Join our community of smart investors

Equals ups corporate turnover

The group cited a “less than benign” backdrop
September 27, 2019

Equals (EQLS) – the e-banking and payments group formerly known as ‘FairFX’ – reported an 18.1 per cent rise in turnover (gross value of currency transactions sold, plus the gross value of deposits into bank accounts) to £1.26bn over the half-year to June. More than two-thirds of this figure stemmed from corporate customers – up from 52 per cent. No bad thing, given that – as chief executive Ian Strafford-Taylor notes – there’s considerable competition in the retail arena.

IC TIP: Hold at 94p

Meanwhile, adjusted cash profits soared by more than three-quarters to £4.7m. But statutory pre-tax profits were dampened by higher administrative expenses and interest paid on lease liabilities.

In February, Equals was granted settlement accounts with the Bank of England, gaining direct membership of the UK Faster Payments Scheme. In July, it entered a banking partnership with Citi. The latter’s local settlement and clearance capabilities in many countries means faster settlement and reduced transaction costs for Equals. Just a day before these interim numbers were released, Equals said it had entered a five-year agreement with Mastercard.

Net cash fell over the period from £10.7m to £4.8m. But, this excludes the impact of August’s share placing, which raised gross proceeds of £14.3m.

House broker Cenkos expects adjusted EPS of 5.2p for 2019, up from 4.6p in 2018.

EQUALS (EQLS)   
ORD PRICE:94pMARKET VALUE:£ 168m
TOUCH:93-95p12-MONTH HIGH:150pLOW: 84p
DIVIDEND YIELD:nilPE RATIO:79
NET ASSET VALUE:23p*NET CASH:£4.8m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201812.02.01.4nil
201914.62.00.9nil
% change+21-2-35-
Ex-div:na   
Payment:na   
*Includes intangible assets of £30.8m or 17p a share