Equals Share Discussion Threads

[swiss paul] 15/9/2023 17:01

Down Day - pocket the cash for the weekend :-)

[slogsweep] 15/9/2023 13:16

12:13 and all the days 'sells' mopped up in one go.

[alter ego] 15/9/2023 10:49

Big businesses are only interested in the bottom line. An entrepreneurial business will not retain its staff unless they can make their own decisions without layers of bureaucracy.

[apad] 15/9/2023 10:09

It's a rational argument that has been around for a long time. I suspect that big banks aren't that rational. A friend with experience says that you deal with a committee that you think has decision making powers only to find that it passes the decision to the next committee up the chain - ad infinitum.
Also the big banks are milking their smaller business customers who have inertia and its a big market to share.
I'm not holding my breath for a takeover, but I reckon there is plenty of room for growth.
apad

[masurenguy] 15/9/2023 00:45

This Sharescope comment reflects the view that I have had on this company for some time now.

"Equals look attractive for M&A activity from the more traditional bank looking to save building their own sub-arm, which will be both costly, and time-consuming – it is much easier to buy a ready-made suitor that has all the components established and looks attractive from a cash generation perspective. This makes Equals an attractive proposition, but not the only factor to consider. The company’s SME-focused Equals Money is an attractive platform because it features best-in-class bank-grade connectivity technology that sets the company apart from other disruptors in the sector. It grants access to expert support for payments and expenses for clients."

[elrico] 14/9/2023 17:55

elrico 28 Jun '21 - 18:27 - 1309 of 2618



#EQLS STOOD THE TEST OF TIME. 45P

[smithie6] 14/9/2023 15:14

Owenski
..so you are a client

How does Equals compare with Wise if a personal wants to have accounts (with IBAN numbers) in different currencies ?
Let us say, £, € & some minor EU currency, say Polish currency (is it Zloty). with a debit card for each currency.
Say for the many Polish people living in the UK.
Does Equals cater for that market or is Equals not interested in individuals & only takes companies as clients ?

[alter ego] 14/9/2023 12:47

I’m late to this part Owen but obviously in good company. Manged to buy a starter position late yesterday having watched an interview with CEO and CFO on Stocko arranged by Paul Hill aka brummy got. Enjoying sunny weather here and feeling much better. Appreciate your good wishes.

[owenski] 14/9/2023 11:51

Growth via UK businesses, now that they have an EU presence, looks assured and a partnership approach in the EU to roll out the new EU money vertical will be interesting to watch.

Management are prudent and risk aware when it comes to biting off more than they can chew, so seems a sound approach, the US isn't the 'B' all 'end all'.

Anyways, finally through a quid on volume - which it's taken a stab at multiple times.

Very impressive management team, they know their stuff, gives one some conviction in the business.

I'm also a happy customer BTW, not just a punter.

[qs99] 14/9/2023 11:38

Final slide I liked on the presentation.....an independent audit said their tech had "10 X Capacity easily accommodated".....so should be north of £1bn turnover no ? DYOR without material spend I presume on upgrading that capacity....put your margins on that and EV/EBITDA multiples.....DYOR as ever...

European access and indeed further UK and then in a few years time maybe the US/Asia still to come to scale more....DYOR

[indalo] 14/9/2023 10:44

I think these will rally to 120-130 promptly then drift to 150-175 over the coming weeks. IMO a valuation of 15-20 x EBITDA is what you would expect for a high growth B2B payments business with a good degree of ‘integrated217; high quality revenue. There are others out there trading on far higher multiples when most their revenue is from high risk, capital intensive hedging business. Equals have chosen to avoid those lines and focus on solutions with IMO far higher revenue quality and far lower market risks.

[ashleyjv] 14/9/2023 10:32

It's great to see the market responding immediately to the good news, normally it's a slow burn

[masurenguy] 14/9/2023 09:11

Further headway this morning - could be another big trading volume today.

[volsung] 14/9/2023 09:09

These look to be going places so bought a few

[masurenguy] 14/9/2023 01:17

Highest daily share volume this year !

[66fingers] 13/9/2023 12:04

Equals is on track to deliver a 70% upside
A leading fintech payments group has raised earnings guidance, but it is only rated on 10 times next year’s likely profit
Equals is on track to deliver a 70% upside
September 13, 2023
By Simon Thompson

First-half transaction values surge 43 per cent to £6bn
First-half revenue up 43 per cent to £45mn
Cash profit doubles to £9.8mn
Operating profit up five-fold to £5.5mn
Net cash up 19 per cent to £17.9mn since start of 2023

Aim-traded fintech payments group Equals (EQLS: 104p), a leading challenger brand in banking and payments, has delivered a robust set of interim results that highlight the operational leverage of its business. The group has also reported a robust trading performance in the third quarter, with revenue per working day up 39 per cent to £370,000 year on year. The directors raised full-year earnings guidance, too.

Supported by investment in a cutting-edge technology platform, digital marketing initiatives and astute bolt-on acquisitions to expand the group’s offering and addressable market, the high-growth business continues to disrupt the market of traditional banks reliant on more cumbersome legacy payment platforms.

The group differentiates itself from rivals by offering both account-to-account transfers and cards, through a technology platform that provides bank-grade connectivity and security. Providing one unified platform to business customers is becoming increasingly vital. For example, many ecommerce businesses only accept card payments, whereas other companies may typically only accept bank transfers.

