The acquisition of fintech business Defaqto gave SimplyBiz an £11.8m revenue boost last year as pre-tax profits at the company more than doubled.
In its latest financial results announced to the market this morning (March 10) the support services provider confirmed the integration of Defaqto had been "rapid and successful", immediately expanding SimplyBiz's customer base by 50 per cent.
Joint chief executives Neil Stevens and Matt Timmins pointed to this deal, which completed in March last year in a £74.3m acquisition, as driving a 24 per cent jump in revenues at the SimplyBiz group.
In 2019 the company saw revenues jump to £62.8m, reflected by a £11.8m boost from the Defaqto acquisition and £300,000 of organic growth.
Pre-tax profits at SimplyBiz grew from £4.2m in 2018 to £10.8m last year, in what the joint chief executives labelled another "significant" 12 months for the company.
SimplyBiz funded the Defaqto acquisition through a debt and equity raise, including a primary placing of new ordinary shares to raise £13.8m and a vendor placing to the value of £15.3m.
The Defaqto fintech platform is used by over 5,800 advisers from 1,900 intermediary firms who were not previously customers of the SimplyBiz group.
But Mr Stevens and Mr Timmins warned strong growth in its core business was offset by the "continuing softness in employee benefits and a slowdown of transactions in the firm's valuations business".
The company said increasing regulation, and in particular preparation the first stage of the Senior Managers and Certification Regime in December last year, had driven higher member engagement in its additional services, leading to a 16 per cent rise in income in this area to £5.2m.
However, SimplyBiz warned delays in processing new applications at the Financial Conduct Authority and an increasingly difficult professional indemnity insurance market had increased the time and complexity to the company's recruitment of new member firms from networks. But Mr Stevens and Mr Timmins maintained this area of the business remained healthy.
They said: "The key challenges for financial advisers are likely to centre on the need to develop their advice and business models to meet more complex client needs efficiently, while managing continued regulatory changes in their business.
"Product providers are responding as the regulator and the market continues to put downwards pressure on fees.
"We have seen, and anticipate a continuation of, consolidation in the product provider, asset manager and platform sectors of the market."
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