Equals Group PLC Full Year Trading Update (9319A)
27 January 2020 - 6:00PM
UK Regulatory
TIDMEQLS
RNS Number : 9319A
Equals Group PLC
27 January 2020
27 January 2020
Equals Group plc
("Equals" or "the Group" or "the Company")
Full Year Trading Update
Strong Growth focused on Corporate customers and platform for
rapid expansion in 2020
Equals Group plc, the e-banking and international payments
group, announces the following trading update related to the full
year 2019.
Full year turnover for the Group was GBP2.91 billion, an
increase of 23% on the prior year (2018: GBP2.36 billion). Revenues
for the full year 2019 were up approximately 20% over 2018, with
revenues in the second half of the year comfortably exceeding the
first half, reflecting the continued underlying growth of the
business. Despite significant investment in branding, marketing and
senior organisational hires to support future growth, adjusted
EBITDA is expected to be 30% higher than 2018 and therefore
increasing by a greater percentage than revenue. Cash at bank and
liquidity providers, less customer liabilities, amounted to GBP16.4
million at 31st December 2019, putting the Group in a strong
position to pursue further growth opportunities in 2020. These
results have been achieved against a backdrop of challenging market
conditions, caused by political and economic uncertainties which
resulted in record-low currency volatilities.
The Group's stated strategy to focus on Corporate/B2B customers,
which represent more profitable relationships with greater
longevity than retail consumers, was successfully delivered with
52% of Group revenue generated from B2B during the year, compared
to 37% in 2018. Furthermore, approximately 71% of Group turnover
was derived from Corporate/B2B in 2019, up from 57% in 2018, which
points to stronger B2B revenue growth in 2020. This shift towards
B2B has been driven by investments into the Group, providing Equals
with substantial product advantages over its competitors. These
include the Equals Spend corporate expenses platform, which
integrates bank-grade capabilities and connectivity to payments
networks both in the UK and overseas. The assembled product suite
increasingly enables Equals to access a greater share of B2B
customer wallets and to service larger corporate customers as well
as SME size businesses.
Acquisitions completed during the year have performed in-line
with management expectations and have now been fully integrated,
yet there are further costs to be removed via efficiency gains
during 2020. Indeed, through the budget planning process, the Group
has identified significant cost saving opportunities by further
utilising existing resources leading to annualised cost savings of
approximately GBP1 million, which are expected to be realised
during FY2020.
The high level of investment made into our products and systems
in 2018 and 2019, including trade settlement infrastructure,
compliance systems and digital security, now provides the business
with an efficient and scalable platform to process increasing
volumes, particularly with B2B customers, in 2020 and beyond. In
addition, our technology platform places the Group in a strong
position to complete and integrate further acquisitions more
efficiently, enabling increased synergy potential.
A more encouraging political and economic backdrop combined with
a strong pipeline of further product enhancement reinforces the
Group's positive outlook for 2020, and trading for January to date
has been encouraging. Steps taken in systems, connectivity and
supply chain rationalisation in 2019 and previous years are
expected to yield further growth in revenues and profits combined
with positive cash generation in 2020. This growth will be
underpinned by our focus on the B2B customer segment via the
unified Equals suite of products, maximising cross-selling and
increasing the number of products used per customer.
All figures contained in this announcement are subject to
audit.
This announcement contains inside information.
For more information, please contact:
Equals Group plc
Ian Strafford-Taylor, CEO +44 (0) 20 7778
Richard Cooper, Group CFO 9308
Cenkos Securities plc - Nominated
Advisor and Joint Broker
Max Hartley (Nomad)
Callum Davidson +44 (0) 20 7397
Nick Searle - Sales 8900
Canaccord Genuity Limited - Joint
Broker
Bobbie Hilliam
David Tyrrell +44 (0) 20 7523
Alex Aylen - Sales 8150
Yellow Jersey +44 (0) 20 3004
9512
Charles Goodwin
Joe Burgess +44 (0) 7747 788
Annabel Atkins 221
About Equals
Equals is a leading challenger brand in banking and payments
that disintermediates the incumbent banks with a superior user
experience and low-cost operating model. Our business enables
personal and business customers to make easy, low-cost payments
both domestically and in a broad range of currencies and across a
range of products all via one integrated system. The Equals
platform facilitates payments either direct to Bank Accounts or at
35 million merchants and over 1 million ATM's in a broad range of
countries globally via Mobile apps, the Internet, SMS, wire
transfer and MasterCard/VISA debit cards.
Equals provides money movement services to both personal and
business customers through four channels: Currency Cards, Physical
Currency, International Payments and Bank Accounts. The Currency
Card and Physical Currency offerings facilitate multiple overseas
payments at points of sale and ATM's whereas the International
Payments channel supports wire transfer foreign exchange
transactions direct to Bank Accounts. For Corporates, Equals has a
market-leading business-expenses solution based around its
corporate platform and prepaid card. This service can yield
significant savings on a Corporate's expenses and procurement both
domestically and overseas, through better controls and improved
transparency. The platform also streamlines the downstream
administrative processes and integrates into accounting software,
thus saving costs. Equals offers retail and business bank accounts
with all the functionality you would expect from a bank, namely
faster payments, BACs, direct debits, international payments and a
debit card.
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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