, again, going back to the reason we'd split out organic and inorganic in this way, as we can see on a slide in the appendices what each of the individual companies that they've acquired has done in terms of the consideration we've paid for it, the EBITDA generated, and what that means on a portfolio basis.
You can see that we spent, as at 31st of December 2024, GBP 31.7 million across those eight acquisitions, and those returned GBP 2.7 million of EBITDA in their own right, and that represents an 11.7 times EBITDA multiple. That is clearly value-accretive because that is lower than our trading multiple at present. We stressed before the positioning in the market in terms of sales to the consolidators, etc., and the power that the enterprise sales will bring. We are very confident that we have acquired a portfolio of eight businesses well, nine if you include RSMR in January, and that positions us really well for future organic growth. Looking at cash conversion, again, 78% versus 88% last year.
Two things to note in the middle of the table there are just simply the effect of acquiring a portfolio of eight businesses saw an entirely predictable cash outflow in terms of working capital, just over GBP 1 million, and we've spent just under million more than we did last year, particularly on the Matrix 360 product. You can see the underlying core metrics are absolutely in the range we expected, and we'll see that 78% cash conversion is a low point, and that'll continue back up towards 100% as we make more money from the investments that we've made. With that, before I hand over to you, again, just a financial summary. Another great financial performance, increased the SaaS and subscription revenue again to over GBP 44 million, strong cash generation and visibility of that cash flow.
Again, we've deployed on a two-to-one debt to equity ratio using the revolving credit facility into acquisition portfolio, and we've increased our dividend again, 6% in line with the EBITDA profitability of the business to have that small but important hygiene factor of return to shareholders. With that, I'll pass over to Neil.
Thank you, David. You have heard from Matt and from David about some really strong momentum and delivery on multiple fronts for the business in 2024. I think we have significantly strengthened each of the three divisions through both careful, well-selected acquisitions and investing into the core products as well as we get ready to serve the needs of a market that is changing at the moment, but presents many positive opportunities for growth. Firstly, in the intermediary sector, we have seen great top-line growth because of the really flagship acquisition of the 360 business. As Matt has said, it brings 1,000 new customer businesses into our membership platform, and collectively, those businesses provide us with access to around 10,000 individual planners and support staff. Fantastic new opportunity to take our product services, software, and data to a really big piece of the market.
We did see some slowing down in intermediary services over 2024 with around 5% reduction in the original customer base. There is always some attrition in the market, but we have seen the effects of consolidation continue a little bit longer than we thought they might. We are responding to that, firstly by making the acquisition of 360 to give us a much bigger membership base to work for, and also in our investments in the Fintel IQ platform. These consolidators present great opportunities for us to be able to go and deliver multiple products and services that really meet their needs as they are trying to get to grips with a market that has increasing regulation and the need to get efficiencies out of their businesses so that their buy-and-build strategies will create more value.
The two-pronged attack is to have a bigger customer base of small and medium firms through the acquisition and to have a much better product set to be able to target the large firms with that Fintel IQ platform. We're really delighted with the progress we made in 2024. We've seen great uptake of our software, both from the small and medium firms, getting on board with upgraded financial planning tools, engaging in our events and learning programs. The consumer duty software that we've been able to bring to the market through the acquisition of vouched for has proven very popular with both the small and medium firms and the very large ones as well. We were delighted to close some really flagship enterprise deals through the VouchedFor business we acquired. We've continued to upgrade the member technology.
Having the benefit of the software and data business all in one group means that we can stay really close to our customers, understand their needs, and build the right products for what they need going forward. de facto's investment in the premium version of Engage has gone down very well with our customers. We have also prepared and very recently taken to market the mortgage technology, which we entered into a really good partnership with the sector leader, a company called Mortgage Brain, to help mortgage brokers be more effective and efficient in giving mortgage advice. I think that's going to really help us with our growth in the mortgage section in 2025 as well. In the distribution channels part of our business, we've seen good steady growth.
