Compliance support provider SimplyBiz Group has reported growing revenue due to increased membership fee income and a "tailwind" of increasing regulation in the advice market.
In its half-year results published today (September 10) the company reported a 41 per cent increase in post-tax profits to £4.9m in the first six months of 2019 alongside a 20 per cent growth in revenue to £29.1m, up from £24.2m in the first half of last year.
SimplyBiz saw increased revenues in its intermediary services division, which currently provides support to 3,704 financial advisers, mortgage advisers and consumer credit brokers.
Membership fee income in the company's organic business grew by 12.9 per cent to £5.1m in the first half of this year, compared to the same six months in 2018, with average membership fees growing by 5.3 per cent from £210.18 a month in December 2018 to £221.26 in June 2019.
The group floated on the Alternative Investment Market in April 2018 in a move which valued the company at £130m, but in today's results SimplyBiz said it had seen an uptick in members leaving the company since then.
In a joint chief executives' statement Matt Timmins and Neil Stevens said: "Since the IPO, the group has pursued a strategy of focusing on the recruitment of larger firms, and while the number of firms joining has remained consistent with prior periods, and the average income per member has increased as a result of this strategy, the group has also experienced an increase in the number of customers lost during the period, particularly in the nascent consumer credit market."
SimplyBiz also pointed to the increasing burden of regulation in the advice market as a "tailwind" for its business, claiming new regulation created "opportunities" for the group to provide support to its members through additional paid-for service offerings.
Income from additional services increased by 9 per cent to £2.4m in the first half of this year, up from £2.2m in the first six months of 2018.
Mr Timmins and Mr Stevens said: "To further enhance our service proposition, the group invested in expanding the compliance and policy teams during H2 2018 and H1 2019, ensuring that the group is well placed to support members through the impending Senior Managers & Certification Regime and beyond."
The company also pointed to the successful acquisition and integration of fintech business Defaqto, which it bought in March for £74.3m, as contributing to its positive set of results, reporting the deal had increased its customer base to almost 6,000 intermediary firms and more than 350 financial institutions.
The company's chief executives said the 20 per cent revenue increase across the business included a £4.2m revenue contribution from the acquisition of Defaqto.
SimplyBiz said its management will also continue to "pursue selective acquisitions to enhance the scale of the group".
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