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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Equals Group Plc | EQLS | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 123.50 | 08:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 123.50 | 123.50 | 123.50 | 123.50 |
| Industry Sector |
|---|
| SUPPORT SERVICES |
| Announcement Date | Type | Currency | Dividend Amount | Ex Date | Record Date | Payment Date |
|---|---|---|---|---|---|---|
| 12/09/2023 | Interim | GBP | 0.005 | 16/11/2023 | 17/11/2023 | 07/12/2023 |
| Top Posts |
|---|
Posted at 15/5/2024 11:23 by anon12345 Agree with others that the longer this drags on, the more likely it is that the indicative bids are well what EQLS hoped for.This puts the BoD in a tough spot - either they accept a bid at a value that is much lower than they thought they'd get, or they reject it, end the process, and if it was IST driving the process (I assume it was) then the BoD need to ask themselves whether IST should remain CEO (given he has misjudged value / bidder appetite, and he seemingly wants out anyway given EQLS initiated the process). |
Posted at 08/5/2024 13:27 by 74tom davidosh, they are both fintech's that handle very material volumes of client cash. They are in the same bucket as WISE, CMCX, IGG, AGFX, CSFS, Adyen and many others. To my knowledge EQLS is the only one to not report on interest income - but they did in the past;Back in 2019 EQLS said the following; "Included in this segment is interest earned on house funds. Given the low interest rates and certain regulatory restrictions governing the deposits on which the Group can earn interest, the Group earned a total of £150k in interest during the year (2018: £145k). At 31 December 2019 the Group had fiduciary responsibility for a total of £52.4 million in bank accounts not included in the Group's consolidated balance sheet (31 December 2018: £48.0 million). Interest income has been included in the segmental revenue where earned." 2019 was also when they last mentioned off balance sheet funds; "The funds attributable to customers are shown as memorandum item. Consistent with 2018, these funds, held on behalf of customers of both CardOneBanking and International Payments have been excluded from the balance sheet following legal advice received in connection with the risks and rewards to the Group. Nevertheless, these funds remain within the fiduciary obligations of the Directors and are included in the table above as an 'aide-memoire'. It is notable that these balances grew by 9.2% to £52.4 million up from £48.0 million at 31 December 2018. This reflects the growth of the underlying use of the Group's platforms." Alpha said the following in their recent uplisting prospectus; "Interest income is a natural by-product of the Group’s Alternative Banking Solutions division (“ABS”). Alpha generates interest income on client funds that are aggregated and held overnight, off balance sheet, as part of the Group’s safeguarding arrangements for its alternative banking solution. Alpha recognises this interest as Net Treasury Income (“NTI”) rather than as underlying revenue from its core FX Risk Management (“FXRM”) and ABS activities." The key phrase in common is 'OFF BALANCE SHEET' If EQLS had £52m in off balance sheet accounts in 2019 and made £150k when interest rates were 0.75%, what are they making today? |
Posted at 08/5/2024 11:57 by 74tom I've seen many stupid IC articles in my time, but think this one takes the biscuit;The author clearly hasn't done any actual research, just relied on numbers from whichever data feed they get. All 3 of WISE, EQLS and ALPH report their revenue in different ways; WISE splits out interest income from customer balances but reports & forecasts it as underlying revenue ALPH splits out interest income but DOES NOT report & forecast it as underlying revenue EQLS doesn't split anything out, but if WISE, ALPH, AGFX & CSFS all benefit significantly from interest income on customer balances then it seems unfathomable that EQLS has missed out What this means is that if you compare the 3 without analysing their accounts then you are going to come to some foolish conclusions - as Paul Jourdan of Amati highlighted back in December ALPH reported PBT of £115m last year & should do significantly more this year, it's current EV is £700m, so EV / PBT is 6x, not the 14x 'bearbull' thinks If EQLS traded at the same valuation as ALPH, then the £26m forecast EBITDA for FY24 would value the business at £156m / 83p a share If ALPH traded at the same valuation as EQLS then it would be trading at £30 a share And yet the column reckons they trade at a 50% discount to ALPH, so shareholders should expect a 200p+ offer, and still be disappointed! If you plug in the actual figures (and the fact EQLS don't disclose interest income) then the article would have to have a completely different narrative. |
Posted at 08/5/2024 08:32 by 74tom From this morning CSFS results;"Other operating income represents interest generated from client cash balances. The recent changes to the interest rate environment have meant that these accounts can be interest bearing, whilst maintaining the safeguarding requirements. Under the terms of the Group's Electronic Money Licence, the Group is not able to pass any of the interest earned back to the clients." They earned £350k interest income in FY23 and only really provide spot FX trading, hence you would expect minimal holding periods for client cash. I strongly suspect EQLS are making ~£5-10m PA in interest income & because they don't disclose the number it is falsely inflating their underlying performance. I actually laughed out loud when I read the IC bearbull commentary about EQLS being cheap vs ALPH, inclusive of interest income ALPH is on a PE of just over 10x! The next PUSU deadline is in a week, will the charade continue? |
Posted at 04/5/2024 17:31 by anon12345 Agree about not needing a minority investor in terms of primary capital.There are plenty of private market transactions for highly comparable businesses being bought at 4-6x revenue. Ebury raised from Santander last year at 5x revenue and Ebury is barely profitable, Corpay has done a handful of deals (Cambridge Global, Global Reach, Afex) at about 4x revenue. At 3x my estimate of £125m FY24 revenue, EQLS would be north of £2. The huge gap between private and public market value of the asset is why they are running this process and probably explains the very elongated negotiation process - buyers would be pointing to the stock price whereas EQLS would be pointing to private market transaction multiples as the right valuation. |
Posted at 03/5/2024 19:07 by swiss paul Its EQLS who allow the PUSU so the ball is most firmly there side of the net.If EQLS rejected the PUSU then it would be game over and MDP would either get off the pot or do the business. |
