- Sales already close to full-year estimates
- Solutions revenues jump almost 300%
- Analysts raise their price target
Financial payments firm Equals Group (EQLS:AIM) delivered shareholders an early Christmas present with its latest trading update and the news full year results would be ahead of market expectations.
The shares jumped as much as 7% to 100p in early dealing before settling back to trade up 3% at 96.5p.
WHY HAS THE COMPANY RAISED GUIDANCE?
The group, which specialises in providing payment platforms to small- and medium-sized businesses, posted a 61% increase in turnover for the 11 months to the end of November to £63.5 million.
The firm said growth remains ‘robust’ despite the unfavourable macroeconomic conditions, with the core small- and mid-cap businesses generating a 38% increase in revenues to £49.6 million.
In addition, the scaled-up Equals Money Solutions business which serves larger corporates and financial institutions recorded a threefold jump in revenues to just under £14 million.
Given the performance year-to-date, with revenues already close to analysts’ forecasts for the full year, the board expects its results to top market expectations.
Chief executive Ian Strafford-Taylor said the business was performing strongly across all segments in the face of a difficult trading environment, which ‘augurs well for 2023 and beyond’.
EXPERT VIEW
Cannacord Genuity analysts Justin Bates and Portia Patel describe Equals Group as ‘trading strongly and carrying significant positive momentum into the new year’.
As well as raising their revenue and earnings forecasts for this year and next, to take account of the board’s raised expectations, they have lifted their 12-month price target to 149p.
The analysts also flag the purchase of Roqqett Ltd late last month for £2.25 million, a deal which brings Equals payment technology enabling it ‘to fully participate in the payment lifecycle of its corporate customers’, which they expect to be an important driver of future growth.
