Equals Share Discussion Threads

[66fingers] 14/6/2024 17:34

Oops, that should read possibility!

[mcl1] 14/6/2024 16:50

Masurenguy I 100% disagree in questioning Ian S-T's commitment. Let's look at the facts. He / the Board instigated the review, that in reality was never a review. It was a blatant attempt to sell the company, an event that would probably trigger the vesting of any share options he / others held. The company would appear to have been doing well with every reason to have a positive outlook, so why suddenly 'pimp' it out to the market, unless for personal gain. In that process, they have lost huge credibility by naming a potential suitor who immediately rejected any interest in Equals and allowing the dd process to drag on for 8 months, only for it to look like its petering out with no bid.
Credibility is everything for a small cap and this debacle will have surely damaged their reputation with Insto's, and if they start to exit then the company will have real problems.
As a retail shareholder I feel we've been badly let down and don't begin to understand the positivity you share for the Board or mgmt team in your comment below.
You know the old saying, if it looks like a Duck and it quacks, then it's a Duck........and imo Ian S-T starting quacking the minute he announced the 'review'.


I cannot see any reason to question IST's ongoing commitment to Equals either - at some point he will want to retire but at 60 that is probably not imminent unless perhaps a deal is done with the Consortium or someone else. Therefore I'm not really sure what incremental information or explanation you are seeking from the company.

[masurenguy] 14/6/2024 15:05

I agree - the forward uncertainty is an inauspicious factor at the moment !

[ltinvest] 14/6/2024 14:55

Tough couple of days here. Need a conclusion for the strategic review sooner rather than later I think. Trading update in July can't come soon enough.

[masurenguy] 14/6/2024 13:38

I think that we have had transparency from the BoD apart from not separately identifying interest income from customer balances. The 2023 results, which were published just over 8 weeks ago on 16 April, can be referenced by anyone. This also includes plenty of narrative on their forward programme.

Sentiment plays a major role in shareprices and there will have been speculator share sales after the MDP announcement was made and subsequently the market leader Wise results, issued yesterday, has indicated some slowdown in growth although one should recognise that 75% of their business is B2C. By comparison, circa 80% of Equals revenues are derieved from B2B customers whereas most of the other fintech competitors in this sector also still predominantly obtain the majority of their income from the B2C sector. This is probably the main factor in MDP's ongoing potential interest in the Equals platform on some licensing or cooperative basis.

We also had a very positive H1 update alongside the final results, which still indicate positive momentum going forward.

H1 FY-2024 Trading update

· Revenue in H1-2024 up to 12 April 2024 reached £31.9m, up from £24.5m in the same period in 2023, an increase of 30%
· Revenue from Solutions in the period was £13.2m, up 74% on the same period in 2023 of £7.6m
· Revenues per working day up to 12 April 2024 were £443k, an increase of 27% over £350k per day in Q1-2023 and 5% higher than £422k per day achieved in Q4-2023
· Cash balances of £21.6m as at 12 April 2024

I cannot see any reason to question IST's ongoing commitment to Equals either - at some point he will want to retire but at 60 that is probably not imminent unless perhaps a deal is done with the Consortium or someone else. Therefore I'm not really sure what incremental information or explanation you are seeking from the company.

[mcl1] 14/6/2024 12:23

As soon as the consortium position is resolved we require full transparency from the Equals Board and Management as to future plans. Does Ian S-T remain committed to the company, how is the European role out going and of course a complete itemised breakdown of profits to clarify the amount generated in interest from client funds.

[qs99] 14/6/2024 11:58

So if bid doesn't materialise where does the share head to? Plenty PIs will offload Me thinks DYOR

BUT, surely the long-term view / opportunity hasn't changed? DYOR

[jaknife] 13/6/2024 10:33

rizler,

"Anyone got a link to Paul hills take on things? Be interested to hear…"

Here:

JakNife

[rizler] 13/6/2024 10:06

Anyone got a link to Paul hills take on things? Be interested to hear...

[mcl1] 12/6/2024 13:50

Redartbmud perhaps I worded it poorly. I agree on the face of it ,( notwithstanding clarity must come forth on the contribution to p/l from interest earned from client accts), they’ve achieved the tough part of building a business and a niche for themselves…..however I feel and have done for along time that shareholders are annoying distraction.
Over the years I would say their fiduciary duties have wavered at the shareholders expense,(eg. Had a rights issue and the share price immediately crashed, tried imposing a very generous executive remuneration package when the share price had dumped to 30-40p badly hurting shareholders and of course this debacle that you cannot begin to defend on any level).

[redartbmud] 12/6/2024 13:18

"Whilst Ian S-T and team are good at building a business they’re poor at running a listed company….they deserve all the negativity coming their way."