Organically, we've been able to take on some new customers, some really flagship names getting signed up to license our IP and make use of our distribution partnerships. Delighted to welcome Timeline and Towergate as distribution partners and to be providing strategic asset allocation and investment IP to Invesco, BlackRock, and Legal & General Investment Management. We're seeing good growth in the use of both our distribution channels and also our investment IP to power other people's offerings in the market. We've seen the mortgage lending market start to show signs of recovery. 2025 will see one of the biggest years for product cessations in a long time, and this is probably the first time in a number of years when customers will get a lower rate when they come back to re-broker their mortgage.
People who are expiring on a two-year deal right now are going to find a slightly more competitive market than when they took some of those products out. That's good news for mortgage brokers. We will have technology to help them undertake that work more efficiently and effectively, and we expect them to do better this year than they have in the last year or two. Some recovery in the mortgage market will flow through and help us with growth in our distribution channels. We've also been able to expand the data products that we have in this part of the market, and our acquisition of Owen James has enabled us to bring an Impulse product. The Impulse captures the attitudes, sentiments, and ambitions of C-suite decision-makers at large organizations and advisory businesses.
It's a really valuable insight into what people are thinking about and the decisions they're going to be making in the year ahead. That's a captive data product for many of our customers to engage with us on. We've also seen a really strong take-up for our face-to-face events in the year. We persevered with face-to-face as soon as we could as we came through the lockdown period because we believe that professionals will want to engage in premium quality events, spend time with their peers, spend time on their learning, and work on things like best practice. We've absolutely seen that come through, and 2024 and coming into 2025, we've seen our events prove more popular than ever, and they're a really fantastic way that we're engaging with our customers.
Of course, they give us a great opportunity to showcase all of the new software offerings we have as a group. We are doing that at the live events all through the year as well. It is good news for everybody on that front. The Fintel and Research Division has also moved forward, strong underlying core growth, organic growth in that business, and accelerated with some acquisitions, small acquisitions, but things that give us extra data and extra customer base as part of the overall plan to build this ecosystem out. Matt's talked about the Matrix 360 product. We have invested in that internally, and it is starting to go out to market this year, and I think it is going to meet with great success because we have built that with the customer set highly involved in designing and telling us what they need as well.
We continue to build out the product ratings and risk mapping service, covering more products in the industry, more specialist products, and putting software around that to help people use that data and make decisions, the right decisions for their clients and businesses. This just adds more software data assets onto the platform and creates more engagement with that customer set. We recognize that we've focused quite heavily for 18 months on M&A. It is, of course, just part of the overall strategy, a very important part, but it is part of it. Back in 2021, we set out to the market how we were going to develop this business, and the early years of that, we focused on positioning the business, the brand. We worked to digitize and bring more quality infrastructure into the business.
We developed some fantastic partnerships, and then that's accelerated us through to the last period where we've really focused on investing in the products and the M&A to give us those pieces of the jigsaw we're going to need to win in the market as we go forward. It has been a particular phase of focus, but it is part of a wider strategy to build the right kind of platform for this sector. In 2025, it's really important we make the most of all of those opportunities. As David has said, the initial acquisition portfolios come in at a lower margin than is the target for our business, and that's fine because we've bought businesses that might be at slightly early stages of a growth phase or have more overhead than their current size would require.
When we bring them into our business and we expose them to these amazing customer sets, we're really confident we can drive the cross-sell and the growth in those businesses that will come through at a strong incremental margin, and that will bring the margins through as we scale these businesses up across the fantastic customer sets that we have. The combination of SimplyBiz and 360 will also help us provide a wider set of services for the large consolidators as well. Those companies can take all of the software and data, and we can wrap those people services around as well, which is a very, very compelling offering and a very unique offering that we have in the market.
We believe we've got the right ingredients for sure to grow the software and data services across SimplyBiz, across 360, and then across the third channel of going out and doing large enterprise deals. Each of the businesses we've bought are strong in their own right. They offer good products that are very valued by their customers, and each of the businesses we've acquired has a reasonable or quite significant, in some cases, customer base of their own. This gives us more combinations with which we can go out to the market to find growth, lots of high-quality interactions with really good customer businesses that are the foundation for us adding on new services and providing extra software to drive that growth profile. As we look to 2025, 2026, think about the outlook. We believe we are in a strong position.