Within the payments market, Equals is focused on the business-to-business (B2B) customer segment, having identified small and medium-sized enterprises (SMEs) as the optimal target audience for its products and services. The focus on SME customers has been a real game-changer, as has the added capability for them to connect to Equals’ platform via API – a software application used for payment data transmission between two systems. It has increased Equals’ total addressable market and is attracting larger customers.


Focus on SMEs delivers strong results
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In the six-month trading period, the group's larger enterprises solution segment more than doubled revenue to account for 30 per cent of total revenue of £45mn. This is a higher-margin business, too, as highlighted by a seven percentage point rise in divisional gross profit margin to 54 per cent. The net result was an eye-watering 155 per cent increase in the segment’s gross profit from £2.9mn to £7.4mn, or 31 per cent of the group total.

The decision to buy out the minority shareholder interests in its white-label business last year has also proved a shrewd move. Reflecting an improved customer mix, divisional gross profit margin surged from 11 to 19 per cent on 23 per cent higher revenue of £8.9mn, which more than doubled the unit’s gross profit to £1.7mn. Finance director Richard Cooper believes that margins are sustainable at these levels for both divisions.

Cooper also notes that the recently completed £4.1mn all-share acquisition of Oonex, a regulated payment institution based in Belgium, should hit break-even by next summer. Strategically, it enables the group to bring its payments, cards and multi-currency account products to a new suite of customers across Europe and has massively expanded Equals’ total addressable market.
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A tech bargain buy on a 57% discount


Robust trading outlook underpins earnings upgrades

Chief executive Ian Strafford-Taylor flagged up the strong pipeline of sales opportunities and the bumper cash generation of the group, too. This has not been lost on analysts at Peel Hunt, who upgraded their full-year cash profit estimates by 10 per cent to £20.2mn based on annual revenue rising from £70mn to £95mn, implying 2023 adjusted earnings per share (EPS) could more than double to 6.3p (16 per cent upgrade).

In addition, the group’s free cash flow generation is forecast to add £7.8mn to the current £17.9mn cash pile by the year-end, and net cash could hit £37.3mn (20p) by the end of 2024, say analysts at Zeus Capital. The board plans to declare a maiden dividend of 1.5p a share at a cost of £2.8mn at the full-year results.

The burgeoning cash pile means that the best metric to value the £193mn market capitalisation company is on a multiple of operating profit to enterprise valuation. On this basis, Equals is rated on 14 times (2023) and 9.8 times (2024) operating profit, a rating that fails to reflect the possibility that earnings per share (EPS) could double again to 12p by 2026 as analyst Paul Hill at investment firm PMH Capital believes.

So, having first advised buying the shares at 77p (Alpha Research: ‘A high tech fintech payments opportunity’, 8 April 2022), and last reiterated that advice at 100p (‘Equals in line for further earnings upgrades’, 7 July 2023), I feel there is strong potential for a narrowing of the share price gap to Peel Hunt and Canaccord Genuity’s raised target prices of 175p. Buy.
Read more from Simon Thompson

■ Simon Thompson's latest book Successful Stock Picking Strategies and his previous book Stock Picking for Profit can be purchased online at www.ypdbooks.com at £16.95 each plus P&P of £3.75, or £25 plus P&P of £5.75 for both books.
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[eagle eye] 13/9/2023 11:53

Equals share price has broken out on two days a heavy volume.
Very impressive, especially with the market backdrop so poor.
Well done management and happy days for all shareholders.

[indalo] 13/9/2023 11:42

The fundamental difference between Equals and others like Argentex, is that Equals are focussed on payments, not hedging products. Hedging products (forwards & options) are commoditised and capital intensive with firms often needing to front additional working capital as collateral often in excess of the incremental EBITDA being generated. Equals is operating a low capital business which is far LESS commoditised because they are focussed on solving payment ops problems for corporates. The solutions segment is by far the more interesting part of this business and they appear to be doing well there. The provision of white label to smaller players has regulatory and banking risks but they appear to be growing it well. I don’t love that part, but have bought in here for the solutions growth.

[qs99] 13/9/2023 11:37

Any insight into ST in the IC comments please?

given management consistently under promise and over deliver, and now with yield and Europe opening up in front of them, should they not be on a high double digit EV/EBITDA multiple?

So where does the share price need to get to for a "proper" tech, growth, scalable plc?

DYOR

[earwacks] 13/9/2023 11:05

74Tom. Certainly been a rather strange delayed reaction. Suspect they were hoping to squeeze more sellers out than they could. I expected this to hover around £1.05for a bit. Not that I’m complaining. When Niox announced a capital reduction it took a good 3 months for the share price to react. I guess the main difference here is they have already announced a dividend and their pe is a little lower. Interesting hearing comparisons with argentex from actual users. Argentex has been an utter shambles since it floated. Cant say much for the management either. Looks like their costs are rising faster than their profits, so running flat out to stand still.In contrast users seem to prefer Equals, and the management seem as sound as a pound. Gl all, enjoy the ride.

[eeza] 13/9/2023 10:37

This is his 4th rec
8/4/22
22/5/23
7/7/23
13/9/23

[metis20] 13/9/2023 10:30

Thanks eeza - it has just appeared - Simon Thompson,

Edit:

ST also tipped EQLS April 2022 (Alpha report) and July 2023

[eeza] 13/9/2023 10:20

Tipped in IC

[johndoe23] 13/9/2023 08:54

Moving up now!

[74tom] 13/9/2023 08:19

There is seemingly a desperation from the marker makers to block the rise here - Peel sat on an imaginary ask from 4pm yesterday and continued this morning - nothing to buy, but they won't move the online offer up. Shocking manipulation and avoidance of creating a fair market.