- Shares drift on profit taking
- Potential for a future dividend payment
- Solutions and payments drive growth
Shares in global payments firm Equals Group (EQLS:AIM) eased 2.8% to 92.8p despite the group announcing an impressive set of results for the six months ended 30 June 2022.
Management provided an encouraging outlook and hinted it was considering a future dividend policy, which is significant as the group hasn't paid out any cash so far to shareholders.
The Equals share price has risen by an impressive 50% over the last six months, which may explain today’s share price response to the strong results.
Total revenue increased 86% from £16.9 million to £31.4 million while reported profit after tax and research and development credits was £0.8 million versus a £1.2 million loss in the prior year.
Adjusted EBITDA (earnings before interest tax, depreciation and amortisation) increased by 203% year-on-year from £1.6 million to £4.9 million.
Diluted earnings per share of 0.36p compared with a prior year loss of -0.70p.
FOREIGN PAYMENTS AND SOLUTIONS DRIVE GROWTH
Equals stands out for the breadth of its proposition both for businesses and consumers, including real-time settlement accounts with the Bank of England thanks to its membership of the UK Faster Payments Scheme.
A key factor behind today's strong numbers is Equals Solutions, a single-platform, single-IBAN multi-currency account targeted at larger corporates.
Launched in June last year, it has scaled materially and attracted new customers together with a strong pipeline of orders.
This is reflected in the division’s revenue line, which increased 2,000% from £0.3 million in the first half of 2021 to £6.3 million during the first six months of 2022.
International payments, which represent 58% of group revenue, also benefited from strong demand with revenue increasing by 65%.
EXPERT VIEW
According to Canaccord Genuity analyst Justin Bates, ‘Equals is trading strongly. Revenue growth is accelerating and management’s comments about current trading give us considerable comfort in the likely full year result.’
‘The ongoing strengthening of the balance sheet also gives options, whether it be M&A, organic expansion and/ or the commencement of a dividend policy’
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