We have great momentum coming into this year during the first quarter. We have that track record of being trusted by our customers and now an expanded platform of services that will help us tap into the consolidation theme directly as a growth driver for Fintel. We have built our business on a deep understanding of regulation, and I think that will continue to drive demand from the small and medium businesses, and it will also help bring some of the larger customers to us as well. You have specific things they've got to deal with, and we've got the know-how and the software to make sure we can solve those problems. Providing technology and data is really important for the product providers, empowering the future of the market, and we have seen the consumer duty regulations really sharpen people's focus on getting good data in their business.
It's helping us grow the ratings, the mappings, and it's being part of the investment case for Matrix 360, which we think will be a strong growth driver in this year. As David said, our business is underpinned by strong cash flows and a really nice profile of recurring and repeating revenues. Having the right products, the right financials, and all the good drivers for increased demand for financial planning and the recovery mortgage market, we think it will be a good growth market in the next period. You have heard about the things that we have done to position ourselves for the particular changes that are coming next as well. I will hand back to Matt at this point. Thank you. Thank you, Neil, and thank you, David. That concludes the presentation from the Fintel team, and we are delighted to welcome any questions from the audience. Thank you.
Our first question is from Gautam Pillai from Peel Hunt. Number one, who are you replacing when you win new customers? Are these in-house systems or similar vendors like you? Is there incentives for large investment advisories like a St. James's Place to engage with Fintel? Can you provide examples of such large deals, if any?
Thank you for the question. Obviously, we provide sort of primarily two different types of service into the market. One is compliance and regulatory support, and the second one is fintech technology. We replace different companies with each one of those services. Very often when a firm joins us for compliance and regulatory support, we're replacing an existing network or we're replacing another third-party support service provider.
There are plenty of IFA firms in the market who are directly authorised and do not buy services as well, so there could be one or three options there. In terms of providing technology, what we are doing in the main is replacing an existing vendor. The type of technology solutions we are providing goes all the way across the market, so we could be replacing any vendor from kind of nine different types of technology solutions. Yes, we are going out and winning new clients. As Neil has described, one of our businesses, VouchedFor, has just won a large enterprise deal with Bilt-O. A number of different large businesses are buying fintech solutions from us.
Great. We have a question from Rahim Karim from Investec. Firstly, I would like to thank you, Neil, for all your engagement over the years and wish him all the best going forward. One, your organic growth in the past two years has been weaker than we may have hoped. Can you help us understand why this was the case and what you're doing to try and rectify this? Two, what have you learned from the experience of Planner, and do you intend to make further investments via Fintel Labs going forward? Three, do you expect 2025 to be another busy year for M&A perspective? In the context, what services or competencies do you believe you could add to accelerate growth?
I'll pick up the second one, Neil, for the third on M&A. David, do you want to pick up the first one?
Sorry, the audio was cutting out there. Yeah. If you look at the organic growth over the last couple of years, what you've seen is primarily the mortgage market post the sort of Liz Truss era, and we all remember and know what happened there in terms of forward rates, etc. That saw the mortgage commissions fall from GBP 5.2 million to GBP 4 million, and that was a direct hit to profitability as well in terms of those commissions. There was still organic growth and always has been in the de facto business. The core membership business has gone through some consolidation and the effect of consumer duty on particularly smaller advisor firms, and you've got the structural effect of the mortgage market on distribution.
Individually, we've still got quite strong core revenue growth drivers in the legacy business, but what we've done about it, as we've said, is we've acquired a portfolio of eight companies, nine including RSMR. The position is really well for the market going forward, so you can see that organic growth should come back up towards our medium-term targets once that Fintel IQ proposition starts landing enterprise sales. What's happened in the market has happened. It's been macroeconomically driven, but we're really pleased as to how we've strategically responded to it rather than reacted to it, and I think we're in the best shape we've been in a long time.
Thanks, David. In terms of Planner specifically, we're delighted with the investment into Planner.
The business is growing from strength to strength, and I think it was the right call to make that investment via Fintel Labs rather than look to wholly own the business because the business is very entrepreneurial. It is a new start. It is a CRM and technology business, and what that business needs is investment from Fintel to help it grow, but not to be constrained in any way, shape, or form by being part of a larger business at this moment in time. I think the decision to invest and partner with Planner was the right decision. They are at over 500 licenses at the moment in terms of their customer base. Even though they've only launched less than a year ago, they're still growing incredibly fast.
