Even prior to the pandemic, the commercial outlook for Equiniti (EQN) was already clouded by market volatility, weakening interest rates, and the prospect of worsening trade relations between the US and China. But the subsequent withdrawal of more than £38bn of dividend payments by UK-listed businesses nearly wiped out net earnings for the tech-focussed finance and administrative services provider, sending the shares into a tailspin on results day.
The disruption to normal commercial activity not only curtailed administrative duties linked to distributions, but it also resulted in reduced project work, and deferrals in software deals, which fed through to a five percentage point-reduction in the cash margin to 17.1 per cent, together with a sharp fall in the operating cash-conversion rate.
Liberum expects full-year pre-tax profits of £51.2m, rising to £57.4m in 2021.
| EQUINITI (EQN) | ||||
| ORD PRICE: | 115p | MARKET VALUE: | £ 419m | |
| TOUCH: | 114-115p | 12-MONTH HIGH: | 235p | LOW: 109p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 22 | |
| NET ASSET VALUE: | 145p* | NET DEBT: | £355m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 275 | 11.6 | 2.3 | 2.0 |
| 2020 | 243 | -0.7 | neg | nil |
| % change | -12 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Includes intangible assets of £830m, or 228p a share | ||||
