EQN.L Share News (EQN)

LONDON (Alliance News) - Equiniti Group PLC reduced its dividend Wednesday in line with its policy, after profit fell in 2017 on higher costs despite revenue growing amid a challenging trading environment.

In 2017, pretax profit narrowed to GBP25.6 million from GBP28.5 million the year prior. This was despite revenue growing to GBP406.1 million from GBP382.6 million the year before.

Profit was hurt by a rise in administrative costs to GBP318.1 million from GBP295.2 million the year before. It was also hit by a GBP10.5 million non-operating charge chiefly related to Equiniti's recent acquisition of Wells Fargo Shareowner Services.

Equiniti - a financial technology outsourcer - announced it would buy the share registration and services business of US banking giant Wells Fargo & Co for USD227.0 million in July 2017. The deal closed in early February.

Equiniti proposed a 2.73 pence final dividend, down 6.2% from 2.91p the year prior. This is in line with the company's dividend policy of a payout ratio of 30% of adjusted underlying post-tax profit. For the full year, the dividend stood 1.8% lower at 4.37p per share compared to 4.45p the year prior

"We are pleased with progress against our strategic objectives during 2017, having delivered accelerating organic growth during the second half, whilst securing a landmark entry into the exciting US market," Equiniti Chief Executive Officer Guy Wakeley said.

"Despite the challenging operating environment," Wakeley added, "we have grown revenue and profit ahead of expectations whilst demonstrating our consistent ability to grow operating margins whilst delivering strong cash generation."

"Our acquisition of Wells Fargo Shareowner Services creates a truly multinational opportunity both for core share registration products as well as our broader suite of technology and share plan solutions in a large and growing market," Wakeley said.

"Equiniti operates in an environment characterised by significant change, driven by regulation, digitisation and cost reduction," Wakeley continued. "The relevance of our services and automated technology capabilities has never been greater, and through 2018 our intent remains to deliver organic revenue growth, supplemented by growth from capability enhancing acquisitions whilst integrating our new US operations, creating a platform for significant future growth."

Shares in Equiniti were 1.6% higher at 291.00 pence on Wednesday.