We're really, really supportive of that business, delighted with the investment, and whilst there isn't anything at this moment in time that we would add to from a Fintel Labs perspective, who knows what new technologies we'll see over the course of the next 12 months.
Neil, do you want to pick up on the third point around M&A in particular?
I think as we'd said, we've had a very targeted, selective program of M&A to buy out the things that help us develop the ecosystem within our customers' want. We've said no to a lot of things that we didn't believe were proven in the market or didn't have any customer traction to evidence they were proven.
Some of the things we've bought were certainly not optimized, and some of them we've made some investment in, or particularly we're looking to grow them through that inflection point, as we have done with VouchedFor, which is the first massive success story. It's really about keeping alert and being prepared to take advantage should something very attractive come up. It's not like there's 50 things you can buy and they're all up for sale. Some of these assets don't come to market hardly ever. I mean, it took us seven years to buy 360. We were patient and persistent, harassing at certain points, but it takes time and requires patience to build the ecosystem that we're building. M&A is a tool to be used at the time it materially advances our strategy.
Thanks, Neil.
We have a question from Jacob Armstrong at Stifel. Hi guys, congratulations on another strong set of results. A few questions from me. One, what can you do organically to improve margins, and how do you expect these to trend over the medium term given the number of acquisitions you have completed over the last 18 months? Two, can you talk about your engagements and consolidators? What products are they demanding, and is there any variance between these and your core customers? Three, Matrix 360, well done on getting the first phase rolled out. Do you have a timeline for the remaining phases, and have you already identified other end market adjacencies, and what level of further investment is required to continue rolling this out?
Thank you. Thank you for holding this time. I'll have David to pick up on the first point around margin and continuation or extension of the margin. Neil, to pick on the second point, which is around the services required by consolidators and what we're building across Fintel IQ, and I'll pick up the third point specifically on Matrix 360.
Okay. Margins, the businesses are quite highly operationally leveraged, so new and have got an established cost base. What we're not doing is looking at taking costs out to realize profits. We're holding the line on the cost base because we believe that that operational leverage is key to providing really great service that will help grow the business organically from that base.
We're also well positioned for the mortgage market, and again, we've grown our mortgage market share from high 22s to mid 23 billions, but because of the swap rates, there's been a change in mix there to product transfer as opposed to remortgage, taking out a new five-year fixed, for example, right? You'll see the mortgage market come back just structurally to us, and we've got all the infrastructure to take maximum advantage of that, and that's just 100% flow through to the bottom line. You've got grown operational leverage in the acquired portfolio in and of their own right, and you've got Fintel IQ enterprise sales, and you're looking there at selling hundreds of licenses for a particular product, not 5, 10, 15 licenses to individual advisor firms. I just keep going back to this, very, very well positioned. We've held our nerve on the cost base, and we're really excited about the market ahead of us. All right.
Thanks, David. Over to you, Neil, on the second point around consolidators.
Yeah, we've had some great success with consumer duty, helping consolidators get an aggregated view as to what's happening to all of those customers, all those clients in the businesses they've acquired, helping the consolidators get control of that data and to report and control that and evidence it to the regulator. That has been quite an immediate need for them to get on with. We've also seen a significant number of consolidators engage us to talk about getting their hands on productivity. There is more demand for advice than there are advisors to give it.
There are more opportunities to create financial plans and to sell up financial products than there are people to do that work. The consolidators are looking at how our financial planning technology and our research technology and potentially our back office integrated CRM technology can help them get their hands on real productivity. They have seen a significant shift in the cost of capital, which has taken away one of the legs of their value creation. That has made the challenge a bit harder for the consolidator model. Equally, they have moved from a zone where they were paying quite high multiples on purchase with the expectation of much higher multiples on exit. That has narrowed for them. They are now very focused on getting their hands on productivity.
If I've bought 100 businesses, how can I align them, synchronize the way they work, improve the ratio of fee earners to non-fee earners, improve the ratio of clients per fee earner? They are much more scientific at coming to us with clear metrics for productivity gains, which is a great conversation for us.
