(Sharecast News) - Equiniti shares fell to a record low after the services and payments company warned annual earnings could fall by about 30% because of Covid-19 disruption and low interest rates.
The company said underlying 2020 earnings were likely to drop to between £93m and £97m from £136m in 2019. Revenue is on course to drop to £480-490m from £556m, it said.
Equiniti, which trades as EQ, said long-term contracts making up 75% of revenue were maintained since the start of July but that upheaval in capital markets and the economy had hit market-paid and discretionary income.
About half these revenues, which include interest receivables, commission and fee-based income, were affected, it said. New business will not make up for the shortfall it said.
Equiniti shares fell 6.2% to 97.2p at 13:46 BST - the lowest price since the company's flotation in 2015. The shares have more than halved in 2020.
Guy Wakeley, Equiniti's chief executive, said: "Current trading continues to be difficult, although we are seeing the usual acceleration into Q4. We continue to make strategic progress as evidenced by our strong order intake and resilient financial position, but pending any recovery in our markets we continue to tightly manage costs and cash flow through this now extended period of disruption."
Equiniti has cancelled pay reviews, deferred third-party spending, frozen hiring and speeded up automation to save £16m a year. With more than 70% of employees working flexibly the company will close or combine a number of its offices to save £4m a year at an initial cost of £9m.
The group will take further charges of about £7m for other reorganisation costs and to account for employee leave days built up during Covid-19.
2 Aug 2016 07:25