I don't think you can say that.
They navigaated covid, when the BtoC completely dried up, by repositioning mailnly into BtoB
They built a first class operating platform. Agreed, it took longer and cost more, but
I can't think of a mojor project where that wasn't the case.
They are a small cap company punching well above their weight.
S-T & his CFO work extremely well together

I retain confidence as a long-term holder.

Just MHO.

red

[anon12345] 12/6/2024 13:18

They may end up selling the B2C segment only to MDP - EQLS have been deemphasizing their B2C segment for 4-5 years (they're too small to compete), MoneyGram is B2C focused.

Conversely, RailsR is exclusively a B2B business and likely would perceive EQLS' B2C business as an unnecessary distraction.

[qs99] 12/6/2024 13:05

Not sure how you make "finance is a mess" petewy, given the rising net cash that is plainly not the case.

I think you mean, corporate side of running a public company is a mess? In which case this episode has definitely tarnished the reputations of the Exec & NED team quite frankly.

IF they wanted succession as they want out, then plan for it & action it.

IF they want to sell themselves, do it quickly, if no interest, crack on, don't drag it out for ever and look foolish.

IF they received an offer which triggered this, be more open, don't call it a strategic review BS etc. AND do it quicker than they have.

If trading update is anything less than sterling & upbeat, then management would have been absolutely culpable quite frankly. They have been super upbeat about prospects of business and scalability, so why tf did they need a "strategic review"?

Anyway, Board need to get some positive news into the market to make up for this to start trying to get a decent rating.

DYOR

[petewy] 12/6/2024 12:49

Sold out. Great company but finance is a mess.

[mcl1] 12/6/2024 12:06

Pol123 this whole process was instigated by the management team so shareholders have every right to be angry and negative.
Do you seriously think the likes of JPMAM and other institutions holders will not be evaluating their continued investment in EQLS after this charade.
EQLS even named a company as a possible suitor who immediately denied any interest. They called it a ‘ strategic review’ but in reality it was just putting up the for sale sign. They have made zero reference to considering a mgmt buyout which would clearly be an option.
They should have called time on this process long ago.
They should have been better prepared for today and hopefully limited the negativity with a trading update.
Whilst Ian S-T and team are good at building a business they’re poor at running a listed company….they deserve all the negativity coming their way.

[pol123] 12/6/2024 11:15

Negativity from some who have obviously being holding out for a BO and not interest in the company or its prospects

Should get trading update in approx 4 wks

[qs99] 12/6/2024 10:43

I'm not sure management are bad like that, they have under promised and over delivered time & time again

My issue is with the corporate naivety and lack of strength to really be confident with these "bidders" and to have closed this ridiculously titled "strategic review" months ago

DYOR

[74tom] 12/6/2024 10:15

A predictable turn of events, if I shorted shares then this would have been one of the most obvious setups I'd seen in a long time.

In the final results they disclosed that they had increased headcount by nearly 50%, my suspicion is that they were / are trying to present an attractive growth story to prospective bidders, when in reality they are under the same severe competitive pressure as AGFX and many other bog standard fintechs in the FX / payments space. It apparently hasn't worked with MDB.

I'd punt that they'll hit 2024 top line estimates but miss badly on PBT & EPS, as the added headcount is annualised and can't be offset by further interest income being blended into gross margins & presented as 'organic growth'

[qs99] 12/6/2024 10:01

This is v.v. poor from the Board

They have wasted so much time & probably £s on this, utterly nuts.

Put up or shut up by this Friday should be the message, then move on.

Losing credibility by the day, what have they gained in all this time? Zip.

If they want out, where is the succession planning? Where are the NEDs forcing the issue after nearly a year? Why would Instis want to buy in in the future if management can't make a decision?

Why couldn't they get a commercial deal in all this time anyway with MDP?

None of it stacks up

DYOR

[doobz] 12/6/2024 09:34

The most confusing part of this for me, was the 10% jump out of nowhere on Friday last week. That seriously suggested to me that someone knew something we didn't. I've seen this a few times before a bid gets announced, was nearly certain of something positive at that point. Very strange. Maybe its the case as written above by Maurenguy

[masurenguy] 12/6/2024 09:21

shallwe #3481: "Why pay more now that the competition had decided not to bid?"

Well we don't know the state of play that had been reached in the discussions but what we do know is that both parties have previously made non-binding offers to EQLS. Therefore it is also possible that the Consortium might have indicated a higher price than MDP during this process and as a result the latter may have dropped out as an acquiree but still retain interest in some sort of alternative licensing deal option. If that should prove to be the case then we might see some proposed deal with the Consortium by the next PUSU deadline. If not, then we'll probably see a subsequent conclusion to the SR and an announcement that EQLS will continue to plow on as an independent entity with their incipient European expansion moving ahead this year.