Posted at 30/4/2024 15:02 by mcl1 The whole process since the announcement of a strategic review by EQLS has been strange.Referencing a company that immediately denied any interest, no real detail about other options and still no indication of what the management team think Equals to be worth. I hope that EQLS has a strong, independent Board as I fear the management's interest may not necessarily align with small shareholders, particularly if they are retained by the takeover entity. |
Posted at 19/4/2024 16:00 by 74tom I was listening to an old VOX podcast from December with Paul Jourdan of Amati; Equals is briefly discussed alongside Alpha FX. Paul said something interesting that prompted me to start digging into the accounts of EQLS. 'obviously they have benefitted a lot from the rise in interest rates, so that's now flowing through and that's been a big part of their profitability' Anyone find it curious that they haven't disclosed how much interest income they have earned since the 2019 accounts? There hasn't been so much as a word on it as far as I can see? In 2019 they said; "Included in this segment is interest earned on house funds. Given the low interest rates and certain regulatory restrictions governing the deposits on which the Group can earn interest, the Group earned a total of £150k in interest during the year (2018: £145k). At 31 December 2019 the Group had fiduciary responsibility for a total of £52.4 million in bank accounts not included in the Group's consolidated balance sheet (31 December 2018: £48.0 million). Interest income has been included in the segmental revenue where earned." 2019 was also when they last mentioned off balance sheet funds; "The funds attributable to customers are shown as memorandum item. Consistent with 2018, these funds, held on behalf of customers of both CardOneBanking and International Payments have been excluded from the balance sheet following legal advice received in connection with the risks and rewards to the Group. Nevertheless, these funds remain within the fiduciary obligations of the Directors and are included in the table above as an 'aide-memoire'. It is notable that these balances grew by 9.2% to £52.4 million up from £48.0 million at 31 December 2018. This reflects the growth of the underlying use of the Group's platforms." -------------------- If they had £52.4m in off balance sheet funds at the end of 2019, when international payments earned them just shy of £12m in revenue on £1.2b of transaction flows, what is that balance now, given international payments earned them £39m last year (which if revenue margin has stayed consistent at 0.76% since they last disclosed it in 2020, would mean transaction flows of some £4.5b)? Even at an average of £100m per day earning 4% interest, that would equate to nearly 50% of last years PBT... But could it be significantly higher than this? Absolutely, looking at the group underlying transaction value of £12.6b in FY23 vs £2.8b in 2019... Does this potentially explain the riddle as to why EQLS is up for sale? Hmmm. I certainly found it interesting! |
Posted at 09/11/2023 07:12 by masurenguy Declaration of Maiden Interim DividendEquals Group is pleased to announce that further to the announcements on 12 September 2023 and 1 November 2023 regarding the proposed reduction in share premium account, the Board is pleased to declare a maiden interim dividend of 0.5p per share. Furthermore, it expects that, subject to shareholder approval, the final dividend for the 2023 financial year will be 1.0p per share, giving a total dividend of 1.5p for 2023. The Board is confident that the payment of a dividend will not compromise the Group's ability to execute on its strategic objectives. The Board will continue to prioritise the strong balance sheet that allows the Group to invest in Equals' technology platform, payments infrastructure, licences and connectivity whilst retaining an ability to pursue selective acquisitions in order to accelerate its strategic development. The dividend of 0.5p per share will be payable to shareholders on the register as at 17 November 2023, an ex-dividend date of 16 November 2023 and a payment date of 7 December 2023. |
Posted at 20/1/2023 04:14 by carcosa Seems to me there is often a debate that surrounds the difference between the needs of a growing business and the desires of investors. Growing a business takes years whilst many retail investors have a timeline of weeks, months, a year if lucky.Discussion from investors on boards such as ADVFN often goes along the line of the directors should be buying more shares, institutions should never sell, Directors getting overpaid (salary/LTIP's etc), need better brokers, better press coverage, more RNS's better PR, be traded on other exchanges and... should start paying dividends. All of which are aimed at manipulating the share price and not really doing anything for the business itself. Fact of the matter is Equals have yet to make consistent profits let alone high FCF. Until consistent profits occurs a dividend is out of the question especially when returns are greater from investing in the business than a dividend payout. What is worse is that even if it's a nominal dividend, should the business environment change and they have to stop paying even a nominal dividend, then it tends to have a disproportionate negative effect on the share price wiping out the value of several years of dividends. Am also not convinced that a nominal dividend is meaningful. Even if it allows a new institution to use it as an excuse to buy in then. Academic research shows that institutions typically prefer non dividend paying companies that engage in larger share buybacks, whereas retail investors are the exact opposite. The ability to grow a company above 100m/250m/500m market cap is more significant for institutions than a dividend and the larger the company grows the more institutional investors become interested. Around the current market cap there is simply not enough shares for most institutional buyers to be interested. So that leaves the door open for further placings i.e. dilution to occur or secondary placings (which really is unlikely to happen given EQLS shareholding base). When Crystal Amber had to sell their holding I thought it would go to an institutional buyer but am not sure that entirely happened. Incidentally do Crystal Amber still hold any shares; according to their website they had <3% end September 2022? We now have the prospect that Downing Strategic will be a forced seller of their holding (1.8m shares??) in late 2024 If and when a dividend is paid out it has to be accompanied with a dividend policy statement e.g a percentage of FCF or some such metric which implies a progressive dividend. Just having a year after year dividend yielding 1% does no one any favours. |
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