(Alliance News) - Shares in outsourcing business Equiniti Group PLC slumped on Tuesday following a profit warning.
Equiniti shares were down 13% at 197.30 pence each on Tuesday morning, the worst performer in the FTSE 250 index.
The company, which provides payroll and financial and company secretarial services, said underlying earnings before interest, taxes, depreciation and amortisation for 2019 will be at the lower end of market estimates of between GBP136 million and GBP142 million due to lower activity in higher margin UK corporate business.
However, annual revenue is predicted to be at the upper end of GBP550 million to GBP567 million market estimate range.
In 2018, underlying Ebitda was GBP122.3 million on revenue of GBP530.9 million.
Client retention remained strong across the group, Equiniti said, and the company has secured new clients across all divisions.
The Investment Solutions business continued to take market share with new share register wins, while remediation services and software sales remained the drivers of growth in Intelligent Solutions unit, Equiniti said.
Pension Solutions secured client wins in the period and, with the cost efficiency actions completed in the first half, underlying Ebitda in that unit is expected to stabilise for 2019.
Equiniti expects no further non-operating charges in the second half of 2019 following completion of the US separation in the first half. The company's 2019 leverage is expected to be "at or slightly above" the higher end of market estimate range of 2.3 times to 2.5 times due to timing of business in the fourth quarter.
"Whilst we expect the uncertainty in the macro environment to continue, Equiniti remains well positioned. We expect further organic growth in the UK as we build on our relationships with our exceptional client base. The US offers a platform for accelerated growth based on market opportunity, the potential to take market share and the opportunity to cross-sell digitised services into our blue-chip client base," the company said.
By Tapan Panchal; tapanpanchal@alliancenews.com
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