Thanks, Neil. Specifically on Matrix 360, Matrix is a product used by the general insurance market, the banking, and asset management market. What we have done so far is we have delivered release one to the general insurance market. Release one to the general insurance market has been the most expensive from a development perspective because we have also had to deal with the underlying data architecture of the products as we have delivered out the first release.
The questions for us now are, do we double down in the GI market and deliver a release two and three, or do we extend release one into the asset management and banking market? There are decisions for us to make around the future development of Matrix 360. How we will make that decision is through the test and learn phase with our customers. At the moment, the feedback from Matrix 360 customers in the GI market is incredibly positive. We have the main GI, the largest GI players working with us to help us develop and outline the next phase of growth for Matrix 360, the next release. Depending upon the customer feedback, we'll decide which way we go.
As it's looking at the moment, I think what we will do is we'll invest more into release two in the GI market because, as I said, it's been well used and really well received in that market. I think we'll double down and go further into the market. In terms of existing spend, if we do that, you're looking at somewhere between GBP 900,000 and GBP 1.5 million over the course of the next 12-18 months. I suspect that will be the decision, but as I said, it'll be decided by customers rather than by what our technology roadmap says. Thanks for that question.
We have a couple of questions from Keith Hiscock. Have you completed, have you got complete market coverage of advisors and product providers, or do acquisitions bring new clients as well as product? What lessons have you learned from acquisitions in terms of execution risks and what you would not buy?
Okay. Neil, do you want to take the first one, and I will take the second?
Certainly. Which one? I have conflated them in my head a bit there. What was the particular first?
The first one was, have you got complete market coverage of advisors and product providers, or do acquisitions bring new clients as well as product?
There are levels at which you think about this. It is a strange set for retail financial services in the U.K. There is around GBP 1 trillion of wealth that is managed, influenced, controlled by about 30,000 professionals, and there is GBP 250 billion per year of mortgage loans controlled by about 10,000 brokers.
It's actually a very small market of about 40,000 professional financial brokers who absolutely control the lifeblood of all that client money, small business money, family wealth, and family loans. They are incredibly valuable professionals. The work they do for the clients and the benefit they have for society and the way they move capital around the system and provide assets to fund managers and policies for life insurers and loans for mortgage companies. We think it's really important to have quite a deep engagement with them. We might have a customer today who uses one of our products partially in their business. There might be 10 people in their business and one person uses one of our products. You could say we've got a connection with that customer.
However, through one of the acquisitions, we might deepen that connection to acquire the software that all 10 of the people in their business use every day. They were technically a customer before, but the quality of the engagement and how important we are to them has gone up significantly. We do look quite deeply at how engaged. 40,000 people, we want to become indispensable to. They are using our stuff every day with every customer, and we are there at the center of how they earn fees and how they create value in their business. That is the kind of strength of customer relationship we want.
Thanks, Neil. In terms of the question on M&A, I think you learn something new from every deal that you do, and no two deals are the same. We particularly like founder-led businesses, and we like deals that we originate ourselves. Most of the deals, or perhaps all of the deals that you've seen, have been originated by us. Because we know these businesses incredibly well, it's not like we go into a process and try to do a big discovery on what the business does and who its clients are. Most of the businesses that we've acquired, we've had a working relationship with for many, many years. We know that they're leaders in their field. We get first-hand feedback from their users and customers because most of them are customers of ours as well. I think that de-risks to some extent the M&A process when you know the business well, you know the owners and founders, they're still part of the team, and you go out and originate that yourself.
What we also particularly like is where there's an element of deferred consideration in the deal that is contingent on performance. Very often, we work with the founders, owners, and shareholders to deliver a joint plan between us that will see growth in excess of where they were before because of the Fintel involvement. That delivers results, and it delivers enhanced value to the shareholders of that business. That's the ones that we particularly like, the founder-led businesses that we originate ourselves and where there's a degree of mutual benefit in the upside through deferred consideration in some way, shape, or form. I hope that answers the question.
We've got a few from Robin Savage at Zeus Capital. Q1 IFA Consolidators. You mentioned in the introduction Fintel providing the solution for intermediary firms and IFA Consolidators. There are over 40 IFA Consolidators of varying sizes. Do you consider Towergate Consolidator? Is another example of Succession Wealth, which by 2023 has acquired over 60 firms with over 180 advisors and over GBP 6 million revenue? As Fintel SimplyBiz charges its small IFA firms 2.5% of revenue plus VAT, is it reasonable for us to apply a similar revenue margin to these Consolidators? Are these contracts sufficiently important to report, say, via the R&S breach?
