Insider: directors invest £850k in AIM fintech firm

Fintel (LSE:FNTL) bosses have tied £850,000 of their own money on the success of an £11 million deal that has given a major boost to the company’s star ratings business Defaqto.

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Chief executive Matt Timmins hailed the acquisition of Pearson Ham’s insurance pricing data as an important milestone before he spent about £650,000 on Fintel’s AIM-listed shares in dealings on Wednesday.

Board chair Phil Smith also made an investment worth £175,000, alongside a purchase of £25,000 involving a fellow non-executive director.

The trio’s purchases took place at prices that ranged from 219p for Smith to 243p in the case of Timmins, who now holds a stake equivalent to 3.7% of the company.

The shares rose 20% last week to Friday’s 255p, although joint broker Peel Hunt has a target of 330p after reiterating its Buy stance on the back of the bolt-on acquisition.

The deal gives Defaqto the most extensive product and pricing datasets in the UK personal lines insurance market, covering motor, home, travel and pet insurance.

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Peel Hunt said these were key consumer categories where pricing transparency, benchmarking accuracy and regulatory scrutiny continue to increase.

Highlighting the Consumer Duty requirements around fair-value assessment and evidencing product competitiveness, the broker said having one of the most comprehensive pricing datasets in the market provided Fintel with a “defensible competitive advantage.”

The acquisition has been funded entirely from existing financial resources, with management expecting the addition to be earnings-accretive in 2026.

The integration of pricing data will accelerate Defaqto’s technology portfolio, including its recently launched Matrix360 platform which already serves 22 major insurers.

The Defaqto star ratings business, which Fintel acquired in 2019, provides an independent, expert assessment of a product and its benefits.

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Other parts of the Fintel business include SimplyBiz, which was the stock market name for the AIM-listed company until 2021. It helps to drive efficiencies for UK financial professionals through support and access to technology.

The group recently undertook a strategic reorganisation following investment in 11 businesses over the last two financial years, a move that has resulted in the two divisions of Software & Data and Services.

Half-year results in September showed revenues rose by 18.6% to £42.4 million while adjusted earnings lifted 17% to £11.2 million.

City firm Stifel has a price target of 350p, believing that a valuation multiple of 13.6 times forecast earnings is undemanding for a market-leading UK platform with significant growth opportunities in a highly regulated end market.

Time for  a brew

Two directors of Young & Co's Brewery Class A (LSE:YNGA) have toasted the AIM-listed pub chain’s “exceptional” festive trading performance by spending a total of £63,000 on shares.

The buyers included Torquil Sligo-Young, who is a member of the founding family and a major shareholder.

The non-executive made his £23,000 move the day after the London and Southeast-based business disclosed that like-for-like sales rose 11.2% in the three weeks to 5 January. The figure lifted 5.7% across the 14 weeks of the company’s third quarter.

The other buyer was former Punch Taverns boss Ian Dyson after the senior non-executive director spent £40,000 at Friday’s much higher price of 872p.

The shares finished last week up more than 15% this year, having rallied from mid-December’s 714p to stand at a five-month high.

Chief executive Simon Dodd said the festive performance showed the ongoing appeal of the company’s premium and well-invested offer, adding that Young’s remains well-positioned to withstand the well-publicised headwinds facing the sector.

He pointed out that the six weeks of the festive period included the company’s highest ever sales in one day, as well as multiple daily and weekly records across the estate.

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Dodd said: “We are focused on controlling the controllable and continuing to give our customers a great reason to come to our pubs.”

The company is also targeting a wider group of investors through a plan to move from AIM to the main market of the London Stock Exchange.

Peel Hunt, which has a price target of 1,400p, believes the planned switch after two decades on AIM marks a “great investment opportunity” for a wider group of institutions.

It said: “Young’s continues to grow like-for-like volumes, a trend that should persist, particularly if competitors raise prices by more, reduce operating hours, cut staffing and service levels, or close.

“Profit upside might also benefit from potential business rate reductions, but this is not assumed in our forecasts. Given the progress the company is making and the proposed move to the main market, we believe institutions should use the current low valuation as a buying opportunity.”