Finseta reports strong set of first-half results

Finseta reported strong unaudited results for the first half of 2024 on Tuesday, demonstrating significant growth in revenue and profitability.

The AIM-traded firm, formerly known as Cornerstone FS, said that for the six months ended 30 June, it saw a 42% increase in revenue, reaching £5.1m compared to £3.6m in the first half of 2023.

It said the growth was driven by an increase in active customers, rising to 952 from 874, and an increase in average transaction value.

The expansion of Finseta's sales team and introducer network, along with a focus on high service levels for corporate and high-net-worth individual (HNWI) clients, contributed to the success.

It also reported an improvement in gross margin to around 65%, up from 61% in the same period last year.

That improvement was put down to Finseta's strategic decision to phase out its white label business, focusing instead on direct customer engagement.

On an underlying basis, excluding revenue from white label partners in the first six months of 2023, revenue grew by 54% year-on-year.

The revenue mix by client type remained stable, with HNWIs contributing 61% and corporate customers 39%, similar to the previous year's distribution.

Adjusted EBITDA for the period increased 300% to £0.8m, up from £0.2m a year earlier.

That growth reflected higher revenue and the benefits of the company's scalable platform.

Cash flow generated from operations was £0.7m, compared to £0.1m in the same period last year, resulting in a total net cash inflow of around £0.4m for the first half.

Consequently, cash and cash equivalents rose to £2.8m as of 30 June, from £2.3m at the end of 2023.

Overall, Finseta said it was on track to achieve significant revenue growth for the full year 2024, in line with the board's expectations, building on the strong trading momentum sustained from 2023.

“This has been another excellent period of delivery for Finseta, with substantial growth in revenue and EBITDA as we continued to increase our number of customers and average transaction value,” said chief executive officer James Hickman.

“This reflects our success in executing on our strategy to expand our introducer network and payments capabilities while maintaining the high level of customer service for which we are known.”

Hickman said alongside that, the firm continued to strengthen its business and drivers of future growth with the important progress made in establishing a presence in Canada, and with its card programme.

“Accordingly, and with the strong trading momentum being sustained, we remain on track to deliver significant growth for 2024 in line with the board's expectations and look to the future with great confidence.”

At 1455 BST, shares in Finseta were up 0.63% at 35.72p.

Reporting by Josh White for Sharecast.com.