There are a number of questions in there. Thank you, Robin. I think breaking that down, the Consolidator market has grown significantly over the course of the last two years. There are around 40 Consolidators in the market, and clearly that brings both advantages and disadvantages to our business.
In one sense, the consolidation of smaller intermediary businesses isn't ideal for our support services business, but in another sense, providing solutions, compliance support, and technologies to the consolidators is a big part of our future strategy. We think what will happen over time is that we'll end up with a smaller number of incredibly well-run Consolidators. Those Consolidators that will invest in their technology, those consolidators that bring around efficiency through common workflow and through data sharing will be the ones that will win in the future. As Neil said, when you're putting together a number of different businesses who all have different ways of operating, different technology solutions, different methodologies for dealing with clients, it's a very difficult thing to do. The ones that win, I think, will be the ones that create synergies right at the heart of their business and maximise efficiencies.
Specifically, the businesses you mentioned, yes, they are consolidation businesses, and we have healthy relationships with both of those businesses, and we are providing solutions to at least one, if not both of them. Yeah, yeah, very good businesses. In terms of where the financial model that you mentioned, it's different in terms of our relationship with Consolidators because the primary motivation for us is to provide fintech into those businesses. We'll charge on a per-license basis and work through it that way.
Thanks, Robin.
We have one more question from Robin. What services are not historically provided by 360 to its IFA clients? With reference to slide 23, what evidence is there of Fintel providing additional services to 360's IFAs?
Thanks for that, Robin. I'll hand to Neil for that one specifically. Okay.
I think 360 has delivered really good regulatory services: audit, file reviews, quality of advice, compliance help desk, and training. It has had very loose arrangements for everything else. It doesn't provide an approved or an integrated financial planning system. It doesn't provide mortgage software, protection software, consumer duty software. There is pretty much blue ocean for all of the acquired software to take out to 360 customers. Of course, that doesn't mean you can just push it out to them. We've still got to go through the process of understanding their particular use cases, integrating 360's IP so that the work methods that they're using are reflected in the software. We want to make this easy for people.
We think there are some really significant revenue synergies that we will go about working with the 360 leadership team to figure out how to best position that for the market. It is one of the reasons I think it is important to be patient with acquisitions when you have got professional services, particularly. You do not want to rush these things either in trying to have a quick win on costs or being a bit heavy-handed with the way you take new products to market. We think it is important to be patient and to do it properly and to do it in the spirit of that professional relationship. Therefore, we are expecting this year to be very productive for that opportunity, whereas we did not kind of rush into it straight away when we bought it, but we are making some good progress now.
Great. Thank you there. No more questions on the webcast. I'd like to hand back to the speakers for closing remarks.
Thank you very much. Yeah. In closing, I think we'd like to point out that 2024 has been an incredible year for the business, a really seminal year. I think what we've achieved during 2024 is a strong financial performance. Much more importantly, we have massively changed the business to be able to operate across a larger client bank with the acquisition of 360 and provide solutions all the way across retail financial services for intermediaries. A couple of years ago, we had the de facto Engage product, which is a fantastic product, but it was one technology solution in a market of loads of different solutions. We provided support to advisors in one particular area, but not across the whole range of technology and support services. We now cover everything.
We not only cover everything, but we've acquired the market leaders in most cases in terms of these solutions. I think 2024 has been massively seminal for the business. As we move forward, we move forward with an enhanced customer base, a really strong set of financials in terms of recurring income and positive cash flows, and technology solutions that span the entire market from mortgage advisors to general insurance to IFAs and mortgage brokers. Everything that an intermediary firm needs to give advice to their clients, we provide. The challenge for the business as we drive forward is to integrate those solutions so that the users benefit from buying multiple products from a single vendor. That's a project that we're on with at the moment. We have invested heavily into our core technology solutions like Matrix 360.
I think we're well set up for growth. Thank you very much for dialing in and listening to the FY24 results presentation. Thank you.