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HIGHLIGHTS
- Several financial institutions today are investing in fintech technologies and start-ups.
- Currently, the UK market is brimming with new fintech offering attractive services. However, only a handful of these has been listed on the London Stock Exchange.
- Investing in fintech stocks may provide investors with an opportunity to gain a high return on their investments.
The rise of the fintech sector has been propelled by technology. Regardless of the large size and strength of traditional banking organisations, they are striving to compete with the newer and advanced service offerings of fintech start-ups. Conventional banking setups are bound by regulations, have complex and outdated IT systems and focus too much on catering to larger businesses.
Several financial institutions today are investing in fintech technologies and start-ups to catch up with the trend. Currently, the UK market is brimming with new fintech companies offering attractive services. However, only a handful of these has been listed on the London Stock Exchange. Investing in fintech stocks may provide investors with an opportunity to gain a high return on their investments.
(Data source: Refinitiv)
Here we take a look at 4 fintech stocks in detail and explore the investment prospect in them.
Augmentum Fintech Plc (LON:AUGM)
Augmentum Fintech is a company engaged in investing in disruptive fintech businesses. Recently, Augmentum Fintech invested £7.3 million in Anyfin, a consumer credit refinancer, for expansion in the European market.
The shares of Augmentum Fintech are trading at GBX 166.50, down by 0.30% at 12:15 PM BST on Thursday 16 September 2021. Its market cap stands at £302.29 million. Over the last one year, the shares of Augmentum Fintech returned 39.18% to shareholders.
For the year ended 31 March 2021, Augmentum’s net investments in two new and 11 existing companies were £14.3 million. It reported unrealised gains of £26.7 million (2020: £12.7 million).
CPP Group Plc (LON: CPP)
CPP Group is a developer of FinTech, InsurTech and cyber security solutions. Its customer base increased to 12.3 million in H1 2021 compared to 10.8 million in H1 2020.
The shares of CPP Group are trading flat at GBX 442.00 at 12:32 PM BST on Thursday 16 September 2021. Its market cap stands at £39 million. Over the last one year, the shares of CPP Group returned 41.67% to shareholders.
For H1 2021 ended 30 June 2021, CPP Group’s revenue rose by 10% year-on-year to £66.4 million (H1 2020: £60.3 million), and EBITDA increased by 37% year-on-year to £2.6 million (H1 2020: £1.9 million).
CPP Group declared an interim dividend of 5 pence per share for H1 2021.
TruFin Plc (LON:TRU)
TruFin is a banking and fintech services company based in the UK. In June 2021, TruFin’s subsidiary, Satago Financial Solutions, received a six-month extension to its software licensing agreement with Lloyds Bank.
The shares of TruFin are trading flat at GBX 77.50 at 12:39 PM BST on Thursday 16 September 2021. Its market cap stands at £62.64 million. Over the last one year, the shares of TruFin returned 230.43% to shareholders.
For the year ended 31 December 2020, the Group’s revenue stood at £14.8 million, representing year-on-year growth of 102%.
Paypoint Plc (LON: PAY)
PayPoint provides secure in-store payment, mobile, and online multi-channel payment services and solutions for businesses. In July 2021, it announced a £6.6 million investment in the home delivery business of Snappy Group.
The shares of Paypoint are trading at GBX 685.00, up by 0.88% at 12:50 PM BST on Thursday 16 September 2021. Its market cap stands at £466.73 million. Over the last one year, the shares of Paypoint returned 9.57% to shareholders.
Paypoint Group’s revenue rose by £4.9 million (or 21.3%) year-on-year to £28.1 million in the quarter ended 30 June 2021 to £23.2 million.
Conclusion:
The UK has emerged as a hub for fintech, but most companies still operate privately. Investors desiring to gain exposure to this fast-growing sector can invest in these above-mentioned fintech